I 

112TH CONGRESS 

1ST SESSION H. R. 1909 

To create a charter for Federal Financial Services and Credit Companies. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 13, 2011 

Mr. BACA (for himself, Mr. MEEKS, Mr. SIRES, and Mrs. SCHMIDT) introduced the following bill; which was referred to the Committee on Financial Services 

A BILL 

To create a charter for Federal Financial Services and Credit 

Companies. 

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. 

4 This Act may be cited as the ‘‘FFSCC Charter Act 

5 of 2011’’. 

6 SEC. 2. FINDINGS; PURPOSE. 

7 (a) FINDINGS.—The Congress finds the following: 

8 (1) According to the Federal Deposit Insurance 

9 Corporation, more than 60 million low- and modVerDate Mar 15 2010 17:17 May 25, 2011 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H1909.IH H1909

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1 erate-income consumers in America remain 

2 unbanked, underbanked, or underserved. 

3 (2) The proportion of United States households 

4 that are unbanked varies considerably across racial 

5 and ethnic groups with certain racial and ethnic 

6 groups being more likely to be unbanked than the 

7 population as a whole. Minorities more likely to be 

8 unbanked include Blacks (21.7 percent of Black 

9 households), Hispanics (19.3 percent), and American 

10 Indian/Alaskans (15.6 percent). Racial groups less 

11 likely to be unbanked are Asians (3.5 percent) and 

12 Whites (3.3 percent). 

13 (3) Certain racial and ethnic minorities are 

14 more likely to be underbanked than the population 

15 as a whole. Minorities more likely to be underbanked 

16 include Blacks (an estimated 31.6 percent), Amer17 ican Indian/Alaskans (28.9 percent), and Hispanics 

18 (24.0 percent). Asians and Whites are less likely to 

19 be underbanked (7.2 percent and 14.9 percent, re20 spectively). 

21 (4) Households with income under $30,000 ac22 count for at least 71 percent of unbanked house23 holds. As income increases, the share of households 

24 that are unbanked declines considerably. Nationally, 

25 nearly 20 percent of lower-income United States 


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1 households—almost 7 million households earning 

2 below $30,000 per year—do not currently have a 

3 bank account. In contrast, only 4.2 percent of house4 holds with annual income between $30,000 and 

5 $50,000 and less than 1 percent of households with 

6 yearly income of $75,000 or higher are unbanked. 

7 (5) Lack of access to affordable banking prod8 ucts and services deters the economic advancement 

9 of low- and moderate-income consumers and stunts 

10 the economic growth of communities in which they 

11 live. 

12 (b) PURPOSE.—The purpose of this Act is to estab13 lish a vibrant, safe, and commercially viable market for 

14 underbanked and unbanked individuals to gain access to 

15 financial services and products. 

16 SEC. 3. FEDERAL FINANCIAL SERVICES AND CREDIT COM17 PANY. 

18 (a) IN GENERAL.—The Comptroller of the Currency 

19 shall— 

20 (1) under such regulations as the Comptroller 

21 of the Currency may prescribe, provide for the orga22 nization, incorporation, examination, operation, reg23 ulation, and chartering of companies to be known as 

24 Federal Financial Services and Credit Companies 


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1 (hereinafter in this Act referred to as ‘‘FFSCCs’’); 

2 and 

3 (2) have the responsibility to ensure that credit 

4 alternatives are available to the underbanked. 

5 (b) ELIGIBILITY.—The Comptroller of the Currency 

6 may not issue an FFSCC charter to a company unless 

7 the company satisfies the following requirements, as rea8 sonably determined by the Comptroller of the Currency: 

9 (1) The company has a demonstrated history of 

10 experience in providing underbanked persons with a 

11 financial product from within the following services: 

12 (A) Credit extended to consumers or, in an 

13 amount less than $10,000, to small businesses. 

14 (B) The issuing of reloadable stored value 

15 cards to consumers or small businesses. 

16 (C) Ancillary financial services extended to 

17 consumers or small businesses, including 

18 issuing money orders, sending and receiving 

19 wire transfers, check cashing services, bill pay20 ment services, and tax preparation services. 

21 (D) Such other short-term consumer credit 

22 services as the Comptroller of the Currency de23 termines appropriate. 


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1 (2)(A) No person who is a director, officer, 

2 partner, agent, sole proprietor, owner, or controlling 

3 person of the company— 

4 (i) has been convicted of a felony within 

5 ten years of the charter application date; or 

6 (ii) is associated with any person who has 

7 been convicted of a felony within ten years of 

8 the charter application date. 

9 (B) For purposes of subparagraph (A)— 

10 (i) the term ‘‘controlling person’’ means a 

11 person owning or controlling 10 percent or 

12 more of the total outstanding ownership of the 

13 company; and 

14 (ii) with respect to two people, the term 

15 ‘‘associated with’’ means one person— 

16 (I) is a partner, officer, or director (or 

17 any person occupying a similar status or 

18 performing similar functions) of the other 

19 person; or 

20 (II) directly or indirectly controls, is 

21 controlled by, or is under common control 

22 with the other person. 

23 (3) The company submits a business plan or 

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1 priate statutory and policy considerations. Such plan 

2 shall— 

3 (A) reflect sound financial principles and 

4 demonstrate realistic assessments of risk in 

5 light of economic and competitive conditions in 

6 the market for serving underbanked and 

7 unbanked populations; 

8 (B) include information sufficient to per9 mit the Comptroller of the Currency to evaluate 

10 the overall management ability of the company, 

11 especially the ability to provide financial serv12 ices to the underbanked and unbanked popu13 lation; and 

14 (C) demonstrate that the company is 

15 aware of, and understands, Federal and State 

16 consumer credit laws and sound consumer cred17 it operations and practices in the context of 

18 serving the needs of the underbanked and 

19 unbanked populations. 

20 (4) The company has senior management offi21 cials who are familiar with applicable Federal and 

22 State consumer credit laws and regulations, and the 

23 credit needs of underbanked and unbanked con24 sumers. 


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1 (5) The company has competent management, 

2 with ability and experience relevant to the types of 

3 services to be provided, especially the ability and ex4 perience to design and provide financial services to 

5 the underbanked and unbanked consumer popu6 lation. 

7 (c) REQUIREMENTS PLACED ON FFSCCS.— 

8 (1) CREDIT DISCLOSURES.— 

9 (A) SHORT-TERM CREDIT.—With respect 

10 to an extension of short-term credit by an 

11 FFSCC, the FFSCC shall provide the person to 

12 whom credit is being extended a clear and 

13 prominent statement in the loan agreement that 

14 states the true cost of the loan in terms of an 

15 actual finance charge per dollar of credit ex16 tended to such person instead of the annual 

17 percentage rate disclosure required under the 

18 Truth in Lending Act. 

19 (B) LONG-TERM CREDIT.—With respect to 

20 an extension of long-term credit by an FFSCC, 

21 the FFSCC shall provide the person to whom 

22 credit is being extended a disclosure of the fi23 nance charge to be paid by the person, ex24 pressed as an ‘‘annual percentage rate’’, using 

25 that term. 


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1 (2) ACCOUNT ACCESS.—Each FFSCC shall 

2 provide continuous account access to the customers 

3 of the FFSCC, either through a toll-free telephone 

4 number, the Internet, or both. 

5 (3) FINANCIAL LITERACY PROGRAMS.—Each 

6 FFSCC shall implement a financial literacy pro7 gram, which shall include— 

8 (A) making financial literacy materials 

9 available to its customers; and 

10 (B) assisting customers in building and 

11 improving their credit scores. 

12 (4) FINANCIAL PRODUCTS OFFERED.—Each 

13 FFSCC shall provide to underbanked persons at 

14 least three financial products from within the serv15 ices listed under the subparagraphs of subsection 

16 (b)(1). 

17 (5) ADDITIONAL REQUIREMENTS.—Each 

18 FFSCC shall comply with the following: 

19 (A) Have a primary mission of providing a 

20 comprehensive array of financial services to the 

21 underbanked, unbanked, and consumers with 

22 low credit scores. 

23 (B) Serve as a vehicle for providing access 

24 to credit products predominately to unbanked 

25 or underbanked consumers. 


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1 (C) File articles of association, articles of 

2 incorporation, or other appropriate organiza3 tional documents with the Comptroller of the 

4 Currency. 

5 (D) Submit to the Comptroller of the Cur6 rency for approval a business plan which, 

7 among other things, provides in reasonable de8 tail evidence of the knowledge, understanding, 

9 and experience of the institution and senior 

10 management of the unique challenges that 

11 unbanked and underbanked individuals face 

12 with respect to access to financial credit. 

13 (d) FFSCC POWERS.—Subject to such regulations as 

14 the Comptroller of the Currency may issue, in addition 

15 to general corporate powers, an FFSCC shall have the au16 thority to provide any financial products authorized by the 

17 Comptroller of the Currency under section 4(2). 

18 (e) PENALTY.—Whoever knowingly violates any pro19 vision of this section, or any regulation issued pursuant 

20 to this section, shall be fined not more than $20,000 for 

21 each day such violation continues or imprisoned for not 

22 more than 3 years, or both. The Comptroller of the Cur23 rency may authorize any State attorney general to enforce 

24 violations of this Act, or regulations issued pursuant to 

25 this Act. 


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1 (f) FFSCC FEE.—All FFSCCs shall pay an annual 

2 fee to the Comptroller of the Currency in an amount that 

3 the Comptroller of the Currency determines is sufficient, 

4 in the aggregate, to offset the cost to the Comptroller of 

5 the Currency of carrying out the provisions of this section. 

6 (g) PREEMPTION OF STATE LAW.—A law of a State 

7 or political subdivision thereof shall be preempted if the 

8 application of such law would have a discriminatory effect 

9 on a company because such company is chartered as an 

10 FFSCC. 

11 (h) MODEL FORMS.—The Comptroller of the Cur12 rency shall draft approved, model product and disclosure 

13 forms that may be utilized by FFSCCs with any approved 

14 credit products or services offered by an FFSCC. 

15 SEC. 4. RATES AND TERMS STUDY; DEVELOPMENT OF FI16 NANCIAL PRODUCTS. 

17 The Comptroller of the Currency shall— 

18 (1) conduct a study on rates and terms used in 

19 the extension of credit; and 

20 (2) develop a suite of financial products that 

21 FFSCCs may offer to underbanked persons, that 

22 will— 

23 (A) contain transparent and full disclosure 

24 of all fees and terms related to such products; 

25 and 


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1 (B) be economically viable for FFSCCs to 

2 offer to consumers. 

3 SEC. 5. DEFINITIONS. 

4 For purposes of this Act: 

5 (1) COMPANY DEFINED.—For purposes of this 

6 subsection, the term ‘‘company’’ shall include— 

7 (A) the entity applying for an FFSCC 

8 charter; 

9 (B) any wholly owned subsidiary of such 

10 entity applying for an FFSCC charter; and 

11 (C) any other entity that is part of an af12 filiated control group with such entity applying 

13 for an FFSCC charter. 

14 (2) CONSUMER.—The term ‘‘consumer’’ shall 

15 have the meaning given such term under section 

16 103(h) of the Truth in Lending Act (15 U.S.C. 

17 1602(h)). 

18 (3) INSURED CREDIT UNION.—The term ‘‘in19 sured credit union’’ shall have the meaning given 

20 such term under section 101(7) of the Federal Cred21 it Union Act. 

22 (4) INSURED DEPOSITORY INSTITUTION.—The 

23 term ‘‘insured depository institution’’ shall have the 

24 meaning given such term under section 3(c) of the 

25 Federal Deposit Insurance Act. 


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1 (5) LONG-TERM CREDIT.—The term ‘‘long-term 

2 credit’’ means an extension of credit with an initial 

3 term of one year or more. 

4 (6) SHORT-TERM CREDIT.—The term ‘‘short5 term credit’’ means an extension of credit with an 

6 initial term of less than one year. 

7 (7) SMALL BUSINESS.—The term ‘‘small busi8 ness’’ means a company with no more than 500 em9 ployees. 

10 (8) UNDERBANKED.—The term ‘‘underbanked’’ 

11 means a natural person or a small business that— 

12 (A) has a deposit account with an insured 

13 depository institution or an insured credit 

14 union; and 

15 (B) has limited or no ability to access non16 depository services from insured depository in17 stitutions or insured credit unions, as reason18 ably determined by the Comptroller of the Cur19 rency. 

20 (9) UNDERBANKED PERSON.—The term 

21 ‘‘underbanked person’’ means a natural person or a 

22 small business that is underbanked, unbanked, or 

23 has a low credit score. 

24 (10) OTHER TERMS.—The Comptroller of the 

25 Currency may issue regulations to define such other 


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1 terms as the Comptroller of the Currency determines 

2 necessary to carry out this Act. 

Æ 


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