Calendar No. 272

104TH CONGRESS

1ST SESSION S. 650

[Report No. 104–185]

A BILL

To increase the amount of credit available to fuel

nancial institutions, and for other purposes.reducing the regulatory burden imposed upon filocal, regional, and national economic growth by

DECEMBER 14, 1995

Reported with an amendment
II

Calendar No. 272

104TH CONGRESS

1ST SESSION S. 650

[Report No. 104–185]

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, Mr. DOLE, Mr. GRAMS,

Mr. FRIST, Mr. HOLLINGS, Mr. KYL, Mr. BURNS, Mr. THOMAS, Mr.

HELMS, Mr. PRESSLER, Mr. CRAIG, Mr. HEFLIN, Mr. GREGG, Mr.

COATS, Mr. LOTT, Mr. COCHRAN, Mr. NICKLES, Mr. ASHCROFT, Mr.

KEMPTHORNE, Mr. NUNN, and Mr. WARNER) introduced the following

bill; which was read twice and referred to the Committee on Banking,

Housing, and Urban Affairs

DECEMBER 14, 1995

Reported by Mr. D’AMATO, with an amendment

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

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.
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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’’.

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

8 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
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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.

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
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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

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

2 same meaning as in section 101 of the Federal

3 Credit Union Act.

4 TITLE I—REDUCTIONS IN GOV5 ERNMENT OVERREGULATION

6 Subtitle A—The Home Mortgage

7 Process

8 PART I—REGULATORY SIMPLIFICATION AND

9 UNIFORMITY

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

11 AND THE REAL ESTATE SETTLEMENT PROCE12 DURES ACT.

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

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

15 is amended by adding at the end the following new sub16 section:

17 ‘‘(e) AUTHORITY TO ELIMINATE, MODIFY, OR SIM18 PLIFY DISCLOSURE REQUIREMENTS.—The Board shall,

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

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

21 the disclosure, if such action would make disclosures and

22 timing of disclosures required by this title uniform with

23 other laws relating to the disclosure of information in con24 nection with credit transactions, including the Real Estate

25 Settlement Procedures Act. No disclosure requirement
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1 may be imposed under this subsection unless such require2 ment would have the effect of eliminating, modifying, or

3 simplifying any disclosure required under this title.’’.

4 (b) AMENDMENTS TO REAL ESTATE SETTLEMENT

5 PROCEDURES ACT.—Section 19 of the Real Estate Settle6 ment Procedures Act (12 U.S.C. 2617) is amended by

7 adding at the end the following new subsection:

8 ‘‘(d) AUTHORITY TO ELIMINATE, MODIFY, OR SIM9 PLIFY DISCLOSURE REQUIREMENTS.—The Board shall,

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

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

12 the disclosure, if such action would make disclosures and

13 timing of disclosures required by this title uniform with

14 other laws relating to the disclosure of information in con15 nection with credit transactions, including the Truth in

16 Lending Act. No disclosure requirement may be imposed

17 under this subsection unless such requirement would have

18 the effect of eliminating, modifying, or simplifying any dis19 closure required under this title.’’.

20 SEC. 102. ELIMINATION OF REDUNDANT REGULATORS.

21 (a) DEFINITION.—Section 3 of the Real Estate Set22 tlement Procedures Act (12 U.S.C. 2602) is amended—

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

24 end;
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1 (2) in paragraph (8), by striking the period at

2 the end and inserting ‘‘; and’’; and

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

4 paragraph:

5 ‘‘(9) the term ‘Board’ means the Board of Gov6 ernors of the Federal Reserve System.’’.

7 (b) CONFORMING AMENDMENTS.—The Real Estate

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

9 amended—

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

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

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

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

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

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

16 (4) in section 8—

17 (A) in subsection (c), by striking ‘‘the Sec18 retary,’’ and inserting ‘‘the Board,’’; and

19 (B) in subsection (d), by striking ‘‘Sec20 retary’’ each place such term appears and in21 serting ‘‘Board’’;

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

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

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

25 inserting ‘‘Board’’;
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1 (7) in section 15—

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

3 such term appears and inserting ‘‘Board’’; and

4 (B) by striking ‘‘the Secretary’s assess5 ment’’ and inserting ‘‘the assessment of the

6 Board’’;

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

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

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

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

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

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

13 to read as follows:

14 ‘‘(a) REGULATIONS.—

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

16 such regulations as may be necessary to carry out

17 this title.

18 ‘‘(2) SPECIFICATIONS.—The regulations pro19 mulgated under paragraph (1)—

20 ‘‘(A) may contain such classifications, dif21 ferentiations, or other provisions, and may pro22 vide for such adjustments and exceptions for

23 any class of transactions, as the Board deter24 mines to be necessary or proper to—
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1 ‘‘(i) effectuate the purposes of this

2 title;

3 ‘‘(ii) prevent circumvention or evasion

4 of this title; or

5 ‘‘(iii) facilitate compliance with this

6 title; and

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

8 imposed upon creditors and shall ensure that

9 costs, burdens, and complexities to consumers

10 are reduced.’’.

11 (d) ADMINISTRATIVE ENFORCEMENT.—The Real Es12 tate Settlement Procedures Act (12 U.S.C. 2601 et seq.)

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

14 ‘‘SEC. 20. ADMINISTRATIVE ENFORCEMENT.

15 ‘‘(a) IN GENERAL.—Compliance with the require16 ments imposed under this title shall be enforced under—

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

18 Act, with respect to—

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

20 branch or Federal agency of a foreign bank, by

21 the Office of the Comptroller of the Currency;

22 ‘‘(B) any member bank of the Federal Re23 serve System (other than a national bank), any

24 branch or agency of a foreign bank (other than

25 a Federal branch or Federal agency, or insured
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1 State branch of a foreign bank), any commer2 cial lending company owned or controlled by

3 one or more foreign banks, or any organization

4 operating under section 25 or 25A of the Fed5 eral Reserve Act, by the Board;

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

7 Deposit Insurance Act (other than a member of

8 the Federal Reserve System) or any insured

9 State branch of a foreign bank, by the Board

10 of Directors of the Federal Deposit Insurance

11 Corporation; and

12 ‘‘(D) any savings association the deposits

13 of which are insured under the Federal Deposit

14 Insurance Act, by the Director of the Office of

15 Thrift Supervision;

16 ‘‘(2) the Federal Credit Union Act, by the Ad17 ministrator of the National Credit Union Adminis18 tration with respect to any Federal credit union;

19 ‘‘(3) the Packers and Stockyards Act, 1921 (ex20 cept as provided in section 406 of such Act), by the

21 Secretary of Agriculture with respect to any activi22 ties subject to such Act; and

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

24 Credit Administration with respect to any institution

25 referred to in section 1.2(a) of that Act.
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1 ‘‘(b) DEFINITIONS.—Each term in subsection (a)(1)

2 that is not defined in this title shall have the same mean3 ing as in section 1(b) of the International Banking Act

4 of 1978.

5 ‘‘(c) ADDITIONAL ENFORCEMENT POWERS.—

6 ‘‘(1) VIOLATIONS.—For the purpose of the ex7 ercise by any agency referred to in subsection (a) of

8 the powers of the agency under any Act referred to

9 in that subsection, a violation of any requirement

10 imposed under this title shall be deemed to be a vio11 lation of a requirement imposed under that Act.

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

13 the agency under any provision of law specifically re14 ferred to in subsection (a), each agency referred to

15 in that subsection may exercise, for the purpose of

16 enforcing compliance with any requirement imposed

17 under this title, any other authority conferred on the

18 agency by law.

19 ‘‘(3) REGULATIONS BY AGENCIES OTHER THAN

20 THE BOARD.—The authority of the Board to pro21 mulgate regulations under this title does not impair

22 the authority of any other agency referred to in sub23 section (a) to make rules regarding the procedures

24 of the Board in enforcing compliance with the re25 quirements imposed under this title.
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1 ‘‘(d) FTC ENFORCEMENT.—

2 ‘‘(1) IN GENERAL.—Except to the extent that

3 the enforcement of the requirements imposed under

4 this title is specifically committed to another agency

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

6 Federal Trade Commission shall enforce such

7 requirements.

8 ‘‘(2) VIOLATIONS.—For the purpose of the ex9 ercise by the Federal Trade Commission of the func10 tions and powers of the Commission under the Fed11 eral Trade Commission Act, a violation of any re12 quirement imposed under this title shall be deemed

13 to be a violation of a requirement imposed under

14 that Act.

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

16 functions and powers of the Federal Trade Commis17 sion under the Federal Trade Commission Act are

18 available to the Federal Trade Commission to en19 force compliance by any person with the require20 ments imposed under this title, regardless of wheth21 er or not the person is engaged in commerce or

22 meets any other jurisdictional tests in the Federal

23 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.
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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

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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:
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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

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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.
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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).
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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

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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

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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 RS

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)’’;
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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

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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.
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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’
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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

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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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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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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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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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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
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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-
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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).
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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
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•S 650 RS

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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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
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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
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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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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
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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
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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’’.

12 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

14 ‘‘Economic Growth and Regulatory Paperwork Reduction

15 Act of 1995’’.

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

17 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Definitions.

TITLE I—STREAMLINING THE HOME MORTGAGE LENDING

PROCESS

Sec. 101. Coordination of the Truth in Lending Act and the Real Estate Settlement Procedures Act of 1974.

Sec. 102. Elimination of redundant regulators.

Sec. 103. General exemption authority for loans.

Sec. 104. Reductions in Real Estate Settlement Procedures Act of 1974 regulatory

burdens.

Sec. 105. Co-branding and affinity group endorsements.

Sec. 106. Waiver for certain borrowers.

Sec. 107. Alternative disclosures for adjustable rate mortgages.

Sec. 108. Restitution for violations of the Truth in Lending Act.
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TITLE II—STREAMLINING GOVERNMENT REGULATION

Subtitle A—Eliminating Unnecessary Regulatory Requirements and Procedures

Sec. 201. Elimination of certain filing and approval requirements for certain insured depository institutions.

Sec. 202. Elimination of redundant approval requirement for Oakar transactions.

Sec. 203. Elimination of duplicative requirements imposed upon bank holding

companies.

Sec. 204. Elimination of the per branch capital requirement for national banks

and State member banks.

Sec. 205. Elimination of branch application requirements for automatic teller

machines.

Sec. 206. Elimination of requirement for approval of investments in bank premises for well capitalized and well managed banks.

Sec. 207. Elimination of approval requirement for divestitures.

Sec. 208. Streamlined nonbanking acquisitions by well capitalized and well managed banking organizations.

Sec. 209. Elimination of unnecessary filing for officer and director appointments.

Sec. 210. Amendments to the Depository Institution Management Interlocks Act.

Sec. 211. Elimination of recordkeeping and reporting requirements for officers.

Sec. 212. Consolidation of appraisal subcommittee; transfer of functions.

Sec. 213. Branch closures.

Sec. 214. Foreign banks.

Sec. 215. Disposition of foreclosed assets.

Subtitle B—Eliminating Unnecessary Regulatory Burdens

Sec. 221. Small bank examination cycle.

Sec. 222. Required review of regulations.

Sec. 223. Repeal of identification of nonbank financial institution customers.

Sec. 224. Repeal of commercial loan reporting requirements.

Sec. 225. Increase in home mortgage disclosure exemption threshold.

Sec. 226. Elimination of stock loan reporting requirement.

Sec. 227. Credit availability assessment.

Subtitle C—Regulatory Micromanagement

Sec. 241. National bank directors.

Sec. 242. Paperwork reduction review.

Sec. 243. State bank representation on board of directors of the FDIC.

Sec. 244. Consultation among examiners.

TITLE III—REGULATORY IMPACT ON COST OF CREDIT AND 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 banks.

Sec. 309. Collateralization of advances to members.

Sec. 310. Increasing limit on total advances by the FHLB system to non-QTL

institutions.
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Sec. 311. Fair debt collection practices.

TITLE IV—FAIR CREDIT REPORTING

Sec. 401. Short title.

Sec. 402. Definitions.

Sec. 403. Furnishing consumer reports; use for employment purposes.

Sec. 404. Use of consumer reports for prescreening and direct marketing; prohibition on unauthorized or uncertified use of information.

Sec. 405. Consumer consent required to furnish consumer report containing medical information; furnishing consumer reports for commercial

transactions.

Sec. 406. Obsolete information and information contained in consumer reports.

Sec. 407. Compliance procedures.

Sec. 408. Consumer disclosures.

Sec. 409. Procedures in case of the disputed accuracy of any information in a

consumer’s file.

Sec. 410. Charges for certain disclosures.

Sec. 411. Duties of users of consumer reports.

Sec. 412. Civil liability.

Sec. 413. Responsibilities of persons who furnish information to consumer reporting agencies.

Sec. 414. Investigative consumer reports.

Sec. 415. Increased criminal penalties for obtaining information under false pretenses.

Sec. 416. Administrative enforcement.

Sec. 417. State enforcement of Fair Credit Reporting Act.

Sec. 418. Federal Reserve Board authority.

Sec. 419. Preemption of State law.

Sec. 420. Action by FTC and Federal Reserve Board.

Sec. 421. Amendment to Fair Debt Collection Practices Act.

Sec. 422. Furnishing consumer reports for certain purposes relating to child support.

Sec. 423. Disclosure of information and consumer reports to FBI for counterintelligence purposes.

Sec. 424. Effective date.

Sec. 425. Relationship to other law.

TITLE V—ASSET CONSERVATION, LENDER LIABILITY, AND DEPOSIT

INSURANCE PROTECTION

Sec. 501. Short title.

Sec. 502. Federal Deposit Insurance Act amendment.

Sec. 503. CERCLA amendments.

Sec. 504. Solid Waste Disposal Act amendments.

Sec. 505. Effective date.

TITLE VI—STUDIES AND REPORTS; MISCELLANEOUS

Sec. 601. Electronic Fund Transfer Act clarification.

Sec. 602. Treatment of claims arising from breach of post-appointment agreements.

Sec. 603. Fictitious financial instruments.

Sec. 604. Amendments to the Truth in Savings Act.

Sec. 605. Consumer Leasing Act amendments.

Sec. 606. Credit union study.
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Sec. 607. Report on the reconciliation of differences between regulatory accounting principles and generally accepted accounting principles.

Sec. 608. State-by-state and metropolitan area-by-metropolitan area study of

bank fees.

Sec. 609. Prospective application of gold clauses in contracts.

1 SEC. 2. DEFINITIONS.

2 Unless otherwise specified in this Act, for purposes of

3 this Act—

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

5 the Appraisal Subcommittee established under section

6 1011 of the Federal Financial Institutions Examina7 tion Council Act of 1978 (as in existence on the day

8 before the date of enactment of this Act);

9 (2) the term ‘‘appropriate Federal banking agen10 cy’’ has the same meaning as in section 3 of the Fed11 eral Deposit Insurance Act;

12 (3) the term ‘‘Board’’ means the Board of Gov13 ernors of the Federal Reserve System;

14 (4) the term ‘‘Corporation’’ means the Federal

15 Deposit Insurance Corporation;

16 (5) the term ‘‘Council’’ means the Federal Fi17 nancial Institutions Examination Council established

18 under section 1004 of the Federal Financial Institu19 tions Examination Council Act of 1978;

20 (6) the term ‘‘insured credit union’’ has the same

21 meaning as in section 101 of the Federal Credit

22 Union Act; and
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1 (7) the term ‘‘insured depository institution’’ has

2 the same meaning as in section 3 of the Federal De3 posit Insurance Act.

4 TITLE I—STREAMLINING THE

5 HOME MORTGAGE LENDING

6 PROCESS

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

8 AND THE REAL ESTATE SETTLEMENT PROCE9 DURES ACT OF 1974.

10 (a) AMENDMENTS TO TRUTH IN LENDING ACT.—Sec11 tion 105 of the Truth in Lending Act (15 U.S.C. 1604) is

12 amended by adding at the end the following new subsection:

13 ‘‘(e) AUTHORITY TO ELIMINATE, MODIFY, OR SIM14 PLIFY AND IMPROVE DISCLOSURE REQUIREMENTS.—

15 ‘‘(1) IN GENERAL.—The Board shall, by regula16 tion, eliminate, modify or simplify, and improve any

17 disclosure required by this title, including the content

18 and timing of the disclosure, if such action would

19 make disclosures and timing of disclosures required

20 by this title uniform with other laws relating to the

21 disclosure of information in connection with credit

22 transactions, including the Real Estate Settlement

23 Procedures Act of 1974, while furthering the purposes

24 of this title.
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1 ‘‘(2) LIMITATION.—No disclosure requirement

2 may be imposed under this subsection unless such re3 quirement would have the effect of eliminating, modi4 fying or simplifying, and improving any disclosure

5 required under this title.’’.

6 (b) AMENDMENTS TO REAL ESTATE SETTLEMENT

7 PROCEDURES ACT OF 1974.—Section 19 of the Real Estate

8 Settlement Procedures Act of 1974 (12 U.S.C. 2617) is

9 amended by adding at the end the following new subsection:

10 ‘‘(d) AUTHORITY TO ELIMINATE, MODIFY, OR SIM11 PLIFY AND IMPROVE DISCLOSURE REQUIREMENTS.—

12 ‘‘(1) IN GENERAL.—The Board shall, by regula13 tion, eliminate, modify or simplify, and improve any

14 disclosure required by this Act, including the content

15 and timing of the disclosure, if such action would—

16 ‘‘(A) make disclosures and timing of disclo17 sures required by this title uniform with other

18 laws relating to the disclosure of information in

19 connection with credit transactions, including

20 the Truth in Lending Act; or

21 ‘‘(B) further the purposes of this Act.

22 ‘‘(2) LIMITATION.—No disclosure requirement

23 may be imposed under this subsection unless such re24 quirement would have the effect of eliminating, modi-
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1 fying or simplifying, and improving any disclosure

2 required under this Act.’’.

3 SEC. 102. ELIMINATION OF REDUNDANT REGULATORS.

4 (a) DEFINITION.—Section 3 of the Real Estate Settle5 ment Procedures Act of 1974 (12 U.S.C. 2602) is amend6 ed—

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

8 end;

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

10 the end and inserting a semicolon; and

11 (3) by adding at the end the following new para12 graphs:

13 ‘‘(9) the term ‘Board’ means the Board of Gov14 ernors of the Federal Reserve System; and

15 ‘‘(10) the term ‘appropriate Federal banking

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

17 Federal Deposit Insurance Act.’’.

18 (b) CONFORMING AMENDMENTS.—The Real Estate

19 Settlement Procedures Act of 1974 (12 U.S.C. 2601 et seq.)

20 is amended—

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

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

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

24 place such term appears and inserting ‘‘Board’’;
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1 (3) in section 6, by striking ‘‘Secretary’’ each

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

3 (4) in section 8(d)(4), by striking ‘‘Secretary’’

4 and inserting ‘‘Secretary or the appropriate Federal

5 banking agency, as provided in section 20,’’;

6 (5) in section 10(c)(1)(C), by striking ‘‘Not

7 later’’ and all that follows through ‘‘Act, the Sec8 retary’’, and inserting ‘‘The Board’’;

9 (6) in section 16, by striking ‘‘the Secretary’’

10 and inserting ‘‘the Secretary or the appropriate Fed11 eral banking agency’’;

12 (7) in section 18—

13 (A) by striking ‘‘Secretary is authorized to’’

14 and inserting ‘‘Board or Secretary, as applica15 ble, may’’; and

16 (B) by striking ‘‘Secretary’’ each place such

17 term appears and inserting ‘‘Secretary or the

18 Board’’; and

19 (8) in section 19, by amending the section head20 ing to read as follows:

21 ‘‘SEC. 19. AUTHORITY OF THE SECRETARY AND THE

22 BOARD.’’.

23 (c) REGULATIONS.—
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1 (1) IN GENERAL.—Section 19(a) of the Real Es2 tate Settlement Procedures Act of 1974 (12 U.S.C.

3 2617(a)) is amended to read as follows:

4 ‘‘(a) REGULATIONS.—

5 ‘‘(1) IN GENERAL.—The Board or the Secretary

6 shall prescribe such regulations as may be necessary

7 to carry out this title, as set forth in paragraph (3).

8 ‘‘(2) SPECIFICATIONS.—The regulations promul9 gated under paragraph (1)—

10 ‘‘(A) may contain such classifications, dif11 ferentiations, or other provisions, and may pro12 vide for such adjustments and exceptions for any

13 class of transactions, as the Board or the Sec14 retary, as appropriate, determines to be nec15 essary or proper to—

16 ‘‘(i) effectuate the purposes of this title;

17 ‘‘(ii) prevent circumvention or evasion

18 of this title; or

19 ‘‘(iii) facilitate compliance with this

20 title; and

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

22 imposed upon creditors and shall ensure that

23 costs, burdens, and complexities to consumers are

24 reduced, while necessary information regarding

25 the cost of financing to consumers is provided.
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1 ‘‘(3) APPLICATION.—

2 ‘‘(A) BOARD.—The authority of the Board

3 under paragraph (1) shall apply with respect

4 to—

5 ‘‘(i) sections 4, 5, 6, 10, and 12; and

6 ‘‘(ii) sections 3, 7, 17, 18, and 19, to

7 the extent that such sections are applicable

8 with respect to the sections described in

9 clause (i).

10 ‘‘(B) SECRETARY.—The authority of the

11 Secretary under paragraph (1) shall apply with

12 respect to—

13 ‘‘(i) sections 8 and 9; and

14 ‘‘(ii) sections 3, 7, 17, 18, and 19, to

15 the extent such sections are applicable with

16 respect to the sections described in clause

17 (i).’’.

18 (2) CONFORMING AMENDMENTS.—Section 19 of

19 the Real Estate Settlement Procedures Act of 1974 (12

20 U.S.C. 2617) is amended—

21 (A) in subsection (b), by inserting ‘‘, the

22 Board,’’ after ‘‘the Secretary’’;

23 (B) in subsection (c)(1)—
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1 (i) by striking ‘‘Secretary may’’ and

2 inserting ‘‘Secretary and the appropriate

3 Federal banking agency may’’;

4 (ii) by striking ‘‘Secretary is’’ and in5 serting ‘‘Secretary and the appropriate Fed6 eral banking agency are’’; and

7 (iii) by striking ‘‘Secretary deems’’

8 and inserting ‘‘Secretary or the appropriate

9 Federal banking agency deems’’; and

10 (C) in subsection (c)(2), by striking ‘‘Sec11 retary’’ and inserting ‘‘Secretary or the appro12 priate Federal banking agency’’.

13 (d) ADMINISTRATIVE ENFORCEMENT.—The Real Es14 tate Settlement Procedures Act of 1974 (12 U.S.C. 2601 et

15 seq.) is amended by adding at the end the following new

16 section:

17 ‘‘SEC. 20. ADMINISTRATIVE ENFORCEMENT.

18 ‘‘(a) IN GENERAL.—Compliance with the requirements

19 imposed under this title shall be enforced—

20 ‘‘(1) with respect to—

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

22 branch or Federal agency of a foreign bank, by

23 the Office of the Comptroller of the Currency;

24 ‘‘(B) any member bank of the Federal Re25 serve System (other than a national bank), any
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1 branch or agency of a foreign bank (other than

2 a Federal branch or Federal agency, or insured

3 State branch of a foreign bank), any commercial

4 lending company owned or controlled by one or

5 more foreign banks, or any organization operat6 ing under section 25 or 25A of the Federal Re7 serve Act, by the Board;

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

9 Deposit Insurance Act (other than a member of

10 the Federal Reserve System) or any insured

11 State branch of a foreign bank, by the Board of

12 Directors of the Federal Deposit Insurance Cor13 poration; and

14 ‘‘(D) any savings association the deposits of

15 which are insured under the Federal Deposit In16 surance Act, by the Director of the Office of

17 Thrift Supervision;

18 ‘‘(2) under the Federal Credit Union Act, by the

19 Administrator of the National Credit Union Adminis20 tration with respect to any Federal credit union;

21 ‘‘(3) under the Packers and Stockyards Act, 1921

22 (except as provided in section 406 of such Act), by the

23 Secretary of Agriculture with respect to any activities

24 subject to such Act; and
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1 ‘‘(4) under the Farm Credit Act of 1971, by the

2 Farm Credit Administration with respect to any in3 stitution referred to in section 1.2(a) of that Act.

4 ‘‘(b) LIMITATIONS.—In exercising their powers under

5 subsection (a), the appropriate Federal banking agencies

6 shall not impose any penalties that exceed those provided

7 for in this title.

8 ‘‘(c) HUD ENFORCEMENT.—Except to the extent that

9 the enforcement of the requirements imposed under this title

10 is specifically committed to another agency of the Federal

11 Government under subsection (a), the Secretary of Housing

12 and Urban Development shall enforce such requirements.’’.

13 (e) TRANSFER OF AUTHORITY.—Authority to carry

14 out the Real Estate Settlement Procedures Act of 1974 shall

15 be transferred to the Board, as provided in the amendments

16 made by subsections (b) and (c) of this section, 180 days

17 after the enactment of this Act. Upon transfer of authority,

18 all existing regulations shall remain in effect until such

19 time as the Board modifies them. Not later than 180 days

20 after the date of transfer, the Board shall publish any pro21 posed changes to the regulations required by this Act. Dur22 ing the 180-day period beginning on the date of enactment

23 of this Act, the Secretary of the Treasury shall not modify,

24 repeal, or add any regulations that will be transferred to

25 the Board, as appropriate.
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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—

4 (1) by redesignating paragraphs (5) and (6) as

5 paragraphs (6) and (7), respectively; and

6 (2) by inserting after paragraph (4) the follow7 ing new paragraph:

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

9 determines that coverage under this title is not nec10 essary to carry out the purposes of this title.’’.

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

12 Truth in Lending Act (15 U.S.C. 1604) is amended by add13 ing at the end the following new subsection:

14 ‘‘(f) EXEMPTION AUTHORITY.—

15 ‘‘(1) IN GENERAL.—The Board may exempt from

16 all or part of this title any class of transactions for

17 which, in the determination of the Board, coverage

18 under all or part of this title does not provide a

19 meaningful benefit to consumers in the form of useful

20 information or protection.

21 ‘‘(2) FACTORS FOR CONSIDERATION.—In deter22 mining which classes of transactions to exempt in

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

24 shall consider, among other factors—

25 ‘‘(A) the amount of the loan or closing costs

26 and whether the disclosures, right of rescission,
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1 and other provisions are necessary, particularly

2 for small loans, as determined by the Board;

3 ‘‘(B) whether the requirements of this title

4 complicate, hinder, or make more expensive the

5 credit process for the class of transactions;

6 ‘‘(C) the status of the borrower, including—

7 ‘‘(i) any related financial arrange8 ments of the borrower, as determined by the

9 Board;

10 ‘‘(ii) the financial sophistication of the

11 borrower relative to the type of transaction;

12 and

13 ‘‘(iii) the importance to the borrower of

14 the credit and related supporting property,

15 as determined by the Board;

16 ‘‘(D) whether the loan is secured by the

17 principal residence of the consumer; and

18 ‘‘(E) whether the goal of consumer protec19 tion would be undermined by such an exemp20 tion.’’.
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1 SEC. 104. REDUCTIONS IN REAL ESTATE SETTLEMENT PRO2 CEDURES ACT OF 1974 REGULATORY BUR3 DENS.

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

5 Real Estate Settlement Procedures Act of 1974 (12 U.S.C.

6 2605(a)) is amended to read as follows:

7 ‘‘(a) DISCLOSURE TO APPLICANT RELATING TO AS8 SIGNMENT, SALE, OR TRANSFER OF LOAN SERVICING.—

9 Each person who makes a federally related mortgage loan

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

11 the time of application for the loan, whether the servicing

12 of the loan may be assigned, sold, or transferred to any

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

14 (b) SECOND MORTGAGES.—Section 8 of the Real Es15 tate Settlement Procedures Act of 1974 (12 U.S.C. 2607)

16 is amended by inserting ‘‘(other than a subordinate lien)’’

17 after ‘‘federally related mortgages’’ each place such term ap18 pears.

19 (c) CONSISTENCY OF REAL ESTATE SETTLEMENT

20 PROCEDURES ACT AND TRUTH IN LENDING ACT EXEMP21 TION OF BUSINESS LOANS.—Section 7 of the Real Estate

22 Settlement Procedures Act of 1974 (12 U.S.C. 2606) is

23 amended—

24 (1) by striking ‘‘This Act’’ and inserting the fol25 lowing:

26 ‘‘(a) IN GENERAL.—This Act’’; and
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1 (2) by adding at the end the following new sub2 section:

3 ‘‘(b) INTERPRETATION.—In promulgating regulations

4 under section 19(a), the Board shall ensure that, with re5 spect to subsection (a) of this section, the exemption for

6 credit transactions involving extensions of credit primarily

7 for business, commercial, or agricultural purposes, as pro8 vided in section 7(1) of the Real Estate Settlement Proce9 dures Act of 1974 shall be the same as the exemption for

10 such credit transactions under section 104(1) of the Truth

11 in Lending Act.’’.

12 SEC. 105. CO-BRANDING AND AFFINITY GROUP ENDORSE13 MENTS.

14 (a) COMPLIANCE WITH OTHER REQUIREMENTS.—Sec15 tion 3(3) of the Real Estate Settlement Procedures Act of

16 1974 (12 U.S.C. 2602(3)) is amended by inserting before

17 the semicolon ‘‘, but does not include an endorsement which

18 does not violate the provisions of section 8(c)(4)’’.

19 (b) PAYMENTS.—Section 8(c) of the Real Estate Settle20 ment Procedures Act of 1974 (12 U.S.C. 2607(c)) is amend21 ed—

22 (1) by striking ‘‘(4) controlled’’ and inserting

23 ‘‘(5) controlled’’;

24 (2) by striking ‘‘or (5)’’ and inserting ‘‘or (6)’’;

25 and
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1 (3) by inserting after paragraph (3), the follow2 ing new paragraph: ‘‘(4) a payment to a person or

3 affinity group for or in connection with an endorse4 ment (written or oral), either through an advertise5 ment or through a communication addressed to a per6 son by name or mailing address, of the products or

7 services of a settlement service provider, if the person

8 or affinity group making the endorsement is not itself

9 providing settlement services in connection with the

10 real estate settlement involving the person to whom

11 such endorsement was addressed;’’.

12 SEC. 106. WAIVER FOR CERTAIN BORROWERS.

13 Section 105 of the Truth in Lending Act (15 U.S.C.

14 1604) is amended by adding at the end the following new

15 subsection:

16 ‘‘(g) WAIVER FOR CERTAIN BORROWERS.—

17 ‘‘(1) IN GENERAL.—The Board, by regulation,

18 may exempt from the requirements of this title certain

19 credit transactions if—

20 ‘‘(A) the transaction involves a consumer—

21 ‘‘(i) with an annual earned income of

22 more than $200,000; or

23 ‘‘(ii) having net assets in excess of

24 $1,000,000 at the time of the transaction;

25 and
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1 ‘‘(B) a waiver that is handwritten, signed,

2 and dated by the consumer is first obtained from

3 the consumer.

4 ‘‘(2) ADJUSTMENTS BY THE BOARD.—The Board,

5 at its discretion, may adjust the annual earned in6 come and net asset requirements of paragraph (1) for

7 inflation.’’.

8 SEC. 107. ALTERNATIVE DISCLOSURES FOR ADJUSTABLE

9 RATE MORTGAGES.

10 Section 128(a) of the Truth in Lending Act (15 U.S.C.

11 1638(a)) is amended by adding at the end the following

12 new paragraph:

13 ‘‘(14) In any variable interest rate residential

14 mortgage transaction, at the option of the creditor, a

15 statement that the periodic payments may increase or

16 decrease substantially, and the maximum interest rate

17 and payment for a $10,000 loan originated at a re18 cent interest rate, as determined by the Board, assum19 ing the maximum periodic increases in rates and

20 payments under the program, or a historical example

21 illustrating the effects of interest rate changes imple22 mented according to the loan program.’’.
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1 SEC. 108. RESTITUTION FOR VIOLATIONS OF THE TRUTH IN

2 LENDING ACT.

3 Section 108(e)(3) of the Truth in Lending Act (15

4 U.S.C. 2602(3)) is amended—

5 (1) by striking ‘‘ordered (A) if’’ and inserting

6 the following: ‘‘ordered—

7 ‘‘(A) if’’;

8 (2) by striking ‘‘may require a partial’’ and in9 serting ‘‘may—

10 ‘‘(i) require a partial’’;

11 (3) by striking ‘‘, except that with respect’’ and

12 all that follows through ‘‘Act, the agency shall re13 quire’’ and inserting ‘‘; or

14 ‘‘(ii) require’’;

15 (4) by striking ‘‘reasonable, (B) the’’ and insert16 ing the following: ‘‘reasonable, if (in the case of an

17 agency referred to in paragraph (1), (2), or (3) of

18 subsection (a)), the agency determines that a partial

19 adjustment or making partial payments over an ex20 tended period is necessary to avoid causing the credi21 tor to become undercapitalized pursuant to section 38

22 of the Federal Deposit Insurance Act;

23 ‘‘(B) the’’; and

24 (5) by striking ‘‘(C) except’’ and inserting the

25 following:

26 ‘‘(C) except’’.
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1 TITLE II—STREAMLINING

2 GOVERNMENT REGULATION

3 Subtitle A—Eliminating Unneces4 sary Regulatory Requirements

5 and Procedures

6 SEC. 201. ELIMINATION OF CERTAIN FILING AND APPROVAL

7 REQUIREMENTS FOR CERTAIN INSURED DE8 POSITORY INSTITUTIONS.

9 Section 18(c) of the Federal Deposit Insurance Act (12

10 U.S.C. 1828(c)) is amended by adding at the end the follow11 ing new paragraph:

12 ‘‘(12) EXCEPTIONS.—No prior approval is required

13 under paragraph (2) for any merger, consolidation, acquisi14 tion of assets, or assumption of liabilities involving only

15 insured depository institutions that are subsidiaries of the

16 same depository institution holding company, if—

17 ‘‘(A) the responsible agency would not be prohib18 ited from approving the transaction under section 44;

19 ‘‘(B) the acquiring, assuming, or resulting insti20 tution complies with all applicable provisions of sec21 tion 44 as if the merger, consolidation, or acquisition

22 were approved under this subsection;

23 ‘‘(C) the acquiring, assuming, or resulting insti24 tution provides written notification of the transaction

25 to the appropriate Federal banking agency for the in-
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1 stitution not later than 10 days prior to consumma2 tion of the transaction; and

3 ‘‘(D) during the 10-day period beginning on the

4 date on which the notification required by subpara5 graph (C) was received, the agency does not require

6 the institution to submit an application with respect

7 to such transaction.’’.

8 SEC. 202. ELIMINATION OF REDUNDANT APPROVAL RE9 QUIREMENT FOR OAKAR TRANSACTIONS.

10 (a) IN GENERAL.—Section 5(d)(3) of the Federal De11 posit Insurance Act (12 U.S.C. 1815(d)(3)) is amended—

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

13 prior written approval of’’ and inserting ‘‘if the

14 transaction is approved by’’;

15 (2) in subparagraph (E)—

16 (A) by striking clauses (i) and (iv);

17 (B) by redesignating clauses (ii) and (iii)

18 as clauses (i) and (ii), respectively; and

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

20 clause:

21 ‘‘(iii) CAPITAL REQUIREMENTS.—A

22 transaction described in this paragraph

23 shall not be approved under section 18(c)(2)

24 unless the acquiring, assuming, or resulting

25 depository institution will meet all applica-
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1 ble capital requirements upon consumma2 tion of the transaction.’’;

3 (3) by striking subparagraph (G); and

4 (4) by redesignating subparagraphs (H) through

5 (J) as subparagraphs (G) through (I), respectively.

6 (b) CONFORMING AMENDMENTS.—

7 (1) REVISED STATUTES.—Section 5156A(b)(1) of

8 the Revised Statutes (12 U.S.C. 215c(b)(1)) is amend9 ed by striking ‘‘by section 5(d)(3) of the Federal De10 posit Insurance Act or any other’’ and inserting

11 ‘‘under any’’.

12 (2) HOME OWNERS’ LOAN ACT.—Section

13 10(s)(2)(A) of the Home Owners’ Loan Act (12 U.S.C.

14 1467a(s)(2)(A)) is amended by striking ‘‘under sec15 tion 5(d)(3) of the Federal Deposit Insurance Act or

16 any other’’ and inserting ‘‘under any’’.

17 SEC. 203. ELIMINATION OF DUPLICATIVE REQUIREMENTS

18 IMPOSED UPON BANK HOLDING COMPANIES.

19 (a) EXEMPTION FOR BANK HOLDING COMPANIES.—

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

21 1467a) is amended by adding at the end the following new

22 subsection:

23 ‘‘(t) EXEMPTION FOR BANK HOLDING COMPANIES.—

24 This section does not apply to a bank holding company that
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1 is subject to the Bank Holding Company Act of 1956, or

2 any company controlled by such bank holding company.’’.

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

4 Owners’ Loan Act (12 U.S.C. 1467a(a)(1)(D)) is amended

5 to read as follows:

6 ‘‘(D) SAVINGS AND LOAN HOLDING COM7 PANY.—

8 ‘‘(i) IN GENERAL.—Except as provided

9 in clause (ii), the term ‘savings and loan

10 holding company’ means any company that

11 directly or indirectly controls a savings as12 sociation or that controls any other com13 pany that is a savings and loan holding

14 company.

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

16 and loan holding company’ does not include

17 a bank holding company that is registered

18 under, and subject to, the Bank Holding

19 Company Act of 1956, or to any company

20 directly or indirectly controlled by such

21 company (other than a savings associa22 tion).’’.

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

24 Owners’ Loan Act (12 U.S.C. 1467a(e)(1)) is amended—
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1 (1) in subparagraph (A)(iii)(VII), by inserting

2 ‘‘or’’ at the end;

3 (2) in subparagraph (A)(iv), by inserting ‘‘and’’

4 at the end; and

5 (3) in subparagraph (B)—

6 (A) by striking ‘‘or (ii)’’ and inserting

7 ‘‘(ii)’’; and

8 (B) by inserting before the first period ‘‘, or

9 (iii) acquired by a bank holding company that

10 is registered under, and subject to, the Bank

11 Holding Company Act of 1956, or any company

12 controlled by such bank holding company’’.

13 (d) AMENDMENTS TO THE BANK HOLDING COMPANY

14 ACT OF 1956.—Section 4(i) of the Bank Holding Company

15 Act of 1956 (12 U.S.C. 1843(i)) is amended by adding at

16 the end the following new paragraphs:

17 ‘‘(4) SOLICITATION OF VIEWS.—

18 ‘‘(A) NOTICE TO DIRECTOR.—Upon receiv19 ing any application or notice by a bank holding

20 company to acquire, directly or indirectly, a sav21 ings association under subsection (c)(8), the

22 Board shall solicit comments and recommenda23 tions from the Director with respect to such ac24 quisition.
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1 ‘‘(B) COMMENT PERIOD.—The comments

2 and recommendations of the Director under sub3 paragraph (A) with respect to any acquisition

4 subject to such subparagraph shall be transmit5 ted to the Board not later than 30 days after the

6 receipt by the Director of the notice relating to

7 such acquisition (or such shorter period as the

8 Board may specify if the Board advises the Di9 rector that an emergency exists that requires ex10 peditious action).

11 ‘‘(5) EXAMINATION.—

12 ‘‘(A) SCOPE.—The Board shall consult with

13 the Director, as appropriate, in establishing the

14 scope of an examination by the Board of a bank

15 holding company that directly or indirectly con16 trols a savings association.

17 ‘‘(B) ACCESS TO INSPECTION REPORTS.—

18 Upon the request of the Director, the Board shall

19 furnish the Director with a copy of any inspec20 tion report, additional examination materials, or

21 supervisory information relating to any bank

22 holding company that directly or indirectly con23 trols a savings association.

24 ‘‘(6) COORDINATION OF ENFORCEMENT EF25 FORTS.—The Board and the Director shall cooperate
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1 in any enforcement action against any bank holding

2 company that controls a savings association, if the

3 relevant conduct involves such association.

4 ‘‘(7) DIRECTOR DEFINED.—For purposes of this

5 section, the term ‘Director’ means the Director of the

6 Office of Thrift Supervision.’’.

7 SEC. 204. ELIMINATION OF THE PER BRANCH CAPITAL RE8 QUIREMENT FOR NATIONAL BANKS AND

9 STATE MEMBER BANKS.

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

11 36(h)) is amended to read as follows:

12 ‘‘(h) [Reserved.]’’.

13 SEC. 205. ELIMINATION OF BRANCH APPLICATION RE14 QUIREMENTS FOR AUTOMATIC TELLER MA15 CHINES.

16 (a) ‘‘BRANCH’’ UNDER NATIONAL BANK ACT.—Section

17 5155(j) of the Revised Statutes (12 U.S.C. 36(j)) is amended

18 by adding at the end the following: ‘‘The term ‘branch’, as

19 used in this section, does not include an automated teller

20 machine or a remote service unit.’’.

21 (b) ‘‘DOMESTIC BRANCH’’ UNDER THE FEDERAL DE22 POSIT INSURANCE ACT.—Section 3(o) of the Federal De23 posit Insurance Act (12 U.S.C. 1813(o)) is amended by

24 striking ‘‘lent; and the’’ and inserting ‘‘lent. The term ‘do-
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1 mestic branch’ does not include an automated teller ma2 chine or a remote service unit. The’’.

3 SEC. 206. ELIMINATION OF REQUIREMENT FOR APPROVAL

4 OF INVESTMENTS IN BANK PREMISES FOR

5 WELL CAPITALIZED AND WELL MANAGED

6 BANKS.

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

8 371d) is amended to read as follows:

9 ‘‘SEC. 24A. INVESTMENT IN BANK PREMISES OR STOCK OF

10 CORPORATION HOLDING PREMISES.

11 ‘‘(a) CONDITIONS OF INVESTMENT.—No national bank

12 or State member bank shall invest in bank premises, or in

13 the stock, bonds, debentures, or other such obligations of any

14 corporation holding the premises of such bank, or make

15 loans to or upon the security of any such corporation—

16 ‘‘(1) unless the bank receives the prior approval

17 of the Comptroller of the Currency (with respect to a

18 national bank) or the Board (with respect to a State

19 member bank);

20 ‘‘(2) unless the aggregate of all such investments

21 and loans, together with the amount of any indebted22 ness incurred by any such corporation that is an af23 filiate of the bank, is less than or equal to the amount

24 of the capital stock of such bank; or

25 ‘‘(3) unless—
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1 ‘‘(A) the aggregate of all such investments

2 and loans, together with the amount of any in3 debtedness incurred by any such corporation that

4 is an affiliate of the bank, is less than or equal

5 to 150 percent of the capital and surplus of the

6 bank; and

7 ‘‘(B) the bank—

8 ‘‘(i) has a CAMEL composite rating of

9 1 or 2 under the Uniform Financial Insti10 tutions Rating System (or an equivalent

11 rating under a comparable rating system)

12 as of the most recent examination of such

13 bank;

14 ‘‘(ii) is well capitalized and will con15 tinue to be well capitalized after the invest16 ment or loan; and

17 ‘‘(iii) provides notification to the

18 Comptroller of the Currency (with respect to

19 a national bank) or to the Board (with re20 spect to a State member bank) not later

21 than 30 days after making the investment

22 or loan.

23 ‘‘(b) DEFINITIONS.—For purposes of this section—

24 ‘‘(1) the term ‘affiliate’ has the same meaning as

25 in section 2 of the Banking Act of 1933; and
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1 ‘‘(2) the term ‘well capitalized’ has the same

2 meaning as in section 38(b) of the Federal Deposit

3 Insurance Act.’’.

4 SEC. 207. ELIMINATION OF APPROVAL REQUIREMENT FOR

5 DIVESTITURES.

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

7 1956 (12 U.S.C. 1841(g)) is amended—

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

9 end;

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

11 inserting a period; and

12 (3) by striking paragraph (3).

13 SEC. 208. STREAMLINED NONBANKING ACQUISITIONS BY

14 WELL CAPITALIZED AND WELL MANAGED

15 BANKING ORGANIZATIONS.

16 (a) NOTICE REQUIREMENTS.—Section 4(j) of the Bank

17 Holding Company Act of 1956 (12 U.S.C. 1843(j)) is

18 amended—

19 (1) in paragraph (1)(A), by striking ‘‘No’’ and

20 inserting ‘‘Except as provided in paragraph (3), no’’;

21 and

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

24 ‘‘(3) NO NOTICE REQUIRED FOR CERTAIN TRANS25 ACTIONS.—No notice under paragraph (1) of this sub-
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1 section or under subsection (c)(8) or (a)(2)(B) is re2 quired for a proposal by a bank holding company to

3 engage in any activity or acquire the shares or assets

4 of any company, other than an insured depository in5 stitution, if the proposal qualifies under paragraph

6 (4).

7 ‘‘(4) CRITERIA FOR STATUTORY APPROVAL.—A

8 proposal qualifies under this paragraph if all of the

9 following criteria are met:

10 ‘‘(A) FINANCIAL CRITERIA.—Both before

11 and immediately after the proposed trans12 action—

13 ‘‘(i) the acquiring bank holding com14 pany is well capitalized;

15 ‘‘(ii) the lead insured depository insti16 tution of such holding company is well cap17 italized;

18 ‘‘(iii) well capitalized insured deposi19 tory institutions control at least 80 percent

20 of the aggregate total risk-weighted assets of

21 insured depository institutions controlled by

22 such holding company; and

23 ‘‘(iv) no insured depository institution

24 controlled by such holding company is

25 undercapitalized.
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1 ‘‘(B) MANAGERIAL CRITERIA.—

2 ‘‘(i) WELL MANAGED.—At the time of

3 the transaction, the acquiring bank holding

4 company, its lead insured depository insti5 tution, and insured depository institutions

6 that control at least 90 percent of the aggre7 gate total risk-weighted assets of insured de8 pository institutions controlled by such

9 holding company are well managed.

10 ‘‘(ii) LIMITATION ON POORLY MANAGED

11 INSTITUTIONS.—Except as provided in

12 paragraph (6), no insured depository insti13 tution controlled by the acquiring bank

14 holding company has received 1 of the 2

15 lowest composite ratings at the later of the

16 institution’s most recent examination or

17 subsequent review.

18 ‘‘(C) ACTIVITIES PERMISSIBLE.—Following

19 consummation of the proposal, the bank holding

20 company engages directly or through a subsidi21 ary solely in—

22 ‘‘(i) activities that are permissible

23 under subsection (c)(8), as determined by

24 the Board by regulation or order there25 under, subject to all of the restrictions,
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1 terms, and conditions of such subsection

2 and such regulation or order; and

3 ‘‘(ii) such other activities as are other4 wise permissible under this section, subject

5 to the restrictions, terms and conditions, in6 cluding any prior notice or approval re7 quirements, provided in this section.

8 ‘‘(D) SIZE OF ACQUISITION.—

9 ‘‘(i) ASSET SIZE.—The book value of

10 the total assets to be acquired does not ex11 ceed 10 percent of the consolidated total

12 risk-weighted assets of the acquiring bank

13 holding company.

14 ‘‘(ii) CONSIDERATION.—The gross con15 sideration to be paid for the securities or

16 assets does not exceed 15 percent of the con17 solidated Tier 1 capital of the acquiring

18 bank holding company.

19 ‘‘(E) NOTICE NOT OTHERWISE WAR20 RANTED.—For proposals described in paragraph

21 (5)(B), the Board has not, before the conclusion

22 of the period provided in paragraph (5)(B), ad23 vised the bank holding company that a notice

24 under paragraph (1) is required.
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1 ‘‘(F) COMPLIANCE CRITERION.—During the

2 12-month period ending on the date on which the

3 bank holding company proposes to commence an

4 activity or acquisition, no administrative en5 forcement action has been commenced, and no

6 cease and desist order has been issued pursuant

7 to section 8 of the Federal Deposit Insurance

8 Act, against the bank holding company or any

9 depository institution subsidiary of the holding

10 company, and no such enforcement action, order,

11 or other administrative enforcement proceeding

12 is pending as of such date.

13 ‘‘(5) NOTIFICATION.—

14 ‘‘(A) COMMENCEMENT OF ACTIVITIES AP15 PROVED BY RULE.—A bank holding company

16 that qualifies under paragraph (4) and that pro17 poses to engage de novo, directly or through a

18 subsidiary, in any activity that is permissible

19 under subsection (c)(8), as determined by the

20 Board by regulation, may commence that activ21 ity without prior notice to the Board and must

22 provide written notification to the Board not

23 later than 10 business days after commencing the

24 activity.
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1 ‘‘(B) ACTIVITIES PERMITTED BY ORDER

2 AND ACQUISITIONS.—

3 ‘‘(i) IN GENERAL.—At least 12 business

4 days before commencing any activity pursu5 ant to paragraph (3) (other than an activ6 ity described in subparagraph (A) of this

7 paragraph) or acquiring shares or assets of

8 any company pursuant to paragraph (3),

9 the bank holding company shall provide

10 written notice of the proposal to the Board,

11 unless the Board determines that no notice

12 or a shorter notice period is appropriate.

13 ‘‘(ii) DESCRIPTION OF ACTIVITIES AND

14 TERMS.—A notification under this subpara15 graph shall include a description of the pro16 posed activities and the terms of any pro17 posed acquisition.

18 ‘‘(6) RECENTLY ACQUIRED INSTITUTIONS.—Any

19 insured depository institution which has been ac20 quired by a bank holding company during the 12-

21 month period preceding the date on which the com22 pany proposes to commence an activity or acquisition

23 pursuant to paragraph (3) may be excluded for pur24 poses of paragraph (4)(B)(ii) if—
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1 ‘‘(A) the bank holding company has devel2 oped a plan for the institution to restore the cap3 ital and management of the institution which is

4 acceptable to the appropriate Federal banking

5 agency; and

6 ‘‘(B) all such insured depository institu7 tions represent, in the aggregate, less than 10

8 percent of the aggregate total risk-weighted assets

9 of all insured depository institutions controlled

10 by the bank holding company.

11 ‘‘(7) ADJUSTMENT OF PERCENTAGES.—The

12 Board may, by regulation, adjust the percentages and

13 the manner in which the percentages of insured depos14 itory institutions are calculated under paragraph

15 (4)(B)(i), (4)(D), or (6)(B) if the Board determines

16 that any such adjustment is consistent with safety

17 and soundness and the purposes of this Act.’’.

18 (b) DEFINITIONS.—Section 2(o) of the Bank Holding

19 Company Act of 1956 (12 U.S.C. 1841(o)) is amended—

20 (1) by striking paragraph (1) and inserting the

21 following new paragraph:

22 ‘‘(1) CAPITAL TERMS.—

23 ‘‘(A) INSURED DEPOSITORY INSTITU24 TIONS.—With respect to insured depository insti25 tutions, the terms ‘well capitalized’, ‘adequately
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1 capitalized’, and ‘undercapitalized’ have the

2 same meanings as in section 38(b) of the Federal

3 Deposit Insurance Act.

4 ‘‘(B) BANK HOLDING COMPANY.—

5 ‘‘(i) ADEQUATELY CAPITALIZED.—With

6 respect to a bank holding company, the

7 term ‘adequately capitalized’ means a level

8 of capitalization which meets or exceeds all

9 applicable Federal regulatory capital stand10 ards.

11 ‘‘(ii) WELL CAPITALIZED.—A bank

12 holding company is ‘well capitalized’ if it

13 meets the required capital levels for well

14 capitalized bank holding companies estab15 lished by the Board.

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

17 ‘Tier 1’ and ‘risk-weighted assets’ have the mean18 ings given those terms in the capital guidelines

19 or regulations established by the Board for bank

20 holding companies.’’; and

21 (2) by adding at the end the following new para22 graphs:

23 ‘‘(8) LEAD INSURED DEPOSITORY INSTITU24 TIONS.—
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1 ‘‘(A) IN GENERAL.—The term ‘lead insured

2 depository institution’ means the largest insured

3 depository institution controlled by the subject

4 bank holding company at any time, based on a

5 comparison of the average total risk-weighted as6 sets controlled by each insured depository insti7 tution during the previous 12-month period.

8 ‘‘(B) BRANCH OR AGENCY.—For purposes of

9 this paragraph and section 4(j)(4), the term ‘in10 sured depository institution’ includes any branch

11 or agency operated in the United States by a for12 eign bank.

13 ‘‘(9) WELL MANAGED.—The term ‘well managed’

14 means—

15 ‘‘(A) in the case of any company or deposi16 tory institution which receives examinations, the

17 achievement of—

18 ‘‘(i) a CAMEL composite rating of 1

19 or 2 (or an equivalent rating under an

20 equivalent rating system) in connection

21 with the most recent examination or subse22 quent review of such company or institu23 tion; and

24 ‘‘(ii) at least a satisfactory rating for

25 management, if such rating is given; or
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1 ‘‘(B) in the case of a company or depository

2 institution that has not received an examination

3 rating, the existence and use of managerial re4 sources which the Board determines are satisfac5 tory.’’.

6 SEC. 209. ELIMINATION OF UNNECESSARY FILING FOR OF7 FICER AND DIRECTOR APPOINTMENTS.

8 Section 32 of the Federal Deposit Insurance Act (12

9 U.S.C. 1831i) is amended—

10 (1) in subsection (a)—

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

12 determined by the appropriate Federal banking

13 agency)’’ after ‘‘30 days’’;

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

15 institution or depository institution holding

16 company’’ and inserting ‘‘if ’’;

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

18 (D) by redesignating paragraph (3) as

19 paragraph (1);

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

21 (i) by inserting ‘‘the insured depository

22 institution or depository institution holding

23 company’’ before ‘‘is not in compliance’’;

24 and
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1 (ii) by striking the period at the end

2 and inserting ‘‘; or’’; and

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

4 paragraph:

5 ‘‘(2) the agency determines, in connection with

6 the review by the agency of the plan required under

7 section 38 or otherwise, that such prior notice is ap8 propriate.’’; and

9 (2) in subsection (b), by striking ‘‘30-day pe10 riod’’ and inserting ‘‘notice period, not to exceed 90

11 days,’’.

12 SEC. 210. AMENDMENTS TO THE DEPOSITORY INSTITUTION

13 MANAGEMENT INTERLOCKS ACT.

14 (a) DUAL SERVICE AMONG LARGER ORGANIZA15 TIONS.—Section 204 of the Depository Institution Manage16 ment Interlocks Act (12 U.S.C. 3203) is amended—

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

18 ‘‘$2,500,000,000’’;

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

20 ‘‘$1,500,000,000’’; and

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

22 to allow for inflation or market changes, the appro23 priate Federal depository institutions regulatory

24 agencies may, by regulation, adjust, as necessary, the

25 amount of total assets required for depository institu-
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1 tions or depository holding companies under this sec2 tion.’’.

3 (b) EXTENSION OF GRANDFATHER EXEMPTION.—Sec4 tion 206 of the Depository Institution Management Inter5 locks Act (12 U.S.C. 3205) is amended—

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

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

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

9 (2) in subsection (b), by striking the second sen10 tence; and

11 (3) by striking subsection (c).

12 (c) RULES OR REGULATIONS.—Section 209 of the De13 pository Institution Management Interlocks Act (12 U.S.C.

14 3207) is amended—

15 (1) in subsection (a)—

16 (A) by striking ‘‘(a) IN GENERAL.—Rules’’

17 and inserting ‘‘Rules’’;

18 (B) by inserting ‘‘, including rules or regu19 lations that permit service by a management of20 ficial that would otherwise be prohibited by sec21 tion 203 or section 204, if such service would not

22 result in a monopoly or substantial lessening of

23 competition,’’ after ‘‘title’’;

24 (C) in paragraph (4)—
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1 (i) by striking ‘‘Federal Home Loan

2 Bank Board’’ and inserting ‘‘Director of the

3 Office of Thrift Supervision’’; and

4 (ii) by striking ‘‘Savings and Loan’’

5 and inserting ‘‘Deposit’’; and

6 (2) by striking subsections (b) and (c).

7 SEC. 211. ELIMINATION OF RECORDKEEPING AND REPORT8 ING REQUIREMENTS FOR OFFICERS.

9 (a) EMPLOYEE BENEFIT PLANS.—Section 22(h)(2) of

10 the Federal Reserve Act (12 U.S.C. 375b(2)) is amended—

11 (1) by redesignating subparagraphs (A) through

12 (C) as clauses (i) through (iii), respectively, and in13 denting appropriately;

14 (2) by striking ‘‘(2) PREFERENTIAL TERMS PRO15 HIBITED.—’’ and inserting the following:

16 ‘‘(2) PREFERENTIAL TERMS PROHIBITED.—

17 ‘‘(A) IN GENERAL.—’’; and

18 (3) by adding at the end the following new sub19 paragraph:

20 ‘‘(B) EXCEPTION.—Nothing in this para21 graph shall prohibit any extension of credit

22 made pursuant to a benefit or compensation pro23 gram—

24 ‘‘(i) that is widely available to employ25 ees of the member bank; and
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1 ‘‘(ii) that does not give preference to

2 any officer, director, or principal share3 holder of the member bank, or to any relat4 ed interest of such person, over other em5 ployees of the member bank.’’.

6 (b) EXCEPTION FOR EXTENSIONS OF CREDIT TO EX7 ECUTIVE OFFICERS AND DIRECTORS OF AFFILIATES.—Sec8 tion 22(h)(8)(B) of the Federal Reserve Act (12 U.S.C.

9 375b(8)(B)) is amended to read as follows:

10 ‘‘(B) EXCEPTION.—The Board may, by reg11 ulation, make exceptions to subparagraph (A) for

12 any executive officer or director of a subsidiary

13 of a company that controls the member bank if—

14 ‘‘(i) the executive officer or director

15 does not have authority to participate, and

16 does not participate, in major policymaking

17 functions of the member bank; and

18 ‘‘(ii) the assets of such subsidiary do

19 not exceed 10 percent of the consolidated as20 sets of a company that controls the member

21 bank and such subsidiary (and is not con22 trolled by any other company).’’.
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1 SEC. 212. CONSOLIDATION OF APPRAISAL SUBCOMMITTEE;

2 TRANSFER OF FUNCTIONS.

3 (a) PURPOSES.—Consistent with the original purposes

4 of title XI of the Financial Institutions Reform, Recovery,

5 and Enforcement Act of 1989, the purposes of this section

6 are—

7 (1) to clarify that Federal oversight of appraisal

8 practices and standards is the responsibility of the

9 Council; and

10 (2) to consolidate the functions of the Appraisal

11 Subcommittee into the Council in order to reduce the

12 costs incurred by maintaining a separate organiza13 tion to carry out that responsibility.

14 (b) CONSOLIDATION OF APPRAISAL SUBCOMMITTEE.—

15 (1) AMENDMENT TO FEDERAL FINANCIAL INSTI16 TUTIONS EXAMINATION COUNCIL ACT OF 1978.—Sec17 tion 1011 of the Federal Financial Institutions Ex18 amination Council Act of 1978 (12 U.S.C. 3310) is

19 repealed.

20 (2) AMENDMENTS TO THE FINANCIAL INSTITU21 TIONS REFORM, RECOVERY, AND ENFORCEMENT ACT

22 OF 1989.—

23 (A) REPEALS.—The following sections of the

24 Financial Institutions Reform, Recovery, and

25 Enforcement Act of 1989 (12 U.S.C. 1811 et seq.)

26 are repealed:
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1 (i) Section 1102 (Public Law 101–73;

2 103 Stat. 511).

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

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

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

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

7 (B) DEFINITIONS.—Section 1121 of the Fi8 nancial Institutions Reform, Recovery, and En9 forcement Act of 1989 (12 U.S.C. 3350) is

10 amended—

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

12 (ii) by redesignating paragraphs (3)

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

14 respectively; and

15 (iii) by redesignating paragraphs (9)

16 and (10) as paragraphs (7) and (8), respec17 tively.

18 (3) CONFORMING AMENDMENT TO THE NATIONAL

19 HOUSING ACT.—Section 202(e) of the National Hous20 ing Act (12 U.S.C. 1708(e)) is amended—

21 (A) by striking paragraph (2); and

22 (B) by redesignating paragraphs (3) and

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

24 (c) TRANSFER OF FUNCTIONS.—
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1 (1) AMENDMENTS TO THE FINANCIAL INSTITU2 TIONS REFORM, RECOVERY, AND ENFORCEMENT ACT

3 OF 1989.—

4 (A) TRANSFER OF FUNCTIONS.—Section

5 1103 of the Financial Institutions Reform, Re6 covery, and Enforcement Act of 1989 (12 U.S.C.

7 3332) is amended—

8 (i) by striking ‘‘SEC. 1103.’’ and in9 serting ‘‘SEC. 1102.’’;

10 (ii) by striking ‘‘Appraisal Sub11 committee’’ each place such term appears

12 and inserting ‘‘Federal Financial Institu13 tions Examination Council’’; and

14 (iii) in subsection (a)—

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

16 before the semicolon the following: ‘‘, if

17 the Council determines that maintain18 ing a national registry under this

19 paragraph will further the purposes of

20 this title (as described in section

21 1101)’’; and

22 (II) by striking paragraph (4)

23 and inserting the following:

24 ‘‘(4) include in its annual report to the Congress

25 a description of the manner in which the Council has
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1 performed the functions assigned to the Council under

2 this title.’’.

3 (B) ROSTER OF STATE CERTIFIED OR LI4 CENSED APPRAISERS.—Section 1109 of the Fi5 nancial Institutions Reform, Recovery, and En6 forcement Act of 1989 (12 U.S.C. 3338) is redes7 ignated and amended to read as follows:

8 ‘‘SEC. 1104. ROSTER OF STATE CERTIFIED OR LICENSED AP9 PRAISERS.

10 ‘‘(a) IN GENERAL.—Each State that has an appraiser

11 certifying and licensing agency with a certification or li12 cense that meets the requirements of this title shall—

13 ‘‘(1) not less frequently than annually (unless a

14 less frequent interval is specified by the Council),

15 transmit to the Council a roster listing individuals

16 who have received a State certification or license in

17 accordance with this title;

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

19 or seek to perform appraisals in federally related

20 transactions, an annual registry fee, in an amount

21 equal to $25 (or a lesser amount determined by the

22 Council) to support the activities of the Council under

23 this title; and

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

25 an annual basis.
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1 ‘‘(b) STATUS OF FEES.—Any registry fees collected

2 and transmitted to the Council under subsection (a), and

3 any funds of the Appraisal Subcommittee transferred to the

4 Council pursuant to section 213 of the Economic Growth

5 and Regulatory Paperwork Reduction Act of 1995, shall not

6 constitute appropriated funds.’’.

7 (C) CONFORMING AMENDMENTS.—Title XI

8 of the Financial Institutions Reform, Recovery,

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

10 seq.) is amended—

11 (i) in section 1116(e)—

12 (I) by striking ‘‘Appraisal Sub13 committee’’ and inserting ‘‘Federal Fi14 nancial Institutions Examination

15 Council’’; and

16 (II) by striking ‘‘the Subcommit17 tee’’ and inserting ‘‘the Federal Finan18 cial Institutions Examination Coun19 cil’’;

20 (ii) in section 1118—

21 (I) in the subsection heading for

22 subsection (b), by striking ‘‘BY AP23 PRAISAL SUBCOMMITTEE’’; and

24 (II) by striking ‘‘Appraisal Sub25 committee’’ each place such term ap-
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1 pears and inserting ‘‘Federal Finan2 cial Institutions Examination Coun3 cil’’;

4 (iii) in section 1119—

5 (I) by striking ‘‘Subject to the ap6 proval of the Council, the Appraisal

7 Subcommittee’’ each place such term

8 appears and inserting ‘‘The Council’’;

9 and

10 (II) by striking ‘‘Appraisal Sub11 committee’’ each place such term ap12 pears and inserting ‘‘Federal Finan13 cial Institutions Examination Coun14 cil’’;

15 (iv) in section 1120, by striking ‘‘Ap16 praisal Subcommittee’’ and inserting ‘‘Fed17 eral Financial Institutions Examination

18 Council’’;

19 (v) in section 1122—

20 (I) by striking ‘‘Appraisal Sub21 committee’’ each place such term ap22 pears and inserting ‘‘Council’’; and

23 (II) by striking subsection (f); and

24 (vi) by redesignating—
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1 (I) section 1107 as section 1103;

2 and

3 (II) sections 1110 through 1123 as

4 sections 1105 through 1118, respec5 tively.

6 (2) ADMINISTRATIVE PROVISIONS.—

7 (A) TRANSFER OF FINANCIAL ASSETS AND

8 LIABILITIES.—All funds held by, the right to col9 lect all funds owed to, and all obligations of the

10 Appraisal Subcommittee on the effective date of

11 this section shall be transferred to the Council.

12 (B) APPRAISAL FOUNDATION GRANTS.—The

13 Council may make grants in such amounts as it

14 deems appropriate to the Appraisal Foundation

15 to help defray costs of the Foundation relating to

16 the activities of its Appraisal Standards and Ap17 praiser Qualification Boards, but shall dis18 continue such grants not later than December 31,

19 1998.

20 (C) REPAYMENT OF TREASURY LOAN.—Not

21 later than September 30, 1998, the Council shall

22 repay to the Secretary of the Treasury the funds

23 specified in section 1108 of the Financial Insti24 tutions Reform, Recovery, and Enforcement Act

25 of 1989 (as that section existed on the day before
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1 the effective date of this section), and the Sec2 retary shall deposit such funds into the General

3 Fund of the Treasury of the United States.

4 (D) PROPERTY TRANSFERRED.—All prop5 erty of the Appraisal Subcommittee shall be

6 transferred to the Council.

7 (E) TRANSFER OF EMPLOYEES.—

8 (i) IDENTIFYING EMPLOYEES FOR

9 TRANSFER.—Not later than 30 days after

10 the date of enactment of this Act, the Coun11 cil shall identify for transfer to the Council

12 the employees of the Appraisal Subcommit13 tee that the Council determines to be nec14 essary to perform the functions transferred

15 to the Council under this subsection.

16 (ii) TRANSFER.—Each employee iden17 tified for transfer under clause (i) shall be

18 transferred to the Council in accordance

19 with this subparagraph.

20 (F) RIGHTS OF TRANSFERRED EMPLOY21 EES.—

22 (i) COMPARABLE POSITIONS.—Each

23 employee transferred to the Council under

24 subparagraph (E) shall be appointed to a

25 position under the compensation system and
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1 performance evaluation system of the Coun2 cil that is comparable in tenure and grade

3 to the position held by the employee on the

4 day before the date of such transfer.

5 (ii) PAY.—

6 (I) IN GENERAL.—Except as pro7 vided in subclause (II), each employee

8 transferred to the Council under sub9 paragraph (E) shall, during the 12-

10 month period beginning on the date of

11 such transfer, receive pay at a rate not

12 less than the basic rate of pay that the

13 employee received during the 12-month

14 period immediately preceding that

15 transfer date.

16 (II) EXCEPTIONS.—Subclause (I)

17 does not limit the right of the Council

18 to reduce a transferred rate of basic

19 pay of an employer for cause or unac20 ceptable performance, or with the con21 sent of the employee.

22 (III) PROTECTION ONLY WHILE

23 EMPLOYED.—Subclause (I) shall apply

24 to an employee only during the period
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1 that the employee is employed by the

2 Council.

3 (iii) RETIREMENT BENEFITS.—

4 (I) CONTINUATION OF EXISTING

5 RETIREMENT PLAN.—Except as other6 wise permitted by law, each employee

7 transferred to the Council under sub8 paragraph (E) shall remain enrolled

9 in the retirement plan (and any asso10 ciated thrift savings plan) in which the

11 employee was enrolled on the day be12 fore the date of such transfer during

13 the period that the employee is em14 ployed by the Council.

15 (II) EMPLOYER CONTRIBUTION.—

16 The Council shall pay any employer

17 contributions to the retirement plan in

18 which each employee transferred to the

19 Council under subparagraph (E) is

20 subject during the period that the em21 ployee is employed by the Council, in

22 accordance with such retirement plan.

23 (iv) NO PRIVATE RIGHT OF ACTION.—

24 This subparagraph does not provide any

25 employee with any right of action to require
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1 the Council or any officer, employee, agent,

2 or administrator of the Council to take any

3 action under this subparagraph.

4 (v) PRIORITY OF THIS SECTION.—If

5 any protection provided under this sub6 paragraph conflicts with any protection

7 provided to transferred employees under sec8 tion 3503 of title 5, United States Code, the

9 provisions of this subparagraph shall con10 trol.

11 (d) EFFECTIVE DATE.—Except as otherwise provided

12 in this section, this section and the amendments made by

13 this section shall become effective 90 days after the date of

14 enactment of this Act.

15 (e) STUDY OF OVERSIGHT FUNCTIONS.—

16 (1) STUDY.—The Council shall conduct a study

17 of the progress made in meeting the purposes of this

18 section and the continuing need for Federal oversight

19 of appraisal functions pursuant to title XI of the Fi20 nancial Institutions Reform, Recovery, and Enforce21 ment Act of 1989.

22 (2) REPORT.—Not later than 3 years after the

23 date of enactment of this Act, the Council shall report

24 to the appropriate committees of the Congress on the

25 results of the study conducted under paragraph (1),
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1 along with any appropriate recommendations for leg2 islation to enhance and encourage State or self-regu3 lation of appraisal practices in lieu of Federal over4 sight.

5 SEC. 213. BRANCH CLOSURES.

6 Section 42 of the Federal Deposit Insurance Act (12

7 U.S.C. 1831r–1) is amended by adding at the end the fol8 lowing new subsection:

9 ‘‘(e) SCOPE OF APPLICATION.—This section shall not

10 apply with respect to—

11 ‘‘(1) an automated teller machine;

12 ‘‘(2) the relocation of a branch or consolidation

13 of one or more branches into another branch, if the

14 relocation or consolidation—

15 ‘‘(A) occurs within the immediate neighbor16 hood; and

17 ‘‘(B) does not substantially affect the nature

18 of the business or customers served; or

19 ‘‘(3) a branch that is closed in connection with—

20 ‘‘(A) an emergency acquisition under—

21 ‘‘(i) section 11(n); or

22 ‘‘(ii) subsection (f) or (k) of section 13;

23 or

24 ‘‘(B) any assistance provided by the Cor25 poration under section 13(c).’’.
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1 SEC. 214. FOREIGN BANKS.

2 (a) EXAMINATION OF BRANCHES AND AGENCIES BY

3 BOARD.—Section 7(c) of the International Banking Act of

4 1978 (12 U.S.C. 3105(c)) is amended—

5 (1) by striking ‘‘(c)’’ and inserting the following:

6 ‘‘(c) FOREIGN BANK EXAMINATIONS AND REPORT7 ING.—’’;

8 (2) in paragraph (1)(B), by adding at the end

9 the following new clause:

10 ‘‘(iii) AVOIDANCE OF DUPLICATION.—

11 In exercising its authority under this para12 graph, the Board shall take all reasonable

13 measures to reduce burden and avoid un14 necessary duplication of examinations.’’;

15 (3) by striking subparagraph (C) of paragraph

16 (1) and inserting the following:

17 ‘‘(C) ON-SITE EXAMINATION.—Each Federal

18 branch or agency, and each State branch or

19 agency, of a foreign bank shall be subject to on20 site examination by an appropriate Federal

21 banking agency or State bank supervisor as fre22 quently as would a national bank or a State

23 bank, respectively, by the appropriate Federal

24 banking agency.’’; and

25 (4) in paragraph (1)(D), by inserting before the

26 period at the end the following: ‘‘, only to the same
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1 extent that fees are collected by the Board for exam2 ination of any State member bank’’.

3 (b) ESTABLISHMENT OF FOREIGN BANK OFFICES IN

4 THE UNITED STATES.—Section 7(d) of the International

5 Banking Act of 1978 (12 U.S.C. 3105(d)) is amended—

6 (1) in paragraph (2), by striking ‘‘The Board’’

7 and inserting ‘‘Except as provided in paragraph (6),

8 the Board’’;

9 (2) in paragraph (5), by striking ‘‘Consistent

10 with the standards for approval in paragraph (2),

11 the’’; and inserting ‘‘The’’; and

12 (3) by adding at the end the following new para13 graphs:

14 ‘‘(6) EXCEPTION.—

15 ‘‘(A) IN GENERAL.—If the Board is unable

16 to find, under paragraph (2), that a foreign

17 bank is subject to comprehensive supervision or

18 regulation on a consolidated basis by the appro19 priate authorities in its home country, the Board

20 may nevertheless approve an application by such

21 foreign bank under paragraph (1) if—

22 ‘‘(i) the appropriate authorities in the

23 home country of the foreign bank are ac24 tively working to establish arrangements for
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1 the consolidated supervision of such bank;

2 and

3 ‘‘(ii) all other factors are consistent

4 with approval.

5 ‘‘(B) OTHER CONSIDERATIONS.—In decid6 ing whether to use its discretion under subpara7 graph (A), the Board shall also consider whether

8 the foreign bank has adopted and implements

9 procedures to combat money laundering. The

10 Board may also take into account whether the

11 home country of the foreign bank is developing a

12 legal regime to address money laundering or is

13 participating in multilateral efforts to combat

14 money laundering.

15 ‘‘(C) ADDITIONAL CONDITIONS.—In approv16 ing an application under this paragraph, the

17 Board, after requesting and taking into consider18 ation the views of the appropriate State bank su19 pervisor or the Comptroller of the Currency, as

20 the case may be, may impose such conditions or

21 restrictions relating to the activities or business

22 operations of the proposed branch, agency, or

23 commercial lending company subsidiary, includ24 ing restrictions on sources of funding, as are

25 considered appropriate. The Board shall coordi-
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1 nate with the appropriate State bank supervisor

2 or the Comptroller of the Currency, as appro3 priate, in the implementation of such conditions

4 or restrictions.

5 ‘‘(D) MODIFICATION OF CONDITIONS.—Any

6 condition or restriction imposed by the Board in

7 connection with the approval of an application

8 under authority of this paragraph may be modi9 fied or withdrawn.

10 ‘‘(7) TIME PERIOD FOR BOARD ACTION.—

11 ‘‘(A) FINAL ACTION.—The Board shall take

12 final action on any application under para13 graph (1) not later than 180 days after receipt

14 of the application, except that the Board may ex15 tend for an additional 180 days the period with16 in which to take final action on such application

17 after providing notice of, and the reasons for, the

18 extension to the applicant foreign bank and any

19 appropriate State bank supervisor or the Comp20 troller of the Currency, as appropriate.

21 ‘‘(B) FAILURE TO SUBMIT INFORMATION.—

22 The Board may deny any application if it does

23 not receive information requested from the appli24 cant foreign bank or appropriate authorities in

25 the home country of the foreign bank in suffi-
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1 cient time to permit the Board to evaluate such

2 information adequately within the time periods

3 for final action set forth in subparagraph (A).

4 ‘‘(C) WAIVER.—A foreign bank may waive

5 the applicability of this paragraph with respect

6 to any application under paragraph (1).’’.

7 (c) TERMINATION OF FOREIGN BANK OFFICES IN THE

8 UNITED STATES.—Section 7(e)(1)(A) of the International

9 Banking Act of 1978 (12 U.S.C. 3105(e)(1)(A)) is amend10 ed—

11 (1) by inserting ‘‘(i)’’ after ‘‘(A)’’;

12 (2) by striking ‘‘or’’ at the end and inserting

13 ‘‘and’’; and

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

15 clause:

16 ‘‘(ii) the appropriate authorities in the

17 home country of the foreign bank are not making

18 demonstrable progress in establishing arrange19 ments for the comprehensive supervision or regu20 lation of such foreign bank on a consolidated

21 basis; or’’.

22 SEC. 215. DISPOSITION OF FORECLOSED ASSETS.

23 Section 4(c)(2) of the Bank Holding Company Act of

24 1956 (12 U.S.C. 1843(c)(2)) is amended—
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1 (1) by striking ‘‘for not more than one year at

2 a time’’; and

3 (2) by striking ‘‘but no such extensions shall ex4 tend beyond a date five years’’ and inserting ‘‘and, in

5 the case of a bank holding company which has not

6 disposed of such shares within 5 years after the date

7 on which such shares were acquired, the Board may,

8 upon the application of such company, grant addi9 tional exemptions if, in the judgment of the Board,

10 such extension would not be detrimental to the public

11 interest and, either the bank holding company has

12 made a good faith attempt to dispose of such shares

13 during such 5-year period, or the disposal of such

14 shares during such 5-year period would have been det15 rimental to the company, except that the aggregate

16 duration of such extensions shall not extend beyond

17 10 years’’.

18 Subtitle B—Eliminating

19 Unnecessary Regulatory Burdens

20 SEC. 221. SMALL BANK EXAMINATION CYCLE.

21 Section 10(d) of the Federal Deposit Insurance Act (12

22 U.S.C. 1820(d)) is amended—

23 (1) by redesignating the second paragraph des24 ignated as paragraph (8) as paragraph (10), and by
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1 inserting that paragraph, as redesignated, imme2 diately after paragraph (9); and

3 (2) in paragraph (10), as redesignated, by strik4 ing ‘‘$175,000,000’’ and inserting ‘‘$250,000,000’’.

5 SEC. 222. REQUIRED REVIEW OF REGULATIONS.

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

7 10 years, the Council and each appropriate Federal bank8 ing agency represented on the Council shall conduct a re9 view of all regulations promulgated by the Council or by

10 any such appropriate Federal banking agency, respectively,

11 in order to identify outdated or otherwise unnecessary regu12 latory requirements imposed on insured depository institu13 tions.

14 (b) PROCESS.—In conducting the review under sub15 section (a), the Council or the appropriate Federal banking

16 agency shall—

17 (1) categorize the regulations described in sub18 section (a) by type (such as consumer regulations,

19 safety and soundness regulations, or such other des20 ignations as determined by the Council, or the appro21 priate Federal banking agency); and

22 (2) at regular intervals, provide notice and so23 licit public comment on a particular category or cat24 egories of regulations, requesting commentators to
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1 identify areas of the regulations that are outdated,

2 unnecessary, or unduly burdensome.

3 (c) COMPLETE REVIEW.—The Council or the appro4 priate Federal banking agency shall ensure that the notice

5 and comment period described in subsection (b)(2) is con6 ducted with respect to all regulations described in subsection

7 (a) not less frequently than once every 10 years.

8 (d) REGULATORY RESPONSE.—The Council or the ap9 propriate Federal banking agency shall—

10 (1) publish in the Federal Register a summary

11 of the comments received under this section, identify12 ing significant issues raised and providing comment

13 on such issues; and

14 (2) eliminate unnecessary regulations to the ex15 tent that such action is appropriate.

16 (e) REPORT TO CONGRESS.—Not later than 30 days

17 after carrying out subsection (d)(1), the Council shall sub18 mit to the Congress a report, which shall include—

19 (1) a summary of any significant issues raised

20 by public comments received by the Council and the

21 appropriate Federal banking agencies under this sec22 tion and the relative merits of such issues; and

23 (2) an analysis of whether the appropriate Fed24 eral banking agency involved is able to address the

25 regulatory burdens associated with such issues by reg-
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1 ulation, or whether such burdens must be addressed

2 by legislative action.

3 SEC. 223. REPEAL OF IDENTIFICATION OF NONBANK FINAN4 CIAL INSTITUTION CUSTOMERS.

5 Subchapter II of chapter 53 of title 31, United States

6 Code, is amended—

7 (1) by striking section 5327;

8 (2) in the chapter analysis, by striking the item

9 relating to section 5327; and

10 (3) in section 5321(a), by striking paragraph

11 (7).

12 SEC. 224. REPEAL OF COMMERCIAL LOAN REPORTING RE13 QUIREMENTS.

14 Section 477 of the Federal Deposit Insurance Corpora15 tion Improvement Act of 1991 (12 U.S.C. 251) is repealed.

16 SEC. 225. INCREASE IN HOME MORTGAGE DISCLOSURE EX17 EMPTION THRESHOLD.

18 (a) IN GENERAL.—Section 309 of the Home Mortgage

19 Disclosure Act of 1975 (12 U.S.C. 2808) is amended in the

20 second sentence, by striking ‘‘$10,000,000’’ and inserting

21 ‘‘$50,000,000’’.

22 (b) OPPORTUNITY TO REDUCE COMPLIANCE BUR23 DEN.—Section 304 of the Home Mortgage Disclosure Act

24 of 1975 (12 U.S.C. 2803) is amended by adding at the end

25 the following new subsection:
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1 ‘‘(m) OPPORTUNITY TO REDUCE COMPLIANCE BUR2 DEN.—

3 ‘‘(1) IN GENERAL.—

4 ‘‘(A) SATISFACTION OF PUBLIC AVAILABIL5 ITY REQUIREMENTS.—A depository institution

6 shall be deemed to have satisfied the public avail7 ability requirements of subsection (a) if the insti8 tution compiles the information required under

9 that subsection at the home office of the institu10 tion and provides notice at the branch locations

11 specified in subsection (a) that such information

12 is available from the home office of the institu13 tion upon written request.

14 ‘‘(B) PROVISION OF INFORMATION UPON RE15 QUEST.—Not later than 15 days after the receipt

16 of a written request for any information required

17 to be compiled under subsection (a), the home of18 fice of the depository institution receiving the re19 quest shall provide the information pertinent to

20 the location of the branch in question to the per21 son requesting the information.

22 ‘‘(2) FORM OF INFORMATION.—In complying

23 with paragraph (1), a depository institution shall, in

24 the sole discretion of the institution, provide the per25 son requesting the information with—
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1 ‘‘(A) a paper copy of the information re2 quested; or

3 ‘‘(B) if acceptable to the person, the infor4 mation through a form of electronic medium,

5 such as a computer disk.’’.

6 SEC. 226. ELIMINATION OF STOCK LOAN REPORTING RE7 QUIREMENT.

8 Section 7(j) of the Federal Deposit Insurance Act (12

9 U.S.C. 1817(j)) is amended—

10 (1) in paragraph (9)(A)—

11 (A) by striking ‘‘financial institution and

12 any affiliate of any financial institution’’ and

13 inserting ‘‘foreign bank, or any affiliate there14 of,’’; and

15 (B) by striking ‘‘by the financial institution

16 and such institution’s affiliates’’ and inserting

17 ‘‘by the foreign bank or any affiliate thereof’’;

18 (2) in paragraph (9)(B)—

19 (A) by striking ‘‘paragraph—’’ and insert20 ing ‘‘paragraph, the following definitions shall

21 apply:’’;

22 (B) by striking clause (i) and inserting the

23 following:

24 ‘‘(i) FOREIGN BANK.—The terms ‘for25 eign bank’ and ‘affiliate’ have the same
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1 meanings as in section 1 of the Inter2 national Banking Act of 1978.’’; and

3 (C) in clause (iii), by striking ‘‘financial

4 institution’’ and inserting ‘‘foreign bank or any

5 affiliate thereof’’;

6 (3) in paragraph (9)(C)—

7 (A) by striking ‘‘financial institution or

8 any of its affiliates’’ and inserting ‘‘foreign bank

9 or any affiliate thereof’’; and

10 (B) by striking ‘‘financial institution or its

11 affiliates’’ and inserting ‘‘foreign bank or any

12 affiliate thereof’’;

13 (4) in paragraph (9)(D)—

14 (A) in clause (i)—

15 (i) by striking ‘‘the financial institu16 tion and all affiliates of the institution’’

17 and inserting ‘‘the foreign bank and all af18 filiates thereof’’; and

19 (ii) by striking ‘‘financial institution

20 or any such affiliate’’ and inserting ‘‘for21 eign bank or affiliate thereof’’;

22 (B) in clause (ii), by striking ‘‘financial in23 stitution and any affiliate of such institution’’

24 and inserting ‘‘foreign bank and any affiliate

25 thereof’’; and
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1 (C) in clause (iii), by striking ‘‘financial

2 institution’’ and inserting ‘‘foreign bank or any

3 affiliate thereof’’; and

4 (5) in paragraph (9)(E)—

5 (A) in clause (i)—

6 (i) by striking ‘‘a financial institution

7 and the affiliates of such institution’’ and

8 inserting ‘‘a foreign bank or any affiliate

9 thereof’’; and

10 (ii) by striking ‘‘institution or affili11 ate’’ each place such term appears and in12 serting ‘‘foreign bank or any affiliate there13 of’’; and

14 (B) in clause (ii), by striking ‘‘financial in15 stitution and any affiliate of such institution’’

16 and inserting ‘‘foreign bank and any affiliate

17 thereof’’.

18 SEC. 227. CREDIT AVAILABILITY ASSESSMENT.

19 (a) STUDY.—

20 (1) IN GENERAL.—Not later than 12 months

21 after the date of enactment of this Act, and once every

22 60 months thereafter, the Board, in consultation with

23 the Director of the Office of Thrift Supervision, the

24 Comptroller of the Currency, the Board of Directors

25 of the Corporation, the Administrator of the National
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1 Credit Union Administration, the Administrator of

2 the Small Business Administration, and the Secretary

3 of Commerce, shall conduct a study and submit a re4 port to the Congress detailing the extent of small busi5 ness lending by all creditors.

6 (2) CONTENTS OF STUDY.—The study required

7 under paragraph (1) shall identify, to the extent

8 practicable, those factors which provide policymakers

9 with insights into the small business credit market,

10 including—

11 (A) the demand for small business credit,

12 including consideration of the impact of eco13 nomic cycles on the levels of such demand;

14 (B) the availability of credit to small busi15 nesses;

16 (C) the range of credit options available to

17 small businesses, such as those available from in18 sured depository institutions and other providers

19 of credit;

20 (D) the types of credit products used to fi21 nance small business operations, including the

22 use of traditional loans, leases, lines of credit,

23 home equity loans, credit cards, and other

24 sources of financing;
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1 (E) the credit needs of small businesses, in2 cluding, if appropriate, the extent to which such

3 needs differ, based upon product type, size of

4 business, cash flow requirements, characteristics

5 of ownership or investors, or other aspects of

6 such business;

7 (F) the types of risks to creditors in provid8 ing credit to small businesses; and

9 (G) such other factors as the Board deems

10 appropriate.

11 (b) USE OF EXISTING DATA.—The studies required by

12 this section shall not increase the regulatory or paperwork

13 burden on regulated financial institutions, other sources of

14 small business credit, or small businesses.

15 Subtitle C—Regulatory

16 Micromanagement

17 SEC. 241. NATIONAL BANK DIRECTORS.

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

19 is amended in the first sentence, by striking ‘‘except’’ and

20 all that follows through the end of the sentence and inserting

21 the following: ‘‘except that the Comptroller may, in the dis22 cretion of the Comptroller, waive the requirement of resi23 dency.’’.
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1 SEC. 242. PAPERWORK REDUCTION REVIEW.

2 Section 303(a) of the Riegle Community Development

3 and Regulatory Improvement Act of 1994 (12 U.S.C.

4 4803(a)) is amended—

5 (1) by redesignating paragraphs (2) and (3) as

6 paragraphs (3) and (4), respectively; and

7 (2) by inserting after paragraph (1) the follow8 ing new paragraph:

9 ‘‘(2) review the extent to which existing regula10 tions require insured depository institutions and in11 sured credit unions to produce unnecessary internal

12 written policies and eliminate such requirements,

13 where appropriate;’’.

14 SEC. 243. STATE BANK REPRESENTATION ON BOARD OF DI15 RECTORS OF THE FDIC.

16 Section 2(a)(1)(C) of the Federal Deposit Insurance

17 Act (12 U.S.C. 1812(a)(1)(C)) is amended by inserting be18 fore the period ‘‘, 1 of whom shall have State bank super19 visory experience’’.

20 SEC. 244. CONSULTATION AMONG EXAMINERS.

21 Section 10 of the Federal Deposit Insurance Act (12

22 U.S.C. 1820) is amended by adding at the end the following

23 new subsection:

24 ‘‘(j) CONSULTATION AMONG EXAMINERS.—

25 ‘‘(1) IN GENERAL.—Each appropriate Federal

26 banking agency shall take such action as may be nec-
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1 essary to ensure that examiners employed by the

2 agency—

3 ‘‘(A) consult on examination activities with

4 respect to any depository institution; and

5 ‘‘(B) achieve an agreement and resolve any

6 inconsistencies in the recommendations to be

7 given to such institution as a consequence of any

8 examinations.

9 ‘‘(2) EXAMINER-IN-CHARGE.—Each appropriate

10 Federal banking agency shall consider appointing an

11 examiner-in-charge with respect to a depository insti12 tution to ensure consultation on examination activi13 ties among all of the examiners of that agency in14 volved in examinations of the institution.’’.

15 TITLE III—REGULATORY IMPACT

16 ON COST OF CREDIT AND

17 CREDIT AVAILABILITY

18 SEC. 301. AUDIT COSTS.

19 (a) AUDITOR ATTESTATIONS.—Section 36 of the Fed20 eral Deposit Insurance Act (12 U.S.C. 1831m) is amended

21 by striking subsection (e) and inserting the following:

22 ‘‘(e) [Reserved.]’’.

23 (b) INDEPENDENT AUDIT COMMITTEES.—Section

24 36(g)(1) of the Federal Deposit Insurance Act (12 U.S.C.

25 1831m(g)(1)) is amended—
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1 (1) in subparagraph (A), by inserting ‘‘, except

2 as provided in subparagraph (D)’’ after ‘‘manage3 ment of the institution’’; and

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

6 ‘‘(D) EXEMPTION AUTHORITY.—

7 ‘‘(i) IN GENERAL.—An appropriate

8 Federal banking agency may, by order or

9 regulation, permit the independent audit

10 committee of an insured depository institu11 tion to be made up of less than all, but no

12 fewer than a majority of, outside directors,

13 if the agency determines that the institution

14 has encountered hardships in retaining and

15 recruiting a sufficient number of competent

16 outside directors to serve on the internal

17 audit committee of the institution.

18 ‘‘(ii) FACTORS TO BE CONSIDERED.—

19 In determining whether an insured deposi20 tory institution has encountered hardships

21 referred to in clause (i), the appropriate

22 Federal banking agency shall consider fac23 tors such as the size of the institution, and

24 whether the institution has made a good

25 faith effort to elect or name additional com-
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1 petent outside directors to the board of di2 rectors of the institution who may serve on

3 the internal audit committee.’’.

4 (c) PUBLIC AVAILABILITY.—Section 36(a)(3) of the

5 Federal Deposit Insurance Act (12 U.S.C. 1831m(a)(3)) is

6 amended by adding at the end the following: ‘‘Notwith7 standing the preceding sentence, the Corporation and the

8 appropriate Federal banking agencies may designate cer9 tain information as privileged and confidential and not

10 available to the public.’’.

11 SEC. 302. INCENTIVES FOR SELF-TESTING.

12 (a) EQUAL CREDIT OPPORTUNITY.—

13 (1) IN GENERAL.—The Equal Credit Oppor14 tunity Act (15 U.S.C. 1691 et seq.) is amended by in15 serting after section 704 the following new section:

16 ‘‘SEC. 704A. INCENTIVES FOR SELF-TESTING AND SELF-COR17 RECTION.

18 ‘‘(a) PRIVILEGED INFORMATION.—

19 ‘‘(1) CONDITIONS FOR PRIVILEGE.—A report or

20 result of a self-test (as that term is defined by regula21 tions of the Board) shall be considered to be privileged

22 under paragraph (2) if a creditor—

23 ‘‘(A) conducts, or authorizes an independent

24 third party to conduct, a self-test of any aspect

25 of a credit transaction by a creditor, in order to
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1 determine the level or effectiveness of compliance

2 with this title by the creditor; and

3 ‘‘(B) has identified any possible violation of

4 this title by the creditor and has taken, or is tak5 ing, appropriate corrective action to address any

6 such possible violation.

7 ‘‘(2) PRIVILEGED SELF-TEST.—If a creditor

8 meets the conditions specified in subparagraphs (A)

9 and (B) of paragraph (1) with respect to a self-test

10 described in that paragraph, any report or results of

11 that self-test—

12 ‘‘(A) shall be privileged; and

13 ‘‘(B) may not be obtained or used by any

14 applicant, department, or agency in any—

15 ‘‘(i) proceeding or civil action in which

16 one or more violations of this title are al17 leged; or

18 ‘‘(ii) examination or investigation re19 lating to compliance with this title.

20 ‘‘(b) RESULTS OF SELF-TESTING.—

21 ‘‘(1) IN GENERAL.—No provision of this section

22 may be construed to prevent an applicant, depart23 ment, or agency from obtaining or using a report or

24 results of any self-test in any proceeding or civil ac25 tion in which a violation of this title is alleged, or
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1 in any examination or investigation of compliance

2 with this title if—

3 ‘‘(A) the creditor or any person with lawful

4 access to the report or results—

5 ‘‘(i) voluntarily releases or discloses

6 all, or any part of, the report or results to

7 the applicant, department, or agency, or to

8 the general public; or

9 ‘‘(ii) refers to or describes the report or

10 results as a defense to charges of violations

11 of this title against the creditor to whom the

12 self-test relates; or

13 ‘‘(B) the report or results are sought in con14 junction with an adjudication or admission of a

15 violation of this title for the sole purpose of de16 termining an appropriate penalty or remedy.

17 ‘‘(2) DISCLOSURE FOR DETERMINATION OF PEN18 ALTY OR REMEDY.—Any report or results of a self-test

19 that are disclosed for the purpose specified in para20 graph (1)(B)—

21 ‘‘(A) shall be used only for the particular

22 proceeding in which the adjudication or admis23 sion referred to in paragraph (1)(B) is made;

24 and
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1 ‘‘(B) may not be used in any other action

2 or proceeding.

3 ‘‘(c) ADJUDICATION.—An applicant, department, or

4 agency that challenges a privilege asserted under this sec5 tion may seek a determination of the existence and applica6 tion of that privilege in—

7 ‘‘(1) a court of competent jurisdiction; or

8 ‘‘(2) an administrative law proceeding with ap9 propriate jurisdiction.’’.

10 (2) REGULATIONS.—

11 (A) IN GENERAL.—Not later than 6 months

12 after the date of enactment of this Act, in con13 sultation with the Secretary of Housing and

14 Urban Development and the agencies referred to

15 in section 704 of the Equal Credit Opportunity

16 Act, and after providing notice and an oppor17 tunity for public comment, the Board shall pro18 mulgate final regulations to implement section

19 704A of the Equal Credit Opportunity Act, as

20 added by this section.

21 (B) SELF-TEST.—

22 (i) DEFINITION.—The regulations pro23 mulgated under subparagraph (A) shall in24 clude a definition of the term ‘‘self-test’’ for

25 purposes of section 704A of the Equal Cred-
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1 it Opportunity Act, as added by this sec2 tion.

3 (ii) REQUIREMENT FOR SELF-TEST.—

4 The regulations promulgated under sub5 paragraph (A) shall specify that a self-test

6 shall be sufficiently extensive to constitute a

7 determination of the level and effectiveness

8 of compliance by a creditor with the Equal

9 Credit Opportunity Act.

10 (iii) SUBSTANTIAL SIMILARITY TO CER11 TAIN FAIR HOUSING ACT REGULATIONS.—

12 The regulations promulgated under sub13 paragraph (A) shall be substantially simi14 lar to the regulations promulgated by the

15 Secretary of Housing and Urban Develop16 ment to carry out section 814A(d) of the

17 Fair Housing Act, as added by this section.

18 (3) CLERICAL AMENDMENT.—The table of sec19 tions for title VII of the Consumer Credit Protection

20 Act is amended by inserting after the item relating to

21 section 704 the following new item:

‘‘704A. Incentives for self-testing and self-correction.’’.

22 (b) FAIR HOUSING.—

23 (1) IN GENERAL.—The Fair Housing Act (42

24 U.S.C. 3601 et seq.) is amended by inserting after sec25 tion 814 the following new section:
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1 ‘‘SEC. 814A. INCENTIVES FOR SELF-TESTING AND SELF-COR2 RECTION.

3 ‘‘(a) PRIVILEGED INFORMATION.—

4 ‘‘(1) CONDITIONS FOR PRIVILEGE.—A report or

5 result of a self-test (as that term is defined by regula6 tion of the Secretary) shall be considered to be privi7 leged under paragraph (2) if any person—

8 ‘‘(A) conducts, or authorizes an independent

9 third party to conduct, a self-test of any aspect

10 of a residential real estate related lending trans11 action of that person, or any part of that trans12 action, in order to determine the level or effec13 tiveness of compliance with this title by that per14 son; and

15 ‘‘(B) has identified any possible violation of

16 this title by that person and has taken, or is tak17 ing, appropriate corrective action to address any

18 such possible violation.

19 ‘‘(2) PRIVILEGED SELF-TEST.—If a person meets

20 the conditions specified in subparagraphs (A) and (B)

21 of paragraph (1) with respect to a self-test described

22 in that paragraph, any report or results of that self23 test—

24 ‘‘(A) shall be privileged; and

25 ‘‘(B) may not be obtained or used by any

26 applicant, department, or agency in any—
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1 ‘‘(i) proceeding or civil action in which

2 one or more violations of this title are al3 leged; or

4 ‘‘(ii) examination or investigation re5 lating to compliance with this title.

6 ‘‘(b) RESULTS OF SELF-TESTING.—

7 ‘‘(1) IN GENERAL.—No provision of this section

8 may be construed to prevent an aggrieved person,

9 complainant, department, or agency from obtaining

10 or using a report or results of any self-test in any

11 proceeding or civil action in which a violation of this

12 title is alleged, or in any examination or investiga13 tion of compliance with this title if—

14 ‘‘(A) the person to whom the self-test relates

15 or any person with lawful access to the report or

16 the results—

17 ‘‘(i) voluntarily releases or discloses

18 all, or any part of, the report or results to

19 the aggrieved person, complainant, depart20 ment, or agency, or to the general public; or

21 ‘‘(ii) refers to or describes the report or

22 results as a defense to charges of violations

23 of this title against the person to whom the

24 self-test relates; or
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1 ‘‘(B) the report or results are sought in con2 junction with an adjudication or admission of a

3 violation of this title for the sole purpose of de4 termining an appropriate penalty or remedy.

5 ‘‘(2) DISCLOSURE FOR DETERMINATION OF PEN6 ALTY OR REMEDY.—Any report or results of a self-test

7 that are disclosed for the purpose specified in para8 graph (1)(B)—

9 ‘‘(A) shall be used only for the particular

10 proceeding in which the adjudication or admis11 sion referred to in paragraph (1)(B) is made;

12 and

13 ‘‘(B) may not be used in any other action

14 or proceeding.

15 ‘‘(c) ADJUDICATION.—An aggrieved person, complain16 ant, department, or agency that challenges a privilege as17 serted under this section may seek a determination of the

18 existence and application of that privilege in—

19 ‘‘(1) a court of competent jurisdiction; or

20 ‘‘(2) an administrative law proceeding with ap21 propriate jurisdiction.’’.

22 (2) REGULATIONS.—

23 (A) IN GENERAL.—Not later than 6 months

24 after the date of enactment of this Act, in con25 sultation with the Board and after providing no-
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1 tice and an opportunity for public comment, the

2 Secretary of Housing and Urban Development

3 shall promulgate final regulations to implement

4 section 814A of the Fair Housing Act, as added

5 by this section.

6 (B) SELF-TEST.—

7 (i) DEFINITION.—The regulations pro8 mulgated by the Secretary under subpara9 graph (A) shall include a definition of the

10 term ‘‘self-test’’ for purposes of section 814A

11 of the Fair Housing Act, as added by this

12 section.

13 (ii) REQUIREMENT FOR SELF-TEST.—

14 The regulations promulgated by the Sec15 retary under subparagraph (A) shall specify

16 that a self-test shall be sufficiently extensive

17 to constitute a determination of the level

18 and effectiveness of the compliance by a per19 son engaged in residential real estate relat20 ed lending activities with the Fair Housing

21 Act.

22 (iii) SUBSTANTIAL SIMILARITY TO CER23 TAIN EQUAL CREDIT OPPORTUNITY ACT

24 REGULATIONS.—The regulations promul25 gated under subparagraph (A) shall be sub-
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1 stantially similar to the regulations pro2 mulgated by the Board to carry out section

3 704A of the Equal Credit Opportunity Act,

4 as added by this section.

5 (c) APPLICABILITY.—

6 (1) IN GENERAL.—Except as provided in para7 graph (2), the privilege provided for in section 704A

8 of the Equal Credit Opportunity Act or section 814A

9 of the Fair Housing Act (as those sections are added

10 by this section) shall apply to a self-test (as that term

11 is defined pursuant to the regulations promulgated

12 under subsection (a)(2) or (b)(2) of this section, as

13 appropriate) conducted before, on, or after the effec14 tive date of the regulations promulgated under sub15 section (a)(2) or (b)(2), as appropriate.

16 (2) EXCEPTION.—The privilege referred to in

17 paragraph (1) does not apply to such a self-test con18 ducted prior to the effective date of the regulations

19 promulgated under subsection (a) or (b), as appro20 priate, if—

21 (A) before that effective date, a complaint

22 against the creditor or person engaged in resi23 dential real estate related lending activities (as

24 the case may be) was—
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1 (i) formally filed in any court of com2 petent jurisdiction; or

3 (ii) the subject of an ongoing adminis4 trative law proceeding;

5 (B) in the case of section 704A of the Equal

6 Credit Opportunity Act, the creditor has waived

7 the privilege pursuant to subsection (b)(1)(A)(i)

8 of that section; or

9 (C) in the case of section 814A of the Fair

10 Housing Act, the person engaged in residential

11 real estate related lending activities has waived

12 the privilege pursuant to subsection (b)(1)(A)(i)

13 of that section.

14 SEC. 303. EXEMPTION FOR SAVINGS INSTITUTIONS SERV15 ING MILITARY PERSONNEL.

16 Section 10(m)(3)(F) of the Home Owners’ Loan Act

17 (12 U.S.C. 1467a(m)(3)(F)) is amended to read as follows:

18 ‘‘(F) EXEMPTION FOR SPECIALIZED SAV19 INGS ASSOCIATIONS SERVING CERTAIN MILITARY

20 PERSONNEL.—Subparagraph (A) does not apply

21 to a savings association subsidiary of a savings

22 and loan holding company if not less than 90

23 percent of the customers of the savings and loan

24 holding company and the subsidiaries and affili25 ates of such company are active or former offi-
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1 cers in the Armed Forces of the United States or

2 the widows, widowers, divorced spouses, or cur3 rent or former dependents of such officers.’’.

4 SEC. 304. QUALIFIED THRIFT INVESTMENT AMENDMENTS.

5 (a) CREDIT CARDS.—Section 5(b) of the Home Own6 ers’ Loan Act (12 U.S.C. 1464(b)) is amended—

7 (1) by striking paragraph (4); and

8 (2) by redesignating paragraph (5) as para9 graph (4).

10 (b) LOANS OR INVESTMENTS WITHOUT PERCENTAGE

11 OF ASSETS LIMITATION.—Section 5(c)(1) of the Home

12 Owners’ Loan Act (12 U.S.C. 1464(c)(1)) is amended by

13 adding at the end the following new subparagraphs:

14 ‘‘(T) CREDIT CARD LOANS.—Loans made

15 through credit cards or credit card accounts.

16 ‘‘(U) EDUCATIONAL LOANS.—Loans made

17 for the payment of educational expenses.’’.

18 (c) COMMERCIAL AND OTHER LOANS.—Section

19 5(c)(2)(A) of the Home Owners’ Loan Act (12 U.S.C.

20 1464(c)(2)(A)) is amended by adding at the end the follow21 ing: ‘‘No loan may be made under this subparagraph in

22 an amount that exceeds 20 percent of the total assets of the

23 Federal savings association, and any loan amount in excess

24 of 10 percent of the total assets of the Federal savings asso-
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1 ciation may be invested only in small business loans, as

2 such term is defined by the Director.’’.

3 (d) LOANS OR INVESTMENTS LIMITED TO 5 PERCENT

4 OF ASSETS.—Section 5(c)(3) of the Home Owners’ Loan

5 Act (12 U.S.C. 1464(c)(3)) is amended—

6 (1) by striking subparagraph (A); and

7 (2) by redesignating subparagraphs (B), (C),

8 and (D) as subparagraphs (A), (B), and (C), respec9 tively.

10 (e) QUALIFIED THRIFT LENDER TEST.—Section

11 10(m)(1) of the Home Owners’ Loan Act (12 U.S.C.

12 1467a(m)(1)) is amended—

13 (1) by redesignating subparagraph (B) as clause

14 (ii);

15 (2) in subparagraph (A), by striking ‘‘(A) the

16 savings’’ and inserting ‘‘(B)(i) the savings’’; and

17 (3) by inserting after ‘‘if—’’ the following new

18 subparagraph:

19 ‘‘(A) the savings association qualifies as a

20 domestic building and loan association, as such

21 term is defined in section 7701(a)(19) of the In22 ternal Revenue Code of 1986; or’’.

23 (f) DEFINITION.—Section 10(m)(4) of the Home Own24 ers’ Loan Act (12 U.S.C. 1467a(m)(4)) is amended—
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1 (1) by striking ‘‘subsection—’’ and inserting

2 ‘‘subsection, the following definitions shall apply:’’;

3 (2) in subparagraph (C)—

4 (A) in clause (ii), by adding at the end the

5 following new subclause:

6 ‘‘(VII) Loans for educational pur7 poses, loans to small businesses, and

8 loans made through credit cards or

9 credit card accounts.’’; and

10 (B) in clause (iii), by striking subclause

11 (VI) and inserting the following:

12 ‘‘(VI) Loans for personal, family,

13 or household purposes (other than loans

14 for personal, family, or household pur15 poses described in clause (ii)(VII)).’’;

16 and

17 (3) by adding at the end the following new sub18 paragraphs:

19 ‘‘(D) CREDIT CARD.—The Director shall

20 issue such regulations as may be necessary to de21 fine the term ‘credit card’.

22 ‘‘(E) SMALL BUSINESS.—The Director shall

23 issue such regulations as may be necessary to de24 fine the term ‘small business’.’’.
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1 SEC. 305. DAYLIGHT OVERDRAFTS INCURRED BY FEDERAL

2 HOME LOAN BANKS.

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

4 amended by inserting after section 11A the following new

5 section:

6 ‘‘SEC. 11B. DAYLIGHT OVERDRAFTS INCURRED BY FEDERAL

7 HOME LOAN BANKS.

8 ‘‘(a) IN GENERAL.—Any policy or regulation adopted

9 by the Board governing payment system risk or intraday

10 credit shall—

11 ‘‘(1) include—

12 ‘‘(A) the establishment of net debit caps ap13 propriate to the credit quality of each Federal

14 Home Loan Bank; and

15 ‘‘(B) the imposition of normal fees for day16 light overdrafts, calculated in the same manner

17 as fees for other users; or

18 ‘‘(2) exempt Federal Home Loan Banks from

19 such policy or regulation.

20 ‘‘(b) DEFINITION.—For purposes of this section, the

21 term ‘Federal Home Loan Bank’ has the same meaning as

22 in section 2 of the Federal Home Loan Bank Act.’’.

23 SEC. 306. APPLICATION FOR MEMBERSHIP IN THE FEDERAL

24 HOME LOAN BANK SYSTEM.

25 Section 4(b) of the Federal Home Loan Bank Act (12

26 U.S.C. 1424(b)) is amended to read as follows:
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1 ‘‘(b) MEMBERSHIP BASED ON CONVENIENCE.—

2 ‘‘(1) APPLICATION PROCESS.—An institution

3 that is eligible to become a member under this section

4 may become a member by submitting an application

5 for membership—

6 ‘‘(A) to the Bank in the district in which

7 the principal place of business of the institution

8 is located; or

9 ‘‘(B) if the Board determines that such ac10 tion is necessary for the convenience of the insti11 tution, to the Bank in any district that is adja12 cent to the district in which the principal place

13 of business of the institution is located.

14 ‘‘(2) APPROVAL OF APPLICATION.—An applica15 tion for membership submitted under this subsection

16 shall be approved by the Bank—

17 ‘‘(A) if—

18 ‘‘(i) in the judgment of the Bank, the

19 applicant meets the criteria for eligibility

20 contained in this section; and

21 ‘‘(ii) the applicant has a CAMEL com22 posite rating of 1 or 2 under the Uniform

23 Financial Institutions Rating System (or

24 an equivalent rating under a comparable
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1 rating system) as of the most recent rating

2 of that applicant; or

3 ‘‘(B) in the case of an applicant not de4 scribed in subparagraph (A), the bank provides

5 notice to the Board prior to the approval of the

6 application.’’.

7 SEC. 307. AUTHORITY FOR FEDERAL HOME LOAN BANKS TO

8 SELECT EXTERNAL AUDITORS.

9 Section 11(j) of the Federal Home Loan Bank Act (12

10 U.S.C. 1431(j)) is amended—

11 (1) by striking ‘‘(j) Notwithstanding’’ and insert12 ing the following:

13 ‘‘(j) AUDITS.—

14 ‘‘(1) IN GENERAL.—Notwithstanding’’; and

15 (2) by adding at the end the following new para16 graph:

17 ‘‘(2) SELECTION OF EXTERNAL AUDITORS.—

18 ‘‘(A) IN GENERAL.—The Federal Home

19 Loan Banks shall, on an annual basis, contract

20 jointly for an annual independent audit.

21 ‘‘(B) ROLE OF THE BOARD.—Notwithstand22 ing any other provision of law, the Board shall

23 not participate in the independent audit con24 tracting process under this paragraph, except

25 that the Board may establish requirements for
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1 independent audit contracts and requirements to

2 ensure consistency in financial reporting.’’.

3 SEC. 308. LIMITED PURPOSE BANKS.

4 (a) GROWTH CAP RELIEF.—Section 4(f)(3)(B) of the

5 Bank Holding Company Act of 1956 (12 U.S.C.

6 1843(f)(3)(B)) is amended—

7 (1) in clause (ii), by adding ‘‘or’’ at the end;

8 (2) in clause (iii), by striking ‘‘; or’’ at the end

9 and inserting a period; and

10 (3) by striking clause (iv).

11 (b) LIMITED PURPOSE BANK EXCEPTION.—Section

12 2(c)(2)(F) of the Bank Holding Company Act of 1956 (12

13 U.S.C. 1841(c)(2)(F)) is amended by inserting ‘‘, including

14 an institution that accepts collateral for extensions of credit

15 by holding deposits under $100,000, and by other means’’

16 after ‘‘An institution’’.

17 SEC. 309. COLLATERALIZATION OF ADVANCES TO MEM18 BERS.

19 Section 10(a)(1) of the Federal Home Loan Bank Act

20 (12 U.S.C. 1430(a)(1)) is amended to read as follows:

21 ‘‘(1) Fully disbursed, whole first mortgages on

22 improved residential property that are not more than

23 90 days delinquent, mortgages on improved residen24 tial property insured or guaranteed by the United
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1 States Government or any agency thereof, or securi2 ties representing a whole interest in such mortgages.’’.

3 SEC. 310. INCREASING LIMIT ON TOTAL ADVANCES BY THE

4 FHLB SYSTEM TO NON-QTL INSTITUTIONS.

5 Section 10(e)(2) of the Federal Home Loan Bank Act

6 (12 U.S.C. 1430(e)(2)) is amended by striking ‘‘30 percent’’

7 and inserting ‘‘40 percent’’.

8 SEC. 311. FAIR DEBT COLLECTION PRACTICES.

9 (a) FALSE OR MISLEADING REPRESENTATIONS.—Sec10 tion 807(11) of the Fair Debt Collection Practices Act (15

11 U.S.C. 1692e(11)) is amended by striking ‘‘all communica12 tions made to collect’’ and inserting ‘‘the initial written

13 communication with the consumer in connection with the

14 collection of ’’.

15 (b) COLLECTION ACTIVITY DURING VALIDATION PE16 RIOD.—Section 809(a) of the Fair Debt Collection Practices

17 Act (15 U.S.C. 1692g(a)) is amended—

18 (1) in paragraph (4), by striking ‘‘and’’ at the

19 end;

20 (2) in paragraph (5), by striking the period at

21 the end and inserting ‘‘; and’’; and

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

24 ‘‘(6) a statement that, except as provided in sub25 section (b), a debt collector may—
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1 ‘‘(A) demand that the debt be paid during

2 the 30-day period described in paragraph (3);

3 and

4 ‘‘(B) collect payment on the debt during

5 such period.’’.

6 TITLE IV—FAIR CREDIT

7 REPORTING

8 SEC. 401. SHORT TITLE.

9 This title may be cited as the ‘‘Consumer Reporting

10 Reform Act of 1995’’.

11 SEC. 402. DEFINITIONS.

12 (a) ADVERSE ACTION.—Section 603 of the Fair Credit

13 Reporting Act (15 U.S.C. 1681a) is amended by adding at

14 the end the following new subsection:

15 ‘‘(k) ADVERSE ACTION.—

16 ‘‘(1) ACTIONS INCLUDED.—The term ‘adverse ac17 tion’—

18 ‘‘(A) has the same meaning as in section

19 701(d)(6) of the Equal Credit Opportunity Act;

20 and

21 ‘‘(B) means—

22 ‘‘(i) a denial or cancellation of, an in23 crease in any charge for, or a reduction or

24 other adverse or unfavorable change in the

25 terms of coverage or amount of, any insur-
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1 ance, existing or applied for, in connection

2 with the underwriting of insurance;

3 ‘‘(ii) a denial of employment or any

4 other decision for employment purposes that

5 adversely affects any current or prospective

6 employee;

7 ‘‘(iii) a denial or cancellation of, an

8 increase in any charge for, or any other ad9 verse or unfavorable change in the terms of,

10 any license or benefit described in section

11 604(a)(3)(D); and

12 ‘‘(iv) an action taken or determination

13 that is—

14 ‘‘(I) made in connection with an

15 application that was made by, or a

16 transaction that was initiated by, any

17 consumer, or in connection with a re18 view of an account under section

19 604(a)(3)(E)(ii); and

20 ‘‘(II) adverse to the interests of the

21 consumer.

22 ‘‘(2) APPLICABLE FINDINGS, DECISIONS, COM23 MENTARY, AND ORDERS.—For purposes of any deter24 mination of whether an action is an adverse action

25 under paragraph (1)(A), all appropriate final find-
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1 ings, decisions, commentary, and orders issued under

2 section 701(d)(6) of the Equal Credit Opportunity

3 Act by the Board of Governors of the Federal Reserve

4 System or any court shall apply.’’.

5 (b) FIRM OFFER OF CREDIT OR INSURANCE.—Section

6 603 of the Fair Credit Reporting Act (15 U.S.C. 1681a)

7 (as amended by subsection (a) of this section) is amended

8 by adding at the end the following new subsection:

9 ‘‘(l) FIRM OFFER OF CREDIT OR INSURANCE.—The

10 term ‘firm offer of credit or insurance’ means any offer of

11 credit or insurance to a consumer that will be honored if

12 the consumer is determined, based on information in a

13 consumer report on the consumer, to meet the specific cri14 teria used to select the consumer for the offer, except that

15 the offer may be further conditioned on one or more of the

16 following:

17 ‘‘(1) The consumer being determined, based on

18 information in the consumer’s application for the

19 credit or insurance, to meet specific criteria bearing

20 on creditworthiness or insurability, as applicable,

21 that are established—

22 ‘‘(A) before selection of the consumer for the

23 offer; and
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1 ‘‘(B) for the purpose of determining whether

2 to extend credit or insurance pursuant to the

3 offer.

4 ‘‘(2) Verification—

5 ‘‘(A) that the consumer continues to meet

6 the specific criteria used to select the consumer

7 for the offer, by using information in a consumer

8 report on the consumer, information in the con9 sumer’s application for the credit or insurance,

10 or other information bearing on the creditworthi11 ness or insurability of the consumer; or

12 ‘‘(B) of the information in the consumer’s

13 application for the credit or insurance, to deter14 mine that the consumer meets the specific cri15 teria bearing on creditworthiness or insurability.

16 ‘‘(3) The consumer furnishing any collateral that

17 is a requirement for the extension of the credit or in18 surance that was—

19 ‘‘(A) established before selection of the

20 consumer for the offer of credit or insurance; and

21 ‘‘(B) disclosed to the consumer in the offer

22 of credit or insurance.’’.

23 (c) CREDIT OR INSURANCE TRANSACTION THAT IS

24 NOT INITIATED BY THE CONSUMER.—Section 603 of the

25 Fair Credit Reporting Act (15 U.S.C. 1681a) (as amended
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1 by subsection (b) of this section) is amended by adding at

2 the end the following new subsection:

3 ‘‘(m) CREDIT OR INSURANCE TRANSACTION THAT IS

4 NOT INITIATED BY THE CONSUMER.—The term ‘credit or

5 insurance transaction that is not initiated by the consumer’

6 does not include the use of a consumer report by a person

7 with which the consumer has an account or insurance pol8 icy, for purposes of—

9 ‘‘(1) reviewing the account or insurance policy;

10 or

11 ‘‘(2) collecting the account.’’.

12 (d) STATE.—Section 603 of the Fair Credit Reporting

13 Act (15 U.S.C. 1681a) (as amended by subsection (c) of this

14 section) is amended by adding at the end the following new

15 subsection:

16 ‘‘(n) STATE.—The term ‘State’ means any State, the

17 Commonwealth of Puerto Rico, the District of Columbia,

18 and any territory or possession of the United States.’’.

19 (e) DEFINITION OF CONSUMER REPORT.—Section

20 603(d) of the Fair Credit Reporting Act (15 U.S.C.

21 1681a(d)) is amended—

22 (1) by striking ‘‘(d) The term’’ and inserting the

23 following:

24 ‘‘(d) CONSUMER REPORT.—

25 ‘‘(1) IN GENERAL.—The term’’;
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1 (2) by striking ‘‘for (1) credit’’ and inserting the

2 following: ‘‘for—

3 ‘‘(A) credit’’;

4 (3) by striking ‘‘purposes, or (2)’’ and all that

5 follows through ‘‘section 604.’’ and inserting the fol6 lowing: ‘‘purposes;

7 ‘‘(B) employment purposes; or

8 ‘‘(C) any other purpose authorized under

9 section 604.’’; and

10 (4) by striking the second sentence and inserting

11 the following:

12 ‘‘(2) EXCLUSIONS.—The term ‘consumer report’

13 does not include—

14 ‘‘(A) any—

15 ‘‘(i) report containing information

16 solely as to transactions or experiences be17 tween the consumer and the person making

18 the report;

19 ‘‘(ii) communication of that informa20 tion among persons related by common

21 ownership or affiliated by corporate control;

22 or

23 ‘‘(iii) any communication of other in24 formation among persons related by com25 mon ownership or affiliated by corporate
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1 control, if it is clearly and conspicuously

2 disclosed to the consumer that the informa3 tion may be communicated among such per4 sons and the consumer is given the oppor5 tunity, prior to the time that the informa6 tion is initially communicated, to direct

7 that such information not be communicated

8 among such persons;

9 ‘‘(B) any authorization or approval of a

10 specific extension of credit directly or indirectly

11 by the issuer of a credit card or similar device;

12 ‘‘(C) any report in which a person who has

13 been requested by a third party to make a spe14 cific extension of credit directly or indirectly to

15 a consumer conveys his or her decision with re16 spect to such request, if the third party advises

17 the consumer of the name and address of the per18 son to whom the request was made, and such

19 person makes the disclosures to the consumer re20 quired under section 615;

21 ‘‘(D) any report furnished for use in con22 nection with a transaction that is primarily for

23 a commercial purpose, regardless of the purpose

24 for which information in the report was origi25 nally collected or is otherwise used; or
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1 ‘‘(E) a communication described in sub2 section (o).’’.

3 (f) EXCLUSION OF CERTAIN COMMUNICATIONS BY EM4 PLOYMENT AGENCIES FROM DEFINITION OF CONSUMER

5 REPORT.—Section 603 of the Fair Credit Reporting Act (15

6 U.S.C. 1681(a)) is amended by adding at the end the follow7 ing new subsection:

8 ‘‘(o) EXCLUDED COMMUNICATIONS.—A communica9 tion is described in this subsection if it is a communica10 tion—

11 ‘‘(1) that, but for subsection (d)(2)(E), would be

12 an investigative consumer report;

13 ‘‘(2) that is made to a prospective employer for

14 the purpose of—

15 ‘‘(A) procuring an employee for the em16 ployer; or

17 ‘‘(B) procuring an opportunity for a natu18 ral person to work for the employer;

19 ‘‘(3) that is made by a person who regularly per20 forms such procurement;

21 ‘‘(4) that is not used by any person for any pur22 pose other than a purpose described in subparagraph

23 (A) or (B) of paragraph (2); or

24 ‘‘(5) with respect to which—
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1 ‘‘(A) the consumer who is the subject of the

2 communication—

3 ‘‘(i) consents orally or in writing to

4 the nature and scope of the communication,

5 before the collection of any information for

6 the purpose of making the communication;

7 ‘‘(ii) consents orally or in writing to

8 the making of the communication to a pro9 spective employer, before the making of the

10 communication; and

11 ‘‘(iii) in the case of consent under

12 clause (i) or (ii) given orally, is provided

13 written confirmation of that consent by the

14 person making the communication, not

15 later than 3 business days after the receipt

16 of the consent by that person;

17 ‘‘(B) the person who makes the communica18 tion does not, for the purpose of making the com19 munication, make any inquiry that if made by

20 a prospective employer of the consumer who is

21 the subject of the communication would violate

22 any applicable Federal or State equal employ23 ment opportunity law or regulation; and

24 ‘‘(C) the person who makes the communica25 tion—
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1 ‘‘(i) discloses in writing to the

2 consumer who is the subject of the commu3 nication, not later than 5 business days

4 after receiving any request from the

5 consumer for such disclosure, the nature

6 and substance of all information in the con7 sumer’s file at the time of the request, except

8 that the sources of any information that is

9 acquired solely for use in making the com10 munication and is actually used for no

11 other purpose, need not be disclosed other

12 than under appropriate discovery proce13 dures in any court of competent jurisdiction

14 in which an action is brought; and

15 ‘‘(ii) notifies the consumer who is the

16 subject of the communication, in writing, of

17 the consumer’s right to request the informa18 tion described in clause (i).’’.

19 (g) CONSUMER REPORTING AGENCY THAT COMPILES

20 AND MAINTAINS FILES ON A NATIONWIDE BASIS.—Section

21 603 of the Fair Credit Reporting Act (15 U.S.C. 1681a)

22 (as amended by subsection (f) of this section) is amended

23 by adding at the end the following new subsection:

24 ‘‘(p) CONSUMER REPORTING AGENCY THAT COMPILES

25 AND MAINTAINS FILES ON CONSUMERS ON A NATIONWIDE
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1 BASIS.—The term ‘consumer reporting agency that com2 piles and maintains files on consumers on a nationwide

3 basis’ means a consumer reporting agency that regularly

4 engages in the practice of assembling or evaluating, and

5 maintaining, for the purpose of furnishing consumer re6 ports to third parties bearing on a consumer’s creditworthi7 ness, credit standing, or credit capacity, each of the follow8 ing regarding consumers residing nationwide:

9 ‘‘(1) Public record information.

10 ‘‘(2) Credit account information from persons

11 who furnish that information regularly and in the or12 dinary course of business.’’.

13 SEC. 403. FURNISHING CONSUMER REPORTS; USE FOR EM14 PLOYMENT PURPOSES.

15 (a) FURNISHING CONSUMER REPORTS FOR BUSINESS

16 TRANSACTIONS.—Section 604 of the Fair Credit Reporting

17 Act (15 U.S.C. 1681b) is amended—

18 (1) by inserting ‘‘(a) IN GENERAL.—’’ before ‘‘A

19 consumer reporting agency’’; and

20 (2) in subsection (a)(3) (as so designated by

21 paragraph (1) of this subsection), by striking sub22 paragraph (E) and inserting the following:

23 ‘‘(E) otherwise has a legitimate business need for

24 the information—
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1 ‘‘(i) in connection with a business trans2 action that—

3 ‘‘(I) is initiated by the consumer; or

4 ‘‘(II) is a direct marketing transaction

5 for which the furnishing of information

6 from a consumer’s file by the agency is not

7 prohibited under subsection (d); or

8 ‘‘(ii) to review an account to determine

9 whether the consumer continues to meet the

10 terms of the account.’’.

11 (b) FURNISHING AND USING CONSUMER REPORTS FOR

12 EMPLOYMENT PURPOSES.—Section 604 of the Fair Credit

13 Reporting Act (15 U.S.C. 1681b) is amended by adding at

14 the end the following new subsection:

15 ‘‘(b) CONDITIONS FOR FURNISHING AND USING

16 CONSUMER REPORTS FOR EMPLOYMENT PURPOSES.—

17 ‘‘(1) CERTIFICATION FROM USER.—A consumer

18 reporting agency may furnish a consumer report for

19 employment purposes only if—

20 ‘‘(A) the person who obtains such report

21 from the agency certifies to the agency that—

22 ‘‘(i) the person has complied with

23 paragraph (2) with respect to the consumer

24 report, and the person will comply with

25 paragraph (3) with respect to the consumer
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1 report if paragraph (3) becomes applicable;

2 and

3 ‘‘(ii) information from the consumer

4 report will not be used in violation of any

5 applicable Federal or State equal employ6 ment opportunity law or regulation; and

7 ‘‘(B) the consumer reporting agency pro8 vides with the report a summary of the consum9 er’s rights under this title, as prescribed by the

10 Federal Trade Commission under section

11 609(c)(3).

12 ‘‘(2) DISCLOSURE TO CONSUMER.—A person

13 may not procure a consumer report, or cause a

14 consumer report to be procured, for employment pur15 poses with respect to any consumer, unless—

16 ‘‘(A) a clear and conspicuous disclosure has

17 been made in writing to the consumer at any

18 time before the report is procured or caused to be

19 procured, in a document that consists solely of

20 the disclosure, that a consumer report may be ob21 tained for employment purposes; and

22 ‘‘(B) the consumer has authorized in writ23 ing the procurement of the report by that person.

24 ‘‘(3) CONDITIONS ON USE FOR ADVERSE AC25 TIONS.—
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1 ‘‘(A) IN GENERAL.—Except as provided in

2 subparagraph (B), in using a consumer report

3 for employment purposes, before taking any ad4 verse action based in whole or in part on the re5 port, the person intending to take such adverse

6 action shall provide to the consumer to whom the

7 report relates—

8 ‘‘(i) a copy of the report;

9 ‘‘(ii) a description in writing of the

10 rights of the consumer under this title, as

11 prescribed by the Federal Trade Commis12 sion under section 609(c)(3); and

13 ‘‘(iii) a period of not longer than 5

14 business days following receipt of the report

15 by the consumer under clause (i) to respond

16 to any information in the report that is dis17 puted by the consumer and notice in writ18 ing of the opportunity for the consumer to

19 respond during that period.

20 ‘‘(B) EXCEPTION.—The opportunity to re21 spond and notice described in subparagraph

22 (A)(iii) shall not be required with respect to any

23 person who takes an adverse action described in

24 subparagraph (A) based on a reasonable belief

25 that the consumer has engaged in fraudulent or
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1 criminal activity that is related to, or that could

2 affect, the consumer’s employment.’’.

3 SEC. 404. USE OF CONSUMER REPORTS FOR

4 PRESCREENING AND DIRECT MARKETING;

5 PROHIBITION ON UNAUTHORIZED OR

6 UNCERTIFIED USE OF INFORMATION.

7 (a) IN GENERAL.—Section 604 of the Fair Credit Re8 porting Act (15 U.S.C. 1681b) (as amended by section 403

9 of this Act) is amended—

10 (1) in subsection (a), by striking ‘‘A consumer

11 reporting agency’’ and inserting ‘‘Subject to sub12 sections (c) and (d), any consumer reporting agency’’;

13 and

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

16 ‘‘(c) FURNISHING REPORTS IN CONNECTION WITH

17 CREDIT OR INSURANCE TRANSACTIONS THAT ARE NOT INI18 TIATED BY THE CONSUMER.—

19 ‘‘(1) IN GENERAL.—A consumer reporting agen20 cy may furnish a consumer report relating to any

21 consumer pursuant to subsection (a)(3)(A) in connec22 tion with any credit or insurance transaction that is

23 not initiated by the consumer only if—

24 ‘‘(A) the consumer authorizes the agency to

25 provide such report to such person; or
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1 ‘‘(B)(i) the transaction consists of a firm

2 offer of credit or insurance;

3 ‘‘(ii) the consumer reporting agency has

4 complied with subsection (e); and

5 ‘‘(iii) there is not in effect an election by the

6 consumer, made in accordance with subsection

7 (e), to have the consumer’s name and address ex8 cluded from lists of names provided by the agen9 cy pursuant to this paragraph.

10 ‘‘(2) LIMITS ON INFORMATION RECEIVED UNDER

11 PARAGRAPH (1)(B).—A person may receive pursuant

12 to paragraph (1)(B) only—

13 ‘‘(A) the name and address of a consumer;

14 ‘‘(B) an identifier that is not unique to the

15 consumer and that is used by the person solely

16 for the purpose of verifying the identity of the

17 consumer; and

18 ‘‘(C) other information pertaining to a

19 consumer that does not identify the relationship

20 or experience of the consumer with respect to a

21 particular creditor or other entity.

22 ‘‘(3) INFORMATION REGARDING INQUIRIES.—Ex23 cept as provided in section 609(a)(5), a consumer re24 porting agency shall not furnish to any person a

25 record of inquiries in connection with a credit or in-
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1 surance transaction that is not initiated by a

2 consumer.

3 ‘‘(d) FURNISHING INFORMATION FROM CONSUMER

4 FILES IN CONNECTION WITH DIRECT MARKETING TRANS5 ACTIONS THAT ARE NOT INITIATED BY THE CONSUMER.—

6 ‘‘(1) IN GENERAL.—A consumer reporting agen7 cy may furnish information from a file relating to a

8 consumer pursuant to subsection (a)(3)(E) in connec9 tion with a direct marketing transaction that is not

10 initiated by the consumer only if—

11 ‘‘(A) the consumer authorizes the agency to

12 provide such information to such person; or

13 ‘‘(B)(i) the consumer reporting agency has

14 complied with subsection (e); and

15 ‘‘(ii) there is not in effect an election by the

16 consumer, made in accordance with subsection

17 (e), to have the name and address of the

18 consumer excluded from lists of names provided

19 by the agency pursuant to this paragraph.

20 ‘‘(2) LIMITS ON FURNISHING INFORMATION

21 UNDER PARAGRAPH (1)(B).—A consumer reporting

22 agency may furnish, pursuant to paragraph (1)(B),

23 only the name and address of a consumer and other

24 information that would not disclose the credit pay-
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1 ment history, credit limit, credit balance, or any neg2 ative information pertaining to the consumer.

3 ‘‘(3) INFORMATION REGARDING INQUIRIES.—Ex4 cept as provided in section 609(a)(5), a consumer re5 porting agency shall not furnish to any person a

6 record of inquiries made in connection with a direct

7 marketing transaction that is not initiated by a

8 consumer.

9 ‘‘(e) ELECTION OF CONSUMER TO BE EXCLUDED

10 FROM LISTS.—

11 ‘‘(1) IN GENERAL.—A consumer may elect to

12 have the consumer’s name and address excluded from

13 any list provided by a consumer reporting agency

14 under subsection (c)(1)(B) in connection with a credit

15 or insurance transaction that is not initiated by the

16 consumer or under subsection (d)(1)(B) in connection

17 with a direct marketing transaction that is not initi18 ated by the consumer, by notifying the agency in ac19 cordance with paragraph (2) that the consumer does

20 not consent to any use of a consumer report relating

21 to the consumer in connection with any credit or in22 surance transaction that is not initiated by the

23 consumer or any direct marketing transaction that is

24 not initiated by the consumer.
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1 ‘‘(2) MANNER OF NOTIFICATION.—A consumer

2 shall notify a consumer reporting agency under para3 graph (1)—

4 ‘‘(A) through the notification system main5 tained by the agency under paragraph (5); or

6 ‘‘(B) by submitting to the agency a signed

7 notice of election form issued by the agency for

8 purposes of this subparagraph.

9 ‘‘(3) RESPONSE OF AGENCY AFTER NOTIFICATION

10 THROUGH SYSTEM.—Upon receipt of notification of

11 the election of a consumer under paragraph (1)

12 through the notification system maintained by the

13 agency under paragraph (5), a consumer reporting

14 agency shall—

15 ‘‘(A) inform the consumer that the election

16 is effective only for the 2-year period following

17 the election if the consumer does not submit to

18 the agency a signed notice of election form issued

19 by the agency for purposes of paragraph (2)(B);

20 and

21 ‘‘(B) provide to the consumer a notice of

22 election form, if requested by the consumer, not

23 later than 5 business days after receipt of the no24 tification of the election through the system es25 tablished under paragraph (5), in the case of a
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1 request made at the time the consumer provides

2 notification through the system.

3 ‘‘(4) EFFECTIVENESS OF ELECTION.—An election

4 of a consumer under paragraph (1)—

5 ‘‘(A) shall be effective with respect to a

6 consumer reporting agency beginning on the date

7 on which the consumer notifies the agency in ac8 cordance with paragraph (2);

9 ‘‘(B) shall be effective with respect to a

10 consumer reporting agency—

11 ‘‘(i) subject to subparagraph (C), dur12 ing the 2-year period beginning on the date

13 on which the consumer notifies the agency

14 of the election, in the case of an election for

15 which a consumer notifies the agency only

16 in accordance with paragraph (2)(A); or

17 ‘‘(ii) until the consumer notifies the

18 agency under subparagraph (C), in the case

19 of an election for which a consumer notifies

20 the agency in accordance with paragraph

21 (2)(B);

22 ‘‘(C) shall not be effective after the date on

23 which the consumer notifies the agency, through

24 the notification system established by the agency
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1 under paragraph (5), that the election is no

2 longer effective; and

3 ‘‘(D) shall be effective with respect to each

4 affiliate of the agency.

5 ‘‘(5) NOTIFICATION SYSTEM.—

6 ‘‘(A) IN GENERAL.—Each consumer report7 ing agency that, under subsection (c)(1)(B), fur8 nishes a consumer report in connection with a

9 credit or insurance transaction that is not initi10 ated by a consumer or, under subsection

11 (d)(1)(B), furnishes a consumer report in con12 nection with a direct marketing transaction that

13 is not initiated by a consumer, shall—

14 ‘‘(i) establish and maintain a notifica15 tion system, including a toll-free telephone

16 number, which permits any consumer whose

17 consumer report is maintained by the agen18 cy to notify the agency, with appropriate

19 identification, of the consumer’s election to

20 have the consumer’s name and address ex21 cluded from any such list of names and ad22 dresses provided by the agency for such a

23 transaction; and

24 ‘‘(ii) publish by not later than 365

25 days after the date of enactment of the
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1 Consumer Reporting Reform Act of 1995,

2 and not less than annually thereafter, in a

3 publication of general circulation in the

4 area served by the agency—

5 ‘‘(I) a notification that informa6 tion in consumer files maintained by

7 the agency may be used in connection

8 with such transactions; and

9 ‘‘(II) the address and toll-free tele10 phone number for consumers to use to

11 notify the agency of the consumer’s

12 election under clause (i).

13 ‘‘(B) ESTABLISHMENT AND MAINTENANCE

14 AS COMPLIANCE.—Establishment and mainte15 nance of a notification system (including a toll16 free telephone number) and publication by a

17 consumer reporting agency on the agency’s own

18 behalf and on behalf of any of its affiliates in ac19 cordance with this paragraph is deemed to be

20 compliance with this paragraph by each of those

21 affiliates.

22 ‘‘(6) NOTIFICATION SYSTEM BY AGENCIES THAT

23 OPERATE NATIONWIDE.—Each consumer reporting

24 agency that compiles and maintains files on consum25 ers on a nationwide basis shall establish and main-
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1 tain a notification system for purposes of paragraph

2 (5) jointly with other such consumer reporting agen3 cies.’’.

4 (b) USE OF INFORMATION OBTAINED FROM RE5 PORTS.—Section 604 of the Fair Credit Reporting Act (15

6 U.S.C. 1681b) (as amended by subsection (a) of this section)

7 is amended by adding at the end the following new sub8 section:

9 ‘‘(f) CERTAIN USE OR OBTAINING OF INFORMATION

10 PROHIBITED.—A person shall not use or obtain a consumer

11 report for any purpose unless—

12 ‘‘(1) the consumer report is obtained for a pur13 pose for which the consumer report is authorized to

14 be furnished under this section; and

15 ‘‘(2) the purpose is certified in accordance with

16 section 607 by a prospective user of the report through

17 a general or specific certification.’’.

18 SEC. 405. CONSUMER CONSENT REQUIRED TO FURNISH

19 CONSUMER REPORT CONTAINING MEDICAL

20 INFORMATION; FURNISHING CONSUMER RE21 PORTS FOR COMMERCIAL TRANSACTIONS.

22 Section 604 of the Fair Credit Reporting Act (15

23 U.S.C. 1681b) (as amended by this Act) is amended by add24 ing at the end the following new subsection:
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1 ‘‘(g) FURNISHING REPORTS CONTAINING MEDICAL IN2 FORMATION.—A consumer reporting agency shall not fur3 nish for employment purposes, or in connection with a cred4 it or insurance transaction or a direct marketing trans5 action, a consumer report that contains medical informa6 tion about a consumer, unless the consumer consents to the

7 furnishing of the report.’’.

8 SEC. 406. OBSOLETE INFORMATION AND INFORMATION

9 CONTAINED IN CONSUMER REPORTS.

10 (a) REPEAL LARGE-DOLLAR EXCEPTIONS.—Section

11 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c)

12 is amended—

13 (1) in subsection (a), by striking ‘‘(a) Except as

14 authorized under subsection (b), no’’ and inserting the

15 following new subsection:

16 ‘‘(a) INFORMATION EXCLUDED FROM CONSUMER RE17 PORTS.—No’’; and

18 (2) by striking subsection (b).

19 (b) CLARIFICATION OF REPORTING PERIOD.—Section

20 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c)

21 (as amended by subsection (a) of this section) is amended

22 by adding at the end the following:

23 ‘‘(b) RUNNING OF REPORTING PERIOD.—

24 ‘‘(1) IN GENERAL.—The 7-year period referred to

25 in paragraphs (4) and (6) of subsection (a) shall
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1 begin, with respect to any delinquent account that is

2 placed for collection (internally or by referral to a

3 third party, whichever is earlier), charged to profit

4 and loss, or subjected to any similar action, upon the

5 expiration of the 180-day period beginning on the

6 date of the commencement of the delinquency which

7 immediately preceded the collection activity, charge to

8 profit and loss, or similar action.

9 ‘‘(2) EFFECTIVE DATE.—Paragraph (1) shall

10 apply only to items of information added to a

11 consumer report on or after the date that is 455 days

12 after the date of enactment of the Consumer Reporting

13 Reform Act of 1995.’’.

14 (c) ADDITIONAL INFORMATION ON BANKRUPTCY FIL15 INGS REQUIRED.—Section 605 of the Fair Credit Reporting

16 Act (15 U.S.C. 1681c) is amended by adding after sub17 section (b) (as added by subsection (b) of this section) the

18 following new subsection:

19 ‘‘(c) INFORMATION REQUIRED TO BE DISCLOSED.—

20 Any consumer reporting agency that furnishes a consumer

21 report that contains information regarding any case involv22 ing the consumer that arises under title 11, United States

23 Code, shall include in the report an identification of the

24 chapter of such title 11 under which such case arises if pro25 vided by the source of the information. If any case arising
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1 or filed under title 11, United States Code, is withdrawn

2 by the consumer prior to a final judgment, the consumer

3 reporting agency shall include in the report that such case

4 or filing was withdrawn upon receipt of documentation cer5 tifying such withdrawal.’’.

6 (d) INDICATION OF CLOSURE OF ACCOUNT; INDICA7 TION OF DISPUTE BY CONSUMER.—Section 605 of the Fair

8 Credit Reporting Act (15 U.S.C. 1681c) (as amended by

9 subsection (c) of this section) is amended by adding at the

10 end the following new subsections:

11 ‘‘(d) INDICATION OF CLOSURE OF ACCOUNT BY

12 CONSUMER.—If a consumer reporting agency is notified

13 pursuant to section 623(a)(4) that a credit account of a

14 consumer was voluntarily closed by the consumer, the agen15 cy shall indicate that fact in any consumer report that in16 cludes information related to the account.

17 ‘‘(e) INDICATION OF DISPUTE BY CONSUMER.—If a

18 consumer reporting agency is notified pursuant to section

19 623(a)(3) that information regarding a consumer who was

20 furnished to the agency is disputed by the consumer, the

21 agency shall indicate that fact in each consumer report that

22 includes the disputed information.’’.

23 (e) CONFORMING AMENDMENTS.—

24 (1) Section 605 of the Fair Credit Reporting Act

25 (15 U.S.C. 1681c) is amended in the section heading,
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1 by striking ‘‘OBSOLETE INFORMATION’’ and in2 serting ‘‘REQUIREMENTS RELATING TO INFOR3 MATION CONTAINED IN CONSUMER REPORTS’’.

4 (2) The table of sections for the Fair Credit Re5 porting Act (15 U.S.C. 1681a et seq.) is amended by

6 striking the item relating to section 605 and inserting

7 the following:

‘‘605. Requirements relating to information contained in consumer reports.’’.

8 SEC. 407. COMPLIANCE PROCEDURES.

9 (a) DISCLOSURE OF CONSUMER REPORTS BY

10 USERS.—Section 607 of the Fair Credit Reporting Act (15

11 U.S.C. 1681e) is amended by adding at the end the follow12 ing new subsection:

13 ‘‘(c) DISCLOSURE OF CONSUMER REPORTS BY USERS

14 ALLOWED.—A consumer reporting agency may not prohibit

15 a user of a consumer report furnished by the agency on a

16 consumer from disclosing the contents of the report to the

17 consumer, if adverse action against the consumer has been

18 taken by the user based in whole or in part on the report.’’.

19 (b) NOTICE TO USERS AND PROVIDERS OF INFORMA20 TION TO ENSURE COMPLIANCE.—Section 607 of the Fair

21 Credit Reporting Act (15 U.S.C. 1681e) is amended by add22 ing after subsection (c) (as added by subsection (a) of this

23 section) the following new subsection:

24 ‘‘(d) NOTICE TO USERS AND FURNISHERS OF INFOR25 MATION.—
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1 ‘‘(1) NOTICE REQUIREMENT.—A consumer re2 porting agency shall provide to any person—

3 ‘‘(A) who regularly and in the ordinary

4 course of business furnishes information to the

5 agency with respect to any consumer; or

6 ‘‘(B) to whom a consumer report is pro7 vided by the agency;

8 a notice of such person’s responsibilities under this

9 title.

10 ‘‘(2) CONTENT OF NOTICE.—The Federal Trade

11 Commission shall prescribe the content of notices

12 under paragraph (1).’’.

13 (c) RECORD OF IDENTITY OF USERS AND PURPOSES

14 CERTIFIED BY USERS OF REPORTS.—Section 607 of the

15 Fair Credit Reporting Act (15 U.S.C. 1681e) is amended

16 by adding after subsection (d) (as added by subsection (b)

17 of this section) the following new subsection:

18 ‘‘(e) PROCUREMENT OF CONSUMER REPORT FOR RE19 SALE.—

20 ‘‘(1) DISCLOSURE.—A person may not procure a

21 consumer report for purposes of reselling the report

22 (or any information in the report) unless the person

23 discloses to the consumer reporting agency that origi24 nally furnishes the report—
233

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1 ‘‘(A) the identity of the end-user of the re2 port (or information); and

3 ‘‘(B) each permissible purpose under section

4 604 for which the report is furnished to the end5 user of the report (or information).

6 ‘‘(2) RESPONSIBILITIES OF PROCURERS FOR RE7 SALE.—A person who procures a consumer report for

8 purposes of reselling the report (or any information

9 in the report) shall—

10 ‘‘(A) establish and comply with reasonable

11 procedures designed to ensure that the report (or

12 information) is resold by the person only for a

13 purpose for which the report may be furnished

14 under section 604, including by requiring that

15 each person to which the report (or information)

16 is resold and that resells or provides the report

17 (or information) to any other person—

18 ‘‘(i) identifies each end user of the re19 sold report (or information);

20 ‘‘(ii) certifies each purpose for which

21 the report (or information) will be used;

22 and

23 ‘‘(iii) certifies that the report (or infor24 mation) will be used for no other purpose;

25 and
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1 ‘‘(B) before reselling the report, make rea2 sonable efforts to verify the identifications and

3 certifications made under subparagraph (A).’’.

4 SEC. 408. CONSUMER DISCLOSURES.

5 (a) ALL INFORMATION IN CONSUMER’S FILE RE6 QUIRED TO BE DISCLOSED.—Section 609(a)(1) of the Fair

7 Credit Reporting Act (15 U.S.C. 1681g(a)(1)) is amended

8 to read as follows:

9 ‘‘(1) All information in the consumer’s file at the

10 time of the request, except that nothing in this para11 graph shall be construed to require a consumer re12 porting agency to disclose to a consumer any infor13 mation concerning credit scores or any other risk

14 scores or predictors relating to the consumer.’’.

15 (b) MORE INFORMATION CONCERNING RECIPIENTS OF

16 REPORTS REQUIRED.—Section 609(a)(3) of the Fair Credit

17 Reporting Act (15 U.S.C. 1681g(a)) is amended to read as

18 follows:

19 ‘‘(3)(A) Identification of each person (including

20 each end-user identified under section 607(e)(1)) that

21 procured a consumer report—

22 ‘‘(i) for employment purposes, during the 2-

23 year period preceding the date on which the re24 quest is made; or
235

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1 ‘‘(ii) for any other purpose, during the 1-

2 year period preceding the date on which the re3 quest is made.

4 ‘‘(B) An identification of a person under sub5 paragraph (A) shall include—

6 ‘‘(i) the name of the person or, if applicable,

7 the trade name (written in full) under which

8 such person conducts business; and

9 ‘‘(ii) upon request of the consumer, the ad10 dress and telephone number of the person.’’.

11 (c) INFORMATION REGARDING INQUIRIES.—Section

12 609(a) of the Fair Credit Reporting Act (15 U.S.C.

13 1681g(a)) is amended by adding at the end the following

14 new paragraph:

15 ‘‘(5) A record of all inquiries received by the

16 agency during the 1-year period preceding the request

17 that identified the consumer in connection with a

18 credit or insurance transaction that was not initiated

19 by the consumer.’’.

20 (d) SUMMARY OF RIGHTS REQUIRED TO BE IN21 CLUDED WITH DISCLOSURE.—

22 (1) IN GENERAL.—Section 609 of the Fair Credit

23 Reporting Act (15 U.S.C. 1681g) is amended by add24 ing at the end the following new subsection:
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1 ‘‘(c) SUMMARY OF RIGHTS REQUIRED TO BE IN2 CLUDED WITH DISCLOSURE.—

3 ‘‘(1) SUMMARY OF RIGHTS.—A consumer report4 ing agency shall provide to a consumer, with each

5 written disclosure by the agency to the consumer

6 under this section—

7 ‘‘(A) a written summary of all rights the

8 consumer has under this title; and

9 ‘‘(B) in the case of a consumer reporting

10 agency that compiles and maintains files on con11 sumers on a nationwide basis, a toll-free tele12 phone number established by the agency at which

13 personnel are accessible to consumers during nor14 mal business hours.

15 ‘‘(2) SPECIFIC ITEMS REQUIRED TO BE IN16 CLUDED.—The summary of rights required under

17 paragraph (1) shall include—

18 ‘‘(A) a brief description of this title and all

19 rights of consumers under this title;

20 ‘‘(B) an explanation of how the consumer

21 may exercise the rights of the consumer under

22 this title;

23 ‘‘(C) a list of all Federal agencies respon24 sible for enforcing any provision of this title and

25 the address and any appropriate phone number
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1 of each such agency, in a form that will assist

2 the consumer in selecting the appropriate agen3 cy;

4 ‘‘(D) a statement that the consumer may

5 have additional rights under State law and that

6 the consumer may wish to contact a State or

7 local consumer protection agency or a State at8 torney general to learn of those rights; and

9 ‘‘(E) a statement that a consumer reporting

10 agency is not required to remove accurate derog11 atory information from a consumer’s file, unless

12 the information is outdated under section 605 or

13 cannot be verified.

14 ‘‘(3) FORM OF SUMMARY OF RIGHTS.—For pur15 poses of this subsection and any disclosure by a

16 consumer reporting agency required under this title

17 with respect to consumers’ rights, the Federal Trade

18 Commission (after consultation with each Federal

19 agency referred to in section 621(b)) shall prescribe

20 the form and content of any such disclosure of the

21 rights of consumers required under this title.’’.

22 (2) TECHNICAL AMENDMENT.—Section

23 606(a)(1)(B) of the Fair Credit Reporting Act (15

24 U.S.C. 1681d(a)(1)(B)) is amended by inserting ‘‘and

25 the written summary of the rights of the consumer
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•S 650 RS

1 prepared pursuant to section 609(c)’’ before the semi2 colon.

3 (e) FORM OF DISCLOSURES.—

4 (1) IN GENERAL.—Subsections (a) and (b) of sec5 tion 610 of the Fair Credit Reporting Act (15 U.S.C.

6 1681h) are amended to read as follows:

7 ‘‘(a) IN GENERAL.—

8 ‘‘(1) PROPER IDENTIFICATION.—A consumer re9 porting agency shall require, as a condition of mak10 ing the disclosures required under section 609, that

11 the consumer furnish proper identification.

12 ‘‘(2) DISCLOSURE IN WRITING.—Except as pro13 vided in subsection (b), the disclosures required to be

14 made under section 609 shall be provided under that

15 section in writing.

16 ‘‘(b) OTHER FORMS OF DISCLOSURE.—

17 ‘‘(1) IN GENERAL.—If authorized by a consumer,

18 a consumer reporting agency may make the disclo19 sures required under 609—

20 ‘‘(A) other than in writing; and

21 ‘‘(B) in such form as may be—

22 ‘‘(i) specified by the consumer in ac23 cordance with paragraph (2); and

24 ‘‘(ii) available from the agency.
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1 ‘‘(2) FORM.—A consumer may specify pursuant

2 to paragraph (1) that disclosures under section 609

3 shall be made—

4 ‘‘(A) in person, upon the appearance of the

5 consumer at the place of business of the consumer

6 reporting agency where disclosures are regularly

7 provided, during normal business hours, and on

8 reasonable notice;

9 ‘‘(B) by telephone, if the consumer has made

10 a written request for disclosure by telephone;

11 ‘‘(C) by electronic means, if available from

12 the agency; or

13 ‘‘(D) by any other reasonable means that is

14 available from the agency.’’.

15 (2) SIMPLIFIED DISCLOSURE.—Not later than 90

16 days after the date of enactment of this Act, each

17 consumer reporting agency shall develop a form on

18 which such consumer reporting agency shall make the

19 disclosures required under section 609(a) of the Fair

20 Credit Reporting Act, for the purpose of maximizing

21 the comprehensibility and standardization of such

22 disclosures.

23 (3) GOALS.—The Federal Trade Commission

24 shall take appropriate action to assure that the goals
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1 of comprehensibility and standardization are achieved

2 in accordance with paragraph (2).

3 (4) CONFORMING AMENDMENTS.—

4 (A) Section 609(a) of the Fair Credit Re5 porting Act (15 U.S.C. 1681h(a)) is amended in

6 the matter preceding paragraph (1) by striking

7 ‘‘and proper identification of any consumer’’

8 and inserting ‘‘and subject to section 610(a)(1)’’.

9 (B) Section 610 of the Fair Credit Report10 ing Act (15 U.S.C. 1681h) is amended in the sec11 tion heading by inserting ‘‘AND FORM’’ after

12 ‘‘CONDITIONS’’.

13 (C) The table of sections at the beginning of

14 the Fair Credit Reporting Act (15 U.S.C. 1681a

15 et seq.) is amended in the item relating to sec16 tion 610 by inserting ‘‘and form’’ after ‘‘Condi17 tions’’.

18 SEC. 409. PROCEDURES IN CASE OF THE DISPUTED ACCU19 RACY OF ANY INFORMATION IN A CONSUM20 ER’S FILE.

21 (a) IN GENERAL.—Section 611(a) of the Fair Credit

22 Reporting Act (15 U.S.C. 1681i(a)) is amended to read as

23 follows:

24 ‘‘(a) REINVESTIGATIONS OF DISPUTED INFORMA25 TION.—
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•S 650 RS

1 ‘‘(1) REINVESTIGATION REQUIRED.—

2 ‘‘(A) IN GENERAL.—If the completeness or

3 accuracy of any item of information contained

4 in a consumer’s file at a consumer reporting

5 agency is disputed by the consumer and the

6 consumer notifies the agency directly of such dis7 pute, the agency shall reinvestigate free of charge

8 and record the current status of the disputed in9 formation, or delete the item from the file in ac10 cordance with paragraph (5), before the end of

11 the 30-day period beginning on the date on

12 which the agency receives the notice of the dis13 pute from the consumer.

14 ‘‘(B) EXTENSION OF PERIOD TO

15 REINVESTIGATE.—Except as provided in sub16 paragraph (C), the 30-day period described in

17 subparagraph (A) may be extended for not more

18 than 15 additional days if the consumer report19 ing agency receives information from the

20 consumer during that 30-day period that is rel21 evant to the reinvestigation.

22 ‘‘(C) LIMITATIONS ON EXTENSION OF PE23 RIOD TO REINVESTIGATE.—Subparagraph (B)

24 shall not apply to any reinvestigation in which,

25 during the 30-day period described in subpara-
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1 graph (A), the information that is the subject of

2 the reinvestigation is found to be inaccurate or

3 incomplete or the consumer reporting agency de4 termines that the information cannot be verified.

5 ‘‘(2) PROMPT NOTICE OF DISPUTE TO FUR6 NISHER OF INFORMATION.—

7 ‘‘(A) IN GENERAL.—Prior to the expiration

8 of the 5-business-day period beginning on the

9 date on which a consumer reporting agency re10 ceives notice of a dispute from any consumer in

11 accordance with paragraph (1), the agency shall

12 provide notification of the dispute to any person

13 who provided any item of information in dis14 pute, at the address and in the manner estab15 lished with the person. The notice shall include

16 all relevant information regarding the dispute

17 that the agency has received from the consumer.

18 ‘‘(B) PROVISION OF OTHER INFORMATION

19 FROM CONSUMER.—The consumer reporting

20 agency shall promptly provide to the person who

21 provided the information in dispute all relevant

22 information regarding the dispute that is re23 ceived by the agency from the consumer after the

24 period referred to in subparagraph (A) and be-
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1 fore the end of the period referred to in para2 graph (1)(A).

3 ‘‘(3) DETERMINATION THAT DISPUTE IS FRIVO4 LOUS OR IRRELEVANT.—

5 ‘‘(A) IN GENERAL.—Notwithstanding para6 graph (1), a consumer reporting agency may ter7 minate a reinvestigation of information disputed

8 by a consumer under that paragraph if the agen9 cy reasonably determines that the dispute by the

10 consumer is frivolous or irrelevant, including by

11 reason of a failure by a consumer to provide suf12 ficient information to investigate the disputed

13 information.

14 ‘‘(B) NOTICE OF DETERMINATION.—Upon

15 making any determination in accordance with

16 subparagraph (A) that a dispute is frivolous or

17 irrelevant, a consumer reporting agency shall no18 tify the consumer of such determination not later

19 than 5 business days after making such deter20 mination, by mail or, if authorized by the

21 consumer for that purpose, by any other means

22 available to the agency.

23 ‘‘(C) CONTENTS OF NOTICE.—A notice

24 under subparagraph (B) shall include—
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1 ‘‘(i) the reasons for the determination

2 under subparagraph (A); and

3 ‘‘(ii) identification of any information

4 required to investigate the disputed infor5 mation, which may consist of a standard6 ized form describing the general nature of

7 such information.

8 ‘‘(4) CONSIDERATION OF CONSUMER INFORMA9 TION.—In conducting any reinvestigation under

10 paragraph (1) with respect to disputed information

11 in the file of any consumer, the consumer reporting

12 agency shall review and consider all relevant infor13 mation submitted by the consumer in the period de14 scribed in paragraph (1)(A) with respect to such dis15 puted information.

16 ‘‘(5) TREATMENT OF INACCURATE OR UNVERIFI17 ABLE INFORMATION.—

18 ‘‘(A) IN GENERAL.—If, after any

19 reinvestigation under paragraph (1) of any in20 formation disputed by a consumer, an item of

21 the information is found to be inaccurate or in22 complete or cannot be verified, the consumer re23 porting agency shall promptly delete that item of

24 information from the consumer’s file. The infor25 mation deleted shall consist solely of the informa-
245

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1 tion that was disputed by the consumer and

2 shall not include any portion of the same item

3 that was not disputed.

4 ‘‘(B) REQUIREMENTS RELATING TO

5 REINSERTION OF PREVIOUSLY DELETED MATE6 RIAL.—

7 ‘‘(i) CERTIFICATION OF ACCURACY OF

8 INFORMATION.—If any information is de9 leted from a consumer’s file pursuant to

10 subparagraph (A), the information may not

11 be reinserted in the file by the consumer re12 porting agency unless the person who fur13 nishes the information certifies that the in14 formation is complete and accurate.

15 ‘‘(ii) NOTICE TO CONSUMER.—If any

16 information that has been deleted from a

17 consumer’s file pursuant to subparagraph

18 (A) is reinserted in the file, the consumer

19 reporting agency shall notify the consumer

20 of the reinsertion in writing not later than

21 5 business days after the reinsertion or, if

22 authorized by the consumer for that pur23 pose, by any other means available to the

24 agency.
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1 ‘‘(iii) ADDITIONAL INFORMATION.—As

2 part of, or in addition to, the notice under

3 clause (ii), a consumer reporting agency

4 shall provide to a consumer in writing not

5 later than 5 business days after the date of

6 the reinsertion—

7 ‘‘(I) a statement that the disputed

8 information has been reinserted;

9 ‘‘(II) the name, business address,

10 and telephone number of any furnisher

11 of information contacted, or of any

12 furnisher of information that contacted

13 the consumer reporting agency, in con14 nection with the reinsertion of such in15 formation; and

16 ‘‘(III) a notice that the consumer

17 has the right to add a statement to the

18 consumer’s file disputing the accuracy

19 or completeness of the disputed infor20 mation.

21 ‘‘(C) PROCEDURES TO PREVENT REAPPEAR22 ANCE.—A consumer reporting agency shall

23 maintain reasonable procedures designed to pre24 vent the reappearance in a consumer’s file, and

25 in consumer reports on the consumer, of infor-
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1 mation that is deleted pursuant to this para2 graph (other than information that is reinserted

3 in accordance with subparagraph (B)(i)).

4 ‘‘(D) AUTOMATED REINVESTIGATION SYS5 TEM.—Any consumer reporting agency that com6 piles and maintains files on consumers on a na7 tionwide basis shall implement an automated

8 system through which furnishers of information

9 to that consumer reporting agency may report

10 the results of a reinvestigation that finds incom11 plete or inaccurate information in a consumer’s

12 file to other such consumer reporting agencies.

13 ‘‘(6) NOTICE OF RESULTS OF

14 REINVESTIGATION.—

15 ‘‘(A) IN GENERAL.—A consumer reporting

16 agency shall provide written notice to a

17 consumer of the results of a reinvestigation under

18 this subsection not later than 5 business days

19 after the completion of the reinvestigation, by

20 mail or, if authorized by the consumer for that

21 purpose, by other means available to the agency.

22 ‘‘(B) CONTENTS.—As part of, or in addi23 tion to, the notice under subparagraph (A), a

24 consumer reporting agency shall provide to a

25 consumer in writing prior to the expiration of
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1 the 5-day period referred to in subparagraph

2 (A)—

3 ‘‘(i) a statement that the

4 reinvestigation is completed;

5 ‘‘(ii) a consumer report that is based

6 upon the consumer’s file as that file is re7 vised as a result of the reinvestigation;

8 ‘‘(iii) a description or indication of

9 any changes made in the consumer report

10 as a result of those revisions to the consum11 er’s file;

12 ‘‘(iv) a notice that, if requested by the

13 consumer, a description of the procedure

14 used to determine the accuracy and com15 pleteness of the information shall be pro16 vided to the consumer by the agency, in17 cluding the name, business address, and

18 telephone number of any furnisher of infor19 mation contacted in connection with such

20 information;

21 ‘‘(v) a notice that the consumer has the

22 right to add a statement to the consumer’s

23 file disputing the accuracy or completeness

24 of the information; and
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1 ‘‘(vi) a notice that the consumer has

2 the right to request under subsection (d)

3 that the consumer reporting agency furnish

4 notifications under that subsection.

5 ‘‘(7) DESCRIPTION OF REINVESTIGATION PROCE6 DURE.—A consumer reporting agency shall provide to

7 a consumer a description referred to in paragraph

8 (6)(B)(iv) by not later than 15 days after receiving

9 a request from the consumer for that description.

10 ‘‘(8) EXPEDITED DISPUTE RESOLUTION.—If a

11 dispute regarding an item of information in a con12 sumer’s file at a consumer reporting agency is re13 solved in accordance with paragraph (5)(A) by the

14 deletion of the disputed information by not later than

15 3 business days after the date on which the agency re16 ceives notice of the dispute from the consumer in ac17 cordance with paragraph (1)(A), then the agency

18 shall not be required to comply with paragraphs (2),

19 (6), and (7) with respect to that dispute if the agen20 cy—

21 ‘‘(A) provides prompt notice of the deletion

22 to the consumer by telephone;

23 ‘‘(B) includes in that notice, or in a written

24 notice that accompanies a confirmation and

25 consumer report provided in accordance with
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1 subparagraph (C), a statement of the consumer’s

2 right to request under subsection (d) that the

3 agency furnish notifications under that sub4 section; and

5 ‘‘(C) provides written confirmation of the

6 deletion and a copy of a consumer report on the

7 consumer that is based on the consumer’s file

8 after the deletion, not later than 5 business days

9 after making the deletion.’’.

10 (b) CONFORMING AMENDMENT.—Section 611(d) of the

11 Fair Credit Reporting Act (15 U.S.C. 1681i(d)) is amended

12 by striking ‘‘The consumer reporting agency shall clearly’’

13 and all that follows through the end of the subsection.

14 SEC. 410. CHARGES FOR CERTAIN DISCLOSURES.

15 Section 612 of the Fair Credit Reporting Act (15

16 U.S.C. 1681j) is amended to read as follows:

17 ‘‘SEC. 612. CHARGES FOR CERTAIN DISCLOSURES.

18 ‘‘(a) REASONABLE CHARGES ALLOWED FOR CERTAIN

19 DISCLOSURES.—Except as provided in subsections (b), (c),

20 and (d), a consumer reporting agency may impose a rea21 sonable charge on a consumer—

22 ‘‘(1) for making a disclosure to the consumer

23 pursuant to section 609, which charge—

24 ‘‘(A) shall not exceed $8; and
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1 ‘‘(B) shall be indicated to the consumer

2 prior to making disclosure; and

3 ‘‘(2) for furnishing pursuant to section 611(d),

4 following a reinvestigation under section 611(a), a

5 statement, codification, or summary to a person des6 ignated by the consumer under that section after the

7 30-day period beginning on the date of notification of

8 the consumer under paragraph (6) or (8) of section

9 611(a) with respect to the reinvestigation, which

10 charge—

11 ‘‘(A) shall not exceed the charge that the

12 agency would impose on each designated recipi13 ent for a consumer report; and

14 ‘‘(B) shall be indicated to the consumer

15 prior to furnishing such information.

16 ‘‘(b) FREE CONSUMER REPORT AFTER ADVERSE NO17 TICE TO CONSUMER.—Each consumer reporting agency

18 that maintains a file on a consumer shall make all disclo19 sures pursuant to section 609 without charge to the

20 consumer if, not later than 60 days after receipt by such

21 consumer of a notification pursuant to section 615, or of

22 a notification from a debt collection agency affiliated with

23 that consumer reporting agency stating that the consumer’s

24 credit rating may be or has been adversely affected, the

25 consumer makes a request under section 609.
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1 ‘‘(c) FREE CONSUMER REPORT UNDER CERTAIN

2 OTHER CIRCUMSTANCES.—Upon the request of the

3 consumer, a consumer reporting agency shall make all dis4 closures pursuant to section 609 once during any 12-month

5 period without charge to that consumer if the consumer cer6 tifies in writing that the consumer—

7 ‘‘(1) is unemployed and intends to apply for em8 ployment in the 60-day period beginning on the date

9 on which the certification is made;

10 ‘‘(2) is a recipient of public welfare assistance;

11 or

12 ‘‘(3) has reason to believe that the file on the

13 consumer at the agency contains inaccurate informa14 tion due to fraud.

15 ‘‘(d) OTHER CHARGES PROHIBITED.—A consumer re16 porting agency shall not impose any charge on a consumer

17 for providing any notification required by this Act or mak18 ing any disclosure required by this Act, except as authorized

19 by subsection (a).’’.

20 SEC. 411. DUTIES OF USERS OF CONSUMER REPORTS.

21 (a) DUTIES OF USERS TAKING ADVERSE ACTIONS.—

22 Section 615(a) of the Fair Credit Reporting Act (15 U.S.C.

23 1681m(a)) is amended to read as follows:

24 ‘‘(a) DUTIES OF USERS TAKING ADVERSE ACTIONS ON

25 THE BASIS OF INFORMATION CONTAINED IN CONSUMER
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1 REPORTS.—If any person takes any adverse action with re2 spect to any consumer that is based in whole or in part

3 on any information contained in a consumer report, the

4 person shall—

5 ‘‘(1) provide written or electronic notice of the

6 adverse action to the consumer;

7 ‘‘(2) provide to the consumer in writing or elec8 tronically—

9 ‘‘(A) the name, address, and telephone num10 ber of the consumer reporting agency (including

11 a toll-free telephone number established by the

12 agency if the agency compiles and maintains

13 files on consumers on a nationwide basis) that

14 furnished the report to the person; and

15 ‘‘(B) a statement that the consumer report16 ing agency did not make the decision to take the

17 adverse action and is unable to provide the

18 consumer the specific reasons why the adverse ac19 tion was taken; and

20 ‘‘(3) provide to the consumer a written or elec21 tronic notice of the consumer’s right—

22 ‘‘(A) to obtain, under section 612, a free

23 copy of a consumer report on the consumer from

24 the consumer reporting agency referred to in

25 paragraph (2), which notice shall include an in-
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1 dication of the 60-day period under that section

2 for obtaining such a copy; and

3 ‘‘(B) to dispute, under section 611, with a

4 consumer reporting agency the accuracy or com5 pleteness of any information in a consumer re6 port furnished by the agency.’’.

7 (b) DUTIES OF USERS MAKING CERTAIN CREDIT SO8 LICITATIONS.—Section 615 of the Fair Credit Reporting

9 Act (15 U.S.C. 1681m) is amended by adding at the end

10 the following new subsection:

11 ‘‘(d) DUTIES OF USERS MAKING WRITTEN CREDIT OR

12 INSURANCE SOLICITATIONS ON THE BASIS OF INFORMA13 TION CONTAINED IN CONSUMER FILES.—

14 ‘‘(1) IN GENERAL.—Any person who uses a

15 consumer report on any consumer in connection with

16 any credit or insurance transaction that is not initi17 ated by the consumer, that is provided to that person

18 under section 604(c)(1)(B), shall provide with each

19 written solicitation made to the consumer regarding

20 the transaction a clear and conspicuous statement

21 that—

22 ‘‘(A) information contained in the consum23 er’s consumer report was used in connection with

24 the transaction;
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1 ‘‘(B) the consumer received the offer of cred2 it or insurance because the consumer satisfied the

3 criteria for creditworthiness or insurability

4 under which the consumer was selected for the

5 offer;

6 ‘‘(C) if applicable, the credit or insurance

7 may not be extended if, after the consumer re8 sponds to the offer, the consumer does not meet

9 the criteria used to select the consumer for the

10 offer or any applicable criteria bearing on cred11 itworthiness or insurability or does not furnish

12 any required collateral;

13 ‘‘(D) the consumer has a right to prohibit

14 information contained in the consumer’s file

15 with any consumer reporting agency from being

16 used in connection with any credit or insurance

17 transaction that is not initiated by the

18 consumer; and

19 ‘‘(E) the consumer may exercise the right

20 referred to in subparagraph (D) by notifying a

21 notification system established under section

22 604(e).

23 ‘‘(2) DISCLOSURE OF ADDRESS AND TELEPHONE

24 NUMBER.—A statement under paragraph (1) shall in25 clude the address and toll-free telephone number of the
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1 appropriate notification system established under sec2 tion 604(e).

3 ‘‘(3) MAINTAINING CRITERIA ON FILE.—A person

4 who makes an offer of credit or insurance to a

5 consumer under a credit or insurance transaction de6 scribed in paragraph (1) shall maintain on file the

7 criteria used to select the consumer to receive the offer,

8 all criteria bearing on creditworthiness or insurabil9 ity, as applicable, that are the basis for determining

10 whether or not to extend credit or insurance pursuant

11 to the offer, and any requirement for the furnishing

12 of collateral as a condition of the extension of credit

13 or insurance, until the expiration of the 3-year period

14 beginning on the date on which the offer is made to

15 the consumer.

16 ‘‘(4) AUTHORITY OF FEDERAL AGENCIES RE17 GARDING UNFAIR OR DECEPTIVE ACTS OR PRACTICES

18 NOT AFFECTED.—This section is not intended to affect

19 the authority of any Federal agency to enforce a pro20 hibition against unfair or deceptive acts or practices,

21 including the making of false or misleading state22 ments in connection with a credit or insurance trans23 action that is not initiated by the consumer.’’.

24 (c) DUTIES OF USERS MAKING OTHER SOLICITA25 TIONS.—Section 615 of the Fair Credit Reporting Act (15
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1 U.S.C. 1681m) is amended by adding at the end the follow2 ing new subsection:

3 ‘‘(e) DUTIES OF USERS MAKING OTHER WRITTEN SO4 LICITATIONS ON THE BASIS OF INFORMATION CONTAINED

5 IN CONSUMER FILES.—

6 ‘‘(1) IN GENERAL.—A person who, in connection

7 with any direct marketing transaction that is not ini8 tiated by a consumer, uses a consumer report on that

9 consumer that is provided to that person under sec10 tion 604(a)(3)(E)(i)(II), shall provide with the initial

11 written solicitation made to the consumer regarding

12 the transaction a clear and conspicuous statement

13 that—

14 ‘‘(A) information contained in the consum15 er’s consumer report was used in connection with

16 the transaction;

17 ‘‘(B) the consumer has a right to prohibit

18 information contained in the consumer’s file

19 with any consumer reporting agency from being

20 used in connection with any direct marketing

21 transaction that is not initiated by the

22 consumer; and

23 ‘‘(C) the consumer may exercise the right re24 ferred to in subparagraph (B) by notifying a no-
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1 tification system established under section

2 604(e).

3 ‘‘(2) DISCLOSURE OF ADDRESS AND TELEPHONE

4 NUMBER.—A statement under paragraph (1) shall in5 clude the address and toll-free telephone number of the

6 appropriate notification system established under sec7 tion 604(e).

8 ‘‘(3) AUTHORITY OF FEDERAL AGENCIES RE9 GARDING UNFAIR OR DECEPTIVE ACTS OR PRACTICES

10 NOT AFFECTED.—This section is not intended to affect

11 the authority of any Federal agency to enforce a pro12 hibition against unfair or deceptive acts or practices,

13 including the making of false or misleading state14 ments in connection with a direct marketing trans15 action that is not initiated by the consumer.’’.

16 (d) CONFORMING AMENDMENT.—Section 615(c) of the

17 Fair Credit Reporting Act (15 U.S.C. 1681m(c)) is amend18 ed by striking ‘‘subsections (a) and (b)’’ and inserting ‘‘this

19 section’’.

20 SEC. 412. CIVIL LIABILITY.

21 (a) CIVIL LIABILITY FOR WILLFUL NONCOMPLI22 ANCE.—Section 616 of the Fair Credit Reporting Act (15

23 U.S.C. 1681n) is amended by striking ‘‘Any consumer re24 porting agency or user of information which’’ and inserting

25 ‘‘(a) IN GENERAL.—Any person who’’.
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1 (b) MINIMUM CIVIL LIABILITY FOR WILLFUL NON2 COMPLIANCE.—Section 616(1) of the Fair Credit Reporting

3 Act (15 U.S.C. 1681n(1)) is amended to read as follows:

4 ‘‘(1)(A) any actual damages sustained by the

5 consumer as a result of the failure or damages of not

6 less than $100 and not more than $1,000; or

7 ‘‘(B) in the case of liability of a natural person

8 for obtaining a consumer report under false pretenses

9 or knowingly without a permissible purpose, actual

10 damages sustained by the consumer as a result of the

11 failure or $1,000, whichever is greater;’’.

12 (c) CIVIL LIABILITY FOR KNOWING NONCOMPLI13 ANCE.—Section 616 of the Fair Credit Reporting Act (15

14 U.S.C. 1681n) is amended by adding at the end the follow15 ing:

16 ‘‘(c) CIVIL LIABILITY FOR KNOWING NONCOMPLI17 ANCE.—Any person who obtains a consumer report from

18 a consumer reporting agency under false pretenses or know19 ingly without a permissible purpose shall be liable to the

20 consumer reporting agency for actual damages sustained by

21 the consumer reporting agency or $1,000, whichever is

22 greater.’’.

23 (d) CIVIL LIABILITY FOR NEGLIGENT NONCOMPLI24 ANCE.—Section 617 of the Fair Credit Reporting Act (15

25 U.S.C. 1681o) is amended by striking ‘‘Any consumer re-
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1 porting agency or user of information which’’ and inserting

2 ‘‘(a) IN GENERAL.—Any person who’’.

3 (e) ATTORNEY’S FEES.—

4 (1) WILLFUL NONCOMPLIANCE.—Section 616 of

5 the Fair Credit Reporting Act (15 U.S.C. 1681n) is

6 amended by adding at the end the following new sub7 section:

8 ‘‘(b) ATTORNEY’S FEES.—On a finding by the court

9 that an unsuccessful pleading, motion, or other paper filed

10 in connection with an action under this section was filed

11 in bad faith or for purposes of harassment, the court shall

12 award to the prevailing party attorney’s fees reasonable in

13 relation to the work expended in responding to the pleading,

14 motion, or other paper.’’.

15 (2) NEGLIGENT NONCOMPLIANCE.—Section 617

16 of the Fair Credit Reporting Act (15 U.S.C. 1681o)

17 is amended by adding at the end the following new

18 subsection:

19 ‘‘(b) ATTORNEY’S FEES.—On a finding by the court

20 that an unsuccessful pleading, motion, or other paper filed

21 in connection with an action under this section was filed

22 in bad faith or for purposes of harassment, the court shall

23 award to the prevailing party attorney’s fees reasonable in

24 relation to the work expended in responding to the pleading,

25 motion, or other paper.’’.
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1 SEC. 413. RESPONSIBILITIES OF PERSONS WHO FURNISH

2 INFORMATION TO CONSUMER REPORTING

3 AGENCIES.

4 (a) IN GENERAL.—The Fair Credit Reporting Act (15

5 U.S.C. 1681 et seq.) is amended—

6 (1) by redesignating section 623 as section 624;

7 and

8 (2) by inserting after section 622 the following:

9 ‘‘SEC. 623. RESPONSIBILITIES OF FURNISHERS OF INFOR10 MATION TO CONSUMER REPORTING AGEN11 CIES.

12 ‘‘(a) DUTY OF FURNISHERS OF INFORMATION TO PRO13 VIDE COMPLETE AND ACCURATE INFORMATION.—

14 ‘‘(1) PROHIBITIONS.—A person shall not furnish

15 any information relating to a consumer to any

16 consumer reporting agency if the person knows that

17 the information is incomplete or inaccurate.

18 ‘‘(2) DUTY TO CORRECT AND UPDATE INFORMA19 TION.—A person who—

20 ‘‘(A) regularly and in the ordinary course

21 of business furnishes information to one or more

22 consumer reporting agencies about the person’s

23 transactions or experiences with any consumer;

24 and
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1 ‘‘(B) has furnished to a consumer reporting

2 agency information that the person determines is

3 not complete or accurate;

4 shall promptly notify the consumer reporting agency

5 of that determination and provide to the agency any

6 corrections to that information, or any additional in7 formation, that is necessary to make the information

8 provided by the person to the agency complete and ac9 curate, and shall not thereafter furnish to the agency

10 any of the information that remains not complete or

11 accurate.

12 ‘‘(3) DUTY TO PROVIDE NOTICE OF DISPUTE.—

13 If the completeness or accuracy of any information

14 furnished by any person to any consumer reporting

15 agency is disputed to such person by a consumer, the

16 person may not furnish the information to any

17 consumer reporting agency without notice that such

18 information is disputed by the consumer.

19 ‘‘(4) DUTY TO PROVIDE NOTICE OF CLOSED AC20 COUNTS.—A person who regularly and in the ordi21 nary course of business furnishes information to a

22 consumer reporting agency regarding a consumer who

23 has a credit account with that person shall notify the

24 agency of the voluntary closure of the account by the
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1 consumer, in information regularly furnished for the

2 period in which the account is closed.

3 ‘‘(5) DUTY TO PROVIDE NOTICE OF DELINQUENCY

4 OF ACCOUNTS.—A person who furnishes information

5 to a consumer reporting agency regarding a delin6 quent account being placed for collection, charged to

7 profit or loss, or subjected to any similar action shall,

8 not later than 90 days after furnishing the informa9 tion, notify the agency of the month and year of the

10 commencement of the delinquency that immediately

11 preceded the action.

12 ‘‘(b) DUTIES OF FURNISHERS OF INFORMATION UPON

13 NOTICE OF DISPUTE.—

14 ‘‘(1) IN GENERAL.—After receiving notice pursu15 ant to section 611(a)(2) of a dispute with regard to

16 the completeness or accuracy of any information pro17 vided by a person to a consumer reporting agency, the

18 person shall—

19 ‘‘(A) conduct an investigation with respect

20 to the disputed information;

21 ‘‘(B) review all relevant information pro22 vided by the consumer reporting agency pursu23 ant to section 611(a)(2);

24 ‘‘(C) report the results of the investigation

25 to the consumer reporting agency; and
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1 ‘‘(D) if the investigation finds that the in2 formation is incomplete or inaccurate, report

3 those results to all other consumer reporting

4 agencies to which the person furnished the infor5 mation and that compile and maintain files on

6 consumers on a nationwide basis.

7 ‘‘(2) DEADLINE.—A person shall complete all in8 vestigations, reviews, and reports required under

9 paragraph (1) regarding information provided by the

10 person to a consumer reporting agency, prior to the

11 expiration of the period under section 611(a)(1) with12 in which the consumer reporting agency is required

13 to complete actions required by that section regarding

14 that information.

15 ‘‘(c) LIMITATION ON LIABILITY.—Sections 616 and

16 617 do not apply to any failure to comply with subsection

17 (a), except as provided in section 621(c)(1)(B).

18 ‘‘(d) LIMITATION ON ENFORCEMENT.—Subsection (a)

19 shall be enforced exclusively under section 621 by the Fed20 eral agencies and officials and the State officials identified

21 in that section.’’.

22 (b) CONFORMING AMENDMENT.—The table of sections

23 at the beginning of the Fair Credit Reporting Act (15

24 U.S.C. 1681a et seq.) is amended by striking the item relat25 ing to section 623 and inserting the following:
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‘‘623. Responsibilities of furnishers of information to consumer reporting agencies.

‘‘624. Relation to State laws.’’.

1 SEC. 414. INVESTIGATIVE CONSUMER REPORTS.

2 Section 606 of the Fair Credit Reporting Act (15

3 U.S.C. 1681d) is amended—

4 (1) in subsection (a)(1), by striking ‘‘or’’ after

5 the semicolon at the end and inserting ‘‘and’’;

6 (2) by striking subsection (a)(2) and inserting

7 the following:

8 ‘‘(2) the person certifies or has certified to the

9 consumer reporting agency that—

10 ‘‘(A) the person has made the disclosures to

11 the consumer required by paragraph (1); and

12 ‘‘(B) the person will comply with subsection

13 (b).’’;

14 (3) in subsection (b), by striking ‘‘shall’’ the sec15 ond place such term appears; and

16 (4) by adding at the end the following new sub17 section:

18 ‘‘(d) PROHIBITIONS.—

19 ‘‘(1) CERTIFICATION.—A consumer reporting

20 agency shall not prepare or furnish an investigative

21 consumer report unless the agency has received a cer22 tification under subsection (a)(2) from the person who

23 requested the report.
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1 ‘‘(2) INQUIRIES.—A consumer reporting agency

2 shall not make an inquiry for the purpose of prepar3 ing an investigative consumer report on a consumer

4 for employment purposes if the making of the inquiry

5 by an employer or prospective employer of the

6 consumer would violate any applicable Federal or

7 State equal employment opportunity law or regula8 tion.

9 ‘‘(3) CERTAIN PUBLIC RECORD INFORMATION.—

10 Except as otherwise provided in section 613, a

11 consumer reporting agency shall not furnish an inves12 tigative consumer report that includes information

13 that is a matter of public record and that relates to

14 an arrest, indictment, conviction, civil judicial ac15 tion, tax lien, or outstanding judgment, unless the

16 agency has verified the accuracy of the information

17 during the 30-day period ending on the date on which

18 the report is furnished.

19 ‘‘(4) CERTAIN ADVERSE INFORMATION.—A

20 consumer reporting agency shall not prepare or fur21 nish an investigative consumer report on a consumer

22 that contains information that is adverse to the inter23 est of the consumer and that is obtained through a

24 personal interview with a neighbor, friend, or associ25 ate of the consumer or with another person with
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1 whom the consumer is acquainted or who has knowl2 edge of such item of information, unless—

3 ‘‘(A) the agency has followed reasonable pro4 cedures to obtain confirmation of the informa5 tion, from an additional source that has inde6 pendent and direct knowledge of the information;

7 or

8 ‘‘(B) the person interviewed is the best pos9 sible source of the information.’’.

10 SEC. 415. INCREASED CRIMINAL PENALTIES FOR OBTAIN11 ING INFORMATION UNDER FALSE PRE12 TENSES.

13 (a) OBTAINING INFORMATION UNDER FALSE PRE14 TENSES.—Section 619 of the Fair Credit Reporting Act (15

15 U.S.C. 1681q) is amended by striking ‘‘fined not more than

16 $5,000 or imprisoned not more than one year, or both’’ and

17 inserting ‘‘fined under title 18, United States Code, impris18 oned for not more than 2 years, or both’’.

19 (b) UNAUTHORIZED DISCLOSURES BY OFFICERS OR

20 EMPLOYEES.—Section 620 of the Fair Credit Reporting Act

21 (15 U.S.C. 1681r) is amended by striking ‘‘fined not more

22 than $5,000 or imprisoned not more than one year, or both’’

23 and inserting ‘‘fined under title 18, United States Code,

24 imprisoned for not more than 2 years, or both’’.
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1 SEC. 416. ADMINISTRATIVE ENFORCEMENT.

2 (a) AVAILABLE ENFORCEMENT POWERS.—Section

3 621(a) of the Fair Credit Reporting Act (15 U.S.C.

4 1681s(a))—

5 (1) is amended in the second sentence, by strik6 ing ‘‘Act and shall be subject to enforcement by the

7 Federal Trade Commission under section 5(b) thereof

8 with respect to any consumer reporting agency or

9 person subject to enforcement by the Federal Trade

10 Commission pursuant to this subsection, irrespective’’

11 and inserting ‘‘Act. All functions and powers of the

12 Federal Trade Commission under the Federal Trade

13 Commission Act shall be available to the Commission

14 to enforce compliance with this title by any person

15 subject to enforcement by the Federal Trade Commis16 sion pursuant to this subsection and not subject to en17 forcement pursuant to section 8 of the Federal Deposit

18 Insurance Act, irrespective’’;

19 (2) as amended by paragraph (1) of this sub20 section, is amended by inserting before the third pe21 riod the following: ‘‘, including the power to enforce

22 the provisions of this title in the same manner as if

23 the violation had been a violation of any Federal

24 Trade Commission trade regulation rule’’; and

25 (3) as amended by paragraph (1) of this sub26 section, is amended by adding after the third period
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1 the following: ‘‘Notwithstanding the preceding sen2 tence, a court may not impose any civil penalty on

3 a person for a violation of section 623(a)(1) unless the

4 person has been enjoined from committing the viola5 tion, or ordered not to commit the violation, in an ac6 tion or proceeding brought by or on behalf of the Fed7 eral Trade Commission and has violated the injunc8 tion or order, and the court may not impose any civil

9 penalty for any violation occurring before the date of

10 the violation of the injunction or order.’’.

11 (b) AGENCIES RESPONSIBLE FOR ENFORCEMENT.—

12 Section 621 of the Fair Credit Reporting Act (15 U.S.C.

13 1681s) is amended—

14 (1) in subsection (a), by inserting ‘‘ENFORCE15 MENT BY FEDERAL TRADE COMMISSION.—’’ before

16 ‘‘Compliance with the requirements’’; and

17 (2) in subsection (b), by striking the matter pre18 ceding paragraph (1) and inserting the following:

19 ‘‘(b) ENFORCEMENT BY OTHER AGENCIES.—Compli20 ance with the requirements imposed under this title with

21 respect to consumer reporting agencies, persons who use

22 consumer reports from such agencies, persons who furnish

23 information to such agencies, and users of information that

24 are subject to subsection (d) or (e) of section 615 shall be

25 enforced under—’’.
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1 SEC. 417. STATE ENFORCEMENT OF FAIR CREDIT REPORT2 ING ACT.

3 Section 621 of the Fair Credit Reporting Act (15

4 U.S.C. 1681s) is amended—

5 (1) by redesignating subsection (c) as subsection

6 (d); and

7 (2) by inserting after subsection (b) the following

8 new subsection:

9 ‘‘(c) STATE ACTION FOR VIOLATIONS.—

10 ‘‘(1) AUTHORITY OF STATES.—In addition to

11 such other remedies as are provided under State law,

12 if the chief law enforcement officer of a State, or an

13 official or agency designated by a State, has reason

14 to believe that any person has violated or is violating

15 this title, the State—

16 ‘‘(A) may bring an action to enjoin such

17 violation in any appropriate United States dis18 trict court or in any other court of competent ju19 risdiction;

20 ‘‘(B) subject to paragraph (5), may bring

21 an action on behalf of the residents of the State

22 to recover—

23 ‘‘(i) damages for which the person is

24 liable to such residents under sections 616

25 and 617 as a result of the violation;
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1 ‘‘(ii) in the case of a violation of sec2 tion 623(a), damages for which the person

3 would, but for section 623(c), be liable to

4 such residents as a result of the violation; or

5 ‘‘(iii) damages of not more than $1,000

6 for each willful or negligent violation; and

7 ‘‘(C) in the case of any successful action

8 under subparagraph (A) or (B), shall be award9 ed the costs of the action and reasonable attorney

10 fees as determined by the court.

11 ‘‘(2) RIGHTS OF FEDERAL REGULATORS.—The

12 State shall serve prior written notice of any action

13 under paragraph (1) upon the Federal Trade Com14 mission or the appropriate Federal regulator deter15 mined under subsection (b) and provide the Commis16 sion or appropriate Federal regulator with a copy of

17 its complaint, except in any case in which such prior

18 notice is not feasible, in which case the State shall

19 serve such notice immediately upon instituting such

20 action. The Federal Trade Commission or appro21 priate Federal regulator shall have the right—

22 ‘‘(A) to intervene in the action;

23 ‘‘(B) upon so intervening, to be heard on all

24 matters arising therein;
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1 ‘‘(C) to remove the action to the appropriate

2 United States district court; and

3 ‘‘(D) to file petitions for appeal.

4 ‘‘(3) INVESTIGATORY POWERS.—For purposes of

5 bringing any action under this subsection, nothing in

6 this subsection shall prevent the chief law enforcement

7 officer, or an official or agency designated by a State,

8 from exercising the powers conferred on the chief law

9 enforcement officer or such official by the laws of such

10 State to conduct investigations or to administer oaths

11 or affirmations or to compel the attendance of wit12 nesses or the production of documentary and other

13 evidence.

14 ‘‘(4) LIMITATION ON STATE ACTION WHILE FED15 ERAL ACTION PENDING.—If the Federal Trade Com16 mission or the appropriate Federal regulator has in17 stituted a civil action or an administrative action

18 under section 8 of the Federal Deposit Insurance Act

19 for a violation of this title, no State may, during the

20 pendency of such action, bring an action under this

21 section against any defendant named in the com22 plaint of the Commission or the appropriate Federal

23 regulator for any violation of this title that is alleged

24 in that complaint.
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1 ‘‘(5) LIMITATIONS ON STATE ACTIONS FOR VIOLA2 TION OF SECTION 623(a)(1).—

3 ‘‘(A) VIOLATION OF INJUNCTION RE4 QUIRED.—A State may not bring an action

5 against a person under paragraph (1)(B) for a

6 violation of section 623(a)(1), unless—

7 ‘‘(i) the person has been enjoined from

8 committing the violation, in an action

9 brought by the State under paragraph

10 (1)(A); and

11 ‘‘(ii) the person has violated the in12 junction.

13 ‘‘(B) LIMITATION ON DAMAGES RECOVER14 ABLE.—In an action against a person under

15 paragraph (1)(B) for a violation of section

16 623(a)(1), a State may not recover any damages

17 incurred before the date of the violation of an in18 junction on which the action is based.’’.

19 SEC. 418. FEDERAL RESERVE BOARD AUTHORITY.

20 Section 621 of the Fair Credit Reporting Act (15

21 U.S.C. 1681s) is amended by adding at the end the follow22 ing new subsection:

23 ‘‘(e) INTERPRETIVE AUTHORITY.—The Board of Gov24 ernors of the Federal Reserve System may issue interpreta25 tions of any provision of this title as such provision may
274

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1 apply to any persons identified under paragraph (1), (2),

2 and (3) of subsection (b), or to the holding companies and

3 affiliates of such persons, in consultation with Federal

4 agencies identified in paragraphs (1), (2), and (3) of sub5 section (b).’’.

6 SEC. 419. PREEMPTION OF STATE LAW.

7 Section 624 of the Fair Credit Reporting Act (as redes8 ignated by section 413(a) of this Act) is amended—

9 (1) by striking ‘‘This title’’ and inserting ‘‘(a) IN

10 GENERAL.—Except as provided in subsections (b) and

11 (c), this title’’; and

12 (2) by adding at the end the following new sub13 section:

14 ‘‘(b) GENERAL EXCEPTIONS.—No requirement or pro15 hibition may be imposed under the laws of any State—

16 ‘‘(1) with respect to any subject matter regulated

17 under—

18 ‘‘(A) subsection (c) or (e) of section 604, re19 lating to the prescreening of consumer reports;

20 ‘‘(B) section 611, relating to the time by

21 which a consumer reporting agency must take

22 any action, including the provision of notifica23 tion to a consumer or other person, in any pro24 cedure related to the disputed accuracy of infor25 mation in a consumer’s file, except that this sub-
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1 paragraph does not apply to any State law in

2 effect on the date of enactment of the Consumer

3 Reporting Reform Act of 1995;

4 ‘‘(C) subsections (a) and (b) of section 615,

5 relating to the duties of a person who takes any

6 adverse action with respect to a consumer;

7 ‘‘(D) section 615(d), relating to the duties of

8 persons who use a consumer report of a

9 consumer in connection with any credit or in10 surance transaction that is not initiated by the

11 consumer and that consists of a firm offer of

12 credit or insurance;

13 ‘‘(E) section 615(e), relating to the duties of

14 persons who use a consumer report of a

15 consumer in connection with any direct market16 ing transaction that is not initiated by the

17 consumer;

18 ‘‘(F) section 605, relating to information

19 contained in consumer reports, except that this

20 subparagraph does not apply to any State law

21 in effect on the date of enactment of the

22 Consumer Reporting Reform Act of 1995; or

23 ‘‘(G) section 623(b)(2), relating to the time

24 by which a person must take any action required

25 under section 623(b)(1) with respect to an inves-
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1 tigation of information furnished by the person

2 to a consumer reporting agency, except that this

3 subparagraph does not apply to any State law

4 in effect on the date of enactment of the

5 Consumer Reporting Reform Act of 1995;

6 ‘‘(2) with respect to the exchange of information

7 among persons affiliated by common ownership or

8 common corporate control; or

9 ‘‘(3) with respect to the form and content of any

10 disclosure required to be made under section 609(c).

11 ‘‘(c) DEFINITION OF FIRM OFFER OF CREDIT OR IN12 SURANCE.—Notwithstanding any definition of the term

13 ‘firm offer of credit or insurance’ (or any equivalent term)

14 under the laws of any State, the definition of that term

15 contained in section 603(l) shall be construed to apply in

16 the enforcement and interpretation of the laws of any State

17 governing consumer reports.

18 ‘‘(d) LIMITATIONS.—Subsections (b) and (c)—

19 ‘‘(1) do not affect any settlement, agreement, or

20 consent judgment between any State Attorney General

21 and any consumer reporting agency in effect on the

22 date of enactment of the Consumer Reporting Reform

23 Act of 1995; and
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1 ‘‘(2) do not apply to any provision of State law

2 (including any provision of a State constitution)

3 that—

4 ‘‘(A) is enacted after January 1, 2004;

5 ‘‘(B) states explicitly that the provision is

6 intended to supplement this Act; and

7 ‘‘(C) gives greater protection to consumers

8 than is provided under this Act.’’.

9 SEC. 420. ACTION BY FTC AND FEDERAL RESERVE BOARD.

10 (a) MODIFICATION OF REQUIREMENTS BY FTC AND

11 FEDERAL RESERVE BOARD AUTHORIZED.—

12 (1) IN GENERAL.—Section 621 of the Fair Credit

13 Reporting Act (15 U.S.C. 1681s) is amended by add14 ing at the end the following new subsection:

15 ‘‘(f) MODIFICATION OF REQUIREMENTS BY FTC AU16 THORIZED.—

17 ‘‘(1) IN GENERAL.—If the Federal Trade Com18 mission considers such action necessary for the protec19 tion of consumers, the Commission may, after con20 sultation with appropriate State regulatory and law

21 enforcement agencies, promulgate regulations in ac22 cordance with section 553 of title 5, United States

23 Code, to impose, with respect to consumer reporting

24 agencies and all other persons subject to this title
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1 other than any person described in paragraph (1),

2 (2), or (3) of subsection (b), requirements—

3 ‘‘(A) that are more stringent than those im4 posed under—

5 ‘‘(i) section 611, relating to the time by

6 which a consumer reporting agency must

7 take any action, including the provision of

8 notification to a consumer or other person,

9 in any procedure related to the disputed ac10 curacy of information in a consumer’s file;

11 ‘‘(ii) section 615(a), relating to the dis12 closure requirements applicable to a person

13 who takes any adverse action with respect

14 to a consumer on the basis of information

15 contained in a consumer report;

16 ‘‘(iii) section 615(d), relating to the

17 disclosure requirements applicable to per18 sons who use a consumer report on a

19 consumer in connection with any credit or

20 insurance transaction that is not initiated

21 by the consumer and that consists of a firm

22 offer of credit or insurance; or

23 ‘‘(iv) section 623(b)(2), relating to the

24 time by which a person must take any ac25 tion required under section 623(b)(1) with
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1 respect to an investigation of information

2 furnished by the person to a consumer re3 porting agency; and

4 ‘‘(B) with respect to the form and content of

5 any disclosure required to be made under section

6 609(c).

7 ‘‘(2) FEDERAL RESERVE BOARD AUTHORITY.—If

8 the Board of Governors of the Federal Reserve System

9 determines such action to be necessary for the protec10 tion of consumers, the Board may prescribe regula11 tions imposing on persons described in paragraph

12 (1), (2), or (3) of subsection (b) or on the holding

13 companies and affiliates of such persons, any require14 ment described in paragraph (1) of this subsection.’’.

15 (2) CONFORMING AMENDMENTS.—

16 (A) The section heading and section des17 ignation for section 621 of the Fair Credit Re18 porting Act (15 U.S.C. 1681s) are amended to

19 read as follows:

20 ‘‘SEC. 621. ADMINISTRATIVE ENFORCEMENT AND AUTHORI21 TIES; STATE ACTIONS.’’.

22 (B) The table of sections at the beginning of

23 the Fair Credit Reporting Act is amended by

24 striking the item relating to section 621 and in25 serting the following:

‘‘621. Administrative enforcement and authorities; State actions.’’.
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1 (b) DEADLINE TO PRESCRIBE MATTERS.—The Fed2 eral Trade Commission shall prescribe all matters required

3 by this title (including the amendments made by this title)

4 to be prescribed by that Commission, before the end of the

5 300-day period beginning on the date of enactment of this

6 Act.

7 SEC. 421. AMENDMENT TO FAIR DEBT COLLECTION PRAC8 TICES ACT.

9 (a) IN GENERAL.—Section 807(11) of the Fair Debt

10 Collection Practices Act (15 U.S.C. 1692e), relating to cer11 tain practices constituting prohibited representations, is

12 amended to read as follows:

13 ‘‘(11) The failure to disclose clearly, in any writ14 ten communication made to collect a debt or to obtain

15 information about a consumer, that the debt collector

16 is attempting to collect a debt and that any informa17 tion obtained will be used for that purpose, except

18 that this paragraph does not apply to a communica19 tion—

20 ‘‘(A) to acquire location information in ac21 cordance with section 804;

22 ‘‘(B) made solely to acknowledge receipt of

23 moneys or payments;
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1 ‘‘(C) that consists solely of information re2 quested by the consumer or the consumer’s attor3 ney; or

4 ‘‘(D) that is a formal pleading made in

5 connection with a legal action.’’.

6 (b) EFFECTIVE DATE.—The amendment made by sub7 section (a) shall become effective 90 days after the date of

8 enactment of this Act.

9 SEC. 422. FURNISHING CONSUMER REPORTS FOR CERTAIN

10 PURPOSES RELATING TO CHILD SUPPORT.

11 Section 604(a) of the Fair Credit Reporting Act (15

12 U.S.C. 1681b) (as so designated by section 403 of this Act)

13 is amended by adding at the end the following new para14 graph:

15 ‘‘(4) In response to a request by the head of a de16 partment, agency, or office of any State or any politi17 cal subdivision of any State that is responsible under

18 law for enforcing child support orders (or an official

19 authorized by the head of any such department, agen20 cy, or office), if the person making the request certifies

21 to the consumer reporting agency that—

22 ‘‘(A) the consumer report is needed to estab23 lish an individual’s capacity to make child sup24 port payments, or to determine the appropriate

25 level of such payments;
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1 ‘‘(B) the person has provided not less than

2 10 days prior written notice to the consumer

3 whose report is requested, by certified or reg4 istered mail to the last known address of the

5 consumer, that the report will be requested; and

6 ‘‘(C) the consumer report obtained pursuant

7 to this paragraph will be kept confidential, will

8 be used solely for establishing child support pay9 ment obligations, and will not be used in connec10 tion with any other civil, administrative, or

11 criminal proceeding or for any other purpose.’’.

12 SEC. 423. DISCLOSURE OF INFORMATION AND CONSUMER

13 REPORTS TO FBI FOR COUNTERINTEL14 LIGENCE PURPOSES.

15 (a) IN GENERAL.—The Fair Credit Reporting Act (15

16 U.S.C. 1681 et seq.) is amended by adding at the end the

17 following new section:

18 ‘‘SEC. 625. DISCLOSURES TO FBI FOR COUNTERINTEL19 LIGENCE PURPOSES.

20 ‘‘(a) IDENTITY OF FINANCIAL INSTITUTIONS.—Not21 withstanding section 604 or any other provision of this

22 title, a consumer reporting agency shall furnish to the Fed23 eral Bureau of Investigation the names and addresses of

24 all financial institutions (as that term is defined in section

25 1101 of the Right to Financial Privacy Act of 1978) at
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1 which a consumer maintains or has maintained an ac2 count, to the extent that information is in the files of the

3 agency, when presented with a written request for that in4 formation, signed by the Director of the Federal Bureau of

5 Investigation, or the Director’s designee, that certifies com6 pliance with this section. The Director or the Director’s des7 ignee may make such a certification only if the Director

8 or the Director’s designee has determined in writing that—

9 ‘‘(1) such information is necessary for the con10 duct of an authorized foreign counterintelligence in11 vestigation; and

12 ‘‘(2) there are specific and articulable facts giv13 ing reason to believe that the consumer—

14 ‘‘(A) is a foreign power (as defined in sec15 tion 101 of the Foreign Intelligence Surveillance

16 Act of 1978) or a person who is not a United

17 States person (as defined in such section 101)

18 and is an official of a foreign power; or

19 ‘‘(B) is an agent of a foreign power and is

20 engaging or has engaged in international terror21 ism (as that term is defined in section 101(c) of

22 the Foreign Intelligence Surveillance Act of

23 1978) or clandestine intelligence activities that

24 involve or may involve a violation of criminal

25 statutes of the United States.
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1 ‘‘(b) IDENTIFYING INFORMATION.—Notwithstanding

2 the provisions of section 604 or any other provision of this

3 title, a consumer reporting agency shall furnish identifying

4 information respecting a consumer, limited to name, ad5 dress, former addresses, places of employment, or former

6 places of employment, to the Federal Bureau of Investiga7 tion when presented with a written request, signed by the

8 Director or the Director’s designee, that certifies compliance

9 with this subsection. The Director or the Director’s designee

10 may make such a certification only if the Director or the

11 Director’s designee has determined in writing that—

12 ‘‘(1) such information is necessary to the conduct

13 of an authorized counterintelligence investigation;

14 and

15 ‘‘(2) there is information giving reason to believe

16 that the consumer has been, or is about to be, in con17 tact with a foreign power or an agent of a foreign

18 power (as defined in section 101 of the Foreign Intel19 ligence Surveillance Act of 1978).

20 ‘‘(c) COURT ORDER FOR DISCLOSURE OF CONSUMER

21 REPORTS.—Notwithstanding section 604 or any other pro22 vision of this title, if requested in writing by the Director

23 of the Federal Bureau of Investigation, or a designee of the

24 Director, a court may issue an order ex parte directing a

25 consumer reporting agency to furnish a consumer report to
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1 the Federal Bureau of Investigation, upon a showing in

2 camera that—

3 ‘‘(1) the consumer report is necessary for the con4 duct of an authorized foreign counterintelligence in5 vestigation; and

6 ‘‘(2) there are specific and articulable facts giv7 ing reason to believe that the consumer whose

8 consumer report is sought—

9 ‘‘(A) is an agent of a foreign power; and

10 ‘‘(B) is engaging or has engaged in inter11 national terrorism (as that term is defined in

12 section 101(c) of the Foreign Intelligence Surveil13 lance Act of 1978) or clandestine intelligence ac14 tivities that involve or may involve a violation

15 of criminal statutes of the United States.

16 The terms of an order issued under this subsection shall

17 not disclose that the order is issued for purposes of a coun18 terintelligence investigation.

19 ‘‘(d) CONFIDENTIALITY.—No consumer reporting agen20 cy or officer, employee, or agent of a consumer reporting

21 agency shall disclose to any person, other than those officers,

22 employees, or agents of a consumer reporting agency nec23 essary to fulfill the requirement to disclose information to

24 the Federal Bureau of Investigation under this section, that

25 the Federal Bureau of Investigation has sought or obtained
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1 the identity of financial institutions or a consumer report

2 respecting any consumer under subsection (a), (b), or (c)

3 and no consumer reporting agency or officer, employee, or

4 agent of a consumer reporting agency shall include in any

5 consumer report any information that would indicate that

6 the Federal Bureau of Investigation has sought or obtained

7 such information or a consumer report.

8 ‘‘(e) PAYMENT OF FEES.—The Federal Bureau of In9 vestigation shall, subject to the availability of appropria10 tions, pay to the consumer reporting agency assembling or

11 providing reports or information in accordance with proce12 dures established under this section, a fee for reimbursement

13 for such costs as are reasonably necessary and that have

14 been directly incurred in searching, reproducing, or trans15 porting books, papers, records, or other data required or re16 quested to be produced under this section.

17 ‘‘(f) LIMIT ON DISSEMINATION.—The Federal Bureau

18 of Investigation may not disseminate information obtained

19 pursuant to this section outside of the Federal Bureau of

20 Investigation, except to the Department of Justice as may

21 be necessary for the approval or conduct of a foreign coun22 terintelligence investigation, or, if the information concerns

23 a person subject to the Uniform Code of Military Justice,

24 to appropriate investigative authorities within the military
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1 department concerned as may be necessary for the conduct

2 of a joint foreign counterintelligence investigation.

3 ‘‘(g) RULES OF CONSTRUCTION.—Nothing in this sec4 tion shall be construed to prohibit information from being

5 furnished by the Federal Bureau of Investigation pursuant

6 to a subpoena or court order, or in connection with a judi7 cial or administrative proceeding to enforce this Act. Noth8 ing in this section shall be construed to authorize or permit

9 the withholding of information from the Congress.

10 ‘‘(h) REPORTS TO CONGRESS.—On a semiannual

11 basis, the Attorney General of the United States shall fully

12 inform—

13 ‘‘(1) the Permanent Select Committee on Intel14 ligence and the Committee on Banking and Financial

15 Services of the House of Representatives; and

16 ‘‘(2) the Select Committee on Intelligence and the

17 Committee on Banking, Housing, and Urban Affairs

18 of the Senate;

19 concerning all requests made pursuant to subsections (a),

20 (b), and (c).

21 ‘‘(i) DAMAGES.—Any agency or department of the

22 United States obtaining or disclosing any consumer reports,

23 records, or information contained therein in violation of

24 this section is liable to the consumer to whom such consumer
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1 reports, records, or information relate in an amount equal

2 to the sum of—

3 ‘‘(1) $100, without regard to the volume of

4 consumer reports, records, or information involved;

5 ‘‘(2) any actual damages sustained by the

6 consumer as a result of the disclosure;

7 ‘‘(3) if the violation is found to have been willful

8 or intentional, such punitive damages as a court may

9 allow; and

10 ‘‘(4) in the case of any successful action to en11 force liability under this subsection, the costs of the

12 action, together with reasonable attorney fees, as de13 termined by the court.

14 ‘‘(j) DISCIPLINARY ACTIONS FOR VIOLATIONS.—If a

15 court determines that any agency or department of the

16 United States has violated any provision of this section and

17 the court finds that the circumstances surrounding the vio18 lation raise questions of whether or not an officer or em19 ployee of the agency or department acted willfully or inten20 tionally with respect to the violation, the agency or depart21 ment shall promptly initiate a proceeding to determine

22 whether or not disciplinary action is warranted against the

23 officer or employee that was responsible for the violation.

24 ‘‘(k) GOOD-FAITH EXCEPTION.—Notwithstanding any

25 other provision of this title, any consumer reporting agency
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1 or agent or employee thereof making disclosure of consumer

2 reports or identifying information pursuant to this sub3 section in good-faith reliance upon a certification of the

4 Federal Bureau of Investigation pursuant to provisions of

5 this section shall not be liable to any person for such disclo6 sure under this title, the constitution of any State, or any

7 law or regulation of any State or any political subdivision

8 of any State.

9 ‘‘(l) LIMITATION OF REMEDIES.—Notwithstanding

10 any other provision of this title, the remedies and sanctions

11 set forth in this section shall be the only judicial remedies

12 and sanctions for violation of this section.

13 ‘‘(m) INJUNCTIVE RELIEF.—In addition to any other

14 remedy contained in this section, injunctive relief shall be

15 available to require compliance with the procedures of this

16 section. In the event of any successful action under this sub17 section, costs together with reasonable attorney fees, as de18 termined by the court, may be recovered.’’.

19 (b) CONFORMING AMENDMENT.—The table of sections

20 at the beginning of the Fair Credit Reporting Act (15

21 U.S.C. 1681a et seq.) is amended by adding after the item

22 relating to section 624 the following:

‘‘625. Disclosures to FBI for counterintelligence purposes.’’.

23 (c) SUNSET.—The amendments made by this section

24 shall become effective on the date of enactment of this Act,

25 and shall remain in effect during the period beginning on
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1 that date of enactment and ending 5 years after that date

2 of enactment.

3 SEC. 424. EFFECTIVE DATE.

4 (a) IN GENERAL.—Except as otherwise specifically

5 provided in this title, the amendments made by this title

6 shall become effective 365 days after the date of enactment

7 of this Act.

8 (b) EARLY COMPLIANCE.—Any person or other entity

9 that is subject to the requirements of this title may, at its

10 option, comply with any provision of this title prior to the

11 date on which that provision becomes effective under this

12 title, in which case, each of the corresponding provisions

13 of this title shall be fully applicable to such person or entity.

14 SEC. 425. RELATIONSHIP TO OTHER LAW.

15 Nothing in this title or the amendments made by this

16 title shall be considered to supersede or otherwise affect sec17 tion 2721 of title 18, United States Code, with respect to

18 motor vehicle records for surveys, marketing, or solicita19 tions.
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1 TITLE V—ASSET CONSERVATION,

2 LENDER LIABILITY, AND DE3 POSIT INSURANCE PROTEC4 TION

5 SEC. 501. SHORT TITLE.

6 This title may be cited as the ‘‘Asset Conservation,

7 Lender Liability, and Deposit Insurance Protection Act of

8 1995’’.

9 SEC. 502. FEDERAL DEPOSIT INSURANCE ACT AMENDMENT.

10 The Federal Deposit Insurance Act (12 U.S.C. 1811

11 et seq.) is amended by adding at the end the following new

12 section:

13 ‘‘SEC. 45. FEDERAL BANKING AND LENDING AGENCY LI14 ABILITY.

15 ‘‘(a) GOVERNMENTAL ENTITIES.—

16 ‘‘(1) BANKING AND LENDING AGENCIES.—Except

17 as provided in paragraph (3), a Federal banking or

18 lending agency shall not be liable under any law im19 posing strict liability for the release or threatened re20 lease of a hazardous substance at or from property

21 (including a right or interest in property) acquired—

22 ‘‘(A) in connection with the exercise of re23 ceivership or conservatorship authority, or the

24 liquidation or winding up of the affairs of an
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1 insured depository institution, including a sub2 sidiary of an insured depository institution;

3 ‘‘(B) in connection with the provision of a

4 loan, a discount, an advance, a guarantee, insur5 ance, or other financial assistance; or

6 ‘‘(C) in connection with property received

7 in a civil or criminal proceeding, or administra8 tive enforcement action, whether by settlement or

9 order.

10 ‘‘(2) APPLICATION OF STATE LAW.—Nothing in

11 this section shall be construed as preempting, affect12 ing, applying to, or modifying a State law, or a

13 right, action, cause of action, or obligation under

14 State law, except that the liability of a Federal bank15 ing or lending agency under a State law shall not ex16 ceed the value of the interest of the agency in the asset

17 giving rise to the liability. Nothing in this section

18 shall prevent a Federal banking or lending agency

19 from agreeing with a State to transfer property to the

20 State in lieu of any liability that might otherwise be

21 imposed under State law.

22 ‘‘(3) LIMITATION.—Notwithstanding paragraph

23 (1), and subject to section 107(d) of the Comprehen24 sive Environmental Response, Compensation, and Li25 ability Act of 1980 and section 9003 of the Solid
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1 Waste Disposal Act, a Federal banking or lending

2 agency that caused or contributed to the release of a

3 hazardous substance may be liable for removal, reme4 dial, corrective, or other response action pertaining to

5 that release.

6 ‘‘(4) SUBSEQUENT PURCHASER.—The immunity

7 provided by paragraph (1) shall extend to the first

8 subsequent purchaser of the property from a Federal

9 banking or lending agency, unless the purchaser—

10 ‘‘(A) would otherwise be liable or poten11 tially liable for all or part of the costs of the re12 moval, remedial, corrective, or other response ac13 tion due to a prior relationship with the prop14 erty;

15 ‘‘(B) is or was affiliated with or related to

16 a party described in subparagraph (A);

17 ‘‘(C) fails to agree to take reasonable steps

18 necessary to remedy the release or threatened re19 lease or to protect public health and safety in a

20 manner consistent with the purposes of applica21 ble environmental laws; or

22 ‘‘(D) causes or contributes to any additional

23 release or threatened release on the property.

24 ‘‘(5) FEDERAL OR STATE ACTION.—If a Federal

25 agency or State environmental agency is required to
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1 take remedial or corrective action due to the failure

2 of a subsequent purchaser to carry out, in good faith,

3 the agreement described in paragraph (4)(C), the sub4 sequent purchaser shall reimburse the Federal or

5 State environmental agency for the costs of the reme6 dial or corrective action. Any such reimbursement

7 shall not exceed the increase in the fair market value

8 of the property attributable to the remedial or correc9 tive action.

10 ‘‘(b) LIEN EXEMPTION.—Notwithstanding any other

11 provision of law, any property held by a subsequent pur12 chaser referred to in subsection (a)(4) or held by a Federal

13 banking or lending agency shall not be subject to a lien

14 for costs or damages associated with the release or threat15 ened release of a hazardous substance existing at the time

16 of the transfer.

17 ‘‘(c) EXEMPTION FROM COVENANTS TO REMEDIATE.—

18 A Federal banking or lending agency shall be exempt from

19 any law requiring the agency to grant a covenant warrant20 ing that a removal, remedial, corrective, or other response

21 action has been, or will in the future be, taken with respect

22 to property acquired in the manner referred to in subsection

23 (a)(1).

24 ‘‘(d) DEFINITIONS.—For purposes of this section, the

25 following definitions shall apply:
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1 ‘‘(1) FEDERAL BANKING OR LENDING AGENCY.—

2 The term ‘Federal banking or lending agency’ means

3 the Corporation, the Resolution Trust Corporation,

4 the Board of Governors of the Federal Reserve System,

5 the Comptroller of the Currency, the Office of Thrift

6 Supervision, a Federal Reserve Bank, a Federal

7 Home Loan Bank, the Department of Housing and

8 Urban Development, the National Credit Union Ad9 ministration Board, the Farm Credit Administration,

10 the Farm Credit System Insurance Corporation, the

11 Farm Credit System Assistance Board, the Farmers

12 Home Administration, the Rural Electrification Ad13 ministration, the Small Business Administration,

14 and any other Federal agency acting in a similar ca15 pacity, in any of their capacities, and their agents or

16 appointees.

17 ‘‘(2) HAZARDOUS SUBSTANCE.—The term ‘haz18 ardous substance’ means—

19 ‘‘(A) any substance defined in section

20 101(14) of the Comprehensive Environmental

21 Response, Compensation, and Liability Act of

22 1980; and

23 ‘‘(B) petroleum.

24 ‘‘(3) RELEASE.—The term ‘release’ has the same

25 meaning as in—
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1 ‘‘(A) section 101(22) of the Comprehensive

2 Environmental Response, Compensation, and Li3 ability Act of 1980, including the use, storage,

4 disposal, treatment, generation, or transpor5 tation of a hazardous substance; and

6 ‘‘(B) section 9001(5) of the Solid Waste Dis7 posal Act.

8 ‘‘(e) SAVINGS CLAUSE.—Nothing in this section

9 shall—

10 ‘‘(1) affect the rights or immunities or other de11 fenses that are available under this Act, the Com12 prehensive Environmental Response, Compensation,

13 and Liability Act of 1980, subtitle I of the Solid

14 Waste Disposal Act, or other applicable law to any

15 party;

16 ‘‘(2) create any liability for any party; or

17 ‘‘(3) create a private right of action against an

18 insured depository institution or lender, a Federal

19 banking or lending agency, or any other party.’’.

20 SEC. 503. CERCLA AMENDMENTS.

21 (a) LENDER AND FIDUCIARY LIABILITY LIMITA22 TIONS.—Title I of the Comprehensive Environmental Re23 sponse, Compensation, and Liability Act of 1980 (42 U.S.C.

24 9601 et seq.) is amended by adding at the end the following

25 new section:
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1 ‘‘SEC. 127. INSURED DEPOSITORY INSTITUTION AND OTHER

2 LENDER LIABILITY.

3 ‘‘(a) LIABILITY LIMITATIONS.—The liability of an in4 sured depository institution or other lender that is liable

5 under any other provision of this Act or subtitle I of the

6 Solid Waste Disposal Act (42 U.S.C. 6991 et seq.) for the

7 release or threatened release of a hazardous substance at,

8 from, or in connection with property—

9 ‘‘(1) acquired through foreclosure;

10 ‘‘(2) subject to a security interest held by the in11 stitution or lender;

12 ‘‘(3) held by a lessor pursuant to the terms of an

13 extension of credit; or

14 ‘‘(4) subject to financial control or financial

15 oversight pursuant to the terms of an extension of

16 credit;

17 shall be limited to the actual benefit conferred on the insti18 tution or lender by a removal, remedial, corrective, or other

19 response action undertaken by another party.

20 ‘‘(b) ACTUAL BENEFIT.—For purposes of this section,

21 the actual benefit conferred on an institution or lender by

22 a removal, remedial, corrective, or other response action

23 shall be equal to the net gain, if any, realized by the institu24 tion or lender due to the action. For purposes of this sub25 section, the net gain shall not exceed the amount realized
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1 by the institution or lender on the sale of property less ac2 quisition, holding, and disposition costs.

3 ‘‘(c) EXCLUSION.—Notwithstanding subsection (a), but

4 subject to section 107(d) and section 9003 of the Solid Waste

5 Disposal Act (42 U.S.C. 6991b), a depository institution

6 or lender that caused or contributed to the release of a haz7 ardous substance may be liable for removal, remedial, cor8 rective, or other response action pertaining to that release.

9 ‘‘(d) ENVIRONMENTAL ASSESSMENTS.—

10 ‘‘(1) DEPOSITORY INSTITUTIONS.—The Adminis11 trator, after consultation with the Federal Deposit In12 surance Corporation, shall issue and publish guide13 lines for insured depository institutions and other

14 lenders to develop and carry out adequate procedures

15 to evaluate actual and potential environmental risks

16 that may arise from or at property prior to making

17 an extension of credit secured by the property. The re18 quirements may provide for exclusions or different

19 types of environmental assessments as may be appro20 priate under the circumstances to account for the lev21 els of risk that may be posed by different classes of

22 collateral. Each Federal agency having the authority

23 under Federal law to make an examination of an in24 sured depository institution shall take compliance
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1 with the guidelines into account in performing the ex2 aminations.

3 ‘‘(2) FINAL GUIDELINES.—Final guidelines re4 quired to be issued pursuant to paragraph (1) shall

5 be issued not later than 180 days after the date of en6 actment of this section.

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

8 following definitions shall apply:

9 ‘‘(1) APPROPRIATE FEDERAL BANKING AGEN10 CY.—The term ‘appropriate Federal banking

11 agency’—

12 ‘‘(A) has the same meaning as in section 3

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

14 1813); and

15 ‘‘(B) includes the National Credit Union

16 Administration Board.

17 ‘‘(2) EXTENSION OF CREDIT.—The term ‘exten18 sion of credit’ includes a lease finance transaction—

19 ‘‘(A) in which the lessor does not initially

20 select the leased property and does not during the

21 lease term control the daily operations or main22 tenance of the property; or

23 ‘‘(B) that conforms with regulations issued

24 by the appropriate Federal banking agency or
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1 the appropriate State banking regulatory agen2 cy.

3 ‘‘(3) HAZARDOUS SUBSTANCE.—The term ‘haz4 ardous substance’ has the same meaning as in section

5 45(d)(2) of the Federal Deposit Insurance Act.

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

7 term ‘insured depository institution’ has the same

8 meaning as in section 3 of the Federal Deposit Insur9 ance Act (12 U.S.C. 1813), and shall also include—

10 ‘‘(A) an insured credit union, as defined in

11 section 101 of the Federal Credit Union Act (12

12 U.S.C. 1752);

13 ‘‘(B) a bank or association chartered under

14 the Farm Credit Act of 1971 (12 U.S.C. 2001 et

15 seq.); and

16 ‘‘(C) a leasing or trust company that is an

17 affiliate of an insured depository institution (as

18 the term is defined in this paragraph).

19 ‘‘(5) LENDER.—The term ‘lender’ means—

20 ‘‘(A) a person (other than an insured depos21 itory institution) that—

22 ‘‘(i) makes a bona fide extension of

23 credit to or takes a security interest from a

24 nonaffiliated party; and
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1 ‘‘(ii) substantially and materially com2 plies with the environmental assessment re3 quirements imposed under subsection (d),

4 after final guidelines under the subsection

5 have been issued;

6 and includes a successor or assignee of any such

7 person;

8 ‘‘(B) the Federal National Mortgage Asso9 ciation, the Federal Home Loan Mortgage Cor10 poration, the Federal Agricultural Mortgage Cor11 poration, or other entity that in a bona fide

12 manner is engaged in the business of buying or

13 selling loans or interests in loans, if the Associa14 tion, Corporation, or entity requires institutions

15 from which it purchases loans (or other obliga16 tions) to comply substantially and materially

17 with the requirements of subsection (d), after

18 final guidelines under that subsection have been

19 issued;

20 ‘‘(C) a person engaged in the business of in21 suring or guaranteeing against a default in the

22 repayment of an extension of credit, or acting as

23 a surety with respect to an extension of credit,

24 to nonaffiliated parties; and
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1 ‘‘(D) a person regularly engaged in the

2 business of providing title insurance who ac3 quires the property as a result of assignment or

4 conveyance in the course of underwriting claims

5 and claims settlement.

6 ‘‘(6) PROPERTY ACQUIRED THROUGH FORE7 CLOSURE.—

8 ‘‘(A) IN GENERAL.—The term ‘property ac9 quired through foreclosure’ means property ac10 quired, or the act of acquiring property, from a

11 nonaffiliated party by an insured depository in12 stitution or other lender—

13 ‘‘(i) through purchase at sales under

14 judgment or decree, power of sales,

15 nonjudicial foreclosure sales, or from a

16 trustee, deed in lieu of foreclosure, or simi17 lar conveyance, or through repossession, if

18 the property was security for an extension

19 of credit previously contracted;

20 ‘‘(ii) through conveyance pursuant to

21 an extension of credit previously contracted,

22 including the termination of a lease agree23 ment; or

24 ‘‘(iii) through any other formal or in25 formal manner by which the insured deposi-
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1 tory institution or other lender temporarily

2 acquires, for subsequent disposition, posses3 sion of collateral in order to protect the in4 terest of the institution or lender.

5 ‘‘(B) EXCLUSION.—Property is not acquired

6 through foreclosure if the insured depository in7 stitution or lender does not seek to sell or other8 wise divest the property at the earliest practical,

9 commercially reasonable time, on commercially

10 reasonable terms, taking into account market

11 conditions and legal and regulatory require12 ments.

13 ‘‘(7) RELEASE.—The term ‘release’ has the same

14 meaning as in section 45(d)(3) of the Federal Deposit

15 Insurance Act.

16 ‘‘(8) SECURITY INTEREST.—The term ‘security

17 interest’ includes rights under a mortgage, deed of

18 trust, assignment, judgment lien, pledge, security

19 agreement, factoring agreement, lease, or any other

20 right accruing to a person to secure the repayment of

21 money, the performance of a duty, or some other obli22 gation.

23 ‘‘(f) SAVINGS CLAUSE.—Nothing in this section

24 shall—
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1 ‘‘(1) affect the rights or immunities or other de2 fenses that are available under this Act, subtitle I of

3 the Solid Waste Disposal Act (42 U.S.C. 6991 et seq.),

4 or other applicable law to a party subject to this sec5 tion;

6 ‘‘(2) create any liability for a party; or

7 ‘‘(3) create a private right of action against an

8 insured depository institution or lender, a Federal

9 agency that regulates an insured depository institu10 tion or other lender, or any other party.

11 ‘‘SEC. 128. LIABILITY OF FIDUCIARIES.

12 ‘‘(a) IN GENERAL.—The liability of a fiduciary that

13 is liable under any other provision of this Act or subtitle

14 I of the Solid Waste Disposal Act (42 U.S.C. 6991 et seq.)

15 for the release or threatened release of a hazardous substance

16 at, from, or in connection with property held in a fiduciary

17 capacity, may not exceed the assets held in the fiduciary

18 capacity that are available to indemnify the fiduciary.

19 ‘‘(b) EXCLUSION.—Subsection (a) does not apply to the

20 extent that a person is liable under this Act independently

21 of the person’s ownership or actions taken in a fiduciary

22 capacity.

23 ‘‘(c) LIMITATION.—Notwithstanding subsections (a)

24 and (d), a fiduciary whose failure to exercise due care

25 caused or contributed to the release of a hazardous substance
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1 may have liability in its personal capacity for a response

2 or corrective action pertaining to the release.

3 ‘‘(d) SAFE HARBOR.—A fiduciary shall not be liable

4 in its personal capacity under this Act for—

5 ‘‘(1) undertaking or directing another person to

6 undertake a response action under section 107(d)(1)

7 or under the direction of an on-scene coordinator;

8 ‘‘(2) undertaking or directing another to under9 take a corrective action under section 9003(h) of the

10 Solid Waste Disposal Act (42 U.S.C. 6991b(h));

11 ‘‘(3) undertaking or directing another to under12 take any other lawful means of addressing hazardous

13 substances in connection with the property;

14 ‘‘(4) terminating the fiduciary relationship;

15 ‘‘(5) including in the terms of the fiduciary

16 agreement a covenant, warranty, or other term or

17 condition that relates to compliance with an environ18 mental law, or monitoring or enforcing the term;

19 ‘‘(6) monitoring or undertaking 1 or more in20 spections of the property;

21 ‘‘(7) providing financial or other advice or coun22 seling to other parties to the fiduciary relationship,

23 including the settler or beneficiary;
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1 ‘‘(8) restructuring, renegotiating, or otherwise al2 tering the terms and conditions of the fiduciary rela3 tionship; or

4 ‘‘(9) declining to take any of the actions referred

5 to in paragraphs (3) through (8).

6 ‘‘(e) DEFINITIONS.—As used in this section:

7 ‘‘(1) FIDUCIARY.—The term ‘fiduciary’—

8 ‘‘(A) means a person acting for the benefit

9 of another party as a bona fide—

10 ‘‘(i) trustee;

11 ‘‘(ii) executor;

12 ‘‘(iii) administrator;

13 ‘‘(iv) custodian;

14 ‘‘(v) guardian of estates or guardian

15 ad litem;

16 ‘‘(vi) receiver;

17 ‘‘(vii) conservator;

18 ‘‘(viii) committee of estates of lunatics

19 or other disabled persons;

20 ‘‘(ix) personal representative; or

21 ‘‘(x) representative in any other capac22 ity that the Administrator, pursuant to

23 public notice, determines to be similar to

24 the persons listed in clauses (i) through (ix);

25 and
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1 ‘‘(B) does not include any person who is

2 acting as a fiduciary with respect to a trust or

3 other fiduciary estate that—

4 ‘‘(i) was not created as part of, or to

5 facilitate, 1 or more estate plans or pursu6 ant to the incapacity of a natural person;

7 and

8 ‘‘(ii) was organized for the primary

9 purpose of, or is engaged in, actively carry10 ing on a trade or business for profit.

11 ‘‘(2) FIDUCIARY CAPACITY.—The term ‘fiduciary

12 capacity’ means the capacity of a person in holding

13 title to the property, or otherwise having control of or

14 an interest in the property, pursuant to the exercise

15 of the responsibilities of the person as a fiduciary.

16 ‘‘(3) FEDERAL BANKING OR LENDING AGENCY.—

17 The term ‘Federal banking or lending agency’ has the

18 same meaning as in section 45(d)(1) of the Federal

19 Deposit Insurance Act.

20 ‘‘(4) HAZARDOUS SUBSTANCE.—The term ‘haz21 ardous substance’ has the same meaning as in section

22 45(d)(2) of the Federal Deposit Insurance Act.

23 ‘‘(5) RELEASE.—The term ‘release’ has the same

24 meaning as in section 45(d)(3) of the Federal Deposit

25 Insurance Act.
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1 ‘‘(f) SAVINGS CLAUSE.—Nothing in this section shall

2 affect the rights or immunities or other defenses that are

3 available under this Act, subtitle I of the Solid Waste Dis4 posal Act (42 U.S.C. 6991 et seq.), or other law that is ap5 plicable to a person subject to this section. Nothing in this

6 section creates any liability for a party or a private right

7 of action against a fiduciary or any other party.

8 ‘‘(g) INAPPLICABILITY TO FEDERAL BANKING AND

9 LENDING AGENCIES.—Nothing in this section applies to a

10 Federal banking or lending agency.

11 ‘‘(h) NO EFFECT ON CERTAIN PERSONS.—Nothing in

12 this section affects the liability, if any, of a person who—

13 ‘‘(1)(A) acts in a capacity other than a fiduciary

14 capacity; and

15 ‘‘(B) directly or indirectly benefits from a trust

16 or fiduciary relationship; or

17 ‘‘(2) who—

18 ‘‘(A) is a beneficiary and a fiduciary with

19 respect to the same fiduciary estate; and

20 ‘‘(B) as a fiduciary, receives benefits that

21 exceed customary or reasonable compensation,

22 and incidental benefits, permitted under other

23 applicable law.
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1 ‘‘(i) REGULATIONS.—The Administrator, after con2 sultation with the Federal Deposit Insurance Corporation,

3 may promulgate regulations to carry out this section.’’.

4 (b) DEFINITION OF OWNER OR OPERATOR.—Section

5 101(20) of the Comprehensive Environmental Response,

6 Compensation, and Liability Act of 1980 (42 U.S.C.

7 9601(20)) is amended—

8 (1) in subparagraph (A)—

9 (A) in clause (iii) of the first sentence, by

10 inserting ‘‘the United States or’’ after ‘‘abandon11 ment, or similar means to’’; and

12 (B) by striking the second sentence;

13 (2) in subparagraph (D)—

14 (A) in the first sentence, by inserting ‘‘the

15 United States or’’ after ‘‘does not include’’; and

16 (B) in the second sentence—

17 (i) by inserting ‘‘any department,

18 agency, or instrumentality of the United

19 States or’’ after ‘‘shall not apply to’’; and

20 (ii) by striking ‘‘, and such a’’ and in21 serting ‘‘, and the department, agency, or

22 instrumentality of the United States or’’;

23 and

24 (3) by adding at the end the following:
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1 ‘‘(E) EXCLUSION OF UNITED STATES, CON2 SERVATOR, OR RECEIVER.—The term ‘owner or

3 operator’ shall not include the United States or

4 any department, agency, or instrumentality of

5 the United States, or a conservator or receiver

6 appointed by a department, agency, or instru7 mentality of the United States, if the United

8 States or the conservator or receiver meets both

9 of the following conditions:

10 ‘‘(i) AUTHORITY.—The United States,

11 conservator, or receiver acquired ownership

12 or control of a vessel or facility (or any

13 right or interest in a vessel or facility)—

14 ‘‘(I) in connection with the exer15 cise of receivership or conservatorship

16 authority or the liquidation or wind17 ing up of the affairs of an entity sub18 ject to a receivership or

19 conservatorship, including a subsidiary

20 of the entity;

21 ‘‘(II) in connection with the exer22 cise of any seizure or forfeiture author23 ity; or

24 ‘‘(III) pursuant to a law specify25 ing the property to be acquired.
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1 ‘‘(ii) NONPARTICIPATION IN MANAGE2 MENT.—The United States, conservator, or

3 receiver does not participate in the manage4 ment of the vessel or facility operations that

5 result in a release or threat of release of

6 hazardous substances and complies with

7 such other requirements as the Adminis8 trator, after consultation with the Federal

9 Deposit Insurance Corporation, may estab10 lish by regulation.

11 ‘‘(F) EXCLUSION OF PERSONS NOT PARTICI12 PANTS IN MANAGEMENT.—

13 ‘‘(i) INDICIA OF OWNERSHIP TO PRO14 TECT SECURITY INTEREST.—The term

15 ‘owner or operator’ does not include a per16 son who, without participating in the man17 agement of a vessel or facility, holds indicia

18 of ownership primarily to protect the secu19 rity interest of the person in the vessel or

20 facility.

21 ‘‘(ii) NONPARTICIPATION IN MANAGE22 MENT PRIOR TO FORECLOSURE.—The term

23 ‘owner or operator’ does not include a per24 son who did not participate in management

25 of a vessel or facility prior to foreclosure,
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1 even if the person forecloses on the vessel or

2 facility, sells, re-leases (in the case of a lease

3 finance transaction), or liquidates the vessel

4 or facility, maintains business activities,

5 winds up operations, undertakes a response

6 action under section 107(d)(1) or under the

7 direction of an on-scene coordinator, or un8 dertakes a corrective action under section

9 9003 of the Solid Waste Disposal Act (42

10 U.S.C. 6991b), with respect to the vessel or

11 facility, or takes other measures to preserve,

12 protect, or prepare the vessel or facility

13 prior to sale or disposition, if the person

14 seeks to sell, re-lease (in the case of a lease

15 finance transaction), or otherwise divest the

16 vessel or facility at the earliest practical,

17 commercially reasonable time, on commer18 cially reasonable terms, taking into account

19 market conditions and legal and regulatory

20 requirements.

21 ‘‘(G) PARTICIPATION IN MANAGEMENT.—

22 For purposes of subparagraph (F)—

23 ‘‘(i) the term ‘participate in manage24 ment’ means actually participating in the

25 management or operational affairs of a ves-
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1 sel or facility, and does not include merely

2 having the capacity to influence, or the

3 unexercised right to control, vessel or facil4 ity operations;

5 ‘‘(ii) a person shall be considered to

6 participate in management while the bor7 rower is still in possession of the vessel or

8 facility encumbered by the security interest

9 only if the person—

10 ‘‘(I) exercises decisionmaking con11 trol over the environmental compliance

12 of a borrower, such that the person has

13 undertaken responsibility for the haz14 ardous substance handling or disposal

15 practices of the borrower; or

16 ‘‘(II) exercises control at a level

17 comparable to that of a manager of the

18 enterprise of the borrower, such that

19 the person has assumed or manifested

20 responsibility for the overall manage21 ment of the enterprise encompassing

22 day-to-day decisionmaking with re23 spect to environmental compliance, or

24 with respect to substantially all of the

25 operational aspects (as distinguished
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1 from financial or administrative as2 pects) of the enterprise, other than en3 vironmental compliance;

4 ‘‘(iii) the term ‘participate in manage5 ment’ does not include conducting an act or

6 failing to act prior to the time that a secu7 rity interest is created in a vessel or facil8 ity; and

9 ‘‘(iv) the term ‘participate in manage10 ment’ does not include—

11 ‘‘(I) holding such a security inter12 est or abandoning or releasing such a

13 security interest;

14 ‘‘(II) including in the terms of an

15 extension of credit, or in a contract or

16 security agreement relating to the ex17 tension, a covenant, warranty, or other

18 term or condition that relates to envi19 ronmental compliance;

20 ‘‘(III) monitoring or enforcing the

21 terms and conditions of the extension

22 of credit or security interest;

23 ‘‘(IV) monitoring or undertaking

24 1 or more inspections of the vessel or

25 facility;
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1 ‘‘(V) requiring or conducting re2 sponse action or other lawful means of

3 addressing the release or threatened re4 lease of a hazardous substance in con5 nection with the vessel or facility prior

6 to, during, or on the expiration of the

7 term of the extension of credit;

8 ‘‘(VI) providing financial or other

9 advice or counseling in an effort to

10 mitigate, prevent, or cure default or

11 diminution in the value of the vessel or

12 facility;

13 ‘‘(VII) restructuring, renegotiat14 ing, or otherwise agreeing to alter the

15 terms and conditions of the extension

16 of credit or security interest, exercising

17 forbearance; or

18 ‘‘(VIII) exercising other remedies

19 that may be available under applicable

20 law for the breach of a term or condi21 tion of the extension of credit or secu22 rity agreement;

23 if the actions do not rise to the level of par24 ticipating in management, as defined in

25 clauses (i) and (ii).
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1 ‘‘(H) OTHER TERMS.—As used in subpara2 graphs (E) through (G), and this subparagraph:

3 ‘‘(i) EXTENSION OF CREDIT.—The term

4 ‘extension of credit’ includes a lease finance

5 transaction—

6 ‘‘(I) in which the lessor does not

7 initially select the leased vessel or facil8 ity and does not during the lease term

9 control the daily operations or mainte10 nance of the vessel or facility; or

11 ‘‘(II) that conforms with regula12 tions issued by the appropriate Federal

13 banking agency or the appropriate

14 State bank supervisor (as those terms

15 are defined in section 3 of the Federal

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

17 1813)) or with regulations issued by

18 the National Credit Union Adminis19 tration Board, as appropriate.

20 ‘‘(ii) FINANCIAL OR ADMINISTRATIVE

21 ASPECT.—The term ‘financial or adminis22 trative aspect’ includes a function such as a

23 function of a credit manager, accounts pay24 able officer, accounts receivable officer, per-
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1 sonnel manager, comptroller, or chief finan2 cial officer, or a similar function.

3 ‘‘(iii) FORECLOSURE; FORECLOSE.—

4 The terms ‘foreclosure’ and ‘foreclose’ mean,

5 respectively, acquiring, and to acquire, a

6 vessel or facility through—

7 ‘‘(I) purchase at sale under a

8 judgment or decree, a power of sale, a

9 nonjudicial foreclosure sale, or from a

10 trustee, deed in lieu of foreclosure, or

11 similar conveyance, or through repos12 session, if the vessel or facility was se13 curity for an extension of credit pre14 viously contracted;

15 ‘‘(II) conveyance pursuant to an

16 extension of credit previously con17 tracted, including the termination of a

18 lease agreement; or

19 ‘‘(III) any other formal or infor20 mal manner by which the person ac21 quires, for subsequent disposition, pos22 session of collateral in order to protect

23 the security interest of the person.

24 ‘‘(iv) HAZARDOUS SUBSTANCE.—The

25 term ‘hazardous substance’ has the same
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1 meaning as in section 45(d)(2) of the Fed2 eral Deposit Insurance Act.

3 ‘‘(v) OPERATIONAL ASPECT.—The term

4 ‘operational aspect’ includes a function such

5 as a function of a facility or plant man6 ager, operations manager, chief operating

7 officer, or chief executive officer.

8 ‘‘(vi) RELEASE.—The term ‘release’

9 has the same meaning as in section 45(d)(3)

10 of the Federal Deposit Insurance Act.

11 ‘‘(vii) SECURITY INTEREST.—The term

12 ‘security interest’ includes a right under a

13 mortgage, deed of trust, assignment, judg14 ment lien, pledge, security agreement, fac15 toring agreement, or lease, or any other

16 right accruing to a person to secure the re17 payment of money, the performance of a

18 duty, or some other obligation.

19 ‘‘(viii) VESSEL OR FACILITY.—The

20 term ‘vessel or facility’ includes an under21 ground storage tank as defined in section

22 9001(1) of the Solid Waste Disposal Act (42

23 U.S.C. 6991(1)).’’.
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1 SEC. 504. SOLID WASTE DISPOSAL ACT AMENDMENTS.

2 (a) DEFINITION OF OWNER AND OPERATOR.—Section

3 9001 of the Solid Waste Disposal Act (42 U.S.C. 6991) is

4 amended by adding at the end the following:

5 ‘‘(9) OWNER AND OPERATOR.—The terms ‘owner’

6 and ‘operator’ do not include any person excluded

7 from the definition of an ‘owner or operator’ under

8 subparagraphs (E) through (H) of section 101(20) of

9 the Comprehensive Environmental Response, Com10 pensation, and Liability Act of 1980 (42 U.S.C.

11 9601(20)).’’.

12 (b) LENDER AND FIDUCIARY LIABILITY.—Subtitle I of

13 the Solid Waste Disposal Act (42 U.S.C. 6991 et seq.) is

14 amended by adding at the end the following:

15 ‘‘SEC. 9011. LENDER AND FIDUCIARY LIABILITY.

16 ‘‘This subtitle shall be subject to the limitations on li17 ability in sections 127 and 128 of the Comprehensive Envi18 ronmental Response, Compensation, and Liability Act of

19 1980.’’.

20 SEC. 505. EFFECTIVE DATE.

21 The amendments made by this title shall be applicable

22 with respect to any claim that has not been finally adju23 dicated as of the date of enactment of this Act.
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1 TITLE VI—STUDIES AND

2 REPORTS; MISCELLANEOUS

3 SEC. 601. ELECTRONIC FUND TRANSFER ACT CLARIFICA4 TION.

5 (a) DEFINITION OF ACCEPTED CARD OR OTHER

6 MEANS OF ACCESS.—Section 903(1) of the Electronic Fund

7 Transfer Act (15 U.S.C. 1693a(1)) is amended—

8 (1) by striking ‘‘access’ means a card’’ and in9 serting ‘‘access’—

10 ‘‘(A) means a card’’;

11 (2) by adding ‘‘and’’ at the end; and

12 (3) by adding at the end the following new sub13 paragraph:

14 ‘‘(B) does not include a card or device that

15 a person may use to pay for transactions

16 through use of value stored on, or assigned to, the

17 card or device itself, except for a transaction in

18 which such card or device is actually used to ac19 cess an account to effect such transaction;’’.

20 (b) DEFINITION OF ACCOUNT.—Section 903(2) of the

21 Electronic Fund Transfer Act (15 U.S.C. 1693a(2)) is

22 amended—

23 (1) by striking ‘‘account’ means’’ and inserting

24 ‘‘account’—

25 ‘‘(A) means’’;
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1 (2) by adding ‘‘and’’ at the end; and

2 (3) by adding at the end the following new sub3 paragraph:

4 ‘‘(B) does not include any value that is

5 stored on, or assigned to, a card or device that

6 enables a person to pay for transactions through

7 the use of that stored value;’’.

8 SEC. 602. TREATMENT OF CLAIMS ARISING FROM BREACH

9 OF POST-APPOINTMENT AGREEMENTS.

10 Section 13(e) of the Federal Deposit Insurance Act (12

11 U.S.C. 1823(e)) is amended by adding at the end the follow12 ing new paragraph:

13 ‘‘(3) TREATMENT OF CERTAIN CLAIMS AS ADMIN14 ISTRATIVE EXPENSES.—

15 ‘‘(A) IN GENERAL.—Notwithstanding any

16 other provision of this subsection or any other

17 provision of law, in an action against a Federal

18 banking agency arising from a claim that the

19 agency breached an agreement entered into after

20 the date of appointment of the agency as con21 servator or receiver of an insured depository in22 stitution, any final judgment for monetary dam23 ages entered against the agency shall be consid24 ered to be an administrative expense of the con25 servator or receiver.
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1 ‘‘(B) APPLICATION.—Subparagraph (A)

2 shall apply whether or not the subject Federal

3 banking agency considers the monetary judgment

4 referred to in subparagraph (A) to be an obliga5 tion that is necessary or appropriate to the

6 smooth and orderly disposition of the assets of

7 the insured depository institution under

8 conservatorship or receivership.’’.

9 SEC. 603. FICTITIOUS FINANCIAL INSTRUMENTS.

10 (a) INCREASED PENALTIES FOR COUNTERFEITING

11 VIOLATIONS.—Sections 474 and 474A of title 18, United

12 States Code, are each amended by striking ‘‘class C felony’’

13 each place that term appears, and inserting ‘‘class B fel14 ony’’.

15 (b) CRIMINAL PENALTY FOR PRODUCTION, SALE,

16 TRANSPORTATION, OR POSSESSION OF FICTITIOUS FINAN17 CIAL INSTRUMENTS PURPORTING TO BE THOSE OF THE

18 STATES, OF POLITICAL SUBDIVISIONS, AND OF PRIVATE

19 ORGANIZATIONS.—

20 (1) IN GENERAL.—Chapter 27 of title 18, United

21 States Code, is amended by inserting after section 513

22 the following new section:

23 ‘‘§ 514. Fictitious obligations

24 ‘‘(a) IN GENERAL.—Whoever, with the intent to de25 fraud—
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1 ‘‘(1) draws, prints, processes, produces, publishes,

2 or otherwise makes, or attempts or causes the same,

3 within the United States;

4 ‘‘(2) passes, utters, presents, offers, brokers, is5 sues, sells, or attempts or causes the same, or with like

6 intent possesses, within the United States; or

7 ‘‘(3) utilizes interstate or foreign commerce, in8 cluding the use of the mails or wire, radio, or other

9 electronic communication, to transmit, transport,

10 ship, move, transfer, or attempts or causes the same,

11 to, from, or through the United States;

12 any false or fictitious instrument, document, or other item

13 appearing, representing, purporting, or contriving through

14 scheme or artifice, to be an actual security or other finan15 cial instrument issued under the authority of the United

16 States, a foreign government, a State or other political sub17 division of the United States, or an organization, shall be

18 guilty of a class B felony.

19 ‘‘(b) INCORPORATED DEFINITIONS.—For purposes of

20 this section, any term used in this section that is defined

21 in section 513(c) shall have the same meaning as in section

22 513(c).

23 ‘‘(c) INVESTIGATIVE AUTHORITY.—The United States

24 Secret Service, in addition to any other agency having such
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1 authority, shall have authority to investigate offenses under

2 this section.’’.

3 (2) TECHNICAL AMENDMENT.—The analysis for

4 chapter 27 of title 18, United States Code, is amended

5 by inserting after the item relating to section 513 the

6 following:

‘‘514. Fictitious obligations.’’.

7 SEC. 604. AMENDMENTS TO THE TRUTH IN SAVINGS ACT.

8 (a) REPEALS.—Sections 268 and 271 of the Truth in

9 Savings Act (12 U.S.C. 4307, 4310) are repealed.

10 (b) ON-PREMISES DISPLAYS.—Section 263(c) of the

11 Truth in Savings Act (12 U.S.C. 4302(c)) is amended—

12 (1) by striking paragraph (2);

13 (2) by striking ‘‘(1) IN GENERAL.—’’; and

14 (3) by redesignating subparagraphs (A) and (B)

15 as paragraphs (1) and (2), respectively, and indent16 ing appropriately.

17 (c) DEPOSITORY INSTITUTION DEFINITION.—Section

18 274(6) of the Truth in Savings Act (12 U.S.C. 4313(6))

19 is amended by inserting before the period ‘‘, but does not

20 include any nonautomated credit union that was not re21 quired to comply with the requirements of this title as of

22 the date of enactment of the Economic Growth and Regu23 latory Paperwork Reduction Act of 1995, pursuant to the

24 determination of the National Credit Union Administra25 tion Board’’.
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1 (d) TIME DEPOSITS.—Section 266(a)(3) of the Truth

2 in Savings Act (12 U.S.C. 4305(a)(3)) is amended by in3 serting ‘‘has a maturity of more than 30 days’’ after ‘‘de4 posit which’’.

5 SEC. 605. CONSUMER LEASING ACT AMENDMENTS.

6 (a) CONGRESSIONAL FINDINGS AND DECLARATION OF

7 PURPOSES.—

8 (1) FINDINGS.—The Congress finds that—

9 (A) competition among the various finan10 cial institutions and other firms engaged in the

11 business of consumer leasing is greatest when

12 there is informed use of leasing;

13 (B) the informed use of leasing results from

14 an awareness of the cost of leasing by consumers;

15 and

16 (C) there has been a continued trend toward

17 leasing automobiles and other durable goods for

18 consumer use as an alternative to installment

19 credit sales and that leasing product advances

20 have occurred such that lessors have been unable

21 to provide consistent industry-wide disclosures to

22 fully account for the competitive progress that

23 has occurred.

24 (2) PURPOSES.—The purposes of this section

25 are—
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1 (A) to assure a simple, meaningful disclo2 sure of leasing terms so that the consumer will

3 be able to compare more readily the various leas4 ing terms available to the consumer and avoid

5 the uninformed use of leasing, and to protect the

6 consumer against inaccurate and unfair leasing

7 practices;

8 (B) to provide for adequate cost disclosures

9 that reflect the marketplace without impairing

10 competition and the development of new leasing

11 products; and

12 (C) to provide the Board with the regu13 latory authority to assure a simplified, meaning14 ful definition and disclosure of the terms of cer15 tain leases of personal property for personal,

16 family, or household purposes so as to—

17 (i) enable the lessee to compare more

18 readily the various lease terms available to

19 the lessee;

20 (ii) enable comparison of lease terms

21 with credit terms, as appropriate; and

22 (iii) assure meaningful and accurate

23 disclosures of lease terms in advertisements.

24 (b) REGULATIONS.—
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1 (1) IN GENERAL.—Chapter 5 of the Truth in

2 Lending Act (15 U.S.C. 1667 et seq.) is amended by

3 adding at the end the following new section:

4 ‘‘SEC. 187. REGULATIONS.

5 ‘‘(a) REGULATIONS AUTHORIZED.—

6 ‘‘(1) IN GENERAL.—The Board shall promulgate

7 regulations to update and clarify the requirements

8 and definitions applicable to lease disclosures and

9 contracts, and any other issues specifically related to

10 consumer leasing, to the extent that the Board deter11 mines such action to be necessary—

12 ‘‘(A) to carry out this chapter;

13 ‘‘(B) to prevent any circumvention of this

14 chapter; or

15 ‘‘(C) to facilitate compliance with the re16 quirements of the chapter.

17 ‘‘(2) CLASSIFICATIONS, ADJUSTMENTS.—Any

18 regulations promulgated under paragraph (1) may

19 contain classifications and differentiations, and may

20 provide for adjustments and exceptions for any class

21 of transactions, as the Board considers appropriate.

22 ‘‘(b) MODEL DISCLOSURE.—

23 ‘‘(1) PUBLICATION.—The Board shall establish

24 and publish model disclosure forms to facilitate com25 pliance with the disclosure requirements of this chap-
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1 ter and to aid the consumer in understanding the

2 transaction to which the subject disclosure form re3 lates.

4 ‘‘(2) USE OF AUTOMATED EQUIPMENT.—In es5 tablishing model forms under this subsection, the

6 Board shall consider the use by lessors of data proc7 essing or similar automated equipment.

8 ‘‘(3) USE OPTIONAL.—A lessor may utilize a

9 model disclosure form established by the Board under

10 this subsection for purposes of compliance with this

11 chapter, at the discretion of the lessor.

12 ‘‘(4) EFFECT OF USE.—Any lessor who uses the

13 material aspects of any model disclosure form estab14 lished by the Board under this subsection shall be

15 deemed to be in compliance with the disclosure re16 quirements to which the form relates.’’.

17 (2) EFFECTIVE DATE.—

18 (A) IN GENERAL.—Any regulation of the

19 Board, or any amendment or interpretation of

20 any regulation of the Board issued pursuant to

21 section 187 of the Truth in Lending Act (as

22 added by paragraph (1) of this subsection), shall

23 become effective on the first October 1 that fol24 lows the date of promulgation of that regulation,
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1 amendment, or interpretation by not less than 6

2 months.

3 (B) LONGER PERIOD.—The Board may, at

4 the discretion of the Board, extend the time pe5 riod referred to in subparagraph (A) in accord6 ance with subparagraph (C), to permit lessors to

7 adjust their disclosure forms to accommodate the

8 requirements of section 127 of the Truth in

9 Lending Act (as added by paragraph (1) of this

10 subsection).

11 (C) SHORTER PERIOD.—The Board may

12 shorten the time period referred to in subpara13 graph (A), if the Board makes a specific finding

14 that such action is necessary to comply with the

15 findings of a court or to prevent an unfair or de16 ceptive practice.

17 (D) COMPLIANCE BEFORE EFFECTIVE

18 DATE.—Any lessor may comply with any means

19 of disclosure provided for in section 127 of the

20 Truth in Lending Act (as added by paragraph

21 (1) of this subsection) before the effective date of

22 such requirement.

23 (E) DEFINITIONS.—For purposes of this

24 subsection, the term ‘‘lessor’’ has the same mean-
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1 ing as in section 181 of the Truth in Lending

2 Act.

3 (3) CLERICAL AMENDMENT.—The table of sec4 tions for chapter 5 of title I of the Truth in Lending

5 Act (15 U.S.C. 1601 et seq.) is amended by inserting

6 after the item relating to section 186 the following

7 new item:

‘‘187. Regulations.’’.

8 (c) CONSUMER LEASE ADVERTISING.—Section 184 of

9 the Truth in Lending Act (15 U.S.C. 1667c) is amended

10 to read as follows:

11 ‘‘SEC. 184. CONSUMER LEASE ADVERTISING.

12 ‘‘(a) IN GENERAL.—If an advertisement for a

13 consumer lease includes a statement of the amount of any

14 payment or a statement that any or no initial payment

15 is required, the advertisement shall clearly and conspicu16 ously state, as applicable—

17 ‘‘(1) the transaction advertised is a lease;

18 ‘‘(2) the total amount of any initial payments

19 required on or before consummation of the lease or de20 livery of the property, whichever is later;

21 ‘‘(3) that a security deposit is required;

22 ‘‘(4) the number, amount, and timing of sched23 uled payments; and

24 ‘‘(5) with respect to a lease in which the liability

25 of the consumer at the end of the lease term is based
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1 on the anticipated residual value of the property, that

2 an extra charge may be imposed at the end of the

3 lease term.

4 ‘‘(b) ADVERTISING MEDIUM NOT LIABLE.—No owner

5 or employee of any entity that serves as a medium in which

6 an advertisement appears or through which an advertise7 ment is disseminated, shall be liable under this section.’’.

8 SEC. 606. STUDY OF CORPORATE CREDIT UNIONS.

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

10 following definitions shall apply:

11 (1) ADMINISTRATION.—The term ‘‘Administra12 tion’’ means the National Credit Union Administra13 tion.

14 (2) BOARD.—The term ‘‘Board’’ means the Na15 tional Credit Union Administration Board.

16 (3) CORPORATE CREDIT UNION.—The term ‘‘cor17 porate credit union’’ has the meaning given such term

18 by rule or regulation of the Board.

19 (4) FUND.—The term ‘‘Fund’’ means the Na20 tional Credit Union Share Insurance Fund estab21 lished under section 203 of the Federal Credit Union

22 Act.

23 (5) SECRETARY.—The term ‘‘Secretary’’ means

24 the Secretary of the Treasury.

25 (b) STUDY.—
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1 (1) IN GENERAL.—The Secretary, in consultation

2 with the Board, the Corporation, the Comptroller of

3 the Currency, and the Administration, shall conduct

4 a study and evaluation of—

5 (A) the oversight and supervisory practices

6 of the Administration concerning the Fund, in7 cluding the treatment of amounts deposited in

8 the Fund pursuant to section 202(c) of the Fed9 eral Credit Union Act, including analysis of—

10 (i) whether those amounts should be—

11 (I) refundable; or

12 (II) treated as expenses; and

13 (ii) the use of those amounts in deter14 mining equity capital ratios;

15 (B) the potential for, and potential effects

16 of, administration of the Fund by an entity

17 other than the Administration;

18 (C) the 10 largest corporate credit unions in

19 the United States, conducted in cooperation with

20 appropriate employees of other Federal agencies

21 with expertise in the examination of federally in22 sured financial institutions, including—

23 (i) the investment practices of those

24 credit unions; and
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1 (ii) the financial stability, financial

2 operations, and financial controls of those

3 credit unions;

4 (D) the regulations of the Administration;

5 and

6 (E) the supervision of corporate credit

7 unions by the Administration.

8 (c) REPORT.—Not later than 12 months after the date

9 of enactment of this Act, the Secretary shall submit to the

10 appropriate committees of the Congress, a report that in11 cludes the results of the study and evaluation conducted

12 under subsection (b), together with any recommendations

13 that the Secretary considers to be appropriate.

14 SEC. 607. REPORT ON THE RECONCILIATION OF DIF15 FERENCES BETWEEN REGULATORY AC16 COUNTING PRINCIPLES AND GENERALLY AC17 CEPTED ACCOUNTING PRINCIPLES.

18 Not later than 180 days after the date of enactment

19 of this Act, each appropriate Federal banking agency shall

20 submit to the Committee on Banking and Financial Serv21 ices of the House of Representatives and the Committee on

22 Banking, Housing, and Urban Affairs of the Senate, a re23 port describing both the actions that have been taken by

24 the agency and the actions that will be taken by the agency

25 to eliminate or conform inconsistent or duplicative account-
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1 ing and reporting requirements applicable to reports or

2 statements filed with any such agency by insured depository

3 institutions, as required by section 121 of the Federal De4 posit Insurance Corporation Improvement Act of 1991.

5 SEC. 608. STATE-BY-STATE AND METROPOLITAN AREA-BY6 METROPOLITAN AREA STUDY OF BANK FEES.

7 Section 1002(b)(2)(A) of the Financial Institutions

8 Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.

9 1811 note) is amended to read as follows:

10 ‘‘(A) a description of any discernible trend,

11 in the Nation as a whole, in each of the 50

12 States, and in each consolidated metropolitan

13 statistical area or primary metropolitan statis14 tical area (as defined by the Director of the Of15 fice of Management and Budget), in the cost and

16 availability of retail banking services (including

17 fees imposed for providing such services), that

18 delineates differences between insured depository

19 institutions on the basis of both the size of the

20 institution and any engagement of the institu21 tion in multistate activity; and’’.

22 SEC. 609. PROSPECTIVE APPLICATION OF GOLD CLAUSES

23 IN CONTRACTS.

24 Section 5118(d)(2) of title 31, United States Code, is

25 amended by adding at the end the following: ‘‘This para-
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1 graph shall apply to any obligation issued on or before Oc2 tober 27, 1977, notwithstanding any assignment or nova3 tion of such obligation after October 27, 1977, unless all

4 parties to the assignment or novation specifically agree to

5 include a gold clause in the new agreement.’’.

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