II

104TH CONGRESS

1ST SESSION S. 650

To increase the amount of credit available to fuel local, regional, and national

economic growth by reducing the regulatory burden imposed upon financial institutions, and for other purposes.

IN THE SENATE OF THE UNITED STATES

MARCH 30 (legislative day, MARCH 27), 1995

Mr. SHELBY (for himself, Mr. MACK, Mr. D’AMATO, Mr. BRYAN, Mr. BENNETT, Mr. FAIRCLOTH, Mr. BOND, Mr. GRAMM, and Mr. DOLE) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs

A BILL

To increase the amount of credit available to fuel local,

regional, and national economic growth by reducing the

regulatory burden imposed upon 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 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Economic Growth and Regulatory Paperwork Reduction

6 Act of 1995’’.
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1 (b) TABLE OF CONTENTS.—The table of contents for

2 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Definitions.

TITLE I—REDUCTIONS IN GOVERNMENT OVERREGULATION

Subtitle A—The Home Mortgage Process

PART I—REGULATORY SIMPLIFICATION AND UNIFORMITY

Sec. 101. Coordination of the Truth in Lending Act and the Real Estate Settlement Procedures Act.

Sec. 102. Elimination of redundant regulators.

Sec. 103. General exemption authority for loans.

Sec. 104. Reductions in Real Estate Settlement Procedures Act regulatory burdens.

PART II—CLARIFICATIONS TO REDUCE COSTS AND REGULATORY BURDENS

Sec. 111. Exemption for certain borrowers.

Sec. 112. Alternative disclosures for adjustable rate mortgages.

Sec. 113. Treatment of certain charges.

Sec. 114. Exemptions from rescission.

Sec. 115. Tolerances; basis of disclosures.

Sec. 116. Limitation on liability.

Sec. 117. Limitation on rescission period.

Sec. 118. Assignee liability.

Sec. 119. Modification of waiver of right of rescission.

Sec. 120. Applicability.

Subtitle B—Amendments to the Community Reinvestment Act of 1977

Sec. 131. Expression of congressional intention.

Sec. 132. Small bank exemption.

Sec. 133. Community input and conclusive rating.

Sec. 134. Special purpose banks.

Sec. 135. Increased incentives to lending to low- and moderate-income communities.

Subtitle C—Payment of Interest Act

Sec. 141. Payment of Interest Act.

TITLE II—STREAMLINING GOVERNMENT REGULATION

Subtitle A—Eliminating Unnecessary Regulatory Requirements and

Procedures

Sec. 201. Streamlining of prior approval requirement for certain acquisitions.

Sec. 202. Elimination of certain filing and approval requirements for certain insured depository institutions.

Sec. 203. Elimination of redundant approval requirement for OAKAR transactions.

Sec. 204. Elimination of unnecessary branch applications.
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Sec. 205. Elimination of duplicative requirements imposed upon bank holding

companies under the Home Owners’ Loan Act.

Sec. 206. Elimination of the per branch capital requirement for national banks

and State member banks.

Sec. 207. Elimination of branch application requirements for automatic teller

machines.

Sec. 208. Elimination of requirement for approval of investments in bank premises for well capitalized and well managed banks.

Sec. 209. Elimination of approval requirement for divestitures.

Sec. 210. Elimination of unnecessary filing for officer and director appointments.

Sec. 211. Amendments to the Depository Institutions Management Interlocks

Act.

Sec. 212. Elimination of recordkeeping and reporting requirements for officers.

Sec. 213. Abolition of Appraisal Subcommittee; transfer of functions.

Sec. 214. Branch closures.

Sec. 215. Foreign banks.

Subtitle B—Eliminating Unnecessary Costs and Paperwork Burdens

Sec. 221. Small bank examination cycle.

Sec. 222. Reimbursement for corporate records.

Sec. 223. Required regulatory review of regulations.

Subtitle C—Eliminating Unnecessary Reporting Requirements

Sec. 231. Prohibition on additional reporting under Community Reinvestment

Act of 1977.

Sec. 232. Exemption from community support requirements of the Federal

Home Loan Bank Act for institutions meeting certain criteria.

Sec. 233. Recording requirements.

Sec. 234. Identification of nonbank financial institution customers.

Sec. 235. Repeal of commercial loan reporting requirements.

Sec. 236. Increase in Home Mortgage Disclosure Act; disclosure exemption.

Sec. 237. Elimination of stock loan reporting requirement.

Subtitle D—Regulatory Micromanagement

Sec. 241. National bank directors.

Sec. 242. Paperwork reduction review.

Sec. 243. State bank representation on Board of Directors of the FDIC.

TITLE III—REGULATORY IMPACT ON COST OF CREDIT AND

CREDIT AVAILABILITY

Subtitle A—Lowering Compliance Costs To Promote Credit Availability

Sec. 301. Audit costs.

Sec. 302. Incentives for self-testing.

Sec. 303. Exemption for savings institutions serving military personnel.

Sec. 304. Qualified thrift investment amendments.

Sec. 305. Daylight overdrafts incurred by Federal home loan banks.

Sec. 306. Application for membership in the Federal home loan bank system.

Sec. 307. Authority for Federal home loan banks to select external auditors.

Sec. 308. Limited purpose bank growth cap relief.

Subtitle B—Disincentives to Risk-Taking
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Sec. 311. Due process protections.

Subtitle C—Miscellaneous Nonsupervisory Reforms

Sec. 321. Liability for unauthorized use of credit cards.

Sec. 322. Unauthorized electronic fund transfers.

1 SEC. 2. DEFINITIONS.

2 For purposes of this Act—

3 (1) the term ‘‘Appraisal Subcommittee’’ means

4 the Appraisal Subcommittee established under sec5 tion 1011 of the Federal Financial Institutions Ex6 amination Council Act of 1978 (as in existence prior

7 to the date of enactment of this Act);

8 (2) the term ‘‘appropriate Federal banking

9 agency’’ has the same meaning as in section 3 of the

10 Federal Deposit Insurance Act;

11 (3) the term ‘‘Council’’ means the Federal Fi12 nancial Institutions Examination Council established

13 under section 1004 of the Federal Financial Institu14 tions Examination Council Act of 1978;

15 (4) the term ‘‘insured depository institution’’

16 has the same meaning as in section 3 of the Federal

17 Deposit Insurance Act; and

18 (5) the term ‘‘insured credit union’’ has the

19 same meaning as in section 101 of the Federal

20 Credit Union Act.
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1 TITLE I—REDUCTIONS IN GOV2 ERNMENT OVERREGULATION

3 Subtitle A—The Home Mortgage

4 Process

5 PART I—REGULATORY SIMPLIFICATION AND

6 UNIFORMITY

7 SEC. 101. COORDINATION OF THE TRUTH IN LENDING ACT

8 AND THE REAL ESTATE SETTLEMENT PROCE9 DURES ACT.

10 (a) AMENDMENTS TO TRUTH IN LENDING ACT.—

11 Section 105 of the Truth in Lending Act (15 U.S.C. 1604)

12 is amended by adding at the end the following new sub13 section:

14 ‘‘(e) AUTHORITY TO ELIMINATE, MODIFY, OR SIM15 PLIFY DISCLOSURE REQUIREMENTS.—The Board shall,

16 by regulation, eliminate, modify, or simplify any disclosure

17 required by this title, including the content and timing of

18 the disclosure, if such action would make disclosures and

19 timing of disclosures required by this title uniform with

20 other laws relating to the disclosure of information in con21 nection with credit transactions, including the Real Estate

22 Settlement Procedures Act. No disclosure requirement

23 may be imposed under this subsection unless such require24 ment would have the effect of eliminating, modifying, or

25 simplifying any disclosure required under this title.’’.
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1 (b) AMENDMENTS TO REAL ESTATE SETTLEMENT

2 PROCEDURES ACT.—Section 19 of the Real Estate Settle3 ment Procedures Act (12 U.S.C. 2617) is amended by

4 adding at the end the following new subsection:

5 ‘‘(d) AUTHORITY TO ELIMINATE, MODIFY, OR SIM6 PLIFY DISCLOSURE REQUIREMENTS.—The Board shall,

7 by regulation, eliminate, modify, or simplify any disclosure

8 required by this title, including the content and timing of

9 the disclosure, if such action would make disclosures and

10 timing of disclosures required by this title uniform with

11 other laws relating to the disclosure of information in con12 nection with credit transactions, including the Truth in

13 Lending Act. No disclosure requirement may be imposed

14 under this subsection unless such requirement would have

15 the effect of eliminating, modifying, or simplifying any dis16 closure required under this title.’’.

17 SEC. 102. ELIMINATION OF REDUNDANT REGULATORS.

18 (a) DEFINITION.—Section 3 of the Real Estate Set19 tlement Procedures Act (12 U.S.C. 2602) is amended—

20 (1) in paragraph (7), by striking ‘‘and’’ at the

21 end;

22 (2) in paragraph (8), by striking the period at

23 the end and inserting ‘‘; and’’; and

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

25 paragraph:
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1 ‘‘(9) the term ‘Board’ means the Board of Gov2 ernors of the Federal Reserve System.’’.

3 (b) CONFORMING AMENDMENTS.—The Real Estate

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

5 amended—

6 (1) in section 4, by striking ‘‘Secretary’’ each

7 place such term appears and inserting ‘‘Board’’;

8 (2) in section 5, by striking ‘‘Secretary’’ each

9 place such term appears and inserting ‘‘Board’’;

10 (3) in section 6, by striking ‘‘Secretary’’ each

11 place such term appears and inserting ‘‘Board’’;

12 (4) in section 8—

13 (A) in subsection (c), by striking ‘‘the Sec14 retary,’’ and inserting ‘‘the Board,’’; and

15 (B) in subsection (d), by striking ‘‘Sec16 retary’’ each place such term appears and in17 serting ‘‘Board’’;

18 (5) in section 10, by striking ‘‘Secretary’’ each

19 place such term appears and inserting ‘‘Board’’;

20 (6) in section 13, by striking ‘‘Secretary’’ and

21 inserting ‘‘Board’’;

22 (7) in section 15—

23 (A) by striking ‘‘Secretary’’ each place

24 such term appears and inserting ‘‘Board’’; and
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1 (B) by striking ‘‘the Secretary’s assess2 ment’’ and inserting ‘‘the assessment of the

3 Board’’;

4 (8) in section 16, by striking ‘‘Secretary’’ each

5 place such term appears and inserting ‘‘Board’’; and

6 (9) in section 18, by striking ‘‘Secretary’’ each

7 place such term appears and inserting ‘‘Board’’.

8 (c) REGULATIONS.—Section 19(a) of the Real Estate

9 Settlement Procedures Act (12 U.S.C. 2617) is amended

10 to read as follows:

11 ‘‘(a) REGULATIONS.—

12 ‘‘(1) IN GENERAL.—The Board shall prescribe

13 such regulations as may be necessary to carry out

14 this title.

15 ‘‘(2) SPECIFICATIONS.—The regulations pro16 mulgated under paragraph (1)—

17 ‘‘(A) may contain such classifications, dif18 ferentiations, or other provisions, and may pro19 vide for such adjustments and exceptions for

20 any class of transactions, as the Board deter21 mines to be necessary or proper to—

22 ‘‘(i) effectuate the purposes of this

23 title;

24 ‘‘(ii) prevent circumvention or evasion

25 of this title; or
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1 ‘‘(iii) facilitate compliance with this

2 title; and

3 ‘‘(B) shall minimize the burdens and cost

4 imposed upon creditors and shall ensure that

5 costs, burdens, and complexities to consumers

6 are reduced.’’.

7 (d) ADMINISTRATIVE ENFORCEMENT.—The Real Es8 tate Settlement Procedures Act (12 U.S.C. 2601 et seq.)

9 is amended by adding at the end the following new section:

10 ‘‘SEC. 20. ADMINISTRATIVE ENFORCEMENT.

11 ‘‘(a) IN GENERAL.—Compliance with the require12 ments imposed under this title shall be enforced under—

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

14 Act, with respect to—

15 ‘‘(A) any national bank or any Federal

16 branch or Federal agency of a foreign bank, by

17 the Office of the Comptroller of the Currency;

18 ‘‘(B) any member bank of the Federal Re19 serve System (other than a national bank), any

20 branch or agency of a foreign bank (other than

21 a Federal branch or Federal agency, or insured

22 State branch of a foreign bank), any commer23 cial lending company owned or controlled by

24 one or more foreign banks, or any organization
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1 operating under section 25 or 25A of the Fed2 eral Reserve Act, by the Board;

3 ‘‘(C) any bank insured under the Federal

4 Deposit Insurance Act (other than a member of

5 the Federal Reserve System) or any insured

6 State branch of a foreign bank, by the Board

7 of Directors of the Federal Deposit Insurance

8 Corporation; and

9 ‘‘(D) any savings association the deposits

10 of which are insured under the Federal Deposit

11 Insurance Act, by the Director of the Office of

12 Thrift Supervision;

13 ‘‘(2) the Federal Credit Union Act, by the Ad14 ministrator of the National Credit Union Adminis15 tration with respect to any Federal credit union;

16 ‘‘(3) the Packers and Stockyards Act, 1921 (ex17 cept as provided in section 406 of such Act), by the

18 Secretary of Agriculture with respect to any activi19 ties subject to such Act; and

20 ‘‘(4) the Farm Credit Act of 1971, by the Farm

21 Credit Administration with respect to any institution

22 referred to in section 1.2(a) of that Act.

23 ‘‘(b) DEFINITIONS.—Each term in subsection (a)(1)

24 that is not defined in this title shall have the same mean-
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1 ing as in section 1(b) of the International Banking Act

2 of 1978.

3 ‘‘(c) ADDITIONAL ENFORCEMENT POWERS.—

4 ‘‘(1) VIOLATIONS.—For the purpose of the ex5 ercise by any agency referred to in subsection (a) of

6 the powers of the agency under any Act referred to

7 in that subsection, a violation of any requirement

8 imposed under this title shall be deemed to be a vio9 lation of a requirement imposed under that Act.

10 ‘‘(2) POWERS.—In addition to the powers of

11 the agency under any provision of law specifically re12 ferred to in subsection (a), each agency referred to

13 in that subsection may exercise, for the purpose of

14 enforcing compliance with any requirement imposed

15 under this title, any other authority conferred on the

16 agency by law.

17 ‘‘(3) REGULATIONS BY AGENCIES OTHER THAN

18 THE BOARD.—The authority of the Board to pro19 mulgate regulations under this title does not impair

20 the authority of any other agency referred to in sub21 section (a) to make rules regarding the procedures

22 of the Board in enforcing compliance with the re23 quirements imposed under this title.

24 ‘‘(d) FTC ENFORCEMENT.—
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1 ‘‘(1) IN GENERAL.—Except to the extent that

2 the enforcement of the requirements imposed under

3 this title is specifically committed to another agency

4 of the Federal Government under subsection (a), the

5 Federal Trade Commission shall enforce such

6 requirements.

7 ‘‘(2) VIOLATIONS.—For the purpose of the ex8 ercise by the Federal Trade Commission of the func9 tions and powers of the Commission under the Fed10 eral Trade Commission Act, a violation of any re11 quirement imposed under this title shall be deemed

12 to be a violation of a requirement imposed under

13 that Act.

14 ‘‘(3) FUNCTIONS AND POWERS.—All of the

15 functions and powers of the Federal Trade Commis16 sion under the Federal Trade Commission Act are

17 available to the Federal Trade Commission to en18 force compliance by any person with the require19 ments imposed under this title, regardless of wheth20 er or not the person is engaged in commerce or

21 meets any other jurisdictional tests in the Federal

22 Trade Commission Act.’’.
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1 SEC. 103. GENERAL EXEMPTION AUTHORITY FOR LOANS.

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

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

4 adding at the end the following new paragraph:

5 ‘‘(7) Transactions for which the Board, by rule,

6 determines that coverage under this title is not nec7 essary to carry out the purposes of this title.’’.

8 (b) EXEMPTION AUTHORITY.—Section 105 of the

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

10 adding at the end the following new subsection:

11 ‘‘(f) EXEMPTION AUTHORITY.—

12 ‘‘(1) IN GENERAL.—The Board shall exempt

13 from all or part of this title any class of transactions

14 for which, in the determination of the Board, cov15 erage under all or part of this title does not provide

16 a measurable benefit to consumers in the form of

17 useful information or protection.

18 ‘‘(2) FACTORS FOR CONSIDERATION.—In deter19 mining which classes of transactions to exempt in

20 whole or in part under paragraph (1), the Board

21 shall consider, among other factors—

22 ‘‘(A) the amount of the loan or closing

23 costs and whether the disclosures, right of re24 scission, and other provisions are necessary,

25 particularly for small loans, as determined by

26 the Board;
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1 ‘‘(B) whether the requirements of this title

2 complicate, hinder, or make more expensive the

3 credit process for the class of transactions; and

4 ‘‘(C) the status of the borrower, includ5 ing—

6 ‘‘(i) the related financial arrange7 ments of the borrower, as determined by

8 the Board;

9 ‘‘(ii) the financial sophistication of the

10 borrower relative to the type of trans11 action; and

12 ‘‘(iii) the importance to the borrower

13 of the credit and related supporting prop14 erty, as determined by the Board.’’.

15 SEC. 104. REDUCTIONS IN REAL ESTATE SETTLEMENT PRO16 CEDURES ACT REGULATORY BURDENS.

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

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

19 is amended to read as follows:

20 ‘‘(a) DISCLOSURE TO APPLICANT RELATING TO AS21 SIGNMENT, SALE, OR TRANSFER OF LOAN SERVICING.—

22 Each person who makes a federally related mortgage loan

23 shall disclose to each person who applies for the loan, at

24 the time of application for the loan, whether the servicing
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1 of the loan may be assigned, sold, or transferred to any

2 other person at any time while the loan is outstanding.’’.

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

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

5 2602(1)(A)) is amended by striking ‘‘or subordinate’’.

6 (c) CONSISTENCY OF REAL ESTATE SETTLEMENT

7 PROCEDURES ACT AND TRUTH IN LENDING ACT EXEMP8 TION OF BUSINESS LOANS.—Section 7 of the Real Estate

9 Settlement Procedures Act (12 U.S.C. 2606) is amend10 ed—

11 (1) by striking ‘‘This Act’’ and inserting the

12 following:

13 ‘‘(a) IN GENERAL.—This Act’’; and

14 (2) by adding at the end the following new sub15 section:

16 ‘‘(b) INTERPRETATION.—In promulgating regula17 tions under section 19(a), the Board shall ensure that,

18 with respect to subsection (a), the exemption for business

19 credit includes all ‘business credit’ exempted from the

20 Truth in Lending Act, as such term is interpreted by the

21 Board.’’.
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1 PART II—CLARIFICATIONS TO REDUCE COSTS

2 AND REGULATORY BURDENS

3 SEC. 111. EXEMPTION FOR CERTAIN BORROWERS.

4 Section 104 of the Truth in Lending Act (15 U.S.C.

5 1603) is amended by adding at the end the following new

6 paragraph:

7 ‘‘(8) Credit transactions involving consumers

8 with an annual earned income of more than

9 $200,000 or having net assets in excess of

10 $1,000,000 at the time of the transaction.’’.

11 SEC. 112. ALTERNATIVE DISCLOSURES FOR ADJUSTABLE

12 RATE MORTGAGES.

13 (a) OPEN END CONSUMER CREDIT PLANS.—Section

14 127A(a)(2)(G) of the Truth in Lending Act (15 U.S.C.

15 1637a(a)(2)(G)) is amended by inserting before the semi16 colon the following: ‘‘, or a statement that the monthly

17 payment may increase or decrease significantly due to in18 creases in the annual percentage rate’’.

19 (b) TECHNICAL AMENDMENT.—Section 127A(b)(3)

20 of the Truth in Lending Act (15 U.S.C. 1637a(b)(3)) is

21 amended by striking ‘‘required under’’ and inserting ‘‘re22 ferred to in’’.

23 (c) CONSUMER CREDIT NOT UNDER OPEN END

24 CREDIT PLAN.—Section 128(a) of the Truth in Lending

25 Act (15 U.S.C. 1638(a)) is amended by adding at the end

26 the following new paragraph:
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1 ‘‘(14) In any variable interest rate residential

2 mortgage transaction, at the option of the creditors,

3 a statement that the monthly payment may increase

4 or decrease substantially, or an historical example il5 lustrating the effects of interest rate changes imple6 mented according to the loan program.’’.

7 SEC. 113. TREATMENT OF CERTAIN CHARGES.

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

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

10 by inserting after the second sentence the following new

11 sentence: ‘‘The finance charge shall not include fees and

12 amounts imposed by third party closing agents (including

13 settlement agents, attorneys, and escrow and title compa14 nies) if the creditor does not expressly require the imposi15 tion of the charges and does not retain the charges.’’.

16 (b) TAXES ON SECURITY INSTRUMENTS OR EVI17 DENCES OF INDEBTEDNESS.—Section 106(d) of the

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

19 by adding at the end the following new paragraph:

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

21 on documents evidencing indebtedness, if the pay22 ment of such tax is a precondition for recording the

23 instrument securing the evidence of indebtedness.’’.
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1 (c) PREPARATION OF LOAN DOCUMENTS.—Section

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

3 1605(e)(2)) is amended to read as follows:

4 ‘‘(2) Fees for preparation of loan-related docu5 ments and attending or conducting settlement.’’.

6 (d) APPLICABILITY.—The amendments made by sub7 sections (a) and (b) shall apply to all extensions of credit

8 with respect to which rescission rights have not been as9 serted as of January 4, 1995.

10 SEC. 114. EXEMPTIONS FROM RESCISSION.

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

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

13 (1) in paragraph (3), by striking ‘‘or’’ at the

14 end;

15 (2) in paragraph (4), by striking the period at

16 the end and inserting ‘‘; or’’; and

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

18 paragraph:

19 ‘‘(5) a consumer credit transaction, other than

20 a mortgage referred to in section 103(aa), that—

21 ‘‘(A) is secured by a first lien, in any

22 amount; and

23 ‘‘(B) constitutes a refinancing or consoli24 dation of an existing extension of credit.’’.
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1 (b) TECHNICAL AND CONFORMING AMENDMENT.—

2 Section 125(e)(2) of the Truth in Lending Act (15 U.S.C.

3 1635(e)(2)) is amended by inserting ‘‘, other than a trans4 action described in subsection (e)(5),’’ after ‘‘a refinancing

5 or consolidation (with no new advances)’’.

6 SEC. 115. TOLERANCES; BASIS OF DISCLOSURES.

7 (a) TOLERANCES FOR ACCURACY.—Section 106 of

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

9 by adding at the end the following new subsection:

10 ‘‘(f) TOLERANCE FOR ACCURACY.—In connection

11 with any consumer credit transaction not under an open

12 end credit plan that is secured by real property or a dwell13 ing, the disclosure of the finance charge and other disclo14 sures affected by any finance charge shall be treated as

15 being accurate for purposes of this title if the amount dis16 closed as the finance charge does not vary from the actual

17 finance charge by more than $100.’’.

18 (b) BASIS OF DISCLOSURE FOR PER DIEM INTER19 EST.—Section 121(c) of the Truth in Lending Act (15

20 U.S.C. 1631(c)) is amended by adding at the end the fol21 lowing new sentence: ‘‘In the case of any consumer credit

22 transaction, a portion of the interest on which is deter23 mined on a per diem basis and is to be collected upon

24 the consummation of such transaction, any disclosure with

25 respect to such portion of interest shall be deemed to be
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1 accurate for purposes of this title if the disclosure is based

2 on reasonably available information known to such person

3 at the time that the disclosure documents are being pre4 pared for the consummation of the transaction.’’.

5 SEC. 116. LIMITATION ON LIABILITY.

6 (a) IN GENERAL.—Chapter 2 of the Truth in Lend7 ing Act (15 U.S.C. 1631 et seq.) is amended by adding

8 at the end the following new section:

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

10 ‘‘(a) LIMITATIONS ON LIABILITY FOR DISCLOSURES

11 RELATING TO CERTAIN FEES AND CHARGES OTHER

12 THAN FINANCE CHARGES.—

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

14 consumer credit transaction subject to this title con15 summated before the date of enactment of the Truth

16 in Lending Act Amendments of 1995, no creditor or

17 assignee with respect to such transaction shall have

18 any civil, administrative, or criminal liability under

19 this title for, and no consumer shall have any ex20 tended rescission rights under section 125(f) by rea21 son of, the treatment by the creditor, for disclosure

22 purposes, of any—

23 ‘‘(A) tax described in section 106(d)(3);

24 ‘‘(B) fees and amounts described in para25 graph (2) or (5) of section 106(e) and third
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1 party fees and amounts described in section

2 106(a); and

3 ‘‘(C) delivery charge imposed by a creditor.

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

5 apply to—

6 ‘‘(A) any individual action or counterclaim

7 brought under this title—

8 ‘‘(i) that was filed before October 1,

9 1994; and

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

11 before such date) allege improper disclo12 sure of charges described in subparagraph

13 (A), (B), or (C) of paragraph (1);

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

15 title—

16 ‘‘(i) for which a class was certified be17 fore October 1, 1994; and

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

19 before such date) allege improper disclo20 sure of charges described in subparagraph

21 (A), (B), or (C) of paragraph (1);

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

23 class action brought under this title—

24 ‘‘(i) that was filed before October 1,

25 1994; and
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1 ‘‘(ii) the pleadings in which (as filed

2 before such date) allege improper disclo3 sure of charges described in subparagraph

4 (A), (B), or (C) of paragraph (1); or

5 ‘‘(D) any consumer credit transaction with

6 respect to which a timely notice of rescission

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

8 ‘‘(b) EXEMPTION FROM LIABILITY FOR FINANCE

9 CHARGE DISCLOSURES WITHIN TOLERANCE LIMITS.—

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

11 consumer credit transaction subject to this title, in12 cluding a transaction consummated before the date

13 of enactment of the Truth in Lending Act Amend14 ments of 1995, no creditor or assignee with respect

15 to such transaction shall have any civil, administra16 tive, or criminal liability under this title for, and no

17 consumer shall have any extended rescission rights

18 under section 125 by reason of, any disclosure relat19 ing to the finance charge imposed with respect to

20 such transaction, if the amount or percentage actu21 ally disclosed—

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

23 to section 106(f); or

24 ‘‘(B) is greater than the amount or per25 centage required to be disclosed under this title.
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1 ‘‘(2) EXCEPTIONS.—Paragraph (1) shall not

2 apply to—

3 ‘‘(A) any individual action or counterclaim

4 brought under this title that was filed before

5 October 1, 1994;

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

7 title for which a class was certified before Octo8 ber 1, 1994;

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

10 class action brought under this title that was

11 filed before October 1, 1994; or

12 ‘‘(D) any consumer credit transaction with

13 respect to which a timely notice of rescission

14 was sent to the creditor before October 1,

15 1994.’’.

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

17 for chapter 2 of the Truth in Lending Act is amended

18 by inserting after the item relating to section 138 the fol19 lowing new item:

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

20 SEC. 117. LIMITATION ON RESCISSION PERIOD.

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

22 U.S.C. 1635(f)) is amended—

23 (1) by striking ‘‘(f) An obligor’s right of rescis24 sion’’ and inserting the following:

25 ‘‘(f) LIMITATION ON RESCISSION PERIOD.—
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1 ‘‘(1) IN GENERAL.—The right of rescission of

2 an obligor’’;

3 (2) by striking ‘‘except that if (1) any agency’’

4 and inserting the following: ‘‘except that if—

5 ‘‘(A) any agency’’;

6 (3) by striking ‘‘transaction, (2) such agency’’

7 and inserting the following: ‘‘transaction;

8 ‘‘(B) such agency’’;

9 (4) by striking ‘‘section 125, and (3) the obli10 gor’s’’ and inserting the following: ‘‘this section; and

11 ‘‘(C) the obligor’s’’; and

12 (5) by adding at the end the following new

13 paragraphs:

14 ‘‘(2) ACTIONS AFFECTED.—Except as otherwise

15 provided in paragraph (1), the expiration of the

16 right of rescission pursuant to this subsection shall

17 be absolute and no consumer may assert rescission,

18 affirmatively or as a defense, in any action brought

19 under this title in any State or Federal court after

20 the earlier of—

21 ‘‘(A) the expiration of the 3-year period be22 ginning on the date on which the transaction is

23 consummated; or

24 ‘‘(B) the date of the sale of the property

25 securing the loan or other extension of credit.
25

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1 ‘‘(3) PREEMPTION OF STATE LAW.—This sub2 section shall supersede any State law that is incon3 sistent with any provision of this subsection.’’.

4 SEC. 118. ASSIGNEE LIABILITY.

5 (a) VIOLATIONS APPARENT ON THE FACE OF TRANS6 ACTION DOCUMENTS.—Section 131(a) of the Truth in

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

8 follows:

9 ‘‘(a) LIABILITY OF ASSIGNEE FOR APPARENT VIOLA10 TIONS.—

11 ‘‘(1) IN GENERAL.—Except as otherwise specifi12 cally provided in this title, any civil action against

13 a creditor for a violation of this title, and any pro14 ceeding under section 108 against a creditor, with

15 respect to a consumer credit transaction may be

16 maintained against any assignee of such creditor

17 only if—

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

19 proceeding is brought is apparent on the face of

20 the disclosure statement provided in connection

21 with such transaction pursuant to this title; and

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

23 voluntary.

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

25 THE DISCLOSURE DESCRIBED.—For purposes of this
26

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1 section, a violation is apparent on the face of the

2 disclosure statement if—

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

4 be incomplete or inaccurate from the face of the

5 disclosure statement; or

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

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

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

9 131 of the Truth in Lending Act (15 U.S.C. 1641) is

10 amended by adding at the end the following new sub11 section:

12 ‘‘(d) TREATMENT OF SERVICER.—

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

14 obligation arising from a consumer credit trans15 action shall not be treated as an assignee of such ob16 ligation for purposes of this section unless the

17 servicer is the owner of the obligation.

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

19 BASIS OF ASSIGNMENT FOR ADMINISTRATIVE CON20 VENIENCE.—A servicer of a consumer obligation

21 arising from a consumer credit transaction shall not

22 be treated as the owner of the obligation for pur23 poses of this section on the basis of an assignment

24 of the obligation from the creditor or another as25 signee to the servicer solely for the administrative
27

•S 650 IS

1 convenience of the servicer in servicing the obliga2 tion.

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

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

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

6 Procedures Act of 1974.’’.

7 SEC. 119. MODIFICATION OF WAIVER OF RIGHT OF RESCIS8 SION.

9 Section 125(d) of the Truth in Lending Act (15

10 U.S.C. 1635(d)) is amended by striking ‘‘, if it finds that

11 such action is necessary in order to permit homeowners

12 to meet bona fide personal financial emergencies,’’.

13 SEC. 120. APPLICABILITY.

14 Except as provided in section 113(d), the amend15 ments made by this part shall apply to all consumer credit

16 transactions consummated on or after the date of enact17 ment of this Act.

18 Subtitle B—Amendments to the

19 Community Reinvestment Act of

20 1977

21 SEC. 131. EXPRESSION OF CONGRESSIONAL INTENTION.

22 Section 802(b) of the Community Reinvestment Act

23 of 1977 (12 U.S.C. 2901(b)) is amended to read as

24 follows:
28

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1 ‘‘(b) It is the purpose of this title to require each ap2 propriate Federal financial supervisory agency to use the

3 authority of such agency, in examining financial institu4 tions, to encourage such institutions to help meet the cred5 it needs of the local communities in which they are char6 tered, consistent with the safe and sound operation of such

7 institutions. In examining financial institutions under this

8 title, a supervisory agency shall not impose any record9 keeping or reporting requirements that do not have the

10 effect of eliminating, streamlining, or reducing regulatory

11 burdens upon such institutions.’’.

12 SEC. 132. SMALL BANK EXEMPTION.

13 The Community Reinvestment Act of 1977 (12

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

15 the following new section:

16 ‘‘SEC. 809. EXEMPT INSTITUTIONS.

17 ‘‘This title does not apply to a regulated financial in18 stitution for a calendar year if, as of the close of the imme19 diately preceding calendar year, the total assets of the in20 stitution were not more than $250,000,000.’’.

21 SEC. 133. COMMUNITY INPUT AND CONCLUSIVE RATING.

22 (a) COMMUNITY INPUT AND CONCLUSIVE RATING.—

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

24 2901 et seq.) is amended by inserting after section 806

25 the following new section:
29

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

2 ‘‘(a) PUBLICATION OF EXAMINATION SCHEDULE

3 AND OPPORTUNITY FOR COMMENT.—

4 ‘‘(1) PUBLICATION OF LIST; PUBLIC COM5 MENTS.—Thirty days prior to the beginning of each

6 calendar quarter, each appropriate Federal financial

7 supervisory agency shall—

8 ‘‘(A) publish in the Federal Register a list

9 of institutions scheduled for examination pursu10 ant to this title during that calendar quarter;

11 and

12 ‘‘(B) provide an opportunity for comments

13 from the community on the performance, under

14 this title, of each institution scheduled for ex15 amination.

16 ‘‘(2) RECEIPT OF COMMENTS.—Any comments

17 submitted under paragraph (1) shall be received by

18 the appropriate Federal financial supervisory agency

19 not later than 30 days after the commencement of

20 the relevant calendar quarter.

21 ‘‘(b) RECONSIDERATION OF RATING.—

22 ‘‘(1) IN GENERAL.—Upon the filing of a re23 quest in accordance with this subsection, the rating

24 of an institution made available to the public in ac25 cordance with section 807(b)(1)(C) may be reconsid-
30

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1 ered by the appropriate Federal financial supervisory

2 agency.

3 ‘‘(2) SPECIFIC REQUIREMENTS.—Each request

4 under paragraph (1)—

5 ‘‘(A) shall be made in writing;

6 ‘‘(B) shall be filed with the appropriate

7 Federal financial supervisory agency not later

8 than 30 days after the date on which the rating

9 of the institution is made available to the public

10 in accordance with section 807(b)(1)(C);

11 ‘‘(C) may be filed by the institution or by

12 a member of the community; and

13 ‘‘(D) shall be based on significant issues of

14 a substantive nature that are relevant to the de15 lineated community of the institution and, in

16 the case of a request made by a member of the

17 community, shall be limited to issues previously

18 raised in comments submitted pursuant to sub19 section (a).

20 ‘‘(3) COMPLETION OF REQUESTED RECONSID21 ERATION.—Not later than 30 days after receiving a

22 request for reconsideration filed in accordance with

23 this subsection, the appropriate Federal financial su24 pervisory agency shall complete the requested recon25 sideration.
31

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1 ‘‘(c) CONCLUSIVE RATING.—

2 ‘‘(1) IN GENERAL.—The rating of an institution

3 under section 807(b)(1)(C) shall become conclusive

4 on the later of—

5 ‘‘(A) 30 days after the date on which the

6 rating is made available to the public under

7 that section; or

8 ‘‘(B) the completion of any requested re9 consideration by the appropriate Federal finan10 cial supervisory agency in accordance with sub11 section (b).

12 ‘‘(2) EFFECT.—The rating of an institution

13 shall be the conclusive assessment of the record of

14 the institution in meeting the credit needs of the

15 community of the institution for purposes of section

16 804 until the next rating of the institution, devel17 oped pursuant to an examination, becomes conclu18 sive. Each institution that receives a ‘satisfactory’ or

19 ‘outstanding’ rating shall be deemed to have met the

20 purposes of section 804. Notwithstanding any other

21 provision of law, nothing in this subsection shall be

22 construed to grant a cause of action to any person.’’.

23 (b) CONFORMING AMENDMENT.—Section 804(a) of

24 the Community Reinvestment Act of 1977 (12 U.S.C.
32

•S 650 IS

1 2903(a)) is amended by inserting ‘‘conducted in accord2 ance with section 806A,’’ after ‘‘financial institution,’’.

3 SEC. 134. SPECIAL PURPOSE BANKS.

4 (a) DEFINITION.—Section 803 of the Community Re5 investment Act of 1977 (12 U.S.C. 2902) is amended—

6 (1) by redesignating the first paragraph des7 ignated as paragraph (2) as subparagraph (D) and

8 indenting accordingly;

9 (2) in paragraph (2), by striking ‘‘and’’ at the

10 end;

11 (3) in paragraph (3), by striking the period at

12 the end and inserting a semicolon;

13 (4) in paragraph (4)—

14 (A) by striking ‘‘A financial’’ and inserting

15 ‘‘a financial’’; and

16 (B) by striking the period at the end and

17 inserting ‘‘; and’’; and

18 (5) by adding at the end the following new

19 paragraph:

20 ‘‘(5) the term ‘special purpose bank’ means a

21 bank that does not generally accept deposits from

22 the public in amounts that are less than $100,000,

23 such as a credit card bank or a trust bank.’’.
33

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1 (b) ASSESSMENT OF RECORD OF MEETING COMMU2 NITY CREDIT NEEDS.—Section 804 of the Community

3 Reinvestment Act of 1977 (12 U.S.C. 2903) is amended—

4 (1) by striking the section designation and all

5 that follows through ‘‘In connection with’’ and in6 serting the following:

7 ‘‘SEC. 804. ASSESSMENT OF RECORD OF MEETING COMMU8 NITY CREDIT NEEDS.

9 ‘‘(a) IN GENERAL.—In connection with’’; and

10 (2) by adding at the end the following new sub11 section:

12 ‘‘(c) SPECIAL PURPOSE BANKS.—In conducting as13 sessments under subsection (a) at special purpose banks,

14 each appropriate Federal financial supervisory agency

15 shall—

16 ‘‘(1) take into consideration the nature of the

17 businesses in which such banks are involved; and

18 ‘‘(2) develop standards under which such banks

19 may be deemed to have complied with the require20 ments of this title that are consistent with the spe21 cific nature of such businesses.’’.
34

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1 SEC. 135. INCREASED INCENTIVES TO LENDING TO LOW2 AND MODERATE-INCOME COMMUNITIES.

3 Section 804 of the Community Reinvestment Act of

4 1977 (12 U.S.C. 2903) is amended by adding at the end

5 the following new subsection:

6 ‘‘(d) LENDING TO LOW- AND MODERATE-INCOME

7 COMMUNITIES.—In assessing and taking into account the

8 record of a financial institution under subsection (a), the

9 appropriate Federal financial supervisory agency shall give

10 positive consideration to any investments in and loans to

11 joint ventures or entities or projects that provide benefits

12 to distressed communities (as such term is defined by the

13 appropriate Federal financial supervisory agency) made by

14 the institution, regardless of whether or not the commu15 nities are located within the service area of the financial

16 institution.’’.

17 Subtitle C—Payment of Interest

18 Act

19 SEC. 141. PAYMENT OF INTEREST ACT.

20 Subtitle F of title II of the Federal Deposit Insurance

21 Corporation Improvement Act of 1991 (12 U.S.C. 4301

22 et seq.) is amended to read as follows:
35

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1 ‘‘Subtitle F—Payment of Interest

2 Act

3 ‘‘SEC. 261. SHORT TITLE.

4 ‘‘This subtitle may be cited as the ‘Payment of Inter5 est Act’.

6 ‘‘SEC. 262. FINDINGS AND PURPOSE.

7 ‘‘(a) FINDINGS.—The Congress finds that the Truth

8 in Savings Act created unnecessary paperwork, adminis9 trative and compliance burdens, and liability for deposi10 tory institutions without enhancing the ability of consum11 ers to make informed decisions regarding deposit ac12 counts.

13 ‘‘(b) PURPOSE.—It is the purpose of this subtitle—

14 ‘‘(1) to repeal the unnecessary disclosure re15 quirements of the Truth in Savings Act; and

16 ‘‘(2) to retain the provisions of the Truth in

17 Savings Act that require that interest be paid on the

18 full amount of the principal in the account for each

19 day of the stated calculation period at the rate or

20 rates of interest disclosed.

21 ‘‘SEC. 263. PAYMENT OF INTEREST.

22 ‘‘(a) CALCULATED ON FULL AMOUNT OF PRIN23 CIPAL.—Interest on an interest-bearing account at any de24 pository institution shall be calculated by the institution

25 on the full amount of principal in the account for each
36

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1 day of the stated calculation period at the rate or rates

2 of interest disclosed by the depository institution.

3 ‘‘(b) NO PARTICULAR METHOD OF COMPOUNDING

4 INTEREST REQUIRED.—Subsection (a) shall not be con5 strued to prohibit or require the use of any particular

6 method of compounding or crediting of interest.

7 ‘‘(c) DATE BY WHICH INTEREST SHALL ACCRUE.—

8 Interest on accounts that are subject to this subtitle shall

9 begin to accrue not later than the business day specified

10 for interest-bearing accounts in section 606 of the Expe11 dited Funds Availability Act, subject to subsections (b)

12 and (c) of that section.

13 ‘‘SEC. 264. REGULATIONS.

14 ‘‘(a) IN GENERAL.—

15 ‘‘(1) BY THE BOARD.—The Board, after con16 sultation with each agency referred to in section

17 265(a) and public notice and opportunity for com18 ment, shall promulgate regulations to carry out this

19 subtitle.

20 ‘‘(2) APPLICABILITY.—This subtitle does not

21 apply with respect to any depository institution be22 fore the effective date of regulations promulgated by

23 the Board under paragraph (1).
37

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1 ‘‘SEC. 265. ADMINISTRATIVE ENFORCEMENT.

2 ‘‘(a) IN GENERAL.—Compliance with the require3 ments imposed under this subtitle shall be enforced

4 under—

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

6 Act—

7 ‘‘(A) by the appropriate Federal banking

8 agency with respect to any insured depository

9 institution;

10 ‘‘(B) by the Federal Deposit Insurance

11 Corporation with respect to any depository in12 stitution described in clause (i), (ii), or (iii) of

13 section 19(b)(1)(A) of the Federal Reserve Act

14 that is not an insured depository institution;

15 and

16 ‘‘(C) by the Director of the Office of Thrift

17 Supervision with respect to any depository insti18 tution described in clause (v) and or (vi) of sec19 tion 19(b)(1)(A) of the Federal Reserve Act

20 that is not an insured depository institution;

21 and

22 ‘‘(2) the Federal Credit Union Act, by the Na23 tional Credit Union Administration Board with re24 spect to any depository institution described in sec25 tion 19(b)(1)(A)(iv) of the Federal Reserve Act.

26 ‘‘(b) ADDITIONAL ENFORCEMENT POWERS.—
38

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1 ‘‘(1) VIOLATIONS.—For purposes of the exer2 cise by any agency referred to in subsection (a) of

3 the powers of such agency under any Act referred to

4 in such subsection, a violation of a requirement im5 posed under this title shall be deemed to be a viola6 tion of a requirement imposed under that Act.

7 ‘‘(2) POWERS.—In addition to the powers of

8 any agency referred to in subsection (a) under any

9 provision of law specifically referred to in such sub10 section, each such agency may exercise, for purposes

11 of enforcing compliance with any requirement im12 posed under this subtitle, any other authority con13 ferred on such agency by law.

14 ‘‘(3) REGULATIONS BY AGENCIES OTHER THAN

15 THE BOARD.—The authority of the Board to pro16 mulgate regulations under this subtitle does not im17 pair the authority of any other agency referred to in

18 subsection (a) to make rules regarding the proce19 dures of the Board in enforcing compliance with the

20 requirements imposed under this subtitle.

21 ‘‘SEC. 266. CIVIL LIABILITY.

22 ‘‘(a) CIVIL LIABILITY.—Except as otherwise provided

23 in this section, any depository institution that fails to com24 ply with any requirement imposed under this subtitle or

25 any regulation promulgated under this subtitle with re-
39

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1 spect to any person who is an account holder at that insti2 tution shall be liable to such person in an amount equal

3 to the sum of—

4 ‘‘(1) any actual damage sustained by such per5 son as a result of the failure;

6 ‘‘(2) such additional amount as the court may

7 allow, except that liability under this subparagraph

8 shall not be less than $100 nor greater than $1,000;

9 and

10 ‘‘(3) in the case of any successful action to en11 force any liability under paragraph (1), the costs of

12 the action, together with a reasonable attorney’s fee,

13 as determined by the court.

14 ‘‘(b) BONA FIDE ERRORS.—

15 ‘‘(1) IN GENERAL.—A depository institution

16 may not be held liable in any action brought under

17 this section for a violation of this subtitle if the de18 pository institution demonstrates by a preponder19 ance of the evidence that the violation was not inten20 tional and resulted from a bona fide error, notwith21 standing the maintenance of procedures reasonably

22 adopted to avoid any such error.

23 ‘‘(2) EXAMPLES.—For purposes of paragraph

24 (1), examples of a bona fide error include clerical,

25 calculation, computer malfunction and programming,
40

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1 and printing errors, except that an error of legal

2 judgment with respect to an obligation of a deposi3 tory institution under this subtitle is not a bona fide

4 error.

5 ‘‘(c) JURISDICTION.—Any action under this section

6 may be brought in any United States district court, or

7 in any other court of competent jurisdiction, not later than

8 1 year after the date of the occurrence of the violation

9 involved.

10 ‘‘(d) RELIANCE ON BOARD RULINGS.—No provision

11 of this section imposing any liability shall apply to any

12 act done or omitted in good faith in conformity with any

13 regulation or order, or any interpretation of any regulation

14 or order, of the Board, or in conformity with any interpre15 tation or approval by an official or employee of the Board

16 duly authorized by the Board to issue such interpretation

17 or approval under procedures prescribed by the Board,

18 notwithstanding the fact that after such act or omission

19 has occurred, such regulation, order, interpretation, or ap20 proval is amended, rescinded, or determined by judicial or

21 other authority to be invalid for any reason.

22 ‘‘(e) NOTIFICATION OF AND ADJUSTMENT FOR ER23 RORS.—A depository institution shall not be liable under

24 this section or section 265 for any failure to comply with
41

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1 any requirement imposed under this subtitle with respect

2 to any account if—

3 ‘‘(1) the depository institution notifies the af4 fected account holder of the failure of such institu5 tion to comply with such requirement before—

6 ‘‘(A) the expiration of the 60-day period

7 beginning on the date on which the depository

8 institution discovered the failure to comply;

9 ‘‘(B) any action is instituted against the

10 depository institution by the account holder

11 under this section with respect to such failure

12 to comply; and

13 ‘‘(C) any written notice of such failure to

14 comply is received by the depository institution

15 from the account holder; and

16 ‘‘(2) the depository institution makes such ad17 justments as may be necessary with respect to the

18 account to ensure that interest is paid on the full

19 amount of principal in the account for each day of

20 the stated calculation period at the rate or rates of

21 interest disclosed by the depository institution.

22 ‘‘(f) MULTIPLE INTEREST IN 1 ACCOUNT.—If more

23 than 1 person holds an interest in any account—

24 ‘‘(1) the minimum and maximum amounts of li25 ability under subsection (a)(2) for any failure to
42

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1 comply with the requirements of this subtitle shall

2 apply with respect to such account; and

3 ‘‘(2) the court shall determine the manner in

4 which the amount shall be distributed among such

5 persons.

6 ‘‘(g) CONTINUING FAILURE TO COMPLY.—

7 ‘‘(1) SINGLE VIOLATION.—Except as provided

8 in paragraph (2), the continuing failure of any de9 pository institution to pay interest in accordance

10 with section 263 with respect to a particular account

11 shall be treated as a single violation for purposes of

12 determining the amount of any liability of such insti13 tution under subsection (a) for such failure to dis14 close.

15 ‘‘(2) SUBSEQUENT VIOLATION.—The continuing

16 failure of any depository institution to pay interest

17 in accordance with section 263 with respect to a par18 ticular account after judgment is rendered in favor

19 of the account holder in connection with a prior fail20 ure to pay interest in accordance with section 263

21 with respect to such account shall be treated as a

22 subsequent violation for purposes of determining li23 ability under subsection (a).

24 ‘‘(3) EFFECT ON ENFORCEMENT POWER.—This

25 subsection does not limit or otherwise affect the en-
43

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1 forcement power under section 265 of any agency re2 ferred to in section 265(a).

3 ‘‘SEC. 267. DEFINITIONS.

4 ‘‘For purposes of this subtitle, the following defini5 tions shall apply:

6 ‘‘(1) ACCOUNT.—The term ‘account’ means any

7 account intended for use by and generally used by

8 a consumer primarily for personal, family, or house9 hold purposes that is offered by a depository institu10 tion into which a customer deposits funds, including

11 demand accounts, time accounts, negotiable order of

12 withdrawal accounts, and share draft accounts.

13 ‘‘(2) APPROPRIATE FEDERAL BANKING AGEN14 CY.—The term ‘appropriate Federal banking agency’

15 has the same meaning as in section 3 of the Federal

16 Deposit Insurance Act.

17 ‘‘(3) DEPOSITORY INSTITUTION.—The term ‘de18 pository institution’ has the same meaning as in

19 clauses (i) through (vi) of section 19(b)(1)(A) of the

20 Federal Reserve Act.

21 ‘‘(4) INSURED DEPOSITORY INSTITUTION.—The

22 term ‘insured depository institution’ has the same

23 meaning as in section 3 of the Federal Deposit In24 surance Act.
44

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1 ‘‘(5) INTEREST.—The term ‘interest’ includes

2 dividends paid with respect to share draft accounts

3 that are accounts within the meaning of paragraph

4 (1).’’.

5 TITLE II—STREAMLINING

6 GOVERNMENT REGULATION

7 Subtitle A—Eliminating Unneces8 sary Regulatory Requirements

9 and Procedures

10 SEC. 201. STREAMLINING OF PRIOR APPROVAL REQUIRE11 MENT FOR CERTAIN ACQUISITIONS.

12 (a) BANK HOLDING COMPANY ACT OF 1956 AMEND13 MENTS.—Section 3 of the Bank Holding Company Act of

14 1956 (12 U.S.C. 1842) is amended by adding at the end

15 the following new subsections:

16 ‘‘(h) NO APPROVAL REQUIRED FOR CERTAIN TRANS17 ACTIONS.—Notwithstanding paragraph (3) or (5) of sub18 section (a), an acquisition of shares by a registered bank

19 holding company, or a merger or consolidation between

20 registered bank holding companies, shall be deemed to be

21 approved at the conclusion of the period specified in para22 graph (7) if each of the following criteria is met:

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

24 ‘‘(A) WELL CAPITALIZED BANK HOLDING

25 COMPANY.—Both at the time of and imme-
45

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1 diately after the proposed transaction, the ac2 quiring bank holding company is well capital3 ized.

4 ‘‘(B) WELL CAPITALIZED LEAD INSURED

5 DEPOSITORY INSTITUTION.—Both at the time

6 of and immediately after the proposed trans7 action, the lead insured depository institution of

8 the acquiring bank holding company is well cap9 italized.

10 ‘‘(C) CAPITAL OF OTHER INSURED DEPOSI11 TORY INSTITUTIONS.—At the time of the trans12 action, well capitalized insured depository insti13 tutions control not less than 80 percent of the

14 aggregate total risk-weighted assets of all in15 sured depository institutions controlled by the

16 acquiring bank holding company.

17 ‘‘(D) NO UNDERCAPITALIZED INSURED

18 DEPOSITORY INSTITUTIONS.—At the time of the

19 transaction, no insured depository institution

20 controlled by the acquiring bank holding com21 pany is undercapitalized.

22 ‘‘(E) WELL MANAGED.—

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

24 transaction, the acquiring bank holding

25 company, the lead insured depository insti-
46

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1 tution of that bank holding company, and

2 insured depository institutions that control

3 not less than 90 percent of the aggregate

4 total risk-weighted assets of all insured de5 pository institutions controlled by that

6 bank holding company are well managed.

7 ‘‘(ii) NO POORLY MANAGED INSTITU8 TIONS.—

9 ‘‘(I) IN GENERAL.—No insured

10 depository institution controlled by

11 the acquiring bank holding company

12 has 1 of the lowest 2 CAMEL com13 posite ratings under the Uniform Fi14 nancial Institutions Rating System (or

15 an equivalent rating under a com16 parable rating system) as of the most

17 recent examination or most recent re18 view of the institution by the appro19 priate Federal banking agency.

20 ‘‘(II) RECENTLY ACQUIRED IN21 STITUTIONS.—Subclause (I) does not

22 apply to an insured depository institu23 tion acquired by the acquiring bank

24 holding company during the 12-month
47

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1 period preceding the date of the pro2 posed transaction, if—

3 ‘‘(aa) the bank holding com4 pany has developed a plan ac5 ceptable to the appropriate Fed6 eral banking agency for the insti7 tution to restore the capital and

8 management of the institution;

9 and

10 ‘‘(bb) all such insured depos11 itory institutions represent, in

12 the aggregate, less than 10 per13 cent of the aggregate total risk14 weighted assets of all of the in15 sured depository institutions con16 trolled by the bank holding com17 pany.

18 ‘‘(iii) ADJUSTMENT OF AMOUNTS.—

19 The Board may, by regulation, adjust the

20 amounts and the manner in which the per21 centage of insured depository institutions

22 is calculated under clauses (i) and

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

24 such adjustment is consistent with the
48

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1 principles of safety and soundness and the

2 purposes of this Act.

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

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

5 institution controlled by the acquiring bank

6 holding company has a ‘needs to improve’ or

7 ‘substantial noncompliance’ composite rating as

8 of the most recent examination of such institu9 tion under the Community Reinvestment Act of

10 1977.

11 ‘‘(B) RECENTLY ACQUIRED INSTITU12 TIONS.—An insured depository institution ac13 quired by the acquiring bank holding company

14 during the 12-month period preceding the pro15 posed transaction may be excluded for purposes

16 of subparagraph (A) if the bank holding com17 pany has developed a plan acceptable to the ap18 propriate Federal banking agency to restore the

19 performance of the institution to at least a ‘sat20 isfactory’ composite rating under the Commu21 nity Reinvestment Act of 1977.

22 ‘‘(3) COMPETITIVE CRITERIA.—The consumma23 tion of the proposal complies with guidelines estab24 lished by the Board, by regulation, after consultation

25 with the Attorney General of the United States, that
49

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1 identify proposals that are not likely to have a sig2 nificantly adverse effect on competition in any rel3 evant financial services market.

4 ‘‘(4) SIZE OF ACQUISITION.—

5 ‘‘(A) LIMITATIONS.—

6 ‘‘(i) ASSET SIZE.—The book value of

7 the total assets acquired does not exceed

8 10 percent of the consolidated total risk9 weighted assets of the acquiring bank hold10 ing company.

11 ‘‘(ii) CONSIDERATION.—The gross

12 consideration to be paid for the securities

13 or assets does not exceed 15 percent of the

14 consolidated Tier 1 capital of the acquiring

15 bank holding company.

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

17 Board may, by regulation, adjust the limita18 tions established in this paragraph in a manner

19 consistent with the principles of safety and

20 soundness and the purposes of this Act.

21 ‘‘(5) INTERSTATE ACQUISITIONS.—Approval by

22 the Board of the transaction is not prohibited under

23 subsection (d).
50

•S 650 IS

1 ‘‘(6) OTHER CONSIDERATIONS.—Approval by

2 the Board of the transaction is not prohibited under

3 subsection (c)(3).

4 ‘‘(7) NOTIFICATION.—The acquiring bank hold5 ing company provides written notice to the Board of

6 the transaction, including a description of the terms

7 of the transaction, not later than 15 business days

8 (or such shorter period as established by the Board)

9 prior to consummation of the transaction, and, prior

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

11 required an application under subsection (a).

12 ‘‘(i) DEFINITIONS.—For purposes of subsection (h),

13 the following definitions shall apply:

14 ‘‘(1) APPROPRIATE FEDERAL BANKING AGEN15 CY.—The term ‘appropriate Federal banking agency’

16 has the same meaning as in section 38(b) of the

17 Federal Deposit Insurance Act.

18 ‘‘(2) CAPITAL TERMS.—

19 ‘‘(A) INSURED DEPOSITORY INSTITU20 TION.—With respect to an insured depository

21 institution, the terms ‘well capitalized’, ‘ade22 quately capitalized’, and ‘undercapitalized’ have

23 the same meanings as in section 38(b) of the

24 Federal Deposit Insurance Act.

25 ‘‘(B) BANK HOLDING COMPANY.—
51

•S 650 IS

1 ‘‘(i) ADEQUATELY CAPITALIZED.—A

2 bank holding company is ‘adequately cap3 italized’ if the company meets the required

4 minimum level for each relevant capital

5 measure established by the Board for bank

6 holding companies.

7 ‘‘(ii) WELL CAPITALIZED.—A bank

8 holding company is ‘well capitalized’ if the

9 company meets the required capital levels

10 for well capitalized bank holding companies

11 established by the Board.

12 ‘‘(C) OTHER CAPITAL TERMS.—The terms

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

14 same meanings as in the capital guidelines or

15 regulations established by the Board for bank

16 holding companies.

17 ‘‘(3) INSURED DEPOSITORY INSTITUTION.—The

18 term ‘insured depository institution’ includes any

19 branch or agency operated in the United States by

20 a foreign bank, as those terms are defined in section

21 1(b)(7) of the International Banking Act of 1978.

22 ‘‘(4) LEAD INSURED DEPOSITORY INSTITU23 TION.—The term ‘lead insured depository institu24 tion’ of a bank holding company means the largest

25 insured depository institution controlled by the bank
52

•S 650 IS

1 holding company, based on a comparison of the av2 erage total risk-weighted assets of each insured de3 pository institution controlled by that bank holding

4 company during the most recent fiscal year of that

5 bank holding company.

6 ‘‘(5) WELL MANAGED.—A bank holding com7 pany or depository institution is ‘well managed’ if,

8 as of the most recent examination or most recent re9 view of the company or institution by the appro10 priate Federal banking agency, the company or in11 stitution has—

12 ‘‘(A) a CAMEL composite rating of 1 or 2

13 under the Uniform Financial Institutions Rat14 ing System (or an equivalent rating under a

15 comparable rating system); and

16 ‘‘(B) at least a ‘satisfactory’ rating for

17 management.’’.

18 SEC. 202. ELIMINATION OF CERTAIN FILING AND AP19 PROVAL REQUIREMENTS FOR CERTAIN IN20 SURED DEPOSITORY INSTITUTIONS.

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

22 (12 U.S.C. 1828(c)) is amended by adding at the end the

23 following new paragraph:

24 ‘‘(12) EXCEPTIONS.—No prior approval is re25 quired under paragraph (2) for any merger, consoli-
53

•S 650 IS

1 dation, acquisition of assets, or assumption of liabil2 ities involving only insured depository institutions

3 that are subsidiaries of the same depository institu4 tion holding company if—

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

6 prohibited from approving the transaction

7 under section 44;

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

9 institution complies with all applicable provi10 sions of section 44 as if the merger, consolida11 tion, or acquisition were approved under this

12 subsection; and

13 ‘‘(C) the acquiring, assuming, or resulting

14 institution provides written notification of the

15 transaction to the appropriate Federal banking

16 agency for the institution not later than 10

17 days prior to consummation of the trans18 action.’’.

19 SEC. 203. ELIMINATION OF REDUNDANT APPROVAL RE20 QUIREMENT FOR OAKAR TRANSACTIONS.

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

22 (12 U.S.C. 1815(d)(3)) is amended—

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

24 prior written approval of the responsible agency

25 under section 18(c)(2)’’;
54

•S 650 IS

1 (2) by striking subparagraph (E) and inserting

2 the following:

3 ‘‘(E) CONDITIONS FOR APPROVAL, GEN4 ERALLY.—A transaction is not authorized

5 under this paragraph unless the acquiring, as6 suming, or resulting depository institution will

7 meet all applicable capital requirements upon

8 consummation of the transaction.’’; and

9 (3) by striking subparagraph (G) and redesig10 nating subparagraphs (H) through (J) as subpara11 graphs (G) through (I), respectively.

12 SEC. 204. ELIMINATION OF UNNECESSARY BRANCH APPLI13 CATIONS.

14 (a) NATIONAL BANK BRANCH APPLICATIONS.—Sec15 tion 5155(i) of the Revised Statutes (12 U.S.C. 36(i)) is

16 amended—

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

18 following:

19 ‘‘(1) APPROVAL REQUIRED.—Except as pro20 vided in paragraph (2), no branch’’; and

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

22 paragraphs:

23 ‘‘(2) NO APPROVAL REQUIRED FOR CERTAIN

24 BRANCHES.—Notwithstanding paragraph (1) of this

25 subsection, subsection (b), or subsection (c), the con-
55

•S 650 IS

1 sent and approval of the Comptroller of the Cur2 rency shall not be required for a national banking

3 association to establish and operate, or to retain and

4 operate, a branch or seasonal agency if—

5 ‘‘(A) the association is well capitalized, as

6 such term is defined in section 38(b) of the

7 Federal Deposit Insurance Act and rules adopt8 ed by the Comptroller of the Currency there9 under;

10 ‘‘(B) the association has a CAMEL com11 posite rating of 1 or 2 under the Uniform Fi12 nancial Institutions Rating System (or an

13 equivalent rating under a comparable rating

14 system) as of the most recent examination of

15 such association;

16 ‘‘(C) the association does not have a ‘needs

17 to improve’ or ‘substantial noncompliance’ com18 posite rating as of the most recent examination

19 of the association under the Community Rein20 vestment Act of 1977; and

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

22 otherwise authorized to grant approval under

23 this section for such action at the proposed lo24 cation.
56

•S 650 IS

1 ‘‘(3) ESTABLISHMENT BY NATIONAL BANKING

2 ASSOCIATION.—A branch or seasonal agency estab3 lished by a national banking association under para4 graph (2) shall be deemed to have been established

5 and operated pursuant to an application approved

6 under this section.’’.

7 (b) STATE MEMBER BANK BRANCH APPLICA8 TIONS.—The third undesignated paragraph of section 9

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

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

11 2 preceding sentences, the approval of the Board shall not

12 be required for a State member bank to establish and op13 erate a branch or seasonal agency if—

14 ‘‘(1) the State member bank is well capitalized,

15 as such term is defined in section 38(b) of the Fed16 eral Deposit Insurance Act and rules adopted by the

17 Board thereunder;

18 ‘‘(2) the State member bank has a CAMEL

19 composite rating of 1 or 2 under the Uniform Fi20 nancial Institutions Rating System (or an equivalent

21 rating under a comparable rating system) as of the

22 most recent examination of such State member

23 bank;

24 ‘‘(3) the State member bank does not have a

25 ‘needs to improve’ or ‘substantial noncompliance’
57

•S 650 IS

1 composite rating as of the most recent examination

2 of the member bank under the Community Reinvest3 ment Act of 1977; and

4 ‘‘(4) the Board is authorized to grant approval

5 under this section to such State member bank to es6 tablish and operate a branch or seasonal agency at

7 the proposed location.

8 A branch or seasonal agency established by a State mem9 ber bank under the preceding sentence shall be deemed

10 to have been established and operated pursuant to an ap11 plication approved under this section.’’.

12 (c) STATE NONMEMBER BANK BRANCH APPLICA13 TIONS.—Section 18(d) of the Federal Deposit Insurance

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

15 the following new paragraphs:

16 ‘‘(5) APPLICATION EXEMPTION FOR CERTAIN

17 BANKS.—Notwithstanding paragraph (1), the con18 sent of the Corporation shall not be required for a

19 State nonmember insured bank to establish and op20 erate any domestic branch if—

21 ‘‘(A) the bank is well capitalized, as such

22 term is defined in section 38(b) and rules

23 adopted by the Corporation thereunder;

24 ‘‘(B) the bank has a CAMEL composite

25 rating of 1 or 2 under the Uniform Financial
58

•S 650 IS

1 Institutions Rating System (or an equivalent

2 rating under a comparable rating system) as of

3 the most recent examination of such bank;

4 ‘‘(C) the bank does not have a ‘needs to

5 improve’ or ‘substantial noncompliance’ compos6 ite rating as of the most recent examination of

7 such bank under the Community Reinvestment

8 Act of 1977; and

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

10 consent under this section to such bank to es11 tablish and operate a domestic branch at the

12 proposed location.

13 ‘‘(6) APPROVAL GRANTED.—A branch estab14 lished by a State member bank under paragraph (5)

15 shall be deemed to have been established and oper16 ated pursuant to an application approved under this

17 section.’’.

18 SEC. 205. ELIMINATION OF DUPLICATIVE REQUIREMENTS

19 IMPOSED UPON BANK HOLDING COMPANIES

20 UNDER THE HOME OWNERS’ LOAN ACT.

21 (a) EXEMPTION FOR BANK HOLDING COMPANIES.—

22 Section 10 of the Home Owners’ Loan Act (12 U.S.C.

23 1467a) is amended by adding at the end the following new

24 subsection:
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•S 650 IS

1 ‘‘(t) EXEMPTION FOR BANK HOLDING COMPA2 NIES.—This section does not apply to a bank holding com3 pany that is subject to the Bank Holding Company Act

4 of 1956, or any company controlled by such bank holding

5 company.’’.

6 (b) DEFINITION.—Section 10(a)(1)(D) of the Home

7 Owners’ Loan Act (12 U.S.C. 1467a(a)(1)(D)) is amend8 ed to read as follows:

9 ‘‘(D) SAVINGS AND LOAN HOLDING COM10 PANY.—

11 ‘‘(i) IN GENERAL.—Except as pro12 vided in clause (ii), the term ‘savings and

13 loan holding company’ means any company

14 that directly or indirectly controls a sav15 ings association or controls any other com16 pany that is a savings and loan holding

17 company.

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

19 and loan holding company’ does not in20 clude a bank holding company that is reg21 istered under, and subject to, the Bank

22 Holding Company Act of 1956, or to any

23 company directly or indirectly controlled by

24 such company (other than a savings asso25 ciation).’’.
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•S 650 IS

1 (c) ACQUISITIONS.—Section 10(e)(1)(B) of the Home

2 Owners’ Loan Act (12 U.S.C. 1467a(e)(1)(B)) is amended

3 in the first sentence—

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

5 and

6 (2) by inserting after ‘‘group of persons’’ the

7 following: ‘‘, or (iii) acquired by a bank holding com8 pany that is registered under, and subject to, the

9 Bank Holding Company Act of 1956, or any com10 pany controlled by such bank holding company’’.

11 SEC. 206. ELIMINATION OF THE PER BRANCH CAPITAL RE12 QUIREMENT FOR NATIONAL BANKS AND

13 STATE MEMBER BANKS.

14 Section 5155(h) of the Revised Statutes (12 U.S.C.

15 36(h)) is amended to read as follows:

16 ‘‘(h) [Reserved.]’’.

17 SEC. 207. ELIMINATION OF BRANCH APPLICATION RE18 QUIREMENTS FOR AUTOMATIC TELLER MA19 CHINES.

20 (a) ‘‘BRANCH’’ UNDER NATIONAL BANK ACT.—Sec21 tion 5155(j) of the Revised Statutes (12 U.S.C. 36(j)) is

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

23 ‘branch’ does not include an automated teller machine or

24 a remote service unit.’’.
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•S 650 IS

1 (b) ‘‘BRANCH’’ UNDER FEDERAL DEPOSIT INSUR2 ANCE ACT.—Section 3(o) of the Federal Deposit Insur3 ance Act (12 U.S.C. 1813(o)) is amended by striking

4 ‘‘lent; and the’’ and inserting ‘‘lent. The term ‘domestic

5 branch’ does not include an automated teller machine or

6 a remote service unit. The’’.

7 SEC. 208. ELIMINATION OF REQUIREMENT FOR APPROVAL

8 OF INVESTMENTS IN BANK PREMISES FOR

9 WELL CAPITALIZED AND WELL MANAGED

10 BANKS.

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

12 371d) is amended by inserting before the period at the

13 end the following: ‘‘, or if such bank has a CAMEL com14 posite rating of 1 or 2 under the Uniform Financial Insti15 tutions Rating System (or an equivalent rating under a

16 comparable rating system) as of the most recent examina17 tion of such bank and, both before and immediately follow18 ing the investment or loan, is well capitalized (as such

19 term is defined in section 38(b) of the Federal Deposit

20 Insurance Act) and the amount of such investment or loan

21 would be equal to or less than 150 percent of the capital

22 and surplus of such bank’’.
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•S 650 IS

1 SEC. 209. ELIMINATION OF APPROVAL REQUIREMENT FOR

2 DIVESTITURES.

3 Section 2(g) of the Bank Holding Company Act of

4 1956 (12 U.S.C. 1841(g)) is amended—

5 (1) in paragraph (1), by adding ‘‘and’’ at the

6 end;

7 (2) in paragraph (2), by striking ‘‘; and’’ and

8 inserting a period; and

9 (3) by striking paragraph (3).

10 SEC. 210. ELIMINATION OF UNNECESSARY FILING FOR OF11 FICER AND DIRECTOR APPOINTMENTS.

12 Section 32 of the Federal Deposit Insurance Act (12

13 U.S.C. 1831i) is amended—

14 (1) in subsection (a)—

15 (A) by inserting ‘‘(or such other period, as

16 determined by the appropriate Federal banking

17 agency)’’ after ‘‘30 days’’;

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

19 institution or depository institution holding

20 company’’ and inserting ‘‘if’’;

21 (C) by striking paragraphs (1) and (2);

22 (D) by redesignating paragraph (3) as

23 paragraph (1);

24 (E) in paragraph (1), as redesignated—

25 (i) by inserting ‘‘the insured deposi26 tory institution or depository institution
63

•S 650 IS

1 holding company’’ before ‘‘is not in compli2 ance’’; and

3 (ii) by striking the period at the end

4 and inserting ‘‘; and’’; and

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

6 paragraph:

7 ‘‘(G) the agency determines, in connection

8 with the review by the agency of the plan re9 quired under section 38 or otherwise, that such

10 prior notice is appropriate.’’; and

11 (2) in subsection (b), by striking ‘‘30-day pe12 riod’’ and inserting ‘‘notice period, not to exceed 90

13 days.’’.

14 SEC. 211. AMENDMENTS TO THE DEPOSITORY INSTITU15 TIONS MANAGEMENT INTERLOCKS ACT.

16 (a) DUAL SERVICE AMONG LARGER ORGANIZA17 TIONS.—Section 204 of the Depository Institution Man18 agement Interlocks Act (12 U.S.C. 3203) is amended—

19 (1) by striking ‘‘$1,000,000,000’’ and inserting

20 ‘‘$2,500,000,000’’;

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

22 ‘‘$1,500,000,000’’; and

23 (3) by adding at the end the following: ‘‘In

24 order to allow for inflation or market changes, the

25 appropriate Federal depository institutions regu-
64

•S 650 IS

1 latory agencies may, by regulation, adjust, as nec2 essary, the amount of total assets required for de3 pository institutions or depository holding companies

4 under this section.’’.

5 (b) EXTENSION OF GRANDFATHER EXEMPTION.—

6 Section 206 of the Depository Institution Management

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

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

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

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

11 (2) in subsection (b), by striking the second

12 sentence; and

13 (3) by striking subsection (c).

14 (c) RULES OR REGULATIONS.—Section 209 of the

15 Depository Institution Management Interlocks Act (12

16 U.S.C. 3207) is amended—

17 (1) by striking ‘‘(a) IN GENERAL.—Rules’’ and

18 inserting ‘‘Rules’’;

19 (2) by inserting ‘‘, including rules or regula20 tions that permit service by a management official

21 that would otherwise be prohibited by section 203 or

22 section 204,’’ after ‘‘title’’; and

23 (3) by striking subsections (b) and (c).
65

•S 650 IS

1 SEC. 212. ELIMINATION OF RECORDKEEPING AND REPORT2 ING REQUIREMENTS FOR OFFICERS.

3 (a) PERMISSIBILITY OF EMPLOYEE-WIDE BENEFIT

4 PLANS.—

5 (1) EMPLOYEE BENEFIT PLANS.—Section

6 22(h)(2) of the Federal Reserve Act (12 U.S.C.

7 375b(2)) is amended—

8 (A) by redesignating subparagraphs (A)

9 through (C) as clauses (i) through (iii), respec10 tively, and indenting accordingly;

11 (B) by striking ‘‘(2) PREFERENTIAL

12 TERMS PROHIBITED.—’’ and inserting the fol13 lowing:

14 ‘‘(2) PREFERENTIAL TERMS PROHIBITED.—

15 ‘‘(A) IN GENERAL.—’’; and

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

17 subparagraph:

18 ‘‘(B) EXCEPTION.—Nothing in this para19 graph shall prohibit extensions of credit made

20 pursuant to a benefit or compensation program

21 widely available to employees of the member

22 bank.’’.

23 (2) EXCEPTION FOR EXTENSIONS OF CREDIT

24 TO EXECUTIVE OFFICERS AND DIRECTORS OF

25 NONBANK AFFILIATES.—Section 22(h)(8)(B) of the

26 Federal Reserve Act (12 U.S.C. 375b(8)(B)) is
66

•S 650 IS

1 amended by striking ‘‘, except as that subparagraph

2 makes applicable paragraph (2),’’.

3 (b) RECORDKEEPING REQUIREMENTS.—Section

4 22(h)(10) of the Federal Reserve Act (12 U.S.C.

5 375b(10)) is amended—

6 (1) by striking ‘‘The Board’’ and inserting the

7 following:

8 ‘‘(A) IN GENERAL.—The Board’’; and

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

10 paragraph:

11 ‘‘(B) RECORDKEEPING REQUIREMENTS.—

12 The regulations prescribed by the Board under

13 subparagraph (A) shall—

14 ‘‘(i) specify the recordkeeping required

15 of member banks to ensure compliance

16 with this section; and

17 ‘‘(ii) provide that if a member bank is

18 determined to be in compliance with such

19 recordkeeping requirements, such member

20 bank shall also be determined to be in

21 compliance with the audit requirement of

22 section 36(e) of the Federal Deposit Insur23 ance Act.’’.

24 (c) REPORTING REQUIREMENTS.—Section 22(g) of

25 the Federal Reserve Act (12 U.S.C. 375a) is amended by
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•S 650 IS

1 striking paragraphs (6) and (9) and redesignating para2 graphs (7), (8), and (10) as paragraphs (6), (7), and (8),

3 respectively.

4 (d) UNNECESSARY REPORTS.—Section 7(k) of the

5 Federal Deposit Insurance Act (12 U.S.C. 1817(k)) is

6 amended to read as follows:

7 ‘‘(k) [Reserved.]’’.

8 (e) REPORTS REGARDING LOANS FROM COR9 RESPONDENT BANKS.—Section 106(b)(2) of the Bank

10 Holding Company Act Amendments of 1970 (12 U.S.C.

11 1972(2)) is amended—

12 (1) by striking subparagraph (G); and

13 (2) by redesignating subparagraphs (H) and (I)

14 as subparagraphs (G) and (H), respectively.

15 SEC. 213. ABOLITION OF APPRAISAL SUBCOMMITTEE;

16 TRANSFER OF FUNCTIONS.

17 (a) ABOLITION OF APPRAISAL SUBCOMMITTEE.—

18 (1) AMENDMENT TO FEDERAL FINANCIAL IN19 STITUTIONS EXAMINATION COUNCIL ACT OF 1978.—

20 Section 1011 of the Federal Financial Institutions

21 Examination Council Act of 1978 (12 U.S.C. 3310)

22 is repealed.

23 (2) AMENDMENTS TO THE FINANCIAL INSTITU24 TIONS REFORM, RECOVERY, AND ENFORCEMENT ACT

25 OF 1989.—
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1 (A) REPEALS.—The following sections of

2 the Financial Institutions Reform, Recovery,

3 and Enforcement Act of 1989 are repealed:

4 (i) Section 1102 (12 U.S.C. 3310).

5 (ii) Section 1104 (12 U.S.C. 3333).

6 (iii) Section 1105 (12 U.S.C. 3334).

7 (iv) Section 1106 (12 U.S.C. 3335).

8 (v) Section 1108 (12 U.S.C. 3337).

9 (B) DEFINITIONS.—Section 1121 of the

10 Financial Institutions Reform, Recovery, and

11 Enforcement Act of 1989 (12 U.S.C. 3350) is

12 amended—

13 (i) by striking paragraphs (2) and (8);

14 (ii) by redesignating paragraphs (3)

15 through (7) as paragraphs (2) through (6),

16 respectively; and

17 (iii) by redesignating paragraphs (9)

18 and (10) as paragraphs (7) and (8), re19 spectively.

20 (3) CONFORMING AMENDMENT TO THE NA21 TIONAL HOUSING ACT.—Section 202(e) of the Na22 tional Housing Act (12 U.S.C. 1708(e)) is amend23 ed—

24 (A) by striking paragraph (2); and
69

•S 650 IS

1 (B) by redesignating paragraphs (3) and

2 (4) and paragraphs (2) and (3), respectively.

3 (b) TRANSFER OF FUNCTIONS.—

4 (1) AMENDMENTS TO THE FINANCIAL INSTITU5 TIONS REFORM, RECOVERY, AND ENFORCEMENT ACT

6 OF 1989.—

7 (A) TRANSFER OF FUNCTIONS.—Section

8 1103 of the Financial Institutions Reform, Re9 covery, and Enforcement Act of 1989 (12

10 U.S.C. 3332) is amended—

11 (i) by striking ‘‘SEC. 1103.’’ and in12 serting ‘‘SEC. 1102.’’;

13 (ii) by striking ‘‘Appraisal Sub14 committee’’ each place such term appears

15 and inserting ‘‘Federal Financial Institu16 tions Examination Council’’; and

17 (iii) in subsection (a)—

18 (I) in paragraph (3), by inserting

19 before the semicolon the following:

20 ‘‘, if the Council determines that

21 maintaining a national registry under

22 this paragraph will further the pur23 poses of this title (as described in sec24 tion 1101)’’; and
70

•S 650 IS

1 (II) by striking paragraph (4)

2 and inserting the following:

3 ‘‘(4) include in its annual report to the Con4 gress a description of the manner in which the

5 Council has performed the functions assigned to the

6 Council under this title.’’.

7 (B) ROSTER OF STATE CERTIFIED OR LI8 CENSED APPRAISERS.—Section 1109 of the Fi9 nancial Institutions Reform, Recovery, and En10 forcement Act of 1989 (12 U.S.C. 3338) is

11 amended to read as follows:

12 ‘‘SEC. 1104. ROSTER OF STATE CERTIFIED OR LICENSED AP13 PRAISERS.

14 ‘‘(a) IN GENERAL.—Each State that has an ap15 praiser certifying and licensing agency with a certification

16 or license that meets the requirements of this title shall—

17 ‘‘(1) upon request of the Federal Financial In18 stitutions Examination Council, transmit to the

19 Council annually (or at a less frequent interval spec20 ified by the Council) a roster listing individuals who

21 have received a State certification or license in ac22 cordance with this title;

23 ‘‘(2) collect from such individuals who perform

24 or seek to perform appraisals in federally related

25 transactions, an annual registry fee, in an amount
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•S 650 IS

1 determined by the Council, but not to exceed $10

2 per year, to support the activities of the State under

3 this title; and

4 ‘‘(3) transmit all registry fees to the Council on

5 an annual basis.

6 ‘‘(b) STATUS OF FEES.—Fees collected and transmit7 ted to the Council under subsection (a) shall not be consid8 ered to be appropriated funds.’’.

9 (C) CONFORMING AMENDMENTS.—Title XI

10 of the Financial Institutions Reform, Recovery,

11 and Enforcement Act of 1989 (12 U.S.C. 3331

12 et seq.) is amended—

13 (i) in section 1116(e)—

14 (I) by striking ‘‘Appraisal Sub15 committee’’ and inserting ‘‘Federal

16 Financial Institutions Examination

17 Council’’; and

18 (II) by striking ‘‘the Subcommit19 tee’’ and inserting ‘‘the Federal Fi20 nancial Institutions Examination

21 Council’’;

22 (ii) in section 1118—

23 (I) in the subsection heading, by

24 striking ‘‘BY APPRAISAL SUBCOMMIT25 TEE’’; and
72

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1 (II) by striking ‘‘Appraisal Sub2 committee’’ each place such term ap3 pears and inserting ‘‘Federal Finan4 cial Institutions Examination Coun5 cil’’;

6 (iii) in section 1119—

7 (I) by striking ‘‘Subject to the

8 approval of the Council, the Appraisal

9 Subcommittee’’ each place such term

10 appears and inserting ‘‘The Council’’;

11 and

12 (II) by striking ‘‘Appraisal Sub13 committee’’ each place such term ap14 pears and inserting ‘‘Federal Finan15 cial Institutions Examination Coun16 cil’’;

17 (iv) in section 1120, by striking ‘‘Ap18 praisal Subcommittee’’ and inserting ‘‘Fed19 eral Financial Institutions Examination

20 Council’’;

21 (v) in section 1122, by striking sub22 section (f); and

23 (vi) by redesignating—

24 (I) section 1107 as section 1103;

25 and
73

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1 (II) sections 1109 through 1121

2 as sections 1104 through 1116, re3 spectively.

4 (2) ADMINISTRATIVE PROVISIONS.—

5 (A) REMISSION OF FUNDS TO THE TREAS6 URY.—On the date that is 90 days after the

7 date of enactment of this Act, all funds held by,

8 and the right to collect all funds owed to, the

9 Appraisal Subcommittee on the date that is 90

10 days after the date of enactment of this Act

11 shall be transferred to the Treasury of the

12 United States.

13 (B) REPAYMENT OF PREPAID REGISTRY

14 FEES.—Not later than 90 days after the date

15 of enactment of this Act, the Appraisal Sub16 committee shall refund to the States any reg17 istry fees prepaid to the Appraisal Subcommit18 tee after the date of enactment of this Act.

19 (C) TRANSFER OF EMPLOYEES.—

20 (i) IDENTIFYING EMPLOYEES FOR

21 TRANSFER.—Not later than 30 days after

22 the date of enactment of this Act, the

23 Council shall identify for transfer to the

24 Council the employees of the Appraisal

25 Subcommittee that the Council determines
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1 to be necessary to perform the functions

2 transferred to the Council under this sub3 section.

4 (ii) TRANSFER DATE.—On the date

5 that is 90 days after the date of enactment

6 of this Act, each employee identified for

7 transfer under clause (i) shall be trans8 ferred to the Council.

9 (D) RIGHTS OF TRANSFERRED EMPLOY10 EES.—

11 (i) COMPARABLE POSITIONS.—Each

12 employee transferred to the Council under

13 subparagraph (C) shall, on the transfer

14 date specified in subparagraph (C)(ii), be

15 appointed to a position under the com16 pensation system and performance evalua17 tion system of the Council that is com18 parable in tenure and grade to the position

19 held by the employee on the day before the

20 transfer date specified in subparagraph

21 (C)(ii).

22 (ii) PAY.—

23 (I) IN GENERAL.—Except as pro24 vided in subclause (II), each employee

25 transferred to the Council under sub-
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1 paragraph (C) shall, during the 12-

2 month period beginning on the trans3 fer date specified in subparagraph

4 (C)(ii), receive pay at a rate not less

5 than the basic rate of pay that the

6 employee received during the 12-

7 month period immediately preceding

8 the transfer date specified in subpara9 graph (C)(ii).

10 (II) EXCEPTIONS.—Subclause (I)

11 does not limit the right of the Council

12 to reduce a transferred rate of basic

13 pay of an employer for cause or unac14 ceptable performance, or with the con15 sent of the employee.

16 (III) PROTECTION ONLY WHILE

17 EMPLOYED.—Subclause (I) shall

18 apply to an employee only during the

19 period that the employee is employed

20 by the Council.

21 (iii) RETIREMENT BENEFITS.—

22 (I) CONTINUATION OF EXISTING

23 RETIREMENT PLAN.—Except as other24 wise permitted by law, each employee

25 transferred to the Council under sub-
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1 paragraph (C) shall remain enrolled in

2 the retirement plan (and any associ3 ated thrift savings plan) in which the

4 employee was enrolled on the day be5 fore the transfer date specified in sub6 paragraph (C)(ii) during the period

7 that the employee is employed by the

8 Council.

9 (II) EMPLOYER CONTRIBU10 TION.—The Council shall pay any em11 ployer contributions to the retirement

12 plan in which each employee trans13 ferred to the Council under subpara14 graph (C) is subject during the period

15 that the employee is employed by the

16 Council, in accordance with such re17 tirement plan.

18 (iv) NO PRIVATE RIGHT OF ACTION.—

19 This subparagraph does not provide any

20 employee with any right of action to re21 quire the Council or any officer, employee,

22 agent, or administrator of the Council to

23 take any action under this subparagraph.

24 (v) PRIORITY OF THIS ACT.—If any

25 protection provided under this subpara-
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1 graph conflicts with any protection pro2 vided to transferred employees under sec3 tion 3503 of title 5, United States Code,

4 the provisions of this subparagraph shall

5 control.

6 SEC. 214. BRANCH CLOSURES.

7 (a) AMENDMENT TO THE FEDERAL DEPOSIT INSUR8 ANCE ACT.—Section 42 of the Federal Deposit Insurance

9 Act (12 U.S.C. 1831r–1) is amended by adding at the end

10 the following new subsection:

11 ‘‘(e) DEFINITIONS.—For purposes of this section, the

12 term ‘branch’ does not include—

13 ‘‘(1) an automated teller machine;

14 ‘‘(2) a branch acquired through merger, consoli15 dation, purchase, assumption or other method that

16 is located in a local market area currently served by

17 another branch of the acquiring institution;

18 ‘‘(3) a branch that is closed and reopened in

19 another location within the same local market area

20 that would continue to provide banking services to

21 substantially all of the customers currently served by

22 the branch that is closed;

23 ‘‘(4) a branch that is closed in connection

24 with—

25 ‘‘(A) an emergency acquisition under—
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1 ‘‘(i) section 11(n); or

2 ‘‘(ii) subsection (f) or (k) of section

3 13; or

4 ‘‘(B) any assistance provided by the Cor5 poration under section 13(c); or

6 ‘‘(5) any other branch closure the exemption of

7 which from the notice requirements of this section

8 would not produce a result inconsistent with the

9 purposes of this section, as determined, by regula10 tion, by the appropriate Federal banking agency.’’.

11 (b) EFFECTIVE DATE.—The amendment made by

12 this section shall be construed to have become effective

13 on the date of enactment of the Federal Deposit Insurance

14 Corporation Improvement Act of 1991.

15 SEC. 215. FOREIGN BANKS.

16 (a) TERMINATION OF FOREIGN BRANCHES.—Section

17 7(e) of the International Banking Act of 1978 (12 U.S.C.

18 3105(e)) is amended—

19 (1) by striking the subsection designation and

20 the subsection heading;

21 (2) by striking paragraphs (1) through (6);

22 (3) by redesignating paragraph (7) as para23 graph (5); and

24 (4) by inserting before paragraph (5), as redes25 ignated, the following:
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1 ‘‘(e) TERMINATION OF FOREIGN BANK OFFICES IN

2 THE UNITED STATES.—

3 ‘‘(1) RECOMMENDATION FOR TERMINATION OF

4 FOREIGN BANK OFFICES IN THE UNITED STATES.—

5 The Board may transmit to the Comptroller of the

6 Currency or to any appropriate State bank super7 visor a recommendation that the license of any

8 branch, agency, or commercial bank lending com9 pany subsidiary of a foreign bank in the United

10 States be terminated if the Board finds that—

11 ‘‘(A) the foreign bank is not subject to

12 comprehensive supervision or regulation on a

13 consolidated basis by the appropriate authori14 ties in the home country of the foreign bank; or

15 ‘‘(B)(i) there is reasonable cause to believe

16 that such foreign bank, or any affiliate of such

17 foreign bank, has committed a violation of law

18 or engaged in an unsafe or unsound banking

19 practice in the United States; and

20 ‘‘(ii) as a result of such violation or prac21 tice, the continued operation of the branch,

22 agency, or commercial lending company subsidi23 ary of the foreign bank in the United States

24 would not be consistent with the public interest

25 or with the purposes of this Act, the Bank
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1 Holding Company Act of 1956, or the Federal

2 Deposit Insurance Act.

3 ‘‘(2) NOTICE AND HEARING.—

4 ‘‘(A) IN GENERAL.—The Board shall pro5 vide notice and opportunity for a hearing to a

6 foreign bank before transmitting to the Comp7 troller of the Currency or to any appropriate

8 State bank supervisor a recommendation de9 scribed in paragraph (1).

10 ‘‘(B) DISCRETION TO DENY HEARING.—

11 The Board may transmit a recommendation

12 under subparagraph (A) without providing for

13 an opportunity for a hearing if the Board deter14 mines that expeditious action is necessary in

15 order to protect the public interest.

16 ‘‘(3) COMPLIANCE WITH STATE AND FEDERAL

17 LAW.—Any foreign bank that is required to termi18 nate activities conducted at offices of subsidiaries in

19 the United States as a result of a recommendation

20 made under this subsection shall comply with the re21 quirements of applicable Federal and State law with

22 respect to procedures for the closure or dissolution

23 of such offices or subsidiaries.

24 ‘‘(4) ENFORCEMENT OF ORDERS.—
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1 ‘‘(A) IN GENERAL.—The Comptroller of

2 the Currency or the appropriate State bank su3 pervisor may invoke the aid of the district court

4 of the United States within the jurisdiction in

5 which the office or subsidiary is located in case

6 of contumacy of any office or subsidiary of the

7 foreign bank against which—

8 ‘‘(i) the Comptroller of the Currency

9 has issued an order under section 4(i); or

10 ‘‘(ii) any appropriate State bank su11 pervisor has issued—

12 ‘‘(I) an order in response to a

13 recommendation under paragraph (1);

14 or

15 ‘‘(II) a refusal by such office or

16 subsidiary to comply with such order.

17 ‘‘(B) COURT ORDER.—Any court referred

18 to in subparagraph (A) may issue an order re19 quiring compliance with an order issued under

20 paragraph (1).’’.

21 (b) ELIMINATION OF DUPLICATE EXAMINATIONS OF

22 FOREIGN BANKS.—Section 7(c)(1) of the International

23 Banking Act of 1978 (12 U.S.C. 3105(c)(1)) is amended

24 by striking subparagraphs (B), (C), and (D) and inserting

25 the following:
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1 ‘‘(B) RELIANCE ON PRIMARY SUPER2 VISOR.—In order to avoid unnecessary duplica3 tion and cost, the Board shall, to the maximum

4 extent practicable, rely upon the reports of ex5 aminations made by the Comptroller of the

6 Currency, the Federal Deposit Insurance Cor7 poration, or the appropriate State bank super8 visor in achieving the purposes of this sub9 section.

10 ‘‘(C) ON-SITE EXAMINATION.—Each

11 branch or agency of a foreign bank shall be

12 subject to on-site examination on the same

13 schedule that a comparable national or State

14 nonmember bank would be examined by the

15 Comptroller of the Currency or the Federal De16 posit Insurance Corporation.

17 ‘‘(D) COST OF EXAMINATIONS.—The cost

18 of any examination undertaken under subpara19 graph (A) shall be assessed against and col20 lected from the foreign bank or the foreign

21 company that controls the foreign bank, as ap22 plicable, but only to the same extent that fees

23 are collected by the Board for examination of

24 any State member insured bank.’’.
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1 (c) STREAMLINING REVIEW OF FOREIGN BANK AP2 PLICATIONS BY THE BOARD.—Section 7(d) of the Inter3 national Banking Act of 1978 (12 U.S.C. 3105(d)) is

4 amended—

5 (1) by striking paragraphs (1) and (2) and in6 serting the following:

7 ‘‘(1) PRIOR REVIEW REQUIRED.—

8 ‘‘(A) IN GENERAL.—Before any foreign

9 bank application to establish a branch or an

10 agency, or acquire ownership or control of a

11 commercial lending company may be approved

12 by any appropriate State bank supervisor or the

13 Comptroller of the Currency, the application

14 shall be submitted for review to the Board for

15 a period of not more than 60 days.

16 ‘‘(B) PURPOSE.—The purpose of the re17 view conducted under subparagraph (A) shall

18 be to determine whether approval of any appli19 cation would place at risk the safe and sound

20 operation of the United States banking system.

21 ‘‘(2) AUTHORITY OF THE BOARD.—Based on

22 the determination described in paragraph (1), the

23 Board may—

24 ‘‘(A) deny the application;
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1 ‘‘(B) extend for 60 days the period for re2 view of any application, after providing notice

3 of and the reasons for the extension to the ap4 plicant and any appropriate State bank super5 visor or the Comptroller of the Currency; or

6 ‘‘(C) approve the application, either by af7 firmative action or by taking no action during

8 the 60-day period described in paragraph (1).’’;

9 and

10 (2) in paragraph (3)—

11 (A) by redesignating subparagraphs (A)

12 through (D) as subparagraphs (C) through (F);

13 and

14 (B) by striking ‘‘In’’ and all that follows

15 through ‘‘account—’’ and inserting the follow16 ing: ‘‘In making any determination under para17 graph (1), the Board may consider—

18 ‘‘(A) whether the foreign bank engages di19 rectly in the business of banking outside of the

20 United States and is subject to comprehensive

21 supervision or regulation on a consolidated

22 basis by the appropriate authorities in the home

23 country of the foreign bank;
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1 ‘‘(B) whether the foreign bank has fur2 nished to the Board the information it needs to

3 adequately assess the application;’’.

4 Subtitle B—Eliminating Unneces5 sary Costs and Paperwork Bur6 dens

7 SEC. 221. SMALL BANK EXAMINATION CYCLE.

8 (a) TIME PERIOD DISCRETION.—Section 10(d)(4) of

9 the Federal Deposit Insurance Act (12 U.S.C. 1820(d)(4))

10 is amended—

11 (1) in the section heading, by striking ‘‘18-

12 MONTH RULE’’ and inserting ‘‘24-MONTH RULE’’;

13 and

14 (2) in the first sentence, by striking ‘‘18-

15 month’’ and inserting ‘‘24-month’’.

16 (b) SMALL BANK SIZE DISCRETION.—Section 10(d)

17 of the Federal Deposit Insurance Act (12 U.S.C. 1820(d))

18 is amended—

19 (1) by redesignating the second paragraph des20 ignated as paragraph (8) as paragraph (9); and

21 (2) in paragraph (9), as redesignated, by strik22 ing ‘‘$175,000,000’’ and inserting ‘‘$250,000,000’’.

23 SEC. 222. REIMBURSEMENT FOR CORPORATE RECORDS.

24 Section 1115(a) of the Right to Financial Privacy Act

25 of 1978 (12 U.S.C. 3415) is amended by inserting ‘‘(in-
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1 cluding any corporate customer)’’ after ‘‘pertaining to a

2 customer’’.

3 SEC. 223. REQUIRED REGULATORY REVIEW OF REGULA4 TIONS.

5 (a) IN GENERAL.—Not less frequently than once

6 every 10 years, the Council and each appropriate Federal

7 banking agency represented on the Council shall conduct

8 a review of all regulations promulgated by the Council or

9 by any such appropriate Federal banking agency, respec10 tively, in order to identify outdated or otherwise unneces11 sary regulatory requirements imposed upon insured depos12 itory institutions.

13 (b) PROCESS.—In conducting the review under sub14 section (a), the Council or the appropriate Federal bank15 ing agency shall—

16 (1) categorize the regulations by type (such as

17 consumer regulations, safety and soundness regula18 tions, or such other designations as determined by

19 the Council); and

20 (2) at regular intervals, provide notice and so21 licit public comment on a particular category or cat22 egories of regulations, requesting commentators to

23 identify areas of the regulations that are outdated,

24 unnecessary, or unduly burdensome.
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1 (c) COMPLETE REVIEW.—The Council or the appro2 priate Federal banking agency shall ensure that the notice

3 and comment period described in subsection (b)(2) is con4 ducted with respect to all regulations described in sub5 section (a) not less frequently than once every 10 years.

6 (d) REGULATORY RESPONSE.—The Council or the

7 appropriate Federal banking agency shall—

8 (1) publish in the Federal Register a summary

9 of the comments received under this section, identi10 fying significant issues raised and providing com11 ment on such issues; and

12 (2) eliminate unnecessary regulations to the ex13 tent that such action is appropriate.

14 (e) REPORT TO CONGRESS.—Not later than 30 days

15 after carrying out subsection (d)(1), the Council shall pro16 vide to the Congress a report, which shall include—

17 (1) a summary of any significant issues raised

18 by public comments received by the Council and the

19 appropriate Federal banking agencies under this sec20 tion and the relative merits of such issues; and

21 (2) an analysis of whether the appropriate Fed22 eral banking agency involved is able to address the

23 regulatory burdens associated with such issues by

24 regulation, or whether such burdens must be ad25 dressed by legislative action.
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1 Subtitle C—Eliminating Unneces2 sary Reporting Requirements

3 SEC. 231. PROHIBITION ON ADDITIONAL REPORTING

4 UNDER COMMUNITY REINVESTMENT ACT OF

5 1977.

6 Section 806 of the Community Reinvestment Act of

7 1977 (12 U.S.C. 2905) is amended to read as follows:

8 ‘‘SEC. 806. REGULATIONS.

9 ‘‘(a) IN GENERAL.—Each appropriate Federal finan10 cial supervisory agency shall promulgate such regulations

11 as may be necessary to carry out this title.

12 ‘‘(b) NO ADDITIONAL RECORDKEEPING REQUIRE13 MENTS.—The regulations promulgated under subsection

14 (a) and any accompanying policy statements, commentary,

15 examiner guidances, or other supervisory material shall

16 not impose any recordkeeping requirements on financial

17 institutions that do not have the effect of eliminating,

18 streamlining, or reducing regulatory burdens upon such

19 institutions.

20 ‘‘(c) LOAN DATA.—No loan data may be required to

21 be collected and reported by a financial institution and no

22 such data may be made public by any Federal financial

23 supervisory agency under this title.’’.
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1 SEC. 232. EXEMPTION FROM COMMUNITY SUPPORT RE2 QUIREMENTS OF THE FEDERAL HOME LOAN

3 BANK ACT FOR INSTITUTIONS MEETING CER4 TAIN CRITERIA.

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

6 (12 U.S.C. 1430(g)) is amended by adding at the end the

7 following new paragraph:

8 ‘‘(3) MEMBERS EXCLUDED.—

9 ‘‘(A) IN GENERAL.—No rule or regulation

10 promulgated under this subsection that estab11 lishes community support requirements shall

12 apply to a member if such member—

13 ‘‘(i) is a regulated financial institution

14 (as such term is defined in section 803 of

15 the Community Reinvestment Act of

16 1977); and

17 ‘‘(ii)(I) has not received a composite

18 rating of ‘needs to improve’ or ‘substantial

19 noncompliance’ from the primary regulator

20 of the member as of the most recent exam21 ination of the member under the Commu22 nity Reinvestment Act of 1977; or

23 ‘‘(II) has been in operation for less

24 than 2 years and has not received a rating

25 from the primary regulator of the member
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1 under the Community Reinvestment Act of

2 1977.

3 ‘‘(B) ADDITIONAL REQUIREMENTS.—If a

4 member does not qualify for an exemption

5 under subparagraph (A), the record of the

6 member of lending to first-time homebuyers

7 shall be taken into account in determining com8 pliance with the rules and regulations described

9 in subparagraph (A).’’.

10 SEC. 233. RECORDING REQUIREMENTS.

11 Section 5325 of title 31, United States Code, is

12 amended—

13 (1) in subsection (a)—

14 (A) by striking ‘‘unless—’’ and all that fol15 lows through the end of paragraph (1) and in16 serting ‘‘unless the individual has a transaction

17 account with such financial institution and the

18 financial institution verifies that fact through a

19 signature card or other information maintained

20 by such institution in connection with the ac21 count of such individual.’’; and

22 (B) by striking paragraph (2); and

23 (2) in subsection (b), by striking ‘‘paragraph

24 (1) or (2)’’.
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1 SEC. 234. IDENTIFICATION OF NONBANK FINANCIAL INSTI2 TUTION CUSTOMERS.

3 (a) IN GENERAL.—Section 5327 of title 31, United

4 States Code, is repealed.

5 (b) TECHNICAL AND CONFORMING AMENDMENT.—

6 Section 5321(a)(7) of title 31, United States Code, is re7 pealed.

8 SEC. 235. REPEAL OF COMMERCIAL LOAN REPORTING RE9 QUIREMENTS.

10 The following sections of the Federal Deposit Insur11 ance Corporation Improvement Act of 1991 are repealed:

12 (1) Section 122 (12 U.S.C. 1817 note).

13 (2) Section 477 (12 U.S.C. 251).

14 SEC. 236. INCREASE IN HOME MORTGAGE DISCLOSURE

15 ACT; DISCLOSURE EXEMPTION.

16 (a) IN GENERAL.—Section 309 of the Home Mort17 gage Disclosure Act of 1975 (12 U.S.C. 2808) is amend18 ed—

19 (1) in the second sentence, by striking

20 ‘‘$10,000,000’’ and inserting ‘‘$50,000,000’’; and

21 (2) by adding at the end the following: ‘‘The

22 Board may also exempt from the provisions of this

23 title any institution described in section 303(2)(A)

24 that has total assets of not less than $50,000,000 as

25 of the last complete fiscal year of the institution, if

26 the burden on the institution of complying with this
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1 title outweighs the usefulness of the information re2 quired to be disclosed.’’.

3 (b) OPPORTUNITY TO REDUCE COMPLIANCE BUR4 DEN.—Section 304 of the Home Mortgage Disclosure Act

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

6 end the following new subsection:

7 ‘‘(m) OPPORTUNITY TO REDUCE COMPLIANCE BUR8 DEN.—

9 ‘‘(1) IN GENERAL.—

10 ‘‘(A) SATISFACTION OF PUBLIC AVAILABIL11 ITY REQUIREMENTS.—A depository institution

12 shall be deemed to have satisfied the public

13 availability requirements of subsection (a) if the

14 institution compiles the information required

15 under that subsection at the home office of the

16 institution and provides notice at the branch lo17 cations specified in subsection (a) that such in18 formation is available from the home office of

19 the institution upon written request.

20 ‘‘(B) PROVISION OF INFORMATION UPON

21 REQUEST.—Not later than 15 days after the re22 ceipt of the written request for any information

23 required to be compiled under subsection (a),

24 the home office of the depository institution re25 ceiving the request shall provide the information
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1 pertinent to the location of the branch in ques2 tion to the person requesting the information.

3 ‘‘(2) FORM OF INFORMATION.—In complying

4 with paragraph (1), a depository institution shall, in

5 the sole discretion of the institution, provide the per6 son requesting such information with—

7 ‘‘(A) a paper copy of the information re8 quested; or

9 ‘‘(B) if acceptable to the person, the infor10 mation through a form of electronic medium,

11 such as a computer disk.’’.

12 SEC. 237. ELIMINATION OF STOCK LOAN REPORTING RE13 QUIREMENT.

14 Section 7(j) of the Federal Deposit Insurance Act (12

15 U.S.C. 1817(j)) is amended—

16 (1) by striking paragraphs (9) and (10);

17 (2) by redesignating paragraphs (11) through

18 (18) as paragraphs (9) through (16), respectively;

19 and

20 (3) in paragraph (9), as redesignated, by strik21 ing ‘‘or (9)’’.
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1 Subtitle D—Regulatory

2 Micromanagement

3 SEC. 241. NATIONAL BANK DIRECTORS.

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

5 is amended in the first sentence, by striking ‘‘except’’ and

6 all that follows through the end of the sentence and insert7 ing the following: ‘‘except that the Comptroller may, in

8 the discretion of the Comptroller, waive the requirement

9 of citizenship (in the case of not more than a minority

10 of the total number of directors) and the requirement of

11 residency.’’.

12 SEC. 242. PAPERWORK REDUCTION REVIEW.

13 Not later than 180 days after the date of enactment

14 of this Act, each appropriate Federal banking agency and

15 the National Credit Union Administration Board, in con16 sultation with insured depository institutions, insured

17 credit unions, and other interested parties, shall—

18 (1) review the extent to which existing regula19 tions require insured depository institutions and in20 sured credit unions to produce unnecessary internal

21 written policies; and

22 (2) eliminate such requirements, where appro23 priate.
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1 SEC. 243. STATE BANK REPRESENTATION ON BOARD OF DI2 RECTORS OF THE FDIC.

3 (a) IN GENERAL.—Section 2(a)(1) of the Federal

4 Deposit Insurance Act (12 U.S.C. 1812(a)(1)) is amend5 ed—

6 (1) by striking ‘‘5 members’’ and inserting ‘‘6

7 members’’;

8 (2) in subparagraph (B), by striking ‘‘and’’ at

9 the end;

10 (3) in subparagraph (C), by striking the period

11 at the end and inserting ‘‘; and’’; and

12 (4) by adding at the end the following new sub13 paragraph:

14 ‘‘(D) 1 of whom shall be appointed by the

15 President, by and with the advice and consent

16 of the Senate, from among individuals serving

17 as State bank commissioners or supervisors (or

18 the functional equivalent thereof) as of the date

19 on which the appointment is made.’’.

20 (b) CHAIRPERSON AND VICE CHAIRPERSON.—Sec21 tion 2(b) of the Federal Deposit Insurance Act (12 U.S.C.

22 1812(b)) is amended—

23 (1) in paragraph (1), by striking ‘‘appointed

24 members’’ and inserting ‘‘members appointed pursu25 ant to subsection (a)(1)(C)’’; and
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1 (2) in paragraph (2), by striking ‘‘appointed

2 members’’ and inserting ‘‘members appointed pursu3 ant to subsection (a)(1)(C)’’.

4 (c) TERMS.—Section 2(c)(1) of the Federal Deposit

5 Insurance Act (12 U.S.C. 1812(c)(1)) is amended—

6 (1) by striking ‘‘Each appointed member’’ and

7 inserting the following:

8 ‘‘(A) IN GENERAL.—Each member ap9 pointed pursuant to subsection (a)(1)(C)’’; and

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

11 ‘‘(B) STATE BANK REPRESENTATIVES.—

12 ‘‘(i) IN GENERAL.—Except as pro13 vided in clause (ii), each member appointed

14 pursuant to subsection (a)(1)(D) shall be

15 appointed for a single term of 2 years.

16 ‘‘(ii) EXCEPTION.—If a member ap17 pointed pursuant to subsection (a)(1)(D)

18 ceases to be a State banking commissioner

19 or supervisor (or functional equivalent

20 thereof) on a date prior to the expiration

21 of the 2-year period described in clause (i),

22 such member’s membership on the Board

23 of Directors shall terminate on that date.’’.

24 (d) VACANCIES.—Section 2(d)(1) of the Federal De25 posit Insurance Act (12 U.S.C. 1812(d)(1)) is amended—
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1 (1) by striking ‘‘Any vacancy’’ and inserting the

2 following:

3 ‘‘(A) IN GENERAL.—Subject to the restric4 tions contained in subparagraph (B), any va5 cancy’’; and

6 (2) by adding at the end the following new sub7 paragraph:

8 ‘‘(B) RESTRICTIONS.—

9 ‘‘(i) SAME INDIVIDUAL.—In filling a

10 vacancy on the Board of Directors pursu11 ant to subsection (a)(1)(D), the President

12 may not appoint an individual who has

13 previously served as a member of the

14 Board of Directors pursuant to subsection

15 (a)(1)(D).

16 ‘‘(ii) SAME STATE.—In filling a va17 cancy on the Board of Directors pursuant

18 to subsection (a)(1)(D) (other than a

19 vacancy occurring under subsection

20 (c)(1)(B)(ii)), the President may not ap21 point an individual who is serving as the

22 State bank commissioner or supervisor (or

23 functional equivalent thereof) of the same

24 State as the member most recently ap25 pointed pursuant to subsection (a)(1)(D).’’.
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1 (e) NONCOMPENSATION; TRAVEL EXPENSES.—Sec2 tion 2 of the Federal Deposit Insurance Act (12 U.S.C.

3 1812) is amended by adding at the end the following new

4 subsection:

5 ‘‘(g) PERSONNEL MATTERS RELATING TO STATE

6 BANK REPRESENTATIVES.—Members of the Board of Di7 rectors appointed pursuant to subsection (a)(1)(D)—

8 ‘‘(1) shall serve without compensation; and

9 ‘‘(2) shall be allowed travel expenses, including

10 per diem in lieu of subsistence, at rates authorized

11 for employees of agencies under subchapter I of

12 chapter 57 of title 5, United States Code, while

13 away from their homes or regular places of business

14 in the performance of services for the Board of Di15 rectors.’’.

16 TITLE III—REGULATORY IMPACT

17 ON COST OF CREDIT AND

18 CREDIT AVAILABILITY

19 Subtitle A—Lowering Compliance

20 Costs To Promote Credit Avail21 ability

22 SEC. 301. AUDIT COSTS.

23 (a) IN GENERAL.—

24 (1) AUDITOR ATTESTATIONS.—Section 36 of

25 the Federal Deposit Insurance Act (12 U.S.C.
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1 1831m) is amended by striking subsection (e) and

2 inserting the following:

3 ‘‘(e) [Reserved.]’’.

4 (2) INDEPENDENT AUDIT COMMITTEES.—Sec5 tion 36(g)(1) of the Federal Deposit Insurance Act

6 (12 U.S.C. 1831m(g)(1)) is amended—

7 (A) in subparagraph (A), by striking ‘‘en8 tirely’’ and inserting ‘‘the majority of which is’’;

9 and

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

11 subparagraph:

12 ‘‘(D) EXEMPTION AUTHORITY.—

13 ‘‘(i) IN GENERAL.—Each appropriate

14 Federal banking agency shall, by regula15 tion, exempt from the requirements of this

16 subsection each insured depository institu17 tion that has, in the determination of the

18 agency, encountered hardships in retaining

19 competent directors on the internal audit

20 committee of the institution as a result of

21 this subsection.

22 ‘‘(ii) FACTORS CONSIDERED.—In de23 termining whether to exempt an insured

24 depository institution under clause (i),

25 each appropriate Federal banking agency
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1 shall take into consideration such factors

2 as the size of the institution and the avail3 ability of competent outside directors from

4 the community of the institution.’’.

5 (3) PUBLIC AVAILABILITY.—Section 36(a)(3) of

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

7 1831m(a)(3)) is amended by adding at the end the

8 following: ‘‘Notwithstanding the preceding sentence,

9 the Corporation and the appropriate Federal bank10 ing agencies may designate certain information as

11 privileged and confidential and not available to the

12 public.’’.

13 SEC. 302. INCENTIVES FOR SELF-TESTING.

14 (a) EQUAL CREDIT OPPORTUNITY.—The Equal

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

16 amended—

17 (1) by inserting after section 704 the following

18 new section:

19 ‘‘SEC. 704A. ENCOURAGEMENT OF CREDITORS TO SELF20 TEST FOR EQUAL CREDIT OPPORTUNITY ACT

21 COMPLIANCE.

22 ‘‘If a creditor conducts, or authorizes an independent

23 third party to conduct, a test or review of the lending oper24 ations of the creditor or any part of the lending operations

25 of the creditor in order to determine the level or effective-
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1 ness of compliance with this title by the creditor, any re2 port or results of such a test or review may not be re3 viewed, obtained, examined, or otherwise acquired or used

4 by any department or agency authorized to enforce this

5 title.’’;

6 (2) in section 706(g), by adding at the end the

7 following: ‘‘An agency may refer a matter to the At8 torney General under this subsection if the creditor

9 has already identified the matter as a possible viola10 tion of this title as the result of internal review, self11 testing, compliance review, or other audit or review

12 procedure instituted by the creditor to determine

13 compliance with this title. Nothing in this subsection

14 shall limit the authority of the agency to enforce this

15 title under any other provision of law.’’; and

16 (3) in section 706(k)—

17 (A) by redesignating subparagraphs (1)

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

19 respectively, and indenting appropriately;

20 (B) by striking ‘‘Whenever’’ and inserting

21 the following:

22 ‘‘(1) IN GENERAL.—Whenever’’; and

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

24 paragraph:
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1 ‘‘(2) LIMITATION.—An agency referred to in

2 paragraph (1), (2), or (3) of section 704(a) may no3 tify the Secretary of Housing and Urban Develop4 ment or the applicant of a violation of this title or

5 of the Fair Housing Act if the creditor has already

6 identified the matter as a possible violation of either

7 this title or the Fair Housing Act as a result of in8 ternal review, self-testing, compliance review, or

9 other audit or review procedure instituted by the

10 creditor to determine compliance with this title.

11 Nothing in this subsection shall limit the authority

12 of the agency to enforce this title under any other

13 provision of law.’’.

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

15 U.S.C. 3601 et seq.) is amended by inserting after section

16 814 the following new section:

17 ‘‘SEC. 814A. ENCOURAGEMENT TO SELF-TEST FOR FAIR

18 HOUSING ACT COMPLIANCE.

19 ‘‘If any person conducts, or authorizes an independ20 ent third party to conduct, a test or review of the residen21 tial real estate or real estate-related activities of the per22 son, or any part thereof, in order to determine the level

23 or effectiveness of compliance with this Act by that person,

24 any report or results of such a test or review may not

25 be reviewed, obtained, examined, or otherwise acquired or
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1 used by any department or agency authorized to enforce

2 this Act.’’.

3 SEC. 303. EXEMPTION FOR SAVINGS INSTITUTIONS SERV4 ING MILITARY PERSONNEL.

5 Section 10(m)(3)(F) of the Home Owners’ Loan

6 Act (12 U.S.C. 1467a(m)(3)(F)) is amended to read as

7 follows:

8 ‘‘(F) EXEMPTION FOR SPECIALIZED SAV9 INGS ASSOCIATIONS SERVING CERTAIN MILI10 TARY PERSONNEL.—Subparagraph (A) does not

11 apply to a savings association subsidiary of a

12 savings and loan holding company if not less

13 than 90 percent of the customers of the savings

14 and loan holding company and the subsidiaries

15 and affiliates of such company are active or

16 former officers in the United States military

17 services or the widows, widowers, divorced

18 spouses, or current or former dependents of

19 such officers.’’.

20 SEC. 304. QUALIFIED THRIFT INVESTMENT AMENDMENTS.

21 (a) CREDIT CARDS.—Section 5(b) of the Home Own22 ers’ Loan Act (12 U.S.C. 1464(b)) is amended—

23 (1) by striking paragraph (4); and

24 (2) by redesignating paragraph (5) as para25 graph (4).
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1 (b) LOANS OR INVESTMENTS WITHOUT PERCENTAGE

2 OF ASSETS LIMITATION.—Section 5(c)(1) of the Home

3 Owners’ Loan Act (12 U.S.C. 1464(c)(1)) is amended by

4 adding at the end the following new subparagraphs:

5 ‘‘(T) CREDIT CARD LOANS.—Loans made

6 through credit cards or credit card accounts.

7 ‘‘(U) EDUCATION LOANS.—Loans made

8 for the payment of educational expenses.’’.

9 (c) COMMERCIAL AND OTHER LOANS.—Section

10 5(c)(2)(A) of the Home Owners’ Loan Act (12 U.S.C.

11 1464(c)(2)(A)) is amended by adding at the end the fol12 lowing: ‘‘No loan may be made under this subparagraph

13 in an amount that exceeds 20 percent of the total assets

14 of the Federal savings association, and any loan amount

15 in excess of 10 percent of the total assets of the Federal

16 savings association may be invested only in small business

17 loans, as such term is defined by the Director.’’.

18 (d) LOANS OR INVESTMENTS LIMITED TO 5 PER19 CENT OF ASSETS.—Section 5(c)(3) of the Home Owners’

20 Loan Act (12 U.S.C. 1464(c)(3)) is amended—

21 (1) by striking subparagraph (A); and

22 (2) by redesignating subparagraphs (B), (C),

23 and (D) as subparagraphs (A), (B), and (C), respec24 tively.
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1 (e) QUALIFIED THRIFT LENDER TEST.—Section

2 10(m)(1) of the Home Owners’ Loan Act (12 U.S.C.

3 1467a(m)(1)) is amended—

4 (1) by redesignating subparagraph (B) as

5 clause (ii);

6 (2) in subparagraph (A), by striking ‘‘(A) the

7 savings’’ and inserting ‘‘(B)(i) the savings’’; and

8 (3) by inserting after ‘‘if—’’ the following new

9 subparagraph:

10 ‘‘(A) the savings association qualifies as a

11 domestic building and loan association, as such

12 term is defined in section 7701(a)(19) of the

13 Internal Revenue Code of 1986; or’’.

14 (f) DEFINITION.—Section 10(m)(4) of the Home

15 Owners’ Loan Act (12 U.S.C. 1467a(m)(4)) is amended—

16 (1) in subparagraph (C)—

17 (A) in clause (ii), by adding at the end the

18 following new subclause:

19 ‘‘(VII) Loans for educational

20 purposes, loans to small businesses,

21 and loans made through credit cards

22 or credit card accounts.’’;

23 (B) in clause (iii), by striking subclause

24 (VI) and inserting the following:
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1 ‘‘(VI) Loans for personal, family,

2 or household purposes (other than

3 loans for personal, family, or house4 hold purposes covered by clause

5 (ii)(VII)).’’; and

6 (2) by adding at the end the following new sub7 paragraphs:

8 ‘‘(D) CREDIT CARD.—The Director shall

9 issue such regulations as may be necessary to

10 define the term ‘credit card’.

11 ‘‘(E) SMALL BUSINESS.—The Director

12 shall issue such regulations a may be necessary

13 to define the term ‘small business’.’’.

14 SEC. 305. DAYLIGHT OVERDRAFTS INCURRED BY FEDERAL

15 HOME LOAN BANKS.

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

17 amended by inserting after section 11A the following new

18 section:

19 SEC. 11B. DAYLIGHT OVERDRAFTS INCURRED BY FEDERAL

20 HOME LOAN BANKS.

21 ‘‘Any policy or regulation adopted by the Board of

22 Governors of the Federal Reserve System governing pay23 ment system risk or intraday credit shall—

24 ‘‘(1) include—
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1 ‘‘(A) the establishment of net debit caps

2 appropriate to the credit quality of each Fed3 eral Home Loan Bank; and

4 ‘‘(B) the imposition of normal fees for day5 light overdrafts, calculated in the same manner

6 as fees for other users; or

7 ‘‘(2) exempt Federal Home Loan Banks from

8 such policy or regulation.’’.

9 SEC. 306. APPLICATION FOR MEMBERSHIP IN THE FED10 ERAL HOME LOAN BANK SYSTEM.

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

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

13 ‘‘(b) MEMBERSHIP BASED ON CONVENIENCE.—

14 ‘‘(1) APPLICATION PROCESS.—An institution el15 igible to become a member under this section may

16 become a member by submitting an application for

17 membership—

18 ‘‘(A) to the Bank in the district in which

19 the principal place of business of the institution

20 is located; or

21 ‘‘(B) if the Board determines that such ac22 tion is necessary for the convenience of the in23 stitution, to the Bank in any district that is ad24 jacent to the district in which the principal

25 place of business of the institution is located.
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1 ‘‘(2) APPROVAL OF APPLICATION.—An applica2 tion for membership submitted under this subsection

3 shall be approved by the Bank if, in the judgment

4 of the Bank, the applicant meets the criteria for eli5 gibility contained in this section.’’.

6 SEC. 307. AUTHORITY FOR FEDERAL HOME LOAN BANKS TO

7 SELECT EXTERNAL AUDITORS.

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

9 (12 U.S.C. 1431(j)) is amended—

10 (1) by striking ‘‘(j) Notwithstanding’’ and in11 serting the following:

12 ‘‘(j) AUDITS.—

13 ‘‘(1) IN GENERAL.—Notwithstanding’’; and

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

15 paragraph:

16 ‘‘(2) SELECTION OF EXTERNAL AUDITORS.—

17 ‘‘(A) IN GENERAL.—The Federal Home

18 Loan Banks shall, on an annual basis, contract

19 for an annual audit with a single auditor.

20 ‘‘(B) ROLE OF THE BOARD.—Notwith21 standing any other provision of law, the Board

22 shall not participate in any audit or audit con23 tracting process under this paragraph, except

24 that the Board may establish requirements for

25 audit contracts and accounting standards used
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1 in connection with any audit under this para2 graph.’’.

3 SEC. 308. LIMITED PURPOSE BANK GROWTH CAP RELIEF.

4 Section 4(f)(3)(B) of the Bank Holding Company Act

5 of 1956 (12 U.S.C. 1843(f)(3)(B)) is amended—

6 (1) in clause (ii), by adding ‘‘or’’ at the end;

7 (2) in clause (iii), by striking ‘‘; or’’ at the end

8 and inserting a period; and

9 (3) by striking clause (iv).

10 Subtitle B—Disincentives to Risk11 Taking

12 SEC. 311. DUE PROCESS PROTECTIONS.

13 (a) ATTACHMENT OF ASSETS.—Section 11(d)(19) of

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

15 1821(d)(19)) is amended—

16 (1) in subparagraph (A), by striking ‘‘without

17 regard’’ and all that follows through ‘‘immediate’’;

18 and

19 (2) in subparagraph (B), by striking ‘‘(as modi20 fied with respect to such proceeding by subpara21 graph (A))’’.

22 (b) CEASE-AND-DESIST PROCEEDINGS.—Section

23 8(b)(6) of the Federal Deposit Insurance Act (12 U.S.C.

24 1818(b)(6)) is amended—
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1 (1) in subparagraph (D), by striking ‘‘and’’ at

2 the end;

3 (2) in subparagraph (E), by striking ‘‘and’’ at

4 the end;

5 (3) by redesignating subparagraph (F) as sub6 paragraph (G); and

7 (4) by inserting after subparagraph (E) the fol8 lowing new subparagraph:

9 ‘‘(F) prohibit such party from withdraw10 ing, transferring, removing, dissipating, or dis11 posing of any funds, assets, or other property

12 if injury, loss, or damage to such property is ir13 reparable and immediate; and’’.

14 (c) PREJUDGMENT ATTACHMENT.—

15 (1) INSURED DEPOSITORY INSTITUTIONS.—Sec16 tion 8(i)(4)(B) of the Federal Deposit Insurance Act

17 (12 U.S.C. 1818(i)) is amended to read as follows:

18 ‘‘(B) STANDARD.—Rule 65 of the Federal

19 Rules of Civil Procedure shall apply with re20 spect to any proceeding under this paragraph.’’.

21 (2) INSURED CREDIT UNIONS.—

22 (A) POWERS AND DUTIES OF BOARD AS

23 CONSERVATOR OR LIQUIDATING AGENT.—Sec24 tion 207(b)(2)(H) of the Federal Credit Union

25 Act (12 U.S.C. 1787(b)(2)(H)) is amended—
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1 (i) in clause (i), by striking ‘‘without

2 regard’’ and all that follows through ‘‘im3 mediate’’; and

4 (ii) in clause (ii), by striking ‘‘(as

5 modified with respect to such proceeding

6 by clause (i))’’.

7 (B) AFFIRMATIVE ACTION TO CORRECT

8 CONDITIONS RESULTING FROM VIOLATIONS OR

9 PRACTICES.—Section 206(e)(3) of the Federal

10 Credit Union Act (12 U.S.C. 1786(e)(3)) is

11 amended—

12 (i) in subparagraph (D), by striking

13 ‘‘and’’ at the end;

14 (ii) in subparagraph (E), by striking

15 ‘‘and’’ at the end;

16 (iii) by redesignating subparagraph

17 (F) as subparagraph (G); and

18 (iv) by inserting after subparagraph

19 (E) the following new subparagraph:

20 ‘‘(F) refrain from withdrawing, transfer21 ring, removing, dissipating, or disposing of any

22 funds, assets, or other property if injury, loss,

23 or damage to such property is irreparable and

24 immediate; and’’.
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1 Subtitle C—Miscellaneous

2 Nonsupervisory Reforms

3 SEC. 321. LIABILITY FOR UNAUTHORIZED USE OF CREDIT

4 CARDS.

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

6 U.S.C. 1643(a)) is amended by adding at the end the fol7 lowing new paragraph:

8 ‘‘(3)(A) Notwithstanding paragraph (1), a card9 holder shall be liable for the unauthorized use of a

10 credit card if—

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

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

13 issuer of any unauthorized transaction that ap14 pears on the statement of the account of the

15 cardholder in connection with an extension of

16 consumer credit prior to the expiration of the

17 60-day period beginning on the date on which

18 such statement is received by the cardholder.

19 ‘‘(B) The liability described in subparagraph

20 (A) does not apply if the cardholder demonstrates

21 that the failure to notify the card issuer in a timely

22 manner of the unauthorized use was due to extenu23 ating circumstances such as extended travel or hos24 pitalization, and notice was provided at the earliest

25 possible time thereafter.
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1 ‘‘(C) The liability described in subparagraph

2 (A) shall only apply if the card issuer has provided

3 prior notice to the cardholder of such liability.’’.

4 SEC. 322. UNAUTHORIZED ELECTRONIC FUND TRANSFERS.

5 Section 909(a)(1) of Electronic Fund Transfer Act

6 (15 U.S.C. 1693g(a)(1)) is amended by inserting ‘‘(or in

7 cases in which the cardholder has substantially contrib8 uted to the unauthorized electronic fund transfer, includ9 ing writing on or keeping with the card or other means

10 of access a personal identification or other security code,

11 $500)’’ after ‘‘$50’’.

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