IIA

103D CONGRESS

1ST SESSION H. R. 3474

IN THE SENATE OF THE UNITED STATES

NOVEMBER 22, 1993

Received

NOVEMBER 24 (legislative day, NOVEMBER 23), 1993

Read twice and referred to the Committee on Banking, Housing, and Urban

Affairs

AN ACT

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; TABLE OF SECTIONS.

5 (a) SHORT TITLE.—This title may be cited as the

6 ‘‘Regulatory Reform Act of 1993’’.

7 (b) TABLE OF CONTENTS.—

TITLE I—REGULATORY REFORM

Sec. 100. Short title; table of sections.
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Subtitle A—Amendments Relating to the Federal Deposit Insurance

Corporation Improvement Act of 1991

Sec. 101. Audit costs.

Sec. 102. 18-month examination rule for certain small institutions.

Sec. 103. Standards for safety and soundness.

Sec. 104. Clarifying amendment relating to data collection.

Subtitle B—General Regulatory Reform

Sec. 111. State regulation of real estate appraisals.

Sec. 112. Collateralization of public deposits.

Sec. 113. Bank Deposit Financial Assistance Program.

Sec. 114. Coordinated and unified examinations.

Sec. 115. Coordination of Federal and State reporting requirements to reduce

duplicative efforts.

Sec. 116. Limiting potential liability on foreign accounts.

Sec. 117. Expedited procedures for forming a bank holding company.

Sec. 118. Flexibility in choosing boards of directors.

Sec. 119. Repeal of obsolete requirements for national banks.

Sec. 120. Limited exemption authority.

Subtitle C—Other Regulatory Reform

Sec. 121. Elimination of duplicative disclosures for home equity loans.

Sec. 122. Alternative dispute resolutions.

Sec. 123. Clarification of RESPA disclosure requirements.

Sec. 124. Exemption of business loans from RESPA requirements.

Sec. 125. Expedited procedures for bank holding companies to seek approval to

engage in certain activities.

Sec. 126. Waiver of right of rescission for certain refinancing transactions.

Sec. 127. Simplified disclosure for existing depositors.

Sec. 128. Deposit broker registration.

Sec. 129. Agency ombudsman.

Sec. 130. Alternative rules for disclosures for radio advertising of credit transactions, deposit accounts, and consumer leases.

Subtitle D—Reports, Studies, Streamlined Regulatory Requirements

Sec. 131. Study on capital standards and their impact on the economy.

Sec. 132. Study of the consumer credit system.

Sec. 133. Studies on the impact of the payment of interest on reserves.

Sec. 134. Streamlining of regulatory requirements.

Sec. 135. Call report simplification.

Sec. 136. Administrative consideration of burden with new regulations.

Sec. 137. Elimination of duplicative filings.

Sec. 138. Recourse agreements.

Sec. 139. Antitrust reports in connection with merger transactions.

Sec. 140. Bankers’ banks.

Sec. 141. Due process protections relating to attachment of assets.

Sec. 142. Time limit on agency consideration of completed applications.

Sec. 143. Timely completion of CRA review.

Sec. 144. Revisions of standards.

Sec. 145. Feasibility study of data bank.
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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 $5,000,000,000 or

18 more and less than $9,000,000,000; and

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

20 or 2 under the Uniform Financial Institu21 tions Rating System (or an equivalent rat22 ing under a comparable rating system) as

23 of the most recent examination of such in24 stitution by the Corporation or the appro25 priate Federal banking agency.
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1 ‘‘(C) The institution—

2 ‘‘(i) has—

3 ‘‘(I) total assets, as of the begin4 ning of such fiscal year, of

5 $9,000,000,000 or more; and

6 ‘‘(II) a CAMEL composite rating

7 of 1 or 2 under the Uniform Financial

8 Institutions Rating System (or an

9 equivalent rating under a comparable

10 rating system) as of the most recent

11 examination of such institution by the

12 Corporation or the appropriate Fed13 eral banking agency; and

14 ‘‘(ii) in the case of an institution

15 which has a CAMEL composite rating of

16 2, is in compliance with the requirements

17 of subsection (b) (without regard to any

18 exemption such institution may otherwise

19 have under this subsection from the re20 quirements of subsection (b)).

21 Notwithstanding paragraph (2), the audit committee of

22 the holding company of an insured depository institution

23 that the Corporation determines to be a large institution

24 shall not include any 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 (a) IN GENERAL.—Section 10(d)(4) of the Federal

15 Deposit Insurance Act (12 U.S.C. 1820(d)(4)) is amend16 ed—

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

18 ‘‘$100,000,000’’ and inserting ‘‘$250,000,000’’;

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

20 the end;

21 (3) by redesignating subparagraph (D) as sub22 paragraph (E); and

23 (4) by inserting after subparagraph (C) the fol24 lowing new subparagraph:
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1 ‘‘(D) the insured institution is not cur2 rently subject to a formal enforcement proceed3 ing or order by the Corporation or the appro4 priate Federal banking agency; and’’.

5 (b) GUIDELINES REQUIRED.—

6 (1) IN GENERAL.—Section 10(d) of the Federal

7 Deposit Insurance Act (12 U.S.C. 1820(d)) is

8 amended by adding at the end the following new

9 paragraph:

10 ‘‘(6) STANDARDS FOR DETERMINING ADEQUACY

11 OF STATE EXAMINATIONS.—The Financial Institu12 tions Examination Council shall prescribe guidelines

13 establishing standards for determining whether a

14 State examination carries out the purposes of this

15 subsection for purposes of paragraph (3).’’.

16 (2) EFFECTIVE DATE OF INITIAL GUIDE17 LINES.—The initial guidelines required to be issued

18 pursuant to the amendment made by subsection (a)

19 shall be issued and shall take effect before the end

20 of the 1-year period beginning on the date of the en21 actment of this Act.

22 SEC. 103. STANDARDS FOR SAFETY AND SOUNDNESS.

23 (a) ELIMINATION OF STOCK VALUATION PROVI24 SION.—Section 39(b)(1) of the Federal Deposit Insurance

25 Act (12 U.S.C. 1831p–1(b)(1)) is amended—
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1 (1) in subparagraph (A), by adding ‘‘and’’ at

2 the end; and

3 (2) by striking subparagraph (C).

4 (b) HOLDING COMPANIES EXCLUDED FROM SCOPE

5 OF STANDARDS.—Section 39 of the Federal Deposit In6 surance Act (12 U.S.C. 1831p–1) is amended—

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

8 depository institution holding companies’’;

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

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

11 company’’; and

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

13 each place such term appears.

14 (c) ESTABLISHING STANDARDS IN GUIDELINES.—

15 (1) IN GENERAL.—Section 39(d)(1) of the Fed16 eral Deposit Insurance Act (12 U.S.C. 1831p–

17 1(d)(1)) is amended—

18 (A) in the 1st sentence, by inserting ‘‘or

19 guideline’’ before the period; and

20 (B) in the 2d sentence, by inserting ‘‘or

21 guidelines’’ after ‘‘Such regulations’’.

22 (2) CLERICAL AMENDMENT.—The heading for

23 section 39(d) of the Federal Deposit Insurance Act

24 (12 U.S.C. 1831p–1(d)) is amended by striking ‘‘BY

25 REGULATION’’.
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1 (d) EFFECTIVE DATE.—The amendments made by

2 subsection (a) to section 39 of the Federal Deposit Insur3 ance Act shall take effect as if such amendments had been

4 included in such section as of the effective date of the sec5 tion.

6 SEC. 104. CLARIFYING AMENDMENT RELATING TO DATA

7 COLLECTION.

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

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

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

11 other requirements for the collection of actual and accu12 rate information pursuant to this paragraph, the Corpora13 tion shall minimize the regulatory burden imposed upon

14 insured depository institutions while taking into account

15 the benefit of the information to the Corporation, includ16 ing the use of the information to enable the Corporation

17 to more accurately determine the total amount of insured

18 deposits in each insured depository institution.’’.

19 Subtitle B—General Regulatory

20 Reform

21 SEC. 111. STATE REGULATION OF REAL ESTATE APPRAIS22 ALS.

23 Section 1122 of the Financial Institutions Reform,

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

25 is amended—
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1 (1) by redesignating subsections (b) through (e)

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

3 (2) by inserting after subsection (a) the follow4 ing new subsection:

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

6 shall encourage the States to develop reciprocity agree7 ments that readily authorize an appraiser who—

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

9 ‘‘(2) is in good standing with the State ap10 praiser certifying or licensing agency in such State,

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

12 (3) in subsection (a)—

13 (A) by redesignating paragraphs (1)

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

15 respectively, and moving the left margin of such

16 subparagraphs (as so redesignated) 2 ems to

17 the right;

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

19 inserting ‘‘PRACTICE.—

20 ‘‘(1) IN GENERAL.—A State’’; and

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

22 paragraph:

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

24 State appraiser certifying or licensing agency shall

25 not impose excessive fees or burdensome require-
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1 ments, as determined by the Appraisal Subcommit2 tee, for temporary practice under this subsection.’’.

3 SEC. 112. COLLATERALIZATION OF PUBLIC DEPOSITS.

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

5 (12 U.S.C. 1823(e)) is amended—

6 (1) by redesignating paragraphs (1) through

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

8 and moving the left margin of such subparagraphs

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

10 (2) by striking ‘‘CORPORATION.—No agree11 ment’’ and inserting ‘‘CORPORATION.—

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

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

14 paragraph:

15 ‘‘(2) PUBLIC DEPOSITS.—An agreement to pro16 vide for the lawful collateralization of—

17 ‘‘(A) deposits of a Federal, State, or local

18 governmental entity or any depositor referred to

19 in section 11(a)(2), including an agreement to

20 provide collateral in lieu of a surety bond;

21 ‘‘(B) bankruptcy estate funds pursuant to

22 section 345 of title 11, United States Code; or

23 ‘‘(C) extensions of credit from any Federal

24 reserve bank or Federal home loan bank,
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1 shall not be deemed to be invalid pursuant to para2 graph (1)(B) solely because such agreement was not

3 executed contemporaneously with changes in the col4 lateral made in accordance with such agreement.’’.

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

7 (a) IN GENERAL.—Effective December 19, 1993, sec8 tion 7(i) of the Federal Deposit Insurance Act (12 U.S.C.

9 1817(i)) is amended—

10 (1) by redesignating paragraph (3) as para11 graph (4); and

12 (2) by inserting after paragraph (2), the follow13 ing new paragraph:

14 ‘‘(3) BANK DEPOSIT FINANCIAL ASSISTANCE

15 PROGRAM.—Notwithstanding paragraph (1), funds

16 deposited by an insured depository institution pursu17 ant to the Bank Deposit Financial Assistance Pro18 gram of the Department of Energy shall be sepa19 rately insured in an amount not to exceed $100,000

20 for each insured depository institution depositing

21 such funds.’’.

22 (b) TECHNICAL AND CONFORMING AMENDMENT.—

23 Section 11(a)(1)(C) of the Federal Deposit Insurance Act

24 (12 U.S.C. 1821(a)(1)(C)) is amended by striking ‘‘sec-
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1 tion 7(i)(1)’’ and inserting ‘‘paragraph (1) or (2) of sec2 tion 7(i) or any funds described in section 7(i)(3)’’.

3 SEC. 114. COORDINATED AND UNIFIED EXAMINATIONS.

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

5 (12 U.S.C. 1820(d)) is amended by inserting after para6 graph (6) (as added by section 102(b) of this Act) the

7 following new paragraphs:

8 ‘‘(7) COORDINATED EXAMINATIONS.—To mini9 mize the disruptive effects of examinations on the

10 operations of insured depository institutions, each

11 Federal banking agency shall, to the extent prac12 ticable and consistent with safety and soundness

13 principles and the public interest—

14 ‘‘(A) coordinate examinations to be con15 ducted by that agency at an insured depository

16 institution and any affiliate of such institution;

17 ‘‘(B) coordinate with the other Federal

18 banking agencies in the conduct of such exami19 nations;

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

21 examinations made pursuant to this subsection

22 with the appropriate State bank supervisor; and

23 ‘‘(D) use copies of reports of examinations

24 of insured depository institutions made by any
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1 other Federal banking agency or appropriate

2 State bank supervisor.

3 ‘‘(8) SAFETY AND SOUNDNESS EXAMS.—Not4 withstanding any provision of paragraph (7) or any

5 system established pursuant to such paragraph, any

6 appropriate Federal banking agency may conduct a

7 separate examination of an insured depository insti8 tution at any time for safety and soundness pur9 poses.’’.

10 SEC. 115. COORDINATION OF FEDERAL AND STATE RE11 PORTING REQUIREMENTS TO REDUCE DU12 PLICATIVE EFFORTS.

13 (a) STATE ACCESS TO FEDERAL AGENCY RE14 PORTS.—The 1st sentence of section 7(a)(2)(A) of the

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

16 is amended by inserting ‘‘and, with respect to any State

17 depository institution, any appropriate State bank super18 visor for such institution’’ after ‘‘The Corporation’’.

19 (b) STATE COORDINATION WITH FEDERAL REPORT20 ING REQUIREMENTS.—The Federal banking agencies and

21 State bank supervisors shall, to the greatest extent prac22 ticable—

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

24 of reports required to be submitted to such agencies

25 and supervisors by insured depository institutions
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1 and the type and amount of information required to

2 be included in such reports; and

3 (2) use copies of reports of condition and other

4 reports submitted by such institutions to any such

5 agency or supervisor.

6 SEC. 116. LIMITING POTENTIAL LIABILITY ON FOREIGN AC7 COUNTS.

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

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

10 amended by inserting after section 25B the following new

11 section:

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

13 ‘‘(a) IN GENERAL.—A member bank shall not be re14 quired to repay any deposit made at a foreign branch of

15 the bank if the branch cannot repay the deposit due to—

16 ‘‘(1) an act of war, insurrection or civil strife;

17 or

18 ‘‘(2) an action by a foreign government or in19 strumentality (whether de jure or de facto) in the

20 country in which the branch is located,

21 unless the member bank has expressly agreed in writing

22 to repay the deposit under those circumstances.

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

24 regulations as the Board may determine to be necessary

25 to carry out this section.’’.
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1 (b) CONFORMING AMENDMENTS TO THE FEDERAL

2 DEPOSIT INSURANCE ACT.—

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

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

5 by adding at the end the following new subsection:

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

7 Reserve Act shall apply to every nonmember insured bank

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

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

10 (2) CONFORMING AMENDMENT.—Subparagraph

11 (A) of section 3(l)(5) of the Federal Deposit Insur12 ance Act (12 U.S.C. 1813(l)(5)) is amended to read

13 as follows:

14 ‘‘(A) any obligation of a depository institu15 tion which is carried on the books and records

16 of an office of such bank or savings association

17 located outside of any State, unless—

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

19 if it were carried on the books and records

20 of the depository institution, and would

21 have been payable at, an office located in

22 any State; and

23 ‘‘(ii) the contract evidencing the obli24 gation provides by express terms, and not

25 by implication, for payment at an office of
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1 the depository institution located in any

2 State; and’’.

3 (c) EXISTING CLAIMS NOT AFFECTED.—Section 25C

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

5 shall not be applied retroactively and shall not be con6 strued to affect or apply to any claim or cause of action

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

8 from events or circumstances that occurred before the date

9 of enactment of this Act.

10 SEC. 117. EXPEDITED PROCEDURES FOR FORMING A BANK

11 HOLDING COMPANY.

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

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

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

15 and

16 (2) by inserting before the period the following:

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

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

19 group of persons exchange their shares of the bank

20 for shares of a newly formed bank holding company

21 and receive after the reorganization substantially the

22 same proportional share interest in the holding com23 pany as they held in the bank except for changes in

24 shareholders’ interests resulting from the exercise of
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1 dissenting shareholders’ rights under State or Fed2 eral law if—

3 ‘‘(i) immediately following the acquisi4 tion—

5 ‘‘(I) the bank holding company

6 meets the capital and other financial

7 standards prescribed by the Board by

8 regulation for such a bank holding

9 company; and

10 ‘‘(II) the bank is adequately cap11 italized (as defined in section 38 of

12 the Federal Deposit Insurance Act);

13 ‘‘(ii) the holding company does not en14 gage in any activities other than those of

15 managing and controlling banks as a result

16 of the reorganization;

17 ‘‘(iii) the company provides 30 days

18 prior notice to the Board and the Board

19 does not object to such transaction during

20 such 30-day period; and

21 ‘‘(iv) the holding company will not ac22 quire control of any additional bank as a

23 result of the reorganization.’’.
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1 SEC. 118. FLEXIBILITY IN CHOOSING BOARDS OF DIREC2 TORS.

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

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

5 and inserting ‘‘a majority’’.

6 SEC. 119. REPEAL OF OBSOLETE REQUIREMENTS FOR NA7 TIONAL BANKS.

8 (a) REPEAL OF PROVISIONS IN THE REVISED STAT9 UTES.—The following sections of the Revised Statutes are

10 hereby repealed:

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

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

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

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

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

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

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

18 (8) Section 5173 (12 U.S.C. 107).

19 (9) Section 5174 (12 U.S.C. 108).

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

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

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

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

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

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

26 (16) Section 5228 (12 U.S.C. 133).
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1 (17) Section 5229 (12 U.S.C. 134).

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

17 (33) Section 5223 (12 U.S.C. 184).

18 (34) Section 5224 (12 U.S.C. 185).

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

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

21 (b) REPEAL OF OTHER OBSOLETE PROVISIONS IN

22 BANKING LAWS.—The following provisions of law are

23 hereby repealed:

24 (1) Section 26 of the Federal Deposit Insurance

25 Act (12 U.S.C. 1831c).
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1 (2) Section 12 of the Act entitled ‘‘An Act To

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

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

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

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

6 U.S.C. 101).

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

8 amend the laws relating to the denominations of cir9 culating notes by national banks and to permit the

10 issuance of notes of small denominations, and for

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

12 U.S.C. 103).

13 (4) The following sections of the Act entitled

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

15 providing for a redistribution of the national-bank

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

17 June 20, 1874:

18 (A) Section 5 (12 U.S.C. 105).

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

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

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

22 (5) The following sections of the Act entitled

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

24 extend their corporate existence, and for other pur25 poses.’’ and approved July 12, 1882:
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1 (A) Section 8 (12 U.S.C. 177).

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

3 (6) The Act entitled ‘‘An Act to amend the na4 tional bank act in providing for the redemption of

5 national bank notes stolen from or lost by banks of

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

7 125).

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

9 conversion of national gold banks.’’ and approved

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

11 (8) The 1st sentence of the 8th undesignated

12 paragraph of section 16 of the Federal Reserve Act

13 (12 U.S.C. 418) is amended by striking ‘‘the Comp14 troller of the Currency shall under the direction of

15 the Secretary of the Treasury,’’ and inserting ‘‘the

16 Secretary of the Treasury shall’’.

17 (9) The 9th undesignated paragraph of section

18 16 of the Federal Reserve Act (12 U.S.C. 419) is

19 amended to read as follows:

20 ‘‘When such notes have been prepared, the

21 notes shall be delivered to the Board of Governors

22 of the Federal Reserve System subject to the order

23 of the Secretary of the Treasury for the delivery of

24 such notes in accordance with this Act.’’.
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1 (10) The 10th undesignated paragraph of sec2 tion 16 of the Federal Reserve Act (12 U.S.C. 420)

3 is amended—

4 (A) by striking ‘‘Comptroller of the Cur5 rency’’ and inserting ‘‘Secretary of the Treas6 ury’’; and

7 (B) by striking ‘‘Federal Reserve Board’’

8 and inserting ‘‘Board of Governors of the Fed9 eral Reserve System’’.

10 (11) The 11th undesignated paragraph of sec11 tion 16 of the Federal Reserve Act (12 U.S.C. 421)

12 is amended to read as follows:

13 ‘‘The Secretary of the Treasury may examine

14 the plates, dies, bed pieces, and other material used

15 in the printing of Federal Reserve notes and issue

16 regulations relating to such examinations.’’.

17 (c) AMENDMENTS TO OTHER LAWS.—

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

19 redemption of national-bank notes, Federal Reserve

20 bank notes, and Federal Reserve notes which cannot

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

22 June 13, 1933, is amended—

23 (A) in the 1st section (12 U.S.C. 121a)—

24 (i) by striking ‘‘whenever any na25 tional-bank notes, Federal Reserve bank
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1 notes,’’ and inserting ‘‘whenever any Fed2 eral Reserve bank notes’’; and

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

4 than Federal Reserve notes, so redeemed

5 shall be forwarded to the Comptroller of

6 the Currency for cancellation and destruc7 tion’’; and

8 (B) in section 2 (12 U.S.C. 122a)—

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

10 and’’; and

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

12 and’’.

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

14 making appropriations for sundry civil expenses of

15 the Government for the fiscal year ending June thir16 tieth, eighteen hundred and seventy-six, and for

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

18 amended in the 1st paragraph which appears under

19 the heading ‘‘NATIONAL CURRENCY’’ by striking

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

21 that follows through the period and inserting ‘‘Sec22 retary of the Treasury.’’.

23 (3) The Act entitled ‘‘An Act to simplify the ac24 counts of the Treasurer of the United States, and

25 for other purposes.’’ and approved October 10, 1940
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1 (12 U.S.C. 177a) is amended by striking all after

2 the enacting clause and inserting the following:

3 ‘‘That the cost of transporting and redeeming out4 standing national bank notes and Federal Reserve

5 bank notes as may be presented to the Treasurer of

6 the United States for redemption shall be paid from

7 the regular annual appropriation for the Department

8 of the Treasury.’’.

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

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

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

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

13 U.S.C. 194) is amended by striking ‘‘, after full pro14 vision has been first made for refunding to the Unit15 ed States any deficiency in redeeming the notes of

16 such association’’.

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

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

19 (d) AMENDMENTS TO OUTDATED DIVIDEND PROVI20 SIONS.—

21 (1) WITHDRAWAL OF CAPITAL.—Section 5204

22 of the Revised Statutes (12 U.S.C. 56) is amend23 ed—

24 (A) in the 2d sentence, by striking ‘‘net

25 profits then on hand, deducting therefrom its
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1 losses and bad debts’’ and inserting ‘‘undivided

2 profits, subject to other applicable provisions of

3 law’’; and

4 (B) by striking the 3d sentence.

5 (2) DECLARATION OF DIVIDENDS.—Section

6 5199 of the Revised Statutes (12 U.S.C. 60) is

7 amended—

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

9 profits of the association’’ and inserting ‘‘undi10 vided profits of the association, subject to the

11 limitations in subsection (b),’’;

12 (B) by striking ‘‘net profits’’ each subse13 quent place such term appears and inserting

14 ‘‘net income’’; and

15 (C) by striking subsection (c).

16 (e) CLERICAL AMENDMENTS.—

17 (1) The table of sections for chapter 1 of title

18 LXII of the Revised Statutes of the United States

19 is amended—

20 (A) by inserting after the item relating to

21 section 5156 the following new item:

‘‘5156A. Mergers, consolidations, and other acquisitions authorized.’’;

22 and

23 (B) by striking the items relating to sec24 tions 5141 and 5151.
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1 (2) The table of sections for chapter 2 of title

2 LXII of the Revised Statutes of the United States

3 is amended by striking the item relating to each of

4 the following sections:

5 (A) Section 5158.

6 (B) Section 5159.

7 (C) Section 5160.

8 (D) Section 5161.

9 (E) Section 5162.

10 (F) Section 5163.

11 (G) Section 5164.

12 (H) Section 5165.

13 (I) Section 5166.

14 (J) Section 5167.

15 (K) Section 5170.

16 (L) Section 5171.

17 (M) Section 5172.

18 (N) Section 5173.

19 (O) Section 5174.

20 (P) Section 5175.

21 (Q) Section 5176.

22 (R) Section 5177.

23 (S) Section 5178.

24 (T) Section 5179.

25 (U) Section 5180.
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1 (V) Section 5181.

2 (W) Section 5182.

3 (X) Section 5183.

4 (Y) Section 5184.

5 (Z) Section 5185.

6 (AA) Section 5186.

7 (BB) Section 5187.

8 (CC) Section 5188.

9 (DD) Section 5189.

10 (3) The table of sections for chapter 3 of title

11 LXII of the Revised Statutes of the United States

12 is amended by striking the item relating to each of

13 the following sections:

14 (A) Section 5193.

15 (B) Section 5194.

16 (C) Section 5195.

17 (D) Section 5196.

18 (E) Section 5202.

19 (F) Section 5203.

20 (G) Section 5206.

21 (H) Section 5209.

22 (I) Section 5212.

23 (3) The table of sections for chapter 4 of title

24 LXII of the Revised Statutes of the United States

25 is amended—
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1 (A) by inserting after the item relating to

2 section 5239 the following new item:

‘‘5239A. Regulatory authority.’’;

3 and

4 (B) by striking the items relating to the

5 following sections:

6 (i) Section 5222.

7 (ii) Section 5223.

8 (iii) Section 5224.

9 (iv) Section 5225.

10 (v) Section 5226.

11 (vi) Section 5227.

12 (vii) Section 5228.

13 (viii) Section 5229.

14 (ix) Section 5230.

15 (x) Section 5231.

16 (xi) Section 5232.

17 (xii) Section 5233.

18 (xiii) Section 5237.

19 (xiv) Section 5243.

20 SEC. 120. LIMITED EXEMPTION AUTHORITY.

21 Section 22(h)(5)(C) of the Federal Reserve Act (12

22 U.S.C. 375b(5)(C)) is amended by striking ‘‘subparagraph

23 (A) for member banks with less than $100,000,000 in de24 posits if the Board’’ and inserting ‘‘subparagraph (A)

25 for—
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1 ‘‘(i) member banks with less than

2 $100,000,000 in deposits; and

3 ‘‘(ii) member banks which have—

4 ‘‘(I) total deposits of

5 $100,000,000 or more and less than

6 $250,000,000; and

7 ‘‘(II) a CAMEL composite rating

8 of 1 or 2 under the Uniform Financial

9 Institutions Rating System (or an

10 equivalent rating under a comparable

11 rating system) as of the most recent

12 examination of such institution by the

13 Federal Deposit Insurance Corpora14 tion or the appropriate Federal bank15 ing agency,

16 if the Board’’.

17 Subtitle C—Other Regulatory

18 Reform

19 SEC. 121. ELIMINATION OF DUPLICATIVE DISCLOSURES

20 FOR HOME EQUITY LOANS.

21 Section 4(a) of the Real Estate Settlement Proce22 dures Act (12 U.S.C. 2603(a)) is amended by adding at

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

24 mortgage loan extended under an open end credit plan (as

25 defined in section 103(i) of the Truth in Lending Act),
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1 disclosures made under section 127A(a) of the Truth in

2 Lending Act may be used in lieu of the disclosures re3 quired under this section if—

4 ‘‘(1) the disclosures made pursuant to such sec5 tion 127A(a) contain all of the information that is

6 required under this section; and

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

8 that is no less conspicuous than is required under

9 this section.’’.

10 SEC. 122. ALTERNATIVE DISPUTE RESOLUTIONS.

11 (a) IN GENERAL.—Each Federal banking agency

12 shall develop and implement a program for using alter13 native means of dispute resolution of issues in controversy

14 (hereafter in this section referred to as the ‘‘alternative

15 dispute resolution program’’) if the parties to the dispute,

16 including the agency, agree to such proceeding.

17 (b) STANDARDS.—Alternative dispute resolution pro18 grams shall—

19 (1) be fair to all interested parties to a dispute;

20 (2) resolve disputes expeditiously; and

21 (3) be less costly than traditional means of dis22 pute resolution, including litigation.

23 (c) IMPLEMENTATION OF PROGRAM.—Each Federal

24 banking agency shall—
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1 (1) within 18 months of the date of the enact2 ment of this Act, establish a pilot alternative dispute

3 resolution program which is consistent with the re4 quirements of subchapter IV of chapter 5 of title 5,

5 United States Code;

6 (2) within 24 months of such date, make a

7 written evaluation of the pilot program on the basis

8 of subsection (b); and

9 (3) within 30 months of such date, implement

10 an alternative dispute resolution program through11 out the agency, taking into account the results of

12 the evaluation made pursuant to paragraph (2).

13 (d) INDEPENDENT EVALUATION.—Before the end of

14 the 30-month period beginning on the date of the enact15 ment of this Act, the Administrative Conference of the

16 United States shall submit to the Congress a report con17 taining—

18 (1) an evaluation of the pilot programs estab19 lished under subsection (c)(1);

20 (2) the extent to which the pilot programs meet

21 the standards established under subsection (b);

22 (3) the extent to which parties to disputes were

23 offered alternative means of dispute resolution and

24 the frequency with which the parties, including the
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1 agencies, accepted or declined to use such means;

2 and

3 (4) any recommendations of the Conference to

4 improve the alternative dispute resolution procedures

5 of the Federal banking agencies.

6 (e) COORDINATION WITH EXISTING AGENCY ADR

7 PROGRAMS.—

8 (1) EVALUATION REQUIRED.—Any Federal

9 banking agency which, as of the date of the enact10 ment of this Act, maintains an alternative dispute

11 resolution program under any other provision of law

12 shall include such program in the evaluation con13 ducted under subsection (c)(2).

14 (2) MULTIPLE ADR PROGRAMS.—No provision

15 of this section shall be construed as precluding any

16 Federal banking agency from establishing more than

17 1 alternative means of dispute resolution.

18 (f) DEFINITIONS.—For purposes of this section—

19 (1) ALTERNATIVE MEANS OF DISPUTE RESOLU20 TION.—The term ‘‘alternative means of dispute reso21 lution’’ has the meaning given to such term in sec22 tion 571 of title 5, United States Code.

23 (2) FEDERAL BANKING AGENCY.—The term

24 ‘‘Federal banking agency’’—
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1 (A) has the meaning given to such term in

2 section 3 of the Federal Deposit Insurance Act;

3 and

4 (B) includes the National Credit Union

5 Administration.

6 (3) ISSUES IN CONTROVERSY.—The term ‘‘is7 sues in controversy’’ means—

8 (A) any final agency decision involving any

9 claim against an insured depository institution

10 or insured credit union for which the agency

11 has been appointed conservator or receiver;

12 (B) any final action taken by an agency in

13 the agency’s capacity as conservator or receiver

14 for an insured depository institution or insured

15 credit union; and

16 (C) any other issue for which the appro17 priate Federal banking agency determines that

18 alternative means of dispute resolution would be

19 appropriate.

20 SEC. 123. CLARIFICATION OF RESPA DISCLOSURE RE21 QUIREMENTS.

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

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

24 amended—
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1 (1) by striking ‘‘(B) for each of the most re2 cent’’ and inserting ‘‘(B) at the choice of the person

3 making a federally related mortgage loan—

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

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

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

7 left margin of such subclauses (as so redesignated)

8 2 ems to the right;

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

10 (II) (as so redesignated by paragraph (2) of this sec11 tion) and inserting ‘‘or’’; and

12 (4) by inserting after clause (i) (as so des13 ignated by paragraph (1) of this section) the follow14 ing new clause:

15 ‘‘(ii) a statement that the person mak16 ing the loan has previously assigned, sold,

17 or transferred the servicing of federally re18 lated mortgage loans; and’’.

19 SEC. 124. EXEMPTION OF BUSINESS LOANS FROM RESPA

20 REQUIREMENTS.

21 The Real Estate Settlement Procedures Act of 1974

22 (12 U.S.C. 2601 et seq.) is amended by inserting after

23 section 6 the following new section:
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1 ‘‘SEC. 7. EXEMPTED TRANSACTIONS.

2 ‘‘This Act shall not apply to credit transactions in3 volving extensions of credit—

4 ‘‘(1) primarily for business, commercial, or ag5 ricultural purposes; or

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

7 instrumentalities.’’.

8 SEC. 125. EXPEDITED PROCEDURES FOR BANK HOLDING

9 COMPANIES TO SEEK APPROVAL TO ENGAGE

10 IN CERTAIN ACTIVITIES.

11 Section 4 of the Bank Holding Company Act of 1956

12 (12 U.S.C. 1843) is amended by adding at the end the

13 following new subsection:

14 ‘‘(j) NOTICE PROCEDURES FOR NONBANKING AC15 TIVITIES.—

16 ‘‘(1) GENERAL NOTICE PROCEDURE.—

17 ‘‘(A) NOTICE REQUIREMENT.—No bank

18 holding company may engage in any non19 banking activity or acquire or retain ownership

20 or control of the shares of a company engaged

21 in activities described in subsection (c)(8) with22 out providing the Board with written notice of

23 the proposed transaction or activity at least 60

24 days before the transaction or activity is pro25 posed to occur or commence.
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1 ‘‘(B) CONTENTS OF NOTICE.—The notice

2 submitted to the Board shall contain such in3 formation as the Board shall prescribe by regu4 lation or by specific request in connection with

5 a particular notice.

6 ‘‘(C) PROCEDURE FOR AGENCY ACTION.—

7 ‘‘(i) NOTICE OF DISAPPROVAL.—Any

8 notice filed under this subsection shall be

9 deemed to be approved by the Board un10 less, before the end of the 60-day period

11 beginning on the date the Board receives a

12 complete notice under subparagraph (A),

13 the Board issues an order disapproving the

14 transaction or activity and setting forth

15 the reasons for disapproval.

16 ‘‘(ii) EXTENSION OF PERIOD.—The

17 Board may extend the 60-day period re18 ferred to in clause (i) for an additional 30

19 days.

20 ‘‘(D) APPROVAL BEFORE END OF

21 PERIOD.—

22 ‘‘(i) IN GENERAL.—Any transaction

23 or activity may commence before the expi24 ration of any period for disapproval estab-
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1 lished under this paragraph if the Board

2 issues a written notice of approval.

3 ‘‘(ii) SHORTER PERIODS BY REGULA4 TION.—The Board may prescribe regula5 tions which provide for no notice under

6 this paragraph or for a shorter notice pe7 riod with respect to particular activities or

8 transactions.

9 ‘‘(E) EXTENSION OF PERIOD.—In the case

10 of any notice to engage in, or to acquire or re11 tain ownership or control of shares of any com12 pany engaged in, any activity pursuant to sub13 section (c)(8) that has not been previously ap14 proved by order or regulation, the Board may

15 extend the notice period under this subsection

16 for an additional 90 days.

17 ‘‘(2) GENERAL STANDARDS FOR REVIEW.—

18 ‘‘(A) CRITERIA.—In connection with a no19 tice under this subsection, the Board may con20 sider the following criteria:

21 ‘‘(i) The managerial resources of the

22 companies involved.

23 ‘‘(ii) The adequacy of the companies

24 financial resources, including capital, giv25 ing consideration to the financial resources
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1 and capital of others engaged in similar ac2 tivities.

3 ‘‘(iii) Any material adverse effect on

4 the safety and soundness or financial con5 dition of any insured depository institution

6 affiliate.

7 ‘‘(iv) Whether, performance of the ac8 tivity by a bank holding company or a sub9 sidiary of such company can reasonably be

10 expected to produce benefits to the public,

11 such as greater convenience, increased

12 competition, or gains in efficiency, that

13 outweigh possible adverse effects, such as

14 undue concentration of resources, de15 creased or unfair competition, conflicts of

16 interests, or unsound banking practices.

17 ‘‘(B) REQUIREMENTS FOR DIS18 APPROVAL.—The Board shall not approve any

19 proposed transaction under this subsection if

20 the Board determines that any insured deposi21 tory institution subsidiary of the bank holding

22 company is engaging in any unsafe and un23 sound practice or is in an unsafe and unsound

24 condition.
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1 ‘‘(3) PUBLIC NOTICE RELATING TO NEW AC2 TIVITIES.—

3 ‘‘(A) PUBLICATION AND OPPORTUNITY

4 FOR COMMENT.—The Board shall—

5 ‘‘(i) publish in the Federal Register a

6 notice of the receipt by the Board of a no7 tice under paragraph (1) involving insur8 ance or any other nonbanking activity

9 which has not previously been determined

10 by the Board (by regulation or order) to be

11 closely related to banking as to be a proper

12 incident thereto; and

13 ‘‘(ii) provide a reasonable period for

14 public comment.

15 ‘‘(B) NOTICE OF APPROVAL BEFORE COM16 MENCEMENT OF ACTIVITY.—The Board shall

17 issue an order with respect to any such notice

18 before the commencement of the proposed in19 surance activity or the other new activity.’’.

20 SEC. 126. WAIVER OF RIGHT OF RESCISSION FOR CERTAIN

21 REFINANCING TRANSACTIONS.

22 The Board of Governors of the Federal Reserve Sys23 tem, in consultation with the consumer advisory council

24 to such Board, shall, within 6 months of the date of the

25 enactment of this Act, submit recommendations to the
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1 Congress regarding whether a waiver or modification, at

2 the option of a consumer, of the right of rescission under

3 section 125 of the Truth in Lending Act with respect to

4 transactions which constitute a refinancing or consolida5 tion (with no new advances) of the principal balance then

6 due and any accrued and unpaid finance charges of an

7 existing extension of credit by a different creditor secured

8 by an interest in the same property would benefit consum9 ers more than existing law.

10 SEC. 127. SIMPLIFIED DISCLOSURE FOR EXISTING DEPOSI11 TORS.

12 (a) IN GENERAL.—Section 43(b)(3) of the Federal

13 Deposit Insurance Act (12 U.S.C. 1831t(b)(3)) is amend14 ed to read as follows:

15 ‘‘(3) ACKNOWLEDGEMENT OF DISCLOSURE.—

16 ‘‘(A) NEW DEPOSITORS.—With respect to

17 any depositor who was not a depositor at the

18 depository institution before June 19, 1994, re19 ceive any deposit for the account of such de20 positor only if the depositor has signed a writ21 ten acknowledgement that—

22 ‘‘(i) the institution is not federally in23 sured; and

24 ‘‘(ii) if the institution fails, the Fed25 eral Government does not guarantee that
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1 the depositor will get back the depositor’s

2 money.

3 ‘‘(B) CURRENT DEPOSITORS.—Receive any

4 deposit after the effective date of this para5 graph for the account of any depositor who was

6 a depositor before June 19, 1994, only if—

7 ‘‘(i) the depositor has signed a written

8 acknowledgement described in subpara9 graph (A); or

10 ‘‘(ii) the institution has complied with

11 the provisions of subparagraph (C) which

12 are applicable as of the date of the deposit.

13 ‘‘(C) ALTERNATIVE PROVISION OF NOTICE

14 TO CURRENT DEPOSITORS.—

15 ‘‘(i) IN GENERAL.—Transmit to each

16 depositor who was a depositor before June

17 19, 1994, and has not signed a written ac18 knowledgement described in subparagraph

19 (A)—

20 ‘‘(I) a card containing the infor21 mation described in clauses (i) and

22 (ii) of subparagraph (A), and a line

23 for the signature of the depositor; and

24 ‘‘(II) accompanying materials re25 questing the depositor to sign the
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1 card, and return the signed card to

2 the institution.

3 ‘‘(ii) MANNER AND TIMING OF NO4 TICE.—

5 ‘‘(I) FIRST NOTICE.—Make the

6 transmission described in clause (i)

7 via first class mail within 90 days

8 after June 19, 1994.

9 ‘‘(II) SECOND NOTICE.—Make a

10 2d transmission described in clause (i)

11 via first class mail not less than 30

12 days and not more than 45 days after

13 a transmission to the depositor in ac14 cordance with subclause (I), if the in15 stitution has not, by the date of such

16 mailing, received from the depositor a

17 card referred to in clause (i)(I) which

18 has been signed by the depositor.

19 ‘‘(III) THIRD NOTICE.—Make a

20 3d transmission described in clause (i)

21 via first class mail not less than 30

22 days and not more than 45 days after

23 a transmission to the depositor in ac24 cordance with subclause (II), if the in25 stitution has not, by the date of such
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1 mailing, received from the depositor a

2 card referred to in clause (i)(I) which

3 has been signed by the depositor.’’.

4 (b) EFFECTIVE DATE.—Section 43(b)(3) of the Fed5 eral Deposit Insurance Act, as amended by subsection (a),

6 shall take effect in accordance with section 151(a)(2)(D)

7 of the Federal Deposit Insurance Corporation Improve8 ment Act of 1991.

9 SEC. 128. DEPOSIT BROKER REGISTRATION.

10 Section 29(g)(3) of the Federal Deposit Insurance

11 Act (12 U.S.C. 1831f(g)(3)) is amended—

12 (1) by inserting ‘‘that is not well capitalized’’

13 after ‘‘includes any insured depository institution’’;

14 (2) by inserting ‘‘such’’ after ‘‘any employee of

15 any’’; and

16 (3) by striking ‘‘having the same type of char17 ter’’.

18 SEC. 129. AGENCY OMBUDSMAN.

19 (a) ESTABLISHMENT REQUIRED.—Not later than

20 180-days after the date of the enactment of this Act, each

21 Federal banking agency and the National Credit Union

22 Administration shall appoint an ombudsman.

23 (b) DUTIES OF OMBUDSMAN.—The ombudsman for

24 any agency shall—
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1 (1) act as a liaison between the agency and any

2 party with respect to the accuracy, consistency, or

3 quality of any examination or regulatory activity of

4 the agency that results in a material supervisory or

5 agency determination rendered by the agency, or

6 may result in an enforcement action by the agency,

7 with respect to such party;

8 (2) act as a liaison between the agency and any

9 party with respect to any problem such party may

10 have in dealing with the agency; and

11 (3) assure that safeguards exist to encourage

12 complainants to come forward and preserve con13 fidentiality.

14 (c) DEFINITIONS.—For purposes of this section—

15 (1) AGENCY.—The term ‘‘agency’’ means a

16 Federal banking agency or the National Credit

17 Union Administration.

18 (2) FEDERAL BANKING AGENCY.—The term

19 ‘‘Federal banking agency’’ has the meaning given to

20 such term in section 3(z) of the Federal Deposit In21 surance Act.

22 (3) MATERIAL SUPERVISORY DETERMINA23 TION.—The term ‘‘material supervisory determina24 tion’’—
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1 (A) means a supervisory determination re2 lating to an insured depository institution that

3 the Federal banking agency has determined to

4 be material under guidelines which the agency

5 shall issue; and

6 (B) does not include a determination by a

7 Federal banking agency to appoint a conserva8 tor or receiver for an insured depository institu9 tion or a decision to take action pursuant to

10 section 38 of the Federal Deposit Insurance

11 Act.

12 SEC. 130. ALTERNATIVE RULES FOR DISCLOSURES FOR

13 RADIO ADVERTISING OF CREDIT TRANS14 ACTIONS, DEPOSIT ACCOUNTS, AND

15 CONSUMER LEASES.

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

17 Truth in Lending Act (15 U.S.C. 1663) is amended—

18 (1) by striking ‘‘No advertisement’’ and insert19 ing ‘‘(a) IN GENERAL.—No advertisement’’; and

20 (2) by adding at the end the following new sub21 sections:

22 ‘‘(b) RADIO ADVERTISEMENTS.—In order to provide

23 a practical alternative for complying with the disclosure

24 requirements of subsection (a) at the option of a creditor,

25 an advertisement by radio broadcast to aid, promote, or
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1 assist, directly or indirectly, the extension of consumer

2 credit under an open end credit plan shall be deemed to

3 meet the requirements of subsection (a) if the advertise4 ment, clearly and conspicuously—

5 ‘‘(1) states any periodic rate that may be ap6 plied under the plan, expressed as an annual per7 centage rate;

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

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

10 ‘‘(3) includes—

11 ‘‘(A) a referral to—

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

13 may be used by consumers to obtain the

14 information required under subsection (a)

15 in accordance with subsection (c); or

16 ‘‘(ii) an advertisement that—

17 ‘‘(I) appears in a publication in

18 general circulation in the community

19 served by the radio station (on which

20 such advertisement is broadcast) dur21 ing the period beginning 7 days before

22 the broadcast and ending 7 days after

23 the broadcast; and
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1 ‘‘(II) includes the information re2 quired to be disclosed under sub3 section (a); and

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

5 (A)(ii) applies, the name and date of the publi6 cation.

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

8 NUMBER.—

9 ‘‘(1) IN GENERAL.—In the case of an advertise10 ment described in subsection (b) or section 144(e) or

11 147(b) which includes a referral to a toll-free tele12 phone number in accordance with such subsection or

13 section, a creditor that offers the credit which such

14 advertisement aids, supports, or assists shall—

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

16 later than the date on which any advertisement

17 is broadcast which includes a referral to the

18 number; and

19 ‘‘(B) maintain the telephone number at

20 least until the end of the 7-day period begin21 ning on the date of any such broadcast.

22 ‘‘(2) AVAILABILITY OF INFORMATION.—

23 ‘‘(A) IN GENERAL.—The creditor referred

24 to in paragraph (1) shall provide the informa25 tion required under subsection (a) with respect
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1 to the open end credit plan for which the toll2 free telephone line is established to any person

3 who calls such number in response to an adver4 tisement by radio broadcast.

5 ‘‘(B) FORM OF INFORMATION.—The infor6 mation required to be provided under subpara7 graph (A) may be provided orally or by offering

8 to mail a written copy of such information to

9 such person.’’.

10 (b) CREDIT OTHER THAN UNDER OPEN END CRED11 IT PLANS.—Section 144 of the Truth in Lending Act (15

12 U.S.C. 1664) is amended—

13 (1) in subsection (a) by inserting ‘‘APPLICA14 TION GENERALLY.—’’ before ‘‘Except as provided’’;

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

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

17 (3) in subsection (c) by inserting ‘‘DISCLO18 SURES REGARDING FINANCE CHARGES.—’’ before

19 ‘‘If any’’;

20 (4) in subsection (d) by inserting ‘‘OTHER RE21 QUIRED DISCLOSURES.—’’ before ‘‘If any advertise22 ment’’; and

23 (5) by adding at the end the following new sub24 section:
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1 ‘‘(e) RADIO ADVERTISEMENTS.—In order to provide

2 a practical alternative for complying with the disclosure

3 requirements of subsection (d) at the option of the credi4 tor, an advertisement by radio broadcast to aid, promote,

5 or assist, directly or indirectly, any consumer credit sale,

6 loan, or other extension of credit subject to this title, other

7 than an open end consumer credit plan, shall be deemed

8 to meet the requirements of subsection (d) if the advertise9 ment, clearly and conspicuously—

10 ‘‘(1) states the rate of the finance charge, ex11 pressed as an annual percentage rate;

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

13 be increased after the date on which credit is ex14 tended, if such an increase is authorized under the

15 terms of the extension of credit to which the adver16 tisement relates; and

17 ‘‘(3) includes—

18 ‘‘(A) a referral to—

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

20 may be used by consumers to obtain, in ac21 cordance with section 143(c), the informa22 tion required under subsection (d); or

23 ‘‘(ii) an advertisement that—

24 ‘‘(I) appears in a publication in

25 general circulation in the community
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1 served by the radio station (on which

2 such advertisement is broadcast) dur3 ing the period beginning 7 days before

4 the broadcast and ending 7 days after

5 the broadcast; and

6 ‘‘(II) includes the information re7 quired to be disclosed under sub8 section (d); and

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

10 (A)(ii) applies, the name and date of the publi11 cation.’’.

12 (c) CREDIT PLANS SECURED BY CONSUMER’S PRIN13 CIPAL DWELLING.—Section 147 of the Truth in Lending

14 Act (15 U.S.C. 1665b) is amended—

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

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

17 respectively; and

18 (2) by inserting after subsection (a) the follow19 ing:

20 ‘‘(b) RADIO ADVERTISEMENTS.—In order to provide

21 a practical alternative for complying with the disclosure

22 requirements of subsection (a) at the option of a creditor,

23 an advertisement by radio broadcast to aid, promote, or

24 assist, directly or indirectly, the extension of consumer

25 credit under an open end consumer credit plan under
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1 which extensions of credit are secured by a consumer’s

2 principal dwelling shall be deemed to meet the require3 ments of subsection (a) if the advertisement, clearly and

4 conspicuously—

5 ‘‘(1) contains the information described in para6 graphs (2) and (3) of subsection (a); and

7 ‘‘(2) includes—

8 ‘‘(A) a referral to—

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

10 may be used by consumers to obtain the

11 information required under subsection (a)

12 in accordance with section 143(c); or

13 ‘‘(ii) an advertisement that—

14 ‘‘(I) appears in a publication in

15 general circulation in the community

16 served by the radio station (on which

17 such advertisement is broadcast) dur18 ing the period beginning 7 days before

19 the broadcast and ending 7 days after

20 the broadcast; and

21 ‘‘(II) includes the information re22 quired to be disclosed under sub23 section (a); and
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1 ‘‘(B) in any case to which subparagraph

2 (A)(ii) applies, the name and date of the publi3 cation.’’.

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

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

6 4302(b)) is amended—

7 (1) by striking ‘‘EXCEPTION.—The Board

8 may—’’ and inserting ‘‘EXCEPTION.—

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

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

11 paragraph:

12 ‘‘(2) RADIO ADVERTISEMENTS.—Paragraphs

13 (4), (5), and (6) of subsection (a) shall not apply

14 with respect to an advertisement, announcement, or

15 solicitation (which is otherwise subject to such sub16 section) by radio broadcast.’’.

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

18 in Leasing Act is amended—

19 (1) by redesignating subsection (b) as sub20 section (d); and

21 (2) by inserting after subsection (a) the follow22 ing new subsections:

23 ‘‘(b) RADIO ADVERTISEMENTS.—In order to provide

24 a practical alternative for complying with the disclosure

25 requirements of subsection (a) at the option of a lessor,
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1 an advertisement by radio broadcast to aid, promote, or

2 assist, directly or indirectly, any consumer lease shall be

3 deemed to meet the requirements of subsection (a) if the

4 advertisement, clearly and conspicuously—

5 ‘‘(1) states the information described in para6 graphs (1) and (2) of subsection (a);

7 ‘‘(2) states the total amount of all payments re8 quired under the lease; and

9 ‘‘(3) includes—

10 ‘‘(A) a referral to—

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

12 may be used by consumers to obtain the

13 information required under subsection (a)

14 in accordance with subsection (c); or

15 ‘‘(ii) an advertisement that—

16 ‘‘(I) appears in a publication in

17 general circulation in the community

18 served by the radio station (on which

19 such advertisement is broadcast) dur20 ing the period beginning 7 days before

21 the broadcast and ending 7 days after

22 the broadcast; and

23 ‘‘(II) includes the information re24 quired to be disclosed under sub25 section (a); and
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1 ‘‘(B) in any case to which subparagraph

2 (A)(ii) applies, the name and date of the publi3 cation.

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

5 NUMBER.—

6 ‘‘(1) IN GENERAL.—In the case of an advertise7 ment described in subsection (b) which includes a re8 ferral to a toll-free telephone number in accordance

9 with such subsection, a lessor who offers the

10 consumer lease which such advertisement aids, sup11 ports, or assists shall—

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

13 later than the date on which an advertisement

14 is broadcast which includes a referral to the

15 number; and

16 ‘‘(B) maintain the telephone number at

17 least until the end of the 7-day period begin18 ning on the date of any such broadcast.

19 ‘‘(2) AVAILABILITY OF INFORMATION.—

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

21 in paragraph (1) shall provide the information

22 required under subsection (a) with respect to

23 the consumer lease for which the toll-free tele24 phone line is established to any person who
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1 calls such number in response to an advertise2 ment by radio broadcast.

3 ‘‘(B) FORM OF INFORMATION.—The infor4 mation required to be provided under subpara5 graph (A) may be provided orally or by offering

6 to mail a written copy of such information to

7 such person.’’.

8 Subtitle D—Reports, Studies,

9 Streamlined Regulatory Re10 quirements

11 SEC. 131. STUDY ON CAPITAL STANDARDS AND THEIR IM12 PACT ON THE ECONOMY.

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

14 consultation with the Federal banking agencies, shall con15 duct a study of the effect that the implementation of risk16 based capital standards, including the Basle international

17 capital standards, is having on—

18 (1) the safety and soundness of insured deposi19 tory institutions;

20 (2) the availability of credit, particularly to in21 dividuals and small businesses; and

22 (3) economic growth.

23 (b) REPORT.—

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

25 period beginning on the date of the enactment of
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1 this Act, the Secretary of the Treasury shall submit

2 a report to the Congress on the findings and conclu3 sions of the Secretary with respect to the study con4 ducted under subsection (a).

5 (2) RECOMMENDATIONS.—The report shall con6 tain any recommendations with respect to capital

7 standards that the Secretary of the Treasury may

8 determine to be appropriate.

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

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

11 institution’’ have the meanings given to such terms in sec12 tion 3 of the Federal Deposit Insurance Act.

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

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

15 consultation with the Board of Governors of the Federal

16 Reserve System, the Administrator of the Small Business

17 Administration, the Secretary of Housing and Urban De18 velopment, and the other Federal banking agencies, shall

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

20 to which credit is made available for consumers and small

21 businesses in order to identify procedures which have the

22 effect of—

23 (1) reducing the amount of credit available for

24 such purposes or the number of persons eligible for

25 such credit; and
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1 (2) increasing the level of consumer inconven2 ience, cost, and time delays in connection with the

3 extension of consumer and small business credit

4 without any corresponding benefit with respect to

5 the protection of consumers or small businesses or

6 the safety and soundness of insured depository insti7 tutions.

8 (b) REPORT.—

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

10 period beginning on the date of the enactment of

11 this Act, the Secretary of the Treasury shall submit

12 report to the Congress on the findings and conclu13 sions of the Secretary with respect to the study con14 ducted under subsection (a).

15 (2) RECOMMENDATIONS.—The report shall con16 tain any recommendations for administrative action

17 that the Secretary of the Treasury may determine to

18 be appropriate.

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

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

21 institution’’ have the meanings given to such terms in sec22 tion 3 of the Federal Deposit Insurance Act.
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1 SEC. 133. STUDIES ON THE IMPACT OF THE PAYMENT OF

2 INTEREST ON RESERVES.

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

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

5 of Governors of the Federal Reserve System, in consulta6 tion with the Federal Deposit Insurance Corporation and

7 the National Credit Union Administration, shall conduct

8 a study and report to Congress on—

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

10 of continuing to require insured depository institu11 tions to maintain sterile reserves;

12 (2) the appropriateness of paying a market rate

13 of interest to insured depository institutions on ster14 ile reserves or, in the alternative, providing for pay15 ment of such interest into the appropriate deposit

16 insurance fund;

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

18 interest on sterile reserves has had on insured depos19 itory institutions, including an estimate of the total

20 dollar amount of interest and the potential income

21 lost by insured depository institutions; and

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

23 on sterile reserves has had on the ability of the

24 banking industry to compete with nonbanking pro25 viders of financial services and with foreign banks.
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1 (b) BUDGETARY IMPACT STUDY.—Not later than

2 180 days after the date of enactment of this Act, the Di3 rector of the Office of Management and Budget and the

4 Director of the Congressional Budget Office, in consulta5 tion with the Committees on the Budget of the Senate and

6 the House of Representatives, shall each conduct a study

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

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

9 depository institutions on sterile reserves; and

10 (2) paying such interest into the respective

11 deposit insurance funds.

12 (c) INSURED DEPOSITORY INSTITUTION DEFINED.—

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

14 institution’’—

15 (1) has the meaning given to such term in sec16 tion 3(c) of the Federal Deposit Insurance Act; and

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

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

19 SEC. 134. STREAMLINING OF REGULATORY REQUIRE20 MENTS.

21 (a) REVIEW OF REGULATIONS; REGULATORY UNI22 FORMITY.—During the 2-year period beginning on the

23 date of the enactment of this Act, each Federal banking

24 agency shall, consistent with principles of safety and

25 soundness and the public interest—
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1 (1) conduct a review of the regulations and

2 written policies of that agency to—

3 (A) streamline those regulations and poli4 cies in order to improve efficiency, reduce un5 necessary costs, and eliminate unwarranted con6 straints on credit availability;

7 (B) remove inconsistencies and outmoded

8 and duplicative requirements; and

9 (C) with respect to regulations prescribed

10 pursuant to section 18(o) of the Federal De11 posit Insurance Act, consider the impact that

12 such standards have on the availability of credit

13 for small business, residential, and agricultural

14 purposes, and on low- and moderate-income

15 communities;

16 (2) work jointly with the other Federal banking

17 agencies to make uniform all regulations and guide18 lines implementing common statutory or supervisory

19 policies; and

20 (3) review what information is collected under

21 the fair housing data system, from which institu22 tions the information is collected, how the informa23 tion collected is used, and how that information

24 compares with information collected under the Home

25 Mortgage Disclosure Act of 1975.
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1 (b) REVIEW OF DISCLOSURES.—The Board of Gov2 ernors of the Federal Reserve System, in consultation with

3 the consumer advisory council to such Board, shall—

4 (1) review the regulations and written policies

5 of the Board with respect to disclosures pursuant to

6 the Truth in Lending Act with regard to variable7 rate mortgages in order to simplify the disclosures

8 and make the disclosures more meaningful for con9 sumers; and

10 (2) implement any regulatory changes, if appro11 priate, consistent with applicable law.

12 (c) REPORT TO CONGRESS.—The Federal banking

13 agencies shall submit a joint report to the Congress annu14 ally for 3 years following the date of the enactment of this

15 Act detailing the progress of the agencies in carrying out

16 the requirements of subsection (a).

17 SEC. 135. CALL REPORT SIMPLIFICATION.

18 (a) MODERNIZATION OF CALL REPORT FILING AND

19 DISCLOSURE SYSTEM.—In order to reduce the adminis20 trative requirements pertaining to bank reports of condi21 tion, savings association financial reports, and bank hold22 ing company consolidated financial statements, and to im23 prove the timeliness of such reports and statements, the

24 Federal banking agencies shall—
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1 (1) work jointly to develop a system under

2 which—

3 (A) insured depository institutions and

4 their affiliates may file such reports and state5 ments electronically; and

6 (B) the Federal banking agencies may

7 make such reports and statements available to

8 the public electronically; and

9 (2) not later than 1 year after the date of the

10 enactment of this Act, submit a report to the Con11 gress containing recommendations for legislation

12 that would enhance efficiency for filers and users of

13 such reports and statements.

14 (b) UNIFORM REPORTS AND SIMPLIFICATION OF IN15 STRUCTIONS.—The Federal banking agencies shall, con16 sistent with the principles of safety and soundness, work

17 jointly to—

18 (1) adopt a single form for the filing of core in19 formation required to be submitted under Federal

20 law to all such agencies in the reports and state21 ments referred to in subsection (a);

22 (2) simplify instructions accompanying such re23 ports and statements; and

24 (3) provide an index to the instructions that is

25 adequate to meet the needs of both filers and users.
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1 (c) REVIEW OF CALL REPORT SCHEDULE.—Each

2 Federal banking agency shall—

3 (1) review the information required by sched4 ules supplementing the core information referred to

5 in subsection (b); and

6 (2) eliminate requirements that are not war7 ranted for reasons of safety and soundness or other

8 public purposes.

9 SEC. 136. ADMINISTRATIVE CONSIDERATION OF BURDEN

10 WITH NEW REGULATIONS.

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

12 and administrative compliance requirements for new regu13 lations that impose additional reporting, disclosure, or

14 other requirements on insured depository institutions,

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

16 the Federal Deposit Insurance Act) shall consider, consist17 ent with the principles of safety and soundness and the

18 public interest—

19 (1) any administrative burdens that such regu20 lations would place on depository institutions, in21 cluding small depository institutions, and customers

22 of depository institutions; and

23 (2) the benefits of such regulations.

24 (b) ADEQUATE TRANSITION PERIOD FOR NEW REG25 ULATIONS.—
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1 (1) IN GENERAL.—New regulations and amend2 ments to regulations prescribed by a Federal bank3 ing agency which impose additional reporting, disclo4 sures, or other new requirements on insured deposi5 tory institutions shall take effect on the 1st day of

6 the calendar quarter which begins at or after the

7 end of the 90-day period beginning on the date the

8 regulations are published in final form unless—

9 (A) the agency makes a finding that—

10 (i) an emergency exists which requires

11 the regulation to take effect before the 1st

12 day of such calendar quarter; or

13 (ii) a delay would have a substantial

14 impact upon the safety and soundness of

15 insured depository institutions;

16 (B) the regulation is issued by the Board

17 of Governors of the Federal Reserve System in

18 connection with the implementation of monetary

19 policy; or

20 (C) the regulation is required to take effect

21 on a date other than the date determined under

22 this paragraph pursuant to any other Act of

23 Congress.

24 (2) EARLY COMPLIANCE.—Any person who is

25 subject to a regulation described in paragraph (1)
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1 may comply with the regulation before the effective

2 date of the regulation.

3 SEC. 137. ELIMINATION OF DUPLICATIVE FILINGS.

4 The Federal banking agencies (as defined in section

5 3(z) of the Federal Deposit Insurance Act) shall work

6 jointly—

7 (1) to eliminate, to the extent practicable, du8 plicative or otherwise unnecessary requests for infor9 mation in connection with applications or notices to

10 the agencies; and

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

12 inconsistent publication and public notice require13 ments.

14 SEC. 138. RECOURSE AGREEMENTS.

15 The Federal banking agencies (as defined in section

16 3(z) of the Federal Deposit Insurance Act) shall jointly—

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

18 recourse by insured depository institutions are treat19 ed under capital standards and other accounting

20 principles applicable with respect to such insured de21 pository institutions; and

22 (2) revise any such standard or principle in ac23 cordance with the findings and conclusions of the

24 agencies pursuant to such review before the end of

25 the 1-year period beginning on the date of the enact-
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1 ment of this Act, except the revision may not be less

2 stringent than generally accepted accounting prin3 ciples.

4 SEC. 139. ANTITRUST REPORTS IN CONNECTION WITH

5 MERGER TRANSACTIONS.

6 (a) BANKING AGENCY REPORTS.—Section 18(c)(4)

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

8 1828(c)(4)) is amended by adding at the end the following

9 new sentence: ‘‘Notwithstanding the preceding sentence,

10 a banking agency shall not be required to file a report

11 requested by the responsible agency under this paragraph

12 if the other banking agency advises the responsible agency

13 by the applicable date under the preceding sentence that

14 the report is not necessary because none of the effects de15 scribed in paragraph (5) is likely to occur as a result of

16 the transaction.’’.

17 (b) LIMITATION ON DELAY OF CONSUMMATION OF

18 TRANSACTION.—The last sentence of section 18(c)(6) of

19 the Federal Deposit Insurance Act (12 U.S.C. 1828(c)(6))

20 is amended by inserting before the period at the end the

21 following: ‘‘, unless the agency is advised by the other 2

22 banking agencies before such date that the reports re23 quired under paragraph (4) on the anticompetitive effects

24 of the transaction are not necessary because none of the
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1 effects described in paragraph (5) is likely to occur as a

2 result of the transaction’’.

3 SEC. 140. BANKERS’ BANKS.

4 (a) OWNERSHIP BY DEPOSITORY INSTITUTION

5 HOLDING COMPANIES.—

6 (1) PROVISION RELATING TO NATIONAL BANK

7 INVESTMENTS.—The 5th proviso of the 7th undesig8 nated paragraph of section 5136 of the Revised

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

10 amended by inserting ‘‘or by depository institution

11 holding companies (as defined in section 3(w) of the

12 Federal Deposit Insurance Act)’’ after ‘‘is owned ex13 clusively (except to the extent directors’ qualifying

14 shares are required by law) by depository institu15 tions’’.

16 (2) PROVISION RELATING TO NATIONAL BANK

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

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

19 is amended by inserting ‘‘or by depository institution

20 holding companies (as defined in section 3(w) of the

21 Federal Deposit Insurance Act)’’ after ‘‘is owned ex22 clusively (except to the extent directors’ qualifying

23 shares are required by law) by other depository insti24 tutions’’.
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1 (b) OWNERSHIP BY SAVINGS ASSOCIATIONS.—Sec2 tion 5(c)(4) of the Home Owners’ Loan Act (12 U.S.C.

3 1464(c)(4)) is amended by adding at the end the following

4 new subparagraph:

5 ‘‘(E) BANKERS’ BANKS.—A Federal sav6 ings association may purchase, for the associa7 tion’s own account, shares of stock of a bank8 ers’ bank or holding company described in the

9 5th proviso of the 7th undesignated paragraph

10 of section 5136 of the Revised Statutes of the

11 United States or section 5169(b) of such Re12 vised Statutes on the same terms and condi13 tions a national bank may purchase such

14 shares.’’.

15 (c) TECHNICAL AND CONFORMING AMENDMENTS.—

16 (1) BANK HOLDING COMPANY ACT.—Section

17 3(e) of the Bank Holding Company Act of 1956 (12

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

19 sentence.

20 (2) DEPOSITORY INSTITUTION MANAGEMENT

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

22 of the Depository Institution Management Interlocks

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

24 ‘‘the voting securities’’ the 1st place such term ap25 pears and all that follows through ‘‘the surplus of
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1 such other bank; or’’ and inserting ‘‘which is a

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

3 7th undesignated paragraph of section 5136 of the

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

5 (d) SERVICES.—

6 (1) PROVISION RELATING TO NATIONAL BANK

7 INVESTMENTS.—The 5th proviso of the 7th undesig8 nated paragraph of section 5136 of the Revised

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

10 amended by striking ‘‘engaged exclusively in provid11 ing services for other depository institutions and

12 their officers, directors and employees’’ and inserting

13 ‘‘engaged exclusively in providing services to or for

14 other depository institutions and their officers, direc15 tors and employees and providing correspondent

16 banking services at the request of other depository

17 institutions (any such bank or company is commonly

18 referred to as a ‘bankers’ bank’)’’.

19 (2) PROVISION RELATING TO NATIONAL BANK

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

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

22 is amended by striking ‘‘engage exclusively in pro23 viding services for other depository institutions and

24 their officers, directors and employees’’ and inserting

25 ‘‘engage exclusively in providing services to or for
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1 other depository institutions and their officers, direc2 tors and employees and providing correspondent

3 banking services at the request of other depository

4 institutions (any such association is commonly re5 ferred to as a ‘bankers’ bank’)’’.

6 SEC. 141. DUE PROCESS PROTECTIONS RELATING TO AT7 TACHMENT OF ASSETS.

8 Section 8 of the Federal Deposit Insurance Act (12

9 U.S.C. 1818) is amended—

10 (1) by striking subsection (i)(4)(B) and insert11 ing the following new subparagraph:

12 ‘‘(B) STANDARD.—

13 ‘‘(i) SHOWING.—Rule 65 of the Fed14 eral Rules of Civil Procedure shall apply

15 with respect to any proceeding under sub16 paragraph (A) without regard to the re17 quirement of such rule that the applicant

18 show that the injury, loss, or damage is ir19 reparable and immediate.

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

21 case of any proceeding in a State court,

22 the court determines that rules of civil pro23 cedure available under the laws of such

24 State provide substantially similar protec25 tions to such party’s right to due process
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1 as Rule 65 (as modified with respect to

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

3 sought under subparagraph (A) may be re4 quested under the laws of such State.’’;

5 and

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

7 new paragraph:

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

9 authority under this subsection or subsection (c) to

10 prohibit any institution-affiliated party from with11 drawing, transferring, removing, dissipating, or dis12 posing of any funds, assets, or other property may

13 be exercised unless the agency meets the standards

14 of Rule 65 of the Federal Rules of Civil Procedure

15 without regard to the requirement of such rule that

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

17 is irreparable and immediate.’’.

18 SEC. 142. TIME LIMIT ON AGENCY CONSIDERATION OF

19 COMPLETED APPLICATIONS.

20 (a) IN GENERAL.—Each Federal banking agency (as

21 defined in section 3(z) of the Federal Deposit Insurance

22 Act) shall take final action on any application to the agen23 cy before the end of the 1-year period beginning on the

24 date a completed application is received by the agency.
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1 (b) WAIVER BY APPLICANT AUTHORIZED.—Any per2 son submitting an application to a Federal banking agency

3 may waive the applicability of subsection (a) with respect

4 to such application at any time.

5 SEC. 143. TIMELY COMPLETION OF CRA REVIEW.

6 The comprehensive regulatory review of the Commu7 nity Reinvestment Act of 1977 that, as of the date of the

8 enactment of this Act, is being conducted by the Federal

9 banking agencies, shall be completed before the end of the

10 6-month period beginning on such date of enactment.

11 SEC. 144. REVISIONS OF STANDARDS.

12 Section 305(b)(1) of the Federal Deposit Insurance

13 Corporation Improvement Act of 1991 (12 U.S.C. 1828

14 note) is amended—

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

17 (2) by striking the period at the end of sub18 paragraph (B) and inserting ‘‘; and’’; and

19 (3) by adding at the end the following new sub20 paragraph:

21 ‘‘(C) ensure that such revisions take into

22 account the size and activities of the institu23 tions and do not cause undue reporting bur24 dens.’’.
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1 SEC. 145. FEASIBILITY STUDY OF DATA BANK.

2 (a) IN GENERAL.—Not later than 18 months after

3 the date of the enactment of this Act, the Financial Insti4 tutions Examination Council shall study the feasibility, in5 cluding the costs and benefits to insured depository insti6 tutions, of establishing and maintaining a data bank for

7 reports submitted by any depository institution to a Fed8 eral banking agency and report the results of such study

9 to the Congress.

10 (b) ADDITIONAL FACTORS.—The study under sub11 section (a) shall consider the feasibility of—

12 (1) permitting depository institutions to file re13 ports directly with the data bank; and

14 (2) permitting Federal banking agencies, State

15 bank supervisors, and the public to obtain access to

16 any appropriate report on file with the data bank

17 which such agency or supervisor or the public is oth18 erwise authorized to receive.

19 TITLE II—COMMUNITY DEVEL20 OPMENT FINANCIAL INSTITU21 TIONS

22 SEC. 201. SHORT TITLE; TABLE OF CONTENTS.

23 (a) SHORT TITLE.—This title may be cited as the

24 ‘‘Community Development Banking and Financial Institu25 tions Act of 1993’’.

26 (b) TABLE OF CONTENTS.—
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TITLE II—COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS

Sec. 201. Short title; table of contents.

Sec. 202. Findings and purpose.

Sec. 203. Definitions.

Sec. 204. Establishment of National Fund for Community Development Banking.

Sec. 205. Applications for assistance.

Sec. 206. Community development partnerships.

Sec. 207. Selection of institutions.

Sec. 208. Assistance provided by the Fund.

Sec. 209. Capitalization assistance to enhance liquidity.

Sec. 210. Encouragement of private entities.

Sec. 211. Clearinghouse function.

Sec. 212. Training assistance for organizing and operating community development financial institutions.

Sec. 213. Recordkeeping, reports, and audits.

Sec. 214. Investment of receipts and proceeds.

Sec. 215. Enforcement provisions.

Sec. 216. Authorization of appropriations.

Sec. 217. Conforming amendment.

Sec. 218. Appointment of Community Enterprise Assessment Credit Board.

Sec. 219. Community development credit union assistance.

Sec. 220. Insured community development financial institution access to Federal home loan bank advances.

Sec. 221. Community investment program incentives.

Sec. 222. 30 percent lending cap increased.

1 SEC. 202. FINDINGS AND PURPOSE.

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

3 (1) many of the Nation’s urban and rural com4 munities and Indian reservations face critical social

5 and economic problems arising in part from the lack

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

7 lack of employment and other opportunities;

8 (2) the restoration and maintenance of the

9 economies of these communities will require coordi10 nated development strategies, intensive supportive

11 services, and increased access to capital and credit

12 for development activities, including investment in

13 businesses, housing, commercial real estate, human
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1 development, and other activities that promote the

2 long-term economic and social viability of the com3 munity;

4 (3) in many urban and rural communities, low5 and moderate-income neighborhoods, and Indian res6 ervations, there is a shortage of capital and credit

7 for business and affordable housing;

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

9 unleash the untapped entrepreneurial energy of

10 America’s poorest communities and to empower indi11 viduals and communities to become self-sufficient;

12 and

13 (5) community development financial institu14 tions have proven their ability to identify and re15 spond to community needs for capital, credit, and

16 development services in the absence of, or as a com17 plement to, services provided by other lenders.

18 (b) PURPOSES.—The purposes of this title are as fol19 lows:

20 (1) To create a Community Development Bank21 ing and Financial Institutions Fund that will sup22 port a program for making investments in and pro23 viding assistance to community development finan24 cial institutions, including enhancing the liquidity of

25 community development financial institutions.
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1 (2) To enable the Community Development

2 Banking and Financial Institutions Fund to—

3 (A) provide financial and technical assist4 ance, including training, to community develop5 ment financial institutions;

6 (B) serve as a national information clear7 inghouse; and

8 (C) be an institutional voice for community

9 development.

10 (3) To provide for the establishment of, or qual11 ification of existing financial institutions as, commu12 nity development financial institutions that, with the

13 support of the Community Development Banking

14 and Financial Institutions Fund, will provide capital,

15 credit, and development services to targeted invest16 ment areas or populations, and will promote eco17 nomic revitalization and community development.

18 SEC. 203. DEFINITIONS.

19 For purposes of this title—

20 (1) AFFILIATE.—The term ‘affiliate’ has the

21 meaning given to such term in section 2(k) of the

22 Bank Holding Company Act of 1956.

23 (2) APPROPRIATE FEDERAL BANKING AGEN24 CY.—The term ‘‘appropriate Federal banking agen-
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1 cy’’ has the meaning given to such term in section

2 3(q) of the Federal Deposit Insurance Act.

3 (3) COMMUNITY DEVELOPMENT FINANCIAL IN4 STITUTION.—

5 (A) IN GENERAL.—The term ‘‘community

6 development financial institution’’ means any

7 bank, savings association, depository institution

8 holding company (subject to section 205(d)),

9 credit union, microenterprise loan fund, com10 munity development corporation, community de11 velopment revolving loan fund, minority-owned

12 or other insured depository institution, or

13 nondepository organization that—

14 (i) has as the institution’s primary

15 mission the promotion of community devel16 opment through the provision of capital,

17 credit, or development services, directly,

18 through an affiliate, or through a commu19 nity development partner, in the institu20 tion’s investment areas or to targeted pop21 ulations; and

22 (ii) encourages, through representa23 tion on the institution’s governing board or

24 otherwise, the input of residents in the in25 vestment areas or the targeted populations.
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1 (B) GOVERNMENT AGENCIES EX2 CLUDED.—The term ‘‘community development

3 financial institution’’ does not include any agen4 cy or instrumentality of the United States or

5 any agency or instrumentality of any State or

6 of any political subdivision of any State.

7 (4) COMMUNITY DEVELOPMENT PARTNER.—

8 The term ‘‘community development partner’’ means

9 a person (other than an individual) that provides

10 loans, equity investments, or development services,

11 including a depository institution holding company,

12 an insured depository institution, an insured credit

13 union, a nonprofit organization, a State or local gov14 ernment agency, and an investment company au15 thorized to operate pursuant to the Small Business

16 Investment Act of 1958.

17 (5) COMMUNITY DEVELOPMENT PARTNER18 SHIP.—The term ‘‘community development partner19 ship’’ means an agreement between a community de20 velopment financial institution and a community de21 velopment partner to provide development services

22 and loans or equity investments to an investment

23 area or targeted population.

24 (6) DEPOSITORY INSTITUTION HOLDING COM25 PANY.—The term ‘‘depository institution holding
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1 company’’ has the meaning given to such term in

2 section 3(w) of the Federal Deposit Insurance Act.

3 (7) DEVELOPMENT SERVICES.—The term ‘‘de4 velopment services’’ means activities conducted by a

5 community development financial institution or com6 munity development partner that promote commu7 nity development by developing, supporting, and

8 strengthening the lending, investment, and capacity9 building activities undertaken by institutions, includ10 ing—

11 (A) business planning services;

12 (B) financial and credit counseling serv13 ices;

14 (C) marketing and management assistance;

15 and

16 (D) administrative activities associated

17 with lending or investment.

18 (8) INDIAN RESERVATION.—The term ‘‘Indian

19 reservation’’ includes public domain Indian allot20 ments, former Indian reservations in the State of

21 Oklahoma, land held by incorporated Native groups,

22 regional corporations and village corporations (as de23 fined in or established pursuant to the Alaska Na24 tive Claims Settlement Act), and dependent Indian

25 communities within the borders of the United
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1 States, whether within the original or subsequently

2 acquired territory of the United States and whether

3 within or without the borders of a State.

4 (9) INDIAN TRIBE.—The term ‘‘Indian tribe’’

5 means any Indian tribe, band, pueblo, nation, or

6 other organized group or community, including any

7 Alaska Native village or regional or village corpora8 tion as defined in or established pursuant to the

9 Alaska Native Claims Settlement Act, which is rec10 ognized as eligible for the special programs and serv11 ices provided by the United States to Indians be12 cause of their status as Indians.

13 (10) INSURED COMMUNITY DEVELOPMENT FI14 NANCIAL INSTITUTION.—The term ‘‘insured commu15 nity development financial institution’’ means any

16 community development financial institution that is

17 an insured depository institution or an insured credit

18 union.

19 (11) INSURED CREDIT UNION.—The term ‘‘in20 sured credit union’’ has the meaning given to such

21 term in section 101(7) of the Federal Credit Union

22 Act.

23 (12) INSURED DEPOSITORY INSTITUTION.—The

24 term ‘‘insured depository institution’’ has the mean-
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1 ing given to such term in section 3(c) of the Federal

2 Deposit Insurance Act.

3 (13) INVESTMENT AREA.—The term ‘‘invest4 ment area’’ means an identifiable community, in5 cluding an Indian reservation, or identifiable com6 munities that—

7 (A) meet objective criteria of distress, in8 cluding the number of low-income families, the

9 extent of poverty, the extent of unemployment,

10 the extend of unmet credit needs, the degree of

11 availability of basic financial services, the de12 gree of limited access to capital and credit pro13 vided by existing financial institutions, and

14 other factors that the Fund determines to be

15 appropriate; or

16 (B) are located in an empowerment zone

17 or enterprise community designated under sec18 tion 1391 of the Internal Revenue Code of

19 1986.

20 (14) QUALIFIED COMMUNITY DEVELOPMENT

21 FINANCIAL INSTITUTION.—The term ‘‘qualified com22 munity development financial institution’’ means a

23 community development financial institution that

24 meets the requirements of paragraphs (2) through

25 (8) of section 205(b).
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1 (15) STATE.—The term ‘‘State’’ has the mean2 ing given to such term in section 3 of the Federal

3 Deposit Insurance Act.

4 (16) SUBSIDIARY.—The term ‘‘subsidiary’’ has

5 the meaning given to such term in section 3 of the

6 Federal Deposit Insurance Act, except that a com7 munity development institution that is a corporation

8 shall not be considered to be a subsidiary of any in9 sured depository institution or bank holding com10 pany that controls less than 25 percent of the voting

11 shares of the corporation.

12 (17) TARGETED POPULATION.—The term ‘‘tar13 geted population’’ means an identifiable group or

14 identifiable groups of low-income or disadvantaged

15 persons that are underserved by existing financial

16 institutions, including an Indian tribe.

17 SEC. 204. ESTABLISHMENT OF NATIONAL FUND FOR COM18 MUNITY DEVELOPMENT BANKING.

19 (a) ESTABLISHMENT.—

20 (1) IN GENERAL.—There is hereby established

21 a corporation to be known as the Community Devel22 opment Banking and Financial Institutions Fund

23 (hereafter in this title referred to as the ‘‘Fund’’)

24 that shall have the powers and responsibilities speci25 fied by this Act.
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1 (2) SUCCESSION.—The Fund shall have succes2 sion until dissolved.

3 (3) RESERVATION OF POWER OF THE CON4 GRESS.—The charter of the Fund may be revised,

5 amended, or modified by Congress at any time.

6 (4) OFFICES.—The offices of the Fund shall be

7 in Washington, D.C.

8 (b) BOARD OF DIRECTORS.—

9 (1) IN GENERAL.—The powers and manage10 ment of the Fund shall be vested in a Board of Di11 rectors (hereafter referred to in this title as the

12 ‘‘Board’’), which shall have 15 members.

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

14 shall consist of the following:

15 (A) The Secretary of Agriculture.

16 (B) The Secretary of Commerce.

17 (C) The Secretary of Housing and Urban

18 Development.

19 (D) The Secretary of the Interior.

20 (E) The Secretary of the Treasury.

21 (F) The Administrator of the Small Busi22 ness Administration.

23 (G) 9 private citizens, appointed by the

24 President, who shall be selected, to the maxi25 mum extent practicable, to provide for national
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1 geographic representation and racial, ethnic,

2 and gender diversity, and shall consist of the

3 following individuals:

4 (i) 2 individuals who are officers of

5 existing community development financial

6 institutions.

7 (ii) 2 individuals who are officers of

8 insured depository institutions (as such

9 term is defined in section 3 of the Federal

10 Deposit Insurance Act).

11 (iii) 2 individuals who are officers of

12 national consumer or public interest orga13 nizations.

14 (iv) 2 individuals who have expertise

15 in community development.

16 (v) 1 individual who has personal ex17 perience and specialized expertise in the

18 unique lending and community develop19 ment issues confronted by Indian tribes on

20 Indian reservations.

21 (3) CHAIRPERSON.—The President shall ap22 point from among the members of the Board speci23 fied in paragraph (2)(G) a chairperson of the Board,

24 who shall serve at the pleasure of the President for

25 a term of 2 years.
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1 (4) VICE-CHAIRPERSON.—The President shall

2 appoint from among the members specified in para3 graph (2) a vice-chairperson who will serve as chair4 person in the absence, disability, or recusal of the

5 chairperson. The vice-chairperson shall serve at the

6 pleasure of the President for a term of 2 years.

7 (5) TERMS OF APPOINTED MEMBERS.—

8 (A) IN GENERAL.—Each member ap9 pointed pursuant to paragraph (2)(G) shall

10 serve at the pleasure of the President for a

11 term of 4 years, except as provided in subpara12 graph (C).

13 (B) VACANCIES.—Any member appointed

14 to fill a vacancy occurring before the expiration

15 of the term for which the previous member was

16 appointed shall be appointed for the remainder

17 of such term. Appointed members may continue

18 to serve following the expiration of their terms

19 until a successor is appointed and qualified.

20 (C) TERMS.—The terms of the initial ap21 pointed members shall be for 4 years and shall

22 begin on the date each member is appointed,

23 except that 2 of the members initially appointed

24 pursuant to paragraph (2)(G) shall be des-
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1 ignated to serve at the pleasure of the President

2 for 5 years.

3 (6) ACTING OFFICIALS.—In the event of a va4 cancy or absence of the individual in any of the of5 fices described in subparagraphs (A) through (F) of

6 paragraph (2), the official acting in that office shall

7 be a member of the Board.

8 (7) AUTHORITY TO DELEGATE.—Each member

9 of the Board specified in subparagraphs (A) through

10 (F) of paragraph (2) may designate another official

11 who has been appointed by the President with the

12 advice and consent of the Senate within the same

13 agency to serve as a member in his or her stead.

14 (8) COMPENSATION.—

15 (A) GOVERNMENT OFFICERS OR EMPLOY16 EES.—Members of the Board who are otherwise

17 officers or employees of the United States shall

18 serve without additional compensation for their

19 duties as members, but shall be reimbursed by

20 the Fund for travel, per diem, and other nec21 essary expenses incurred in the performance of

22 their duties, in accordance with sections 5702

23 and 5703 of title 5, United States Code.

24 (B) APPOINTED MEMBERS.—The ap25 pointed members of the Board shall be entitled
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1 to receive compensation at the daily equivalent

2 of the rate for a position under Level IV of the

3 Executive Schedule under section 5315 of title

4 5, United States Code, and shall be reimbursed

5 by the Fund for travel, per diem, and other

6 necessary expenses incurred in the performance

7 of their duties, in accordance with sections

8 5702 and 5703 of title 5, United States Code.

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

10 at least quarterly. Special meetings of the Board

11 may be called by the Chairperson or on the written

12 request of 3 members of the Board. A majority of

13 the members of the Board in office shall constitute

14 a quorum.

15 (c) OFFICERS AND EMPLOYEES.—

16 (1) CHIEF EXECUTIVE OFFICER.—The Board

17 shall appoint a chief executive officer who shall be

18 responsible for the management of the Fund and

19 such other duties deemed appropriate by the Board.

20 (2) CHIEF FINANCIAL OFFICER.—The Board

21 shall appoint a chief financial officer who shall over22 see all of the financial management activities of the

23 Fund.

24 (3) INSPECTOR GENERAL.—The Board shall

25 also appoint an inspector general.
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1 (4) OTHER OFFICERS AND EMPLOYEES.—The

2 Board may appoint such other officers and employ3 ees of the Fund as the Board determines to be nec4 essary or appropriate.

5 (5) APPOINTMENT PROVISION AND RATES OF

6 PAY.—The chief executive officer, chief financial of7 ficer, and up to 3 other officers of the Fund may

8 be—

9 (A) appointed without regard to the provi10 sions of title 5 of the United States Code, gov11 erning appointments in the Federal service; and

12 (B) subject to paragraph (6), compensated

13 without regard to chapter 51 and subchapter

14 III of chapter 53 of title 5 of the United States

15 Code,

16 (6) MAXIMUM RATES OF PAY.—The rate of pay

17 for the chief executive officer shall not exceed the

18 rate for a position under Level II of the Executive

19 Schedule under section 5313 of title 5 of the United

20 States Code and the rate of pay for the remaining

21 4 officers shall not exceed the rate for a position

22 under Level IV of the Executive Schedule under sec23 tion 5315 of title 5 of the United States Code.

24 (d) GENERAL POWERS.—In carrying out the Fund’s

25 powers and duties, the Fund—
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1 (1) shall have all necessary and proper powers

2 to carry out the Fund’s authority under this title;

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

4 which shall be judicially noticed;

5 (3) may sue and be sued in the Fund’s cor6 porate name and complain and defend in any court

7 of competent jurisdiction;

8 (4) may adopt, amend, and repeal bylaws and

9 regulations governing the manner in which the

10 Fund’s business may be conducted and shall have

11 power to make such rules and regulations as may be

12 necessary or appropriate to implement the provisions

13 of this title;

14 (5) may enter into and perform such agree15 ments, contracts, and transactions as may be

16 deemed necessary or appropriate to the conduct of

17 activities authorized under this title;

18 (6) may determine the character of and neces19 sity for its expenditures and the manner in which

20 they shall be incurred, allowed, and paid;

21 (7) may utilize or employ the services of person22 nel of any agency or instrumentality of the United

23 States with the consent of the agency or instrumen24 tality concerned on a reimbursable or

25 nonreimbursable basis; and
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1 (8) may execute all instruments necessary or

2 appropriate in the exercise of any of the Fund’s

3 functions under this title and may delegate to the

4 members of the Board, to the chief executive officer,

5 or the officers of the Fund such of the Fund’s pow6 ers and responsibilities as it deems necessary or ap7 propriate for the administration of the Fund.

8 (e) WHOLLY-OWNED GOVERNMENT CORPORA9 TION.—

10 (1) IN GENERAL.—The Fund shall be a wholly11 owned Government corporation in the executive

12 branch and shall be treated in all respects as an

13 agency of the United States, except to the extent

14 this title provides otherwise.

15 (2) TECHNICAL AND CONFORMING AMEND16 MENT.—Section 9101(3) of title 31, United States

17 Code, is amended—

18 (A) by redesignating paragraphs (B)

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

20 respectively; and

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

22 following:

23 ‘‘(B) the Community Development Bank24 ing and Financial Institutions Fund.’’.
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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 A community development financial institution that re13 ceives assistance pursuant to this title shall not be deemed

14 to be an agency, department, or instrumentality of the

15 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.—

21 (1) IN GENERAL.—An application for assistance

22 under this title shall be submitted by an applicant

23 in such form and in accordance with such proce24 dures as the Board shall establish.
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1 (2) REGULATIONS.—The Board shall publish

2 regulations with respect to application requirements

3 and procedures not later than 210 days after enact4 ment of this title.

5 (b) MINIMUM REQUIREMENTS.—Except as provided

6 in section 209, the Board shall require that the applica7 tion—

8 (1) demonstrate to the satisfaction of the Board

9 that the applicant is, or upon the receipt of a char10 ter will be, a community development financial insti11 tution;

12 (2) demonstrate that the applicant will serve—

13 (A) a targeted population; or

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

15 (3) in the case of an applicant that has pre16 viously received assistance under this title, dem17 onstrate that the applicant—

18 (A) has successfully carried out its respon19 sibilities under this title;

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

21 entity that will not be dependent upon assist22 ance from the Fund for continued viability; and

23 (C) will expand its operations into a new

24 investment area, offer new services, or will in25 crease the volume of its current business;
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1 (4) in the case of a community development fi2 nancial institution with existing operations, dem3 onstrate a record of success of serving investment

4 areas or targeted populations;

5 (5) include a detailed and comprehensive strate6 gic plan for the organization that contains—

7 (A) a business plan of at least 5 years that

8 demonstrates the applicant is properly managed

9 and has the capacity to form and operate a

10 community development financial institution

11 that is, or will become, an entity that will not

12 be dependent upon assistance from the Fund

13 for continued viability;

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

15 will have, in its charter or other governing doc16 uments a primary commitment to community

17 development, or other evidence of a prior his18 tory and a continuing affirmation of a primary

19 commitment to community development;

20 (C) an analysis of the needs of the invest21 ment areas or targeted populations and a strat22 egy for how the applicant will attempt to meet

23 those needs;

24 (D) a plan to coordinate use of assistance

25 from the Fund with existing assistance pro-
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1 grams of the Federal Government, State and

2 local governments, Indian tribes, and govern3 ment-sponsored enterprises and with private

4 sector financial services;

5 (E) a statement that the proposed activi6 ties of the applicant are consistent with existing

7 economic, community, and housing development

8 plans adopted by or applicable to the invest9 ment areas;

10 (F) a description of how the applicant will

11 affiliate, network, or otherwise coordinate with

12 a full range of community organizations and fi13 nancial institutions which provide, or will pro14 vide, capital, credit, or secondary markets in

15 order to assure that banking, economic develop16 ment, investment, affordable housing, and other

17 related services will be available within the in18 vestment areas or to targeted populations; and

19 (G) such other information as the Board

20 deems appropriate for inclusion in the strategic

21 plan;

22 (6) demonstrate that the applicant will carry on

23 its activities consistent with the purposes of this title

24 within an investment area or with respect to a tar25 geted population;
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1 (7) include a detailed and specific statement of

2 applicant’s plans and likely sources of funds to

3 match the amount of assistance from the Fund with

4 funds from private sources in accordance with the

5 requirements of section 208(e); and

6 (8) include such other information as the Board

7 may require.

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

9 Fund shall provide for an outreach program to identify

10 and provide information to potential applicants and to in11 crease the capacity of potential applicants to meet the ap12 plication and other requirements of this title.

13 (d) CONDITIONS FOR QUALIFICATION OF HOLDING

14 COMPANIES.—

15 (1) CONSOLIDATED TREATMENT.—A depository

16 institution holding company may qualify as a com17 munity development financial institution only if the

18 holding company and the holding company’s subsidi19 aries collectively satisfy the requirements of clauses

20 (i) and (ii) of subparagraph (A) of section

21 203(3)(A).

22 (2) EXCLUSION OF SUBSIDIARY FOR FAILURE

23 TO MEET CONSOLIDATED TREATMENT RULE.—No

24 subsidiary of a depository institution holding com25 pany may qualify as a community development fi-
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1 nancial institution if the holding company and the

2 company’s subsidiaries collectively do not meet the

3 requirements of clauses (i) and (ii) of subparagraph

4 (A) of section 203(3)(A).

5 SEC. 206. COMMUNITY DEVELOPMENT PARTNERSHIPS.

6 (a) APPLICATION.—An application for assistance

7 may be filed jointly by a community development financial

8 institution and a community development partner to carry

9 out a community development partnership.

10 (b) APPLICATION REQUIREMENTS.—The Fund shall

11 require a community development partnership application

12 to—

13 (1) meet the minimum requirements established

14 for community development financial institutions

15 under section 205(b), except that the criteria speci16 fied in paragraph (1) and subparagraphs (A) and

17 (B) of paragraph (5) of such section shall not apply

18 to the community development partner;

19 (2) describe how each coapplicant will partici20 pate in carrying out the community development

21 partnership and how the partnership will enhance

22 activities serving the investment area or targeted

23 population; and

24 (3) demonstrate that the community develop25 ment partnership activities are consistent with the
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1 strategic plan submitted by the community develop2 ment financial institution coapplicant.

3 (c) SELECTION CRITERIA.—The Fund shall consider

4 a community development partnership application based

5 on the selection criteria set out in section 207, except that

6 the criterion specified in subparagraphs (A) and (L) of

7 subsection (a)(2) of such section shall not apply to the

8 community development partner.

9 (d) LIMITATION ON DISTRIBUTION OF ASSIST10 ANCE.—Assistance provided upon approval of an applica11 tion under this section shall be distributed only to the

12 community development financial institution coapplicant,

13 and shall not be used to fund any activities carried out

14 directly by the community development partner or an affil15 iate of the partner.

16 (e) PERFORMANCE GOALS.—The Fund shall nego17 tiate performance goals for each community development

18 partnership in the manner provided in section

19 208(f)(3)(B). Such performance goals shall be incor20 porated into the performance goals of the community de21 velopment financial institution coapplicant.

22 (f) OTHER REQUIREMENTS AND LIMITATIONS.—All

23 other requirements and limitations imposed by this sub24 title on a community development financial institution as25 sisted under this subtitle shall apply (in the manner that
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1 the Fund determines to be appropriate) to assistance pro2 vided to carry out community development partnerships.

3 The Fund may establish additional guidelines and restric4 tions on the use of Federal funds to carry out community

5 development partnerships.

6 SEC. 207. SELECTION OF INSTITUTIONS.

7 (a) SELECTION CRITERIA.—

8 (1) IN GENERAL.—Except as provided in sec9 tion 209, the Board shall, in the Board’s discretion,

10 select applications that meet the requirements of

11 section 205 and award assistance from the Fund in

12 accordance with section 208.

13 (2) FACTORS TO BE CONSIDERED.—In selecting

14 applications, the Board shall consider applications

15 based on the following factors and such other factors

16 as the Board may determine to be appropriate:

17 (A) The likelihood of success of the appli18 cant in forming and operating a community de19 velopment financial institution.

20 (B) The range and comprehensiveness of

21 the capital, credit, and development services to

22 be provided by the applicant.

23 (C) The extent of the need, as measured

24 by objective criteria of distress, within the in-
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1 vestment areas or targeted populations for the

2 types of activities proposed by the applicant.

3 (D) The likelihood that the proposed ac4 tivities will benefit a significant portion of the

5 investment areas or targeted populations or, in

6 the case of a community development financial

7 institution with existing operations, evidence of

8 a record of success in serving investment areas

9 or targeted populations.

10 (E) The extent to which the applicant will

11 concentrate its activities on serving low and

12 very low-income families.

13 (F) The evidence of the extent of a broad

14 cross-section of support from the investment

15 areas or targeted populations.

16 (G) The experience and background of the

17 proposed management team.

18 (H) The amount of legally enforceable

19 commitments available at the time of applica20 tion to meet or exceed the matching require21 ments under section 208(e) and the strength of

22 the plan for raising the balance of the match.

23 (I) In the case of applicants that have pre24 viously received assistance pursuant to this

25 title, the extent to which they have met or ex-
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1 ceeded the performance goals established in

2 connection with such assistance.

3 (J) The extent to which the proposed ac4 tivities will expand the employment base within

5 the investment areas or the targeted popu6 lations.

7 (K) The extent to which the applicant is,

8 or will be, community-owned or community-gov9 erned.

10 (L) Whether the applicant is, or will be11 come, an insured community development fi12 nancial institution.

13 (M) Whether the applicant is, or will be lo14 cated, in an empowerment zone or enterprise

15 community designated under section 1391 of

16 the Internal Revenue Code of 1986 or a rural

17 or urban area which is not an empowerment

18 zone or enterprise community and which has a

19 median income of 80 percent or less of the na20 tional median income.

21 (N) In the case of an institution that is

22 not an insured community development finan23 cial institution, the extent to which the institu24 tion has or will have the ability to increase its

25 resources through affiliation with a secondary
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1 market, insured depository institution, or other

2 financial intermediary in order to multiply the

3 amount of capital or credit available for com4 munity development.

5 (O) In the case of an insured depository

6 institution or insured credit union applicant,

7 whether the institution—

8 (i) has or will have a substantial affili9 ation with an entity or network of entities

10 that are community development financial

11 institutions; and

12 (ii) has a comprehensive plan for pro13 viding meaningful financial assistance to

14 such an entity or network of entities.

15 (b) GEOGRAPHIC DIVERSITY.—

16 (1) IN GENERAL.—In addition to the above, in

17 making its selections the Board shall seek to fund

18 a geographically diverse group of applicants, which

19 shall include applicants from nonmetropolitan and

20 rural areas and small cities.

21 (2) GOAL FOR FUNDING.—The Board should

22 seek to provide funding for applicants which are

23 serving nonmetropolitan and rural areas and small

24 cities with no less than one quarter of the funds

25 available to the Board in any year.
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1 (c) PUBLICATION REQUIREMENT.—The Board shall

2 publish regulations with respect to its selection criteria not

3 later than 210 days after the date of the enactment of

4 this title.

5 SEC. 208. ASSISTANCE PROVIDED BY THE FUND.

6 (a) PURPOSE OF ASSISTANCE.—

7 (1) GENERAL PURPOSES.—The Fund shall

8 work to promote an environment hospitable to busi9 ness formation, economic growth, community devel10 opment, and affordable housing in distressed com11 munities.

12 (2) COORDINATION WITH OTHER AGENCIES

13 AND PROGRAMS.—The Fund shall coordinate the

14 Fund’s activities with existing Federal and other

15 community and economic development programs.

16 (3) ASSISTANCE TO INSTITUTIONS AND PART17 NERSHIPS.—Assistance may be provided to an exist18 ing qualified community development financial insti19 tution or community development partnership to—

20 (A) expand the institution’s or partner21 ship’s activities in order to serve investment

22 areas or targeted populations not currently

23 served by another qualified community develop24 ment financial institution or community devel-
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1 opment partnership receiving assistance under

2 this section;

3 (B) expand the volume of the institution’s

4 or partnership’s activities consistent with the

5 purposes of this title;

6 (C) form a new entity to undertake activi7 ties consistent with the purposes of this title; or

8 (D) assist an existing entity to modify the

9 institution’s or partnership’s structure or activi10 ties in order to undertake activities consistent

11 with the purposes of this title.

12 (b) TYPES OF ASSISTANCE.—

13 (1) FINANCIAL ASSISTANCE.—The Fund may

14 provide financial assistance, and make commitments

15 to provide financial assistance, to qualified commu16 nity development financial institutions or community

17 development partnerships through equity invest18 ments, loans, deposits, membership shares, and

19 grants.

20 (2) TECHNICAL ASSISTANCE.—The Fund may

21 also provide technical assistance, including training,

22 and grants for technical assistance to qualified com23 munity development financial institutions or commu24 nity development partnerships.
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1 (3) ALLOCATION.—The allocation of awards of

2 assistance between insured and uninsured commu3 nity development financial institutions shall be in the

4 discretion of the Board.

5 (4) RULES RELATING TO EQUITY INVEST6 MENTS.—

7 (A) LIMITATION ON EQUITY INVEST8 MENT.—The Fund shall structure financial as9 sistance to a qualified community development

10 financial institution in such a manner that the

11 provision of such assistance does not result in

12 the Fund’s—

13 (i) ownership of more than 50 percent

14 of the equity of such institution; or

15 (ii) control of the operations of such

16 institution.

17 (B) FUND DEEMED NOT TO CONTROL.—

18 Notwithstanding any other provision of law, the

19 Fund shall not be deemed to control a qualified

20 community development financial institution by

21 reason of any assistance provided under this

22 title for the purpose of any other applicable law

23 to the extent the Fund complies with paragraph

24 (1).
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1 (C) FORM OF INVESTMENT.—With respect

2 to equity investments, the Fund shall hold only

3 transferable, nonvoting investments, except that

4 such equity investments may provide for con5 vertibility to voting stock upon transfer by the

6 Fund.

7 (5) DEPOSITS NOT SUBJECT TO COLLATERAL

8 OR SECURITY REQUIREMENTS.—Notwithstanding

9 any other provision of law, deposits made pursuant

10 to this section in qualified insured community devel11 opment financial institutions shall not be subject to

12 any requirement for collateral or security.

13 (6) LIMITATIONS ON OBLIGATIONS.—Direct

14 loan obligations may be incurred only to the extent

15 that appropriations of budget authority to cover

16 their costs, as defined in section 502 of the Congres17 sional Budget Act of 1974, are made in advance.

18 (c) PURPOSE OF FINANCIAL ASSISTANCE.—Financial

19 assistance made available under this title may be used by

20 assisted institutions to develop or support—

21 (1) commercial facilities that enhance revitaliza22 tion, community stability, or job creation and reten23 tion efforts;

24 (2) business creation and expansion efforts

25 that—
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1 (A) create or retain jobs for low-income

2 people;

3 (B) enhance the availability of products

4 and services to low-income people; or

5 (C) create or facilitate the retention of

6 businesses owned by low-income people or resi7 dents of a targeted area;

8 (3) community facilities that provide benefits to

9 low-income people or enhance community stability;

10 (4) the provision of basic financial services to

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

12 (5) the provision of development services;

13 (6) home ownership opportunities that are af14 fordable to low-income households;

15 (7) rental housing that is principally affordable

16 to low-income households; and

17 (8) other activities determined to be appropriate

18 by the Fund.

19 (d) AMOUNT OF ASSISTANCE.—

20 (1) IN GENERAL.—Except as provided in para21 graph (2), the Fund may provide—

22 (A) not to exceed $5,000,000 of assistance

23 per application to any 1 qualified insured com24 munity development financial institution, in-
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1 cluding such institution’s affiliate or community

2 development partnership; and

3 (B) not to exceed $2,000,000 per applica4 tion to any other qualified community develop5 ment financial institution, including such insti6 tution’s affiliate or community development

7 partnership.

8 (2) EXCEPTION.—In the case of an existing

9 community development financial institution that

10 proposes to serve an investment area or targeted

11 population outside of any State or metropolitan area

12 presently served by the institution, the Fund shall

13 have the discretion to provide assistance in an

14 amount exceeding the maximum amount established

15 in paragraph (1) if—

16 (A) the additional amount is used to estab17 lish affiliates to serve such investment area or

18 targeted population;

19 (B) the existing community development fi20 nancial institution is located in a State other

21 than that of the new affiliate; and

22 (C) no other application for assistance has

23 been submitted to the Board under which the

24 needs of the target community could be met.
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1 (3) AUTHORITY TO SET MINIMUM AMOUNTS OF

2 ASSISTANCE.—The Fund shall have the authority to

3 set minimum amounts of assistance per institution.

4 (e) MATCHING REQUIREMENTS.—

5 (1) INSURED COMMUNITY DEVELOPMENT FI6 NANCIAL INSTITUTIONS OR PARTNERSHIPS.—Sub7 ject to paragraph (3), the Fund may provide no as8 sistance to qualified insured community development

9 financial institutions or community development

10 partnerships unless each dollar provided by the

11 Fund is matched by no less than 1 dollar of equity,

12 deposits or membership shares.

13 (2) OTHER MATCHING REQUIREMENTS.—Sub14 ject to paragraph (3), the Fund shall require a

15 match for all other assistance, the amount and form

16 of which shall be in the discretion of the Fund.

17 (3) NO MATCHING REQUIREMENTS FOR CER18 TAIN TYPES OF ASSISTANCE.—The Fund may not

19 establish matching requirements with respect to as20 sistance provided in the form of deposits or member21 ship shares of $100,000 or less, technical assistance,

22 or grants for technical assistance.

23 (4) LEGALLY ENFORCIBLE COMMITMENTS RE24 QUIRED.—
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1 (A) IN GENERAL.—The Fund shall provide

2 no assistance except technical assistance or

3 grants for technical assistance until a qualified

4 community development financial institution or

5 community development partnership has se6 cured legally enforceable commitments for the

7 entire match required.

8 (B) COORDINATION WITH FUND AUTHOR9 ITY TO MAKE COMMITMENTS.—Subparagraph

10 (A) shall not restrict the authority of the Fund

11 under subsection (b)(1) to make a commitment

12 to provide financial assistance to a qualified

13 community development financial institution or

14 community development partnership to the ex15 tent such commitment is contingent on the in16 stitution or partnership meeting the require17 ments of this subsection.

18 (5) FORM OF PAYMENTS.—Assistance may be

19 provided in 1 lump sum, or over a period of time,

20 as determined by the Fund.

21 (6) OTHER FEDERAL ASSISTANCE MAY NOT BE

22 TREATED AS MATCHING FUNDS.—No funds or as23 sistance provided to any qualified community devel24 opment financial institution or community develop25 ment partnership by any agency or instrumentality
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1 of the Federal Government may be taken into ac2 count or otherwise treated as matching funds for

3 purposes of this subsection.

4 (f) TERMS AND CONDITIONS.—

5 (1) IN GENERAL.—The Fund shall provide as6 sistance authorized under this title in such form and

7 subject to such restrictions as are necessary to en8 sure that, to the maximum extent practicable—

9 (A) all assistance granted is used by the

10 qualified community development financial in11 stitution or community development partnership

12 in a manner consistent with the purposes of

13 this title;

14 (B) qualified community development fi15 nancial institutions or community development

16 partnerships receiving assistance that are not

17 otherwise regulated by the Federal Government

18 or by a State government are financially and

19 managerially sound;

20 (C) assistance results in a net increase in

21 capital, credit, and development services, both

22 nationally and in the local communities in

23 which assistance is provided; and

24 (D) assistance is provided in a manner

25 that encourages affiliations and partnerships
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•HR 3474 RFS

1 between insured depository institutions, second2 ary markets or other sources of credit or lever3 age and local organizations dedicated to com4 munity development.

5 (2) CONSULTATION WITH BANKING REGU6 LATORS.—Before providing assistance to a qualified

7 insured community development financial institution,

8 the Board shall consult with the appropriate Federal

9 banking agency or, in the case of an insured credit

10 union, the National Credit Union Administration.

11 (3) ASSISTANCE AGREEMENT.—

12 (A) IN GENERAL.—The Board shall impose

13 restrictions on the use of assistance through a

14 stock purchase agreement, share purchase

15 agreement, or through a contract entered into

16 in consideration for the provision of assistance.

17 (B) PERFORMANCE GOALS.—

18 (i) REQUIRED.—Any agreement or

19 contract referred to in subparagraph (A)

20 shall require institutions assisted under

21 this title to comply with performance goals.

22 (ii) NEGOTIATION OF GOALS.—The

23 performance goals shall be negotiated be24 tween the Board and each qualified com25 munity development financial institution
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•HR 3474 RFS

1 receiving assistance based upon the strate2 gic plan submitted pursuant to section

3 205(b)(5).

4 (iii) RENEGOTIATION.—The perform5 ance goals may be renegotiated jointly as

6 necessary or appropriate, subject to sub7 paragraph (C) of this section.

8 (iv) CONSULTATION WITH BANKING

9 AGENCIES.—Activity levels for insured

10 community development financial institu11 tions shall be determined by the Board in

12 consultation with the appropriate Federal

13 banking agency or, in the case of an in14 sured credit union, with the National Cred15 it Union Administration.

16 (C) CONTRACT SANCTIONS.—

17 (i) IN GENERAL.—Any agreement or

18 contract referred to in subparagraph (A)

19 shall specify sanctions available to the

20 Board, in the Board’s discretion, in the

21 event of noncompliance with the purposes

22 of this title or the terms of the agreement

23 or contract.

24 (ii) CERTAIN SANCTIONS AVAIL25 ABLE.—The sanctions may include revoca-
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•HR 3474 RFS

1 tion of approval of the application, termi2 nating or reducing future assistance, re3 quiring repayment of assistance, and re4 quiring changes to the performance goals

5 imposed pursuant to subparagraph (B) or

6 to the strategic plan submitted pursuant to

7 section 205(b)(5).

8 (iii) CONSULTATION WITH BANKING

9 AGENCIES.—In the case of an insured com10 munity development financial institution,

11 the Board shall consult with the appro12 priate Federal banking agency or, in the

13 case of an insured credit union, the Na14 tional Credit Union Administration, before

15 imposing sanctions pursuant to this para16 graph.

17 (4) REVIEW.—

18 (A) IN GENERAL.—At least annually, the

19 Fund shall review the performance of each as20 sisted qualified community development finan21 cial institution or community development part22 nership in carrying out the institution’s or part23 nership’s strategic plan and performance goals.

24 (B) CONSULTATION WITH TRIBAL GOV25 ERNMENTS.—In reviewing the performance of
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•HR 3474 RFS

1 any assisted qualified community development

2 financial institution whose investment area in3 cludes an Indian reservation, the Board shall

4 consult with, and seek input from, any appro5 priate tribal government.

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

7 qualified community development financial institu8 tion receiving assistance to submit an annual report

9 to the Fund on the institution’s activities and finan10 cial condition, the institution’s success in meeting

11 performance goals, and the institution’s compliance

12 with the other requirements of this title.

13 (g) AUTHORITY TO SELL EQUITY INVESTMENTS AND

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

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

16 retain the power to enforce limitations on assistance en17 tered into in accordance with the requirements of this title.

18 (h) NO AUTHORITY TO LIMIT SUPERVISION AND

19 REGULATION.—No provision of this title shall affect any

20 authority of the appropriate Federal banking agency or,

21 in the case of an insured credit union, the National Credit

22 Union Administration, to supervise and regulate an in23 sured community development financial institution.
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1 SEC. 209. CAPITALIZATION ASSISTANCE TO ENHANCE LI2 QUIDITY.

3 (a) ASSISTANCE.—

4 (1) IN GENERAL.—Notwithstanding the provi5 sions of section 208, the Fund may provide assist6 ance for the purpose of providing capital to organi7 zations that will purchase loans or otherwise en8 hance the liquidity of community development finan9 cial institutions if—

10 (A) the primary purpose of such organiza11 tions is to promote community development;

12 and

13 (B) any assistance received is matched

14 with funds—

15 (i) from sources other than the Fed16 eral Government;

17 (ii) on the basis of not less than $1

18 for each dollar provided by the Fund; and

19 (iii) that are comparable in form and

20 value to the assistance provided by the

21 Fund.

22 (2) LIMITATION ON OTHER ASSISTANCE.—An

23 organization which receives assistance under this

24 section may not receive other financial or technical

25 assistance under this subtitle.
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•HR 3474 RFS

1 (b) SELECTION.—The selection of organizations to

2 receive assistance under this section shall be at the discre3 tion of the Fund and in accordance with criteria estab4 lished by the Fund. In establishing such criteria, the Fund

5 shall take into account the criteria contained in sections

6 205(b) and 207, as appropriate.

7 (c) AMOUNT OF ASSISTANCE.—

8 (1) MAXIMUM AMOUNT LIMITATION.—The

9 Fund may provide a total of not more than

10 $5,000,000 of assistance to an organization under

11 this section during any 3-year period.

12 (2) FORM OF PAYMENT.—Assistance may be

13 provided in a lump sum or over a period of time, as

14 determined by the Fund.

15 (d) AUDIT AND REPORT REQUIREMENTS.—

16 (1) IN GENERAL.—Organizations that receive

17 assistance from the Fund in accordance with this

18 section shall—

19 (A) submit to the Fund not less than once

20 in every 18-month period, financial statements

21 audited by an independent certified public ac22 countant;

23 (B) submit an annual report on its activi24 ties; and
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•HR 3474 RFS

1 (C) keep such records as may be necessary

2 to disclose the manner in which any assistance

3 under this section is used.

4 (2) ACCESS.—The Fund shall have access, on

5 demand and for the purposes of determining compli6 ance with this section, to any records of such organi7 zations.

8 (e) LIMITATIONS ON LIABILITY.—

9 (1) LIABILITY OF FUND.—The liability of the

10 Fund and the United States Government arising out

11 of the provision of assistance to any organization in

12 accordance with this section shall be limited to the

13 amount of such assistance. The Fund shall be ex14 empt from any assessments and any other liability

15 that may be imposed on controlling or principal

16 shareholders by any Federal law or the law of any

17 State.

18 (2) LIABILITY OF GOVERNMENT.—

19 (A) NO OBLIGATION TO PROVIDE

20 FUNDS.—This section shall not be construed as

21 obliging the Federal Government, either directly

22 or indirectly, to provide any funds to any orga23 nization assisted pursuant to this section, or to

24 honor, reimburse, or otherwise guarantee any

25 obligation or liability of such an organization.
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1 (B) NO FULL FAITH AND CREDIT.—This

2 section shall not be construed to imply that any

3 such organization or any obligation or security

4 of any such organization is backed by the full

5 faith and credit of the United States.

6 (f) USE OF PROCEEDS.—Any proceeds from the sale

7 of loans to an organization assisted under this section

8 shall be used by the seller for community development pur9 poses.

10 SEC. 210. ENCOURAGEMENT OF PRIVATE ENTITIES.

11 The Board may cause to be incorporated, or encour12 age the incorporation of, private nonprofit and for-profit

13 entities that will complement the activities of the Fund

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

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

16 assisting community development financial institutions in

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

18 title. Any such entities shall be managed exclusively by

19 private individuals who are selected in accordance with the

20 laws of the jurisdiction of incorporation.

21 SEC. 211. CLEARINGHOUSE FUNCTION.

22 The Fund shall establish and maintain an informa23 tion clearinghouse in coordination with the Departments

24 of Agriculture, Commerce, and Housing and Urban Devel25 opment, the Small Business Administration, other Federal
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•HR 3474 RFS

1 agencies, and community development financial institu2 tions—

3 (1) to cause to be collected, compiled, and ana4 lyzed information pertinent to community develop5 ment financial institutions that will assist in creat6 ing, developing, expanding, and preserving these in7 stitutions; and

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

9 for comprehensive information on financial, tech10 nical, and management assistance, case studies of

11 the activities of community development financial in12 stitutions, regulations, and other information that

13 may promote the purposes of this title.

14 SEC. 212. TRAINING ASSISTANCE FOR ORGANIZING AND OP15 ERATING COMMUNITY DEVELOPMENT FINAN16 CIAL INSTITUTIONS.

17 (a) ASSISTANCE TO ESTABLISH AND OPERATE COM18 MUNITY DEVELOPMENT FINANCIAL INSTITUTIONS.—The

19 Fund shall carry out a program under this subsection to

20 provide training assistance in establishing and operating

21 community development financial institutions, which shall

22 include the following activities:

23 (1) Educating organizations, financial institu24 tions, and other entities and persons in low-income

25 neighborhoods and elsewhere regarding the need for,
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•HR 3474 RFS

1 and the capabilities, functions, and organization of,

2 community development financial institutions.

3 (2) Educating and training organizations, de4 pository and other financial institutions, and other

5 entities and persons in organizing community devel6 opment financial institutions.

7 (3) Recruiting, and assisting organizations, and

8 other entities and persons to recruit existing organi9 zations, depository and other financial institutions,

10 and other entities and persons to establish commu11 nity development financial institutions.

12 (4) Assisting entities and persons interested in

13 establishing qualified community development finan14 cial institutions in identifying community lending

15 needs.

16 (5) Educating and training regarding manage17 ment and operation of community development fi18 nancial institutions, including—

19 (A) designing and utilizing lending prac20 tices to target credit to low-income families and

21 neighborhoods;

22 (B) complying with requirements regarding

23 financial and managerial soundness pursuant to

24 section 208(f)(1)(B) and any recordkeeping re25 quirements pursuant to section 213(a)(1); and
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1 (C) implementing effective asset manage2 ment and fund development techniques.

3 (6) Collecting and disseminating information

4 from various qualified community development fi5 nancial institutions regarding successful manage6 ment and operation techniques, lending practices,

7 and lending activities.

8 (b) PROVISION OF ASSISTANCE.—The Fund may pro9 vide training assistance under this section directly or

10 through public or private organizations pursuant to con11 tracts with such organizations.

12 (c) ADMINISTRATION.—The Fund may require—

13 (1) that training assistance provided under this

14 section to qualified community development lenders

15 and other applicants that receive assistance under

16 section 208 be made available pursuant to a request

17 for such assistance in an application under section

18 205;

19 (2) the selection of the application for the

20 award of assistance; and

21 (3) the inclusion of terms in the agreement or

22 contract for assistance under section 208(f)(3).

23 SEC. 213. RECORDKEEPING, REPORTS, AND AUDITS.

24 (a) RECORDKEEPING.—
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•HR 3474 RFS

1 (1) MAINTENANCE BY INSTITUTION.—A quali2 fied community development financial institution re3 ceiving assistance from the Fund shall keep such

4 records as may be reasonably necessary to disclose

5 the disposition of any assistance under this title and

6 to ensure compliance with the requirements of this

7 title.

8 (2) FUND ACCESS TO RECORDS.—The Fund

9 shall have access, for the purpose of determining

10 compliance with this title, to any books, documents,

11 papers, and records of a qualified community devel12 opment financial institution receiving assistance

13 from the Fund that are pertinent to assistance re14 ceived under this title.

15 (b) REPORTS.—

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

17 an annual evaluation of the activities carried out

18 pursuant to this title and shall submit a report on

19 the Fund’s findings to the President within 120

20 days of the end of each fiscal year of the Fund. The

21 report shall include financial statements audited in

22 accordance with subsection (c).

23 (2) INSTITUTIONAL VOICE FOR COMMUNITY DE24 VELOPMENT.—
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•HR 3474 RFS

1 (A) ONGOING STUDY.—The Fund shall

2 conduct, or cause to be conducted, an ongoing

3 study to identify and evaluate the most effective

4 and financially sound policies and practices for

5 encouraging investment in distressed commu6 nities, including small business and commercial

7 lending, business formation and expansion,

8 community and economic development, commer9 cial real estate and multi-family housing, and

10 home mortgages.

11 (B) ADDITIONAL FACTORS.—In addition to

12 the factors described in subparagraph (A), the

13 Fund may study, or cause to be studied, (in

14 connection with the study conducted pursuant

15 to such subparagraph) related matters, such as

16 identification of sources of and access to capital

17 and loans for community investment, develop18 ment of secondary markets for economic and

19 community development, small business and

20 commercial loans, and home mortgage loans

21 and investments, and methods to involve all

22 segments of the financial services industry in

23 community development.

24 (C) STUDY OF BANKING PRACTICES ON IN25 DIAN RESERVATIONS.—In addition to the study
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1 required under subparagraph (A), the Fund

2 shall conduct a separate and thorough study of

3 banking practices on Indian reservations that

4 specifically addresses the unique lending issues

5 with respect to Indian reservations such as

6 lending with respect to trust lands, Indian

7 headrights, or other trust property, availability

8 of collateral, and related issues.

9 (D) CONSULTATION.—In the conduct of

10 the studies required under subparagraphs (A)

11 and (C), the Fund shall consult, or cause con12 sultation with, the Comptroller of the Currency,

13 the Federal Deposit Insurance Corporation, the

14 Board of Governors of the Federal Reserve Sys15 tem, the Federal Housing Finance Board, the

16 Farm Credit Administration, the Director of

17 the Office of Thrift Supervision, the National

18 Credit Union Administration, Indian tribal gov19 ernments, community reinvestment, civil rights,

20 consumer and financial organizations, and such

21 representatives of agencies or other persons as

22 the Fund may determine.

23 (E) REPORTS.—

24 (i) PRELIMINARY REPORT.—Within

25 270 days after the date of the enactment
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•HR 3474 RFS

1 of this title, the Fund shall submit a re2 port to the President containing the

3 Fund’s initial findings and recommenda4 tions regarding the matters set forth in

5 subparagraphs (A) and (C).

6 (ii) SUBSEQUENT REPORTS.—The

7 Fund shall submit an annual report to the

8 President containing the Fund’s findings

9 and recommendations regarding the mat10 ters set forth in subparagraph (A) with the

11 annual report required by subsection

12 (b)(1).

13 (3) INVESTMENT, GOVERNANCE, AND ROLE OF

14 FUND.—

15 (A) STUDY REQUIRED.—Before the end of

16 the 6-year period beginning on the date of the

17 enactment of this title, the Fund, in accordance

18 with the procedures described in subparagraphs

19 (A) and (B) of paragraph (2), shall conduct a

20 study evaluating the structure, governance, and

21 performance of the Fund.

22 (B) REPORT.—A report on the study con23 ducted pursuant to subparagraph (A) shall be

24 submitted to the President.
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1 (C) EVALUATION AND RECOMMENDA2 TIONS.—The report submitted pursuant to sub3 paragraph (B) shall include—

4 (i) an evaluation of the overall per5 formance of the Fund in meeting the pur6 poses of this title;

7 (ii) any recommendation of the Fund

8 for—

9 (I) restructuring the Board:

10 (II) altering procedures under

11 which the Fund is governed; or

12 (III) the future role of the Fund

13 in addressing community development;

14 and

15 (iii) an assessment of the ability of

16 the Fund to become a private, self-sustain17 ing entity capable of fulfilling the purposes

18 of this title.

19 (c) EXAMINATION AND AUDIT.—The financial state20 ments of the Fund shall be audited in accordance with

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

22 audits required by section 9105(a) of such title shall be

23 performed annually.
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1 SEC. 214. INVESTMENT OF RECEIPTS AND PROCEEDS.

2 Any dividends on equity investments and proceeds

3 from the disposition of investments, deposits, or member4 ship shares that are received by the Fund as a result of

5 assistance provided pursuant to section 208 or 209 shall

6 be deposited and accredited, subject to amounts approved

7 in appropriation Acts, to an account of the Fund estab8 lished to carry out the authorized purposes of this title.

9 Upon request of the chief executive officer, the Secretary

10 of the Treasury shall invest amounts deposited in such ac11 count in public debt securities with maturities suitable to

12 the needs of the Fund, as determined by the chief execu13 tive officer, and bearing interest at rates determined by

14 the Secretary of the Treasury, taking into consideration

15 current market yields on outstanding marketable obliga16 tions of the United States of comparable maturities.

17 Amounts deposited into the account and interest earned

18 on such amounts pursuant to this section shall be available

19 to the Fund until expended.

20 SEC. 215. ENFORCEMENT PROVISIONS.

21 (a) REGULATIONS.—

22 (1) IN GENERAL.—The Board shall prescribe

23 such regulations as may be necessary to carry out

24 the requirements of this Act.
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1 (2) REGULATIONS REQUIRED.—The regulations

2 prescribed under paragraph (1) shall include regula3 tions to—

4 (A) prevent conflicts of interest on the part

5 of directors, officers, and employees of qualified

6 community development financial institutions as

7 the Board determines to be appropriate; and

8 (B) establish such standards with respect

9 to loans by a qualified community development

10 institution to any director, officer, or employee

11 of such institution as the Board determines to

12 be appropriate, including loan amount limita13 tions.

14 (b) ADMINISTRATIVE ENFORCEMENT.—

15 (1) IN GENERAL.—The provisions of this Act,

16 and regulations prescribed under and agreements

17 entered into under this Act, shall be enforced under

18 section 8 of the Federal Deposit Insurance Act by—

19 (A) the appropriate Federal banking agen20 cy, in the case of an insured community devel21 opment financial institution; and

22 (B) the Board, in the case of a community

23 development financial institution which is not

24 an insured community development financial in25 stitution.
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1 (2) APPLICABILITY OF SECTION 8 TO BOARD.—

2 For purposes of applying section 8 of the Federal

3 Deposit Insurance Act to the provisions of this Act

4 in accordance with paragraph (1)—

5 (A) a violation of this Act, or any regula6 tion prescribed under or any agreement entered

7 into under this Act, shall be treated as a viola8 tion of the Federal Deposit Insurance Act; and

9 (B) the Board shall be treated as an ap10 propriate Federal banking agency.

11 (c) CRIMINAL PROVISION.—Section 657 of title 18,

12 United States Code, is amended by inserting ‘‘or any

13 qualified community development financial institution re14 ceiving financial assistance under the Community Devel15 opment Banking and Financial Institutions Act of 1993,’’

16 after ‘‘small business investment company,’’.

17 SEC. 216. AUTHORIZATION OF APPROPRIATIONS.

18 (a) IN GENERAL.—There are authorized to be appro19 priated to the Fund, to remain available until expended,

20 $60,000,000 for fiscal year 1994, $104,000,000 for fiscal

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

22 $111,000,000 for fiscal year 1997, or such greater sums

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

24 title.
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1 (b) AVAILABILITY FOR FUNDING BEA.—Not less

than 331 2 ⁄3 percent of the amounts appropriated to the

3 Fund for any fiscal year pursuant to the authorization in

4 subsection (a) shall be available for use in carrying out

5 sections 232 and 233 of the Bank Enterprise Act and the

6 amendments made by such sections to other provisions of

7 law.

8 (c) ADMINISTRATIVE EXPENSES.—The Fund may set

9 aside up to $10,000,000 each fiscal year to pay adminis10 trative costs and expenses.

11 (d) CAPITALIZATION ASSISTANCE.—Not more than 5

12 percent of the amounts authorized to be appropriated

13 under subsection (a) may be used as provided in section

14 209.

15 SEC. 217. CONFORMING AMENDMENT.

16 Section 8F(a)(2) of the Inspector General Act of

17 1978 (5 U.S.C. App. 8F(a)(2)) is amended by inserting

18 ‘‘the Community Development Banking and Financial In19 stitutions Fund,’’ immediately following ‘‘the Commodity

20 Futures Trading Commission,’’.

21 SEC. 218. APPOINTMENT OF COMMUNITY ENTERPRISE AS22 SESSMENT CREDIT BOARD.

23 The President shall appoint the members of the Com24 munity Enterprise Assessment Credit Board described in

25 section 233(d)(2)(D) of the Bank Enterprise Act before
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1 the end of the 90-day period beginning on the date of the

2 enactment of this Act.

3 SEC. 219. COMMUNITY DEVELOPMENT CREDIT UNION AS4 SISTANCE.

5 (a) AUTHORIZATION OF ADDITIONAL APPROPRIA6 TIONS.—In addition to the amounts appropriated to the

7 Community Development Credit Union Revolving Loan

8 Fund pursuant to section 101(j) of the joint resolution

9 entitled ‘Joint Resolution making continuing appropria10 tions for the fiscal year 1980, and for other purposes’’

11 and approved October 12, 1979, there is authorized to be

12 appropriated to the National Credit Union Administration

13 Board for purposes of the Community Development Credit

14 Union Revolving Loan Fund—

15 (1) $3,000,000 for fiscal year 1994;

16 (2) $4,000,000 for fiscal year 1995;

17 (3) $4,000,000 for fiscal year 1996; and

18 (4) $4,000,000 for fiscal year 1997.

19 (b) INVESTMENT OF FUNDS.—The National Credit

20 Union Administration Board may invest any moneys in

21 the Community Development Credit Union Revolving

22 Loan Fund which are not needed for current expenditures

23 in United States Treasury securities. Any interest accrued

24 on such securities shall, subject to amounts approved in
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1 appropriation Acts, be deposited into and accredited to the

2 Fund.

3 (c) AUTHORITY.—Notwithstanding any other provi4 sion of law, the National Credit Union Administration

5 Board may exercise the authority granted to the Board

6 by the Community Development Credit Union Revolving

7 Fund Transfer Act, including any additional appropria8 tions made and earnings accrued, subject only to this sec9 tion and to regulations prescribed by the Board.

10 SEC. 220. INSURED COMMUNITY DEVELOPMENT FINANCIAL

11 INSTITUTION ACCESS TO FEDERAL HOME

12 LOAN BANK ADVANCES.

13 Section 10 of the Federal Home Loan Bank Act (12

14 U.S.C. 1430) is amended by adding at the end the follow15 ing new subsection:

16 ‘‘(k) COMMUNITY DEVELOPMENT FINANCIAL INSTI17 TUTION ACCESS TO ADVANCES.—Any insured community

18 development financial institution (as defined in section

19 3(e) of the Community Development Banking and Finan20 cial Institutions Act of 1993) which meets the require21 ments of subparagraphs (A) and (B) of section 4(a)(1)

22 may obtain advances from the appropriate Federal home

23 loan bank in accordance with this section in the same

24 manner and to the same extent as members of such bank
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1 without regard to any stock purchase requirement imposed

2 on members under this Act.’’.

3 SEC. 221. COMMUNITY INVESTMENT PROGRAM INCEN4 TIVES.

5 (a) ASSETS DERIVED FROM CIP ADVANCES INCLUD6 IBLE WITHOUT LIMITATION FOR PURPOSES OF QTL

7 TEST.—Section 10(m)(4)(C)(ii) of the Home Owners’

8 Loan Act (12 U.S.C. 1467a(m)(4)(C)(ii)) is amended by

9 adding at the end the following new subclause:

10 ‘‘(VII) Loan assets derived from

11 the proceeds of an advance made to

12 the savings association from a Federal

13 home loan bank under the community

14 investment program of such bank.’’.

15 (b) AUTHORITY TO WAIVE FHLB STOCK PURCHASE

16 REQUIREMENT IN CONNECTION WITH A CIP ADVANCE.—

17 Section 6(b) of the Federal Home Loan Bank Act (12

18 U.S.C. 1426(b)) is amended by adding at the end the fol19 lowing new paragraph:

20 ‘‘(6) TREATMENT OF CIP ADVANCES.—A Fed21 eral home loan bank may waive the requirement that

22 advances to such member from the bank’s commu23 nity investment program be taken into account in

24 determining the amount of aggregate outstanding
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1 advances to the member from the bank for purposes

2 of this subsection.’’.

3 (c) TREATMENT OF ECONOMIC DEVELOPMENT

4 LOANS AND ASSETS DERIVED FROM CIP ADVANCES AS

5 COLLATERAL FOR ADDITIONAL FHLB ADVANCES.—Sec6 tion 10(a) of the Federal Home Loan Bank Act (12

7 U.S.C. 1430(a)) is amended—

8 (1) by redesignating paragraph (5) as para9 graph (6);

10 (2) in paragraph (6) (as so redesignated), by

11 striking ‘‘(1) through (4)’’ and inserting ‘‘(1)

12 through (5)’’; and

13 (3) by inserting after paragraph (4) the follow14 ing new paragraph:

15 ‘‘(5) Economic development loans derived from

16 the proceeds of an advance made to a member from

17 a Federal home loan bank under the community in18 vestment program of such bank.’’.

19 SEC. 222. 30 PERCENT LENDING CAP INCREASED.

20 Paragraph (2) of the 1st subsection (e) of section 10

21 of the Federal Home Loan Bank Act (12 U.S.C.
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1 1430(e)(2)) is amended by striking ‘‘30 percent’’ and in2 serting ‘‘40 percent’’.

Passed the House of Representatives November 21,

1993.

Attest: DONNALD K. ANDERSON,

Clerk.

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