Calendar No. 35

106TH CONGRESS

1ST SESSION S. 576

[Report No. 106–11]

A BILL

To provide for improved monetary policy and regucredit disclosure, and for other purposes. agency actions, to provide for improved consumer and activities, to streamline financial regulatory latory reform in financial institution management

MARCH 10, 1999

Read twice and placed on the calendar
II

Calendar No. 35

106TH CONGRESS

1ST SESSION S. 576

[Report No. 106–11]

To provide for improved monetary policy and regulatory reform in financial

institution management and activities, to streamline financial regulatory

agency actions, to provide for improved consumer credit disclosure, and

for other purposes.

IN THE SENATE OF THE UNITED STATES

MARCH 10, 1999

Mr. GRAMM, from the Committee on Banking, Housing, and Urban Affairs,

reported the following original bill; which was read twice and placed on

the calendar

A BILL

To provide for improved monetary policy and regulatory reform in financial institution management and activities,

to streamline financial regulatory agency actions, to provide for improved consumer credit disclosure, and for

other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

3 ‘‘Financial Regulatory Relief and Economic Efficiency Act

4 of 1999’’.

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

6 this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—IMPROVING MONETARY POLICY AND FINANCIAL

INSTITUTION MANAGEMENT PRACTICES

Sec. 101. Payment of interest on reserves at Federal reserve banks.

Sec. 102. Amendments relating to interest on certain accounts at depository institutions.

Sec. 103. Repeal of savings association liquidity provision.

Sec. 104. Repeal of dividend notice requirement.

Sec. 105. Thrift service companies.

Sec. 106. Elimination of thrift multistate multiple holding company restrictions.

Sec. 107. Noncontrolling investments by savings association holding companies.

Sec. 108. Repeal of deposit broker notification and recordkeeping requirement.

Sec. 109. Uniform regulation of extensions of credit to executive officers.

Sec. 110. Expedited procedures for certain reorganizations.

Sec. 111. National bank directors.

Sec. 112. Amendment to Bank Consolidation and Merger Act.

Sec. 113. Loans on or purchases by institutions of their own stock; affiliations.

Sec. 114. Depository institution management interlocks.

Sec. 115. Purchased mortgage servicing rights.

Sec. 116. Cross marketing restriction; limited purpose bank relief.

Sec. 117. Divestiture requirement.

TITLE II—STREAMLINING ACTIVITIES OF INSTITUTIONS

Sec. 201. Updating of authority for community development investments.

Sec. 202. Federal Reserve Act lending limits.

Sec. 203. Business purpose credit extensions.

Sec. 204. Affinity groups.

Sec. 205. Fair debt collection practices.

Sec. 206. Restriction on acquisitions of other insured depository institutions.

Sec. 207. Mutual holding companies.

Sec. 208. Call report simplification.

TITLE III—STREAMLINING AGENCY ACTIONS

Sec. 301. Elimination of duplicative disclosure of fair market value of assets

and liabilities.

Sec. 302. Payment of interest in receiverships with surplus funds.

Sec. 303. Repeal of reporting requirement on differences in accounting standards.

Sec. 304. Agency review of competitive factors in Bank Merger Act filings.

Sec. 305. Elimination of SAIF and DIF special reserves.
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TITLE IV—MISCELLANEOUS

Sec. 401. Alternative compliance methods for advertising credit terms.

Sec. 402. Positions of Board of Governors of Federal Reserve System on the

Executive Schedule.

Sec. 403. Federal Housing Finance Board.

Sec. 404. CRA Flexibility for credit card banks.

TITLE V—TECHNICAL CORRECTIONS

Sec. 501. Technical correction relating to deposit insurance funds.

Sec. 502. Rules for continuation of deposit insurance for member banks converting charters.

Sec. 503. Amendments to the Revised Statutes.

Sec. 504. Conforming change to the International Banking Act of 1978.

1 TITLE I—IMPROVING MONETARY

2 POLICY AND FINANCIAL IN3 STITUTION MANAGEMENT

4 PRACTICES

5 SEC. 101. PAYMENT OF INTEREST ON RESERVES AT FED6 ERAL RESERVE BANKS.

7 (a) IN GENERAL.—Section 19(b) of the Federal Re8 serve Act (12 U.S.C. 461(b)) is amended by adding at

9 the end the following new paragraph:

10 ‘‘(12) EARNINGS ON RESERVES.—

11 ‘‘(A) IN GENERAL.—Balances maintained

12 at a Federal reserve bank by or on behalf of a

13 depository institution may receive earnings, to

14 be paid by the Federal reserve bank at least

15 once in each calendar quarter, at a rate or rates

16 not to exceed the general level of short-term in17 terest rates.
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1 ‘‘(B) REGULATIONS RELATING TO PAY2 MENTS AND DISTRIBUTION.—The Board may

3 prescribe regulations concerning—

4 ‘‘(i) the payment of earnings in ac5 cordance with this paragraph;

6 ‘‘(ii) the distribution of such earnings

7 to the depository institutions which main8 tain balances at such banks, or on behalf

9 of which such balances are maintained;

10 and

11 ‘‘(iii) the responsibilities of depository

12 institutions, Federal home loan banks, and

13 the National Credit Union Administration

14 Central Liquidity Facility with respect to

15 the crediting and distribution of earnings

16 attributable to balances maintained, in ac17 cordance with subsection (c)(1)(B), in a

18 Federal reserve bank by any such entity on

19 behalf of depository institutions which are

20 not member banks.’’.

21 (b) AUTHORIZATION FOR PASS THROUGH RESERVES

22 FOR MEMBER BANKS.—Section 19(c)(1)(B) of the Fed23 eral Reserve Act (12 U.S.C. 461(c)(1)(B)) is amended by

24 striking ‘‘which is not a member bank’’.
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1 (c) TECHNICAL AND CONFORMING AMENDMENTS.—

2 Section 19 of the Federal Reserve Act (12 U.S.C. 461)

3 is amended—

4 (1) in subsection (b)(4) (12 U.S.C. 461(b)(4)),

5 by striking subparagraph (C) and redesignating sub6 paragraphs (D) and (E) as subparagraphs (C) and

7 (D), respectively; and

8 (2) in subsection (c)(1)(A) (12 U.S.C.

9 461(c)(1)(A)), by striking ‘‘subsection (b)(4)(C)’’

10 and inserting ‘‘subsection (b)’’.

11 SEC. 102. AMENDMENTS RELATING TO INTEREST ON CER12 TAIN ACCOUNTS AT DEPOSITORY INSTITU13 TIONS.

14 (a) INTEREST-BEARING TRANSACTION ACCOUNTS

15 AUTHORIZED FOR ALL BUSINESSES.—Section 2 of Public

16 Law 93–100 (12 U.S.C. 1832) is amended—

17 (1) by redesignating subsections (b) and (c) as

18 subsections (c) and (d), respectively; and

19 (2) by inserting after subsection (a) the follow20 ing:

21 ‘‘(b) TRANSFERS.—Notwithstanding any other provi22 sion of law, any depository institution may, before Janu23 ary 1, 2001, permit the owner of any deposit or account

24 on which interest or dividends are paid to make up to 24

25 transfers per month, for any purpose, to another account
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1 of the owner in the same institution. Nothing in this sub2 section shall be construed to prevent an account offered

3 pursuant to this subsection from being considered a trans4 action account (as defined in section 19(b) of the Federal

5 Reserve Act (12 U.S.C. 461(b)) for purposes of that Act.’’.

6 (b) AMENDMENTS RELATING TO SAVINGS AND DE7 MAND DEPOSIT ACCOUNTS AT DEPOSITORY INSTITU8 TIONS.—

9 (1) NOW ACCOUNTS AUTHORIZED FOR ALL

10 BUSINESSES.—Section 2 of Public Law 93–100 (12

11 U.S.C. 1832) is amended to read as follows:

12 ‘‘SEC. 2. WITHDRAWALS BY NEGOTIABLE OR TRANSFER13 ABLE INSTRUMENTS FOR TRANSFERS TO

14 THIRD PARTIES.

15 ‘‘Notwithstanding any other provision of law, any de16 pository institution (as defined in section 3 of the Federal

17 Deposit Insurance Act) may permit the owner of any de18 posit or account to make withdrawals from such deposit

19 or account by negotiable or transferable instruments for

20 the purpose of making payments to third parties. With

21 respect to an escrow account maintained in connection

22 with a loan, a lender or servicer shall pay interest on such

23 account only if such payments are required by contract

24 between the lender or servicer and the borrower, or a spe25 cific statutory provision of the law of the State in which
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1 the security property is located requires the lender or

2 servicer to make such payments.’’.

3 (2) REPEAL OF PROHIBITION ON PAYMENT OF

4 INTEREST ON DEMAND DEPOSITS.—

5 (A) FEDERAL RESERVE ACT.—Section

6 19(i) of the Federal Reserve Act (12 U.S.C.

7 371a) is amended to read as follows:

8 ‘‘(i) [Reserved].’’.

9 (B) HOME OWNERS’ LOAN ACT.—Section

10 5(b)(1)(B) of the Home Owners’ Loan Act (12

11 U.S.C. 1464(b)(1)(B)) is amended in the first

12 sentence, by striking ‘‘savings association may

13 not—’’ and all that follows through ‘‘(ii) permit

14 any’’ and inserting ‘‘savings association may

15 not permit any’’.

16 (C) FEDERAL DEPOSIT INSURANCE ACT.—

17 Section 18(g) of the Federal Deposit Insurance

18 Act (12 U.S.C. 1828(g)) is amended to read as

19 follows:

20 ‘‘(g) [Reserved].’’.

21 (3) EFFECTIVE DATE.—The amendments made

22 by this subsection shall take effect on January 1,

23 2001.
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1 SEC. 103. REPEAL OF SAVINGS ASSOCIATION LIQUIDITY

2 PROVISION.

3 (a) REPEAL OF LIQUIDITY PROVISION.—Section 6 of

4 the Home Owners’ Loan Act (12 U.S.C. 1465) is repealed.

5 (b) CONFORMING AMENDMENTS.—

6 (1) SECTION 5.—Section 5(c)(1)(M) of the

7 Home Owners’ Loan Act (12 U.S.C. 1464(c)(1)(M))

8 is amended to read as follows:

9 ‘‘(M) LIQUIDITY INVESTMENTS.—Invest10 ments identified by the Director, including

11 cash, funds on deposit at a Federal reserve

12 bank or a Federal home loan bank, or bankers’

13 acceptances.’’.

14 (2) SECTION 10.—Section 10(m)(4)(B)(iii) of

15 the Home Owners’ Loan Act (12 U.S.C.

16 1467a(m)(4)(B)(iii)) is amended by striking ‘‘liquid

17 assets’’ and all that follows through ‘‘Loan Act,’’

18 and inserting ‘‘cash and marketable securities identi19 fied by the Director,’’.

20 SEC. 104. REPEAL OF DIVIDEND NOTICE REQUIREMENT.

21 Section 10(f) of the Home Owners’ Loan Act (12

22 U.S.C. 1467a(f)) is amended to read as follows:

23 ‘‘(f) [Reserved].’’.

24 SEC. 105. THRIFT SERVICE COMPANIES.

25 Section 5(c)(4)(B) of the Home Owners’ Loan Act

26 (12 U.S.C. 1464(c)(4)(B)) is amended—
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1 (1) in the subparagraph heading, by striking

2 ‘‘CORPORATIONS’’ and inserting ‘‘COMPANIES’’; and

3 (2) in the first sentence, by striking ‘‘corpora4 tion organized’’ and all that follows through ‘‘such

5 State.’’ and inserting ‘‘company, if such company

6 engages or will engage only in activities reasonably

7 related to the activities of financial institutions, as

8 the Director may determine and approve. For pur9 poses of this subparagraph, the term ‘company’ in10 cludes any corporation and any limited liability com11 pany (as defined in section 1(b)(7) of the Bank

12 Service Company Act).’’.

13 SEC. 106. ELIMINATION OF THRIFT MULTISTATE MULTIPLE

14 HOLDING COMPANY RESTRICTIONS.

15 Section 10(e) of the Home Owners’ Loan Act (12

16 U.S.C. 1467a(e)) is amended—

17 (1) by striking paragraph (3); and

18 (2) by redesignating paragraphs (4), (5), and

19 (6) as paragraphs (3), (4), and (5), respectively.

20 SEC. 107. NONCONTROLLING INVESTMENTS BY SAVINGS

21 ASSOCIATION HOLDING COMPANIES.

22 Section 10(e)(1)(A)(iii) of the Home Owners’ Loan

23 Act (12 U.S.C. 1467a(e)(1)(A)(iii) is amended—

24 (1) by inserting ‘‘, except with the prior written

25 approval of the Director,’’ after ‘‘or to retain’’;
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1 (2) by striking ‘‘so acquire or retain’’ and in2 serting ‘‘acquire or retain, and the Director may not

3 authorize acquisition or retention of,’’; and

4 (3) by striking ‘‘(c)(2). This clause’’ and insert5 ing ‘‘(c)(2), except that this clause’’.

6 SEC. 108. REPEAL OF DEPOSIT BROKER NOTIFICATION AND

7 RECORDKEEPING REQUIREMENT.

8 Section 29A of the Federal Deposit Insurance Act

9 (12 U.S.C. 1831f–1) is repealed.

10 SEC. 109. UNIFORM REGULATION OF EXTENSIONS OF

11 CREDIT TO EXECUTIVE OFFICERS.

12 Section 22(g)(4) of the Federal Reserve Act (12

13 U.S.C. 375a(4)) is amended by striking ‘‘member bank’s

14 appropriate Federal banking agency’’ and inserting

15 ‘‘Board’’.

16 SEC. 110. EXPEDITED PROCEDURES FOR CERTAIN REORGA17 NIZATIONS.

18 The National Bank Consolidation and Merger Act

19 (12 U.S.C. 215 et seq.) is amended—

20 (1) by redesignating section 5 as section 7; and

21 (2) by inserting after section 4 the following

22 new section:
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1 ‘‘SEC. 5. EXPEDITED PROCEDURES FOR CERTAIN REORGA2 NIZATIONS.

3 ‘‘(a) IN GENERAL.—A national banking association

4 may, with the approval of the Comptroller, pursuant to

5 rules and regulations promulgated by the Comptroller, and

6 upon the affirmative vote of the shareholders of such asso7 ciation owning at least two-thirds of its capital stock out8 standing, reorganize so as to become a subsidiary of a

9 bank holding company or a company that will, upon con10 summation of such reorganization, become a bank holding

11 company.

12 ‘‘(b) REORGANIZATION PLAN.—A reorganization au13 thorized under subsection (a) shall be carried out in ac14 cordance with a reorganization plan that—

15 ‘‘(1) specifies the manner in which the reorga16 nization shall be carried out;

17 ‘‘(2) is approved by a majority of the entire

18 board of directors of the association;

19 ‘‘(3) specifies—

20 ‘‘(A) the amount of cash or securities of

21 the bank holding company, or both, or other

22 consideration, to be paid to the shareholders of

23 the reorganizing association in exchange for

24 their shares of stock of the association;
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1 ‘‘(B) the date as of which the rights of

2 each shareholder to participate in such ex3 change will be determined; and

4 ‘‘(C) the manner in which the exchange

5 will be carried out; and

6 ‘‘(4) is submitted to the shareholders of the re7 organizing association at a meeting to be held on the

8 call of the directors in accordance with the proce9 dures prescribed in connection with a merger of a

10 national bank under section 3.

11 ‘‘(c) RIGHTS OF DISSENTING SHAREHOLDERS.—If,

12 pursuant to this section, a reorganization plan has been

13 approved by the shareholders and the Comptroller, any

14 shareholder of the association who has voted against the

15 reorganization at the meeting referred to in subsection

16 (b)(4), or has given notice in writing at or prior to that

17 meeting to the presiding officer that the shareholder dis18 sents from the reorganization plan, shall be entitled to re19 ceive the value of his or her shares, as provided by section

20 3 for the merger of a national bank.

21 ‘‘(d) EFFECT OF REORGANIZATION.—The corporate

22 existence of an association that reorganizes in accordance

23 with this section shall not be deemed to have been affected

24 in any way by reason of such reorganization.
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1 ‘‘(e) APPROVAL UNDER THE BANK HOLDING COM2 PANY ACT.—This section does not affect in any way the

3 applicability of the Bank Holding Company Act of 1956

4 to a transaction described in subsection (a).’’.

5 SEC. 111. NATIONAL BANK DIRECTORS.

6 (a) AMENDMENTS TO THE REVISED STATUTES.—

7 Section 5145 of the Revised Statutes of the United States

8 (12 U.S.C. 71) is amended—

9 (1) by striking ‘‘for one year’’ and inserting

10 ‘‘for a period of not more than 3 years’’; and

11 (2) by adding at the end the following: ‘‘In ac12 cordance with regulations issued by the Comptroller

13 of the Currency, an association may adopt bylaws

14 that provide for staggering the terms of its direc15 tors.’’.

16 (b) AMENDMENT TO THE BANKING ACT OF 1933.—

17 Section 31 of the Banking Act of 1933 (12 U.S.C. 71a)

18 is amended in the first sentence, by inserting before the

19 period ‘‘, except that the Comptroller of the Currency may,

20 by regulation or order, exempt a national banking associa21 tion from the 25-member limit established by this sec22 tion’’.
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1 SEC. 112. AMENDMENT TO BANK CONSOLIDATION AND

2 MERGER ACT.

3 The National Bank Consolidation and Merger Act

4 (12 U.S.C. 215 et seq.) is amended by inserting after sec5 tion 5, as added by section 110 of this Act, the following

6 new section:

7 ‘‘SEC. 6. MERGERS AND CONSOLIDATIONS WITH SUBSIDI8 ARIES AND NONBANK AFFILIATES.

9 ‘‘(a) IN GENERAL.—Upon the approval of the Comp10 troller, a national banking association may merge with 1

11 or more of its nonbank subsidiaries or affiliates.

12 ‘‘(b) SCOPE.—Nothing in this section shall be

13 construed—

14 ‘‘(1) to affect the applicability of section 18(c)

15 of the Federal Deposit Insurance Act; or

16 ‘‘(2) to grant a national banking association

17 any power or authority that is not permissible for a

18 national banking association under other applicable

19 provisions of law.

20 ‘‘(c) REGULATIONS.—The Comptroller shall promul21 gate regulations to implement this section.’’.

22 SEC. 113. LOANS ON OR PURCHASES BY INSTITUTIONS OF

23 THEIR OWN STOCK; AFFILIATIONS.

24 (a) AMENDMENT TO REVISED STATUTES.—Section

25 5201 of the Revised Statutes of the United States (12

26 U.S.C. 83) is amended to read as follows:
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1 ‘‘SEC. 5201. LOANS BY BANK ON ITS OWN STOCK.

2 ‘‘(a) GENERAL PROHIBITION.—No national banking

3 association shall make any loan or discount on the security

4 of the shares of its own capital stock.

5 ‘‘(b) EXCLUSION.—For purposes of this section, an

6 association shall not be deemed to be making a loan or

7 discount on the security of the shares of its own capital

8 stock if it acquires the stock to prevent loss upon a debt

9 previously contracted for in good faith.’’.

10 (b) AMENDMENT TO FEDERAL DEPOSIT INSURANCE

11 ACT.—Section 18 of the Federal Deposit Insurance Act

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

13 following new subsection:

14 ‘‘(t) LOANS BY INSURED INSTITUTIONS ON THEIR

15 OWN STOCK.—

16 ‘‘(1) GENERAL PROHIBITION.—No insured de17 pository institution shall make any loan or discount

18 on the security of the shares of its own capital stock.

19 ‘‘(2) EXCLUSION.—For purposes of this sub20 section, an insured depository institution shall not be

21 deemed to be making a loan or discount on the secu22 rity of the shares of its own capital stock if it ac23 quires the stock to prevent loss upon a debt pre24 viously contracted for in good faith.’’.

25 (c) REMOVAL OF PROHIBITION ON CERTAIN AFFILI26 ATIONS.—Section 18(s) of the Federal Deposit Insurance
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1 Act (12 U.S.C. 1828(s)) is amended by adding at the end

2 the following new paragraph:

3 ‘‘(6) CERTAIN INVESTMENTS.—Paragraph (1)

4 does not apply with respect to investments lawfully

5 made prior to April 11, 1996, by a depository insti6 tution in any Government-sponsored enterprise (as

7 defined in section 1404(e)(1) of the Financial Insti8 tutions Reform, Recovery, and Enforcement Act of

9 1989 (12 U.S.C. 1811 note)).’’.

10 SEC. 114. DEPOSITORY INSTITUTION MANAGEMENT INTER11 LOCKS.

12 Section 205(8) of the Depository Institution Manage13 ment Interlocks Act (12 U.S.C. 3204(8)) is amended by

14 striking ‘‘director’’ each place it appears and inserting

15 ‘‘management official’’.

16 SEC. 115. PURCHASED MORTGAGE SERVICING RIGHTS.

17 Section 475 of the Federal Depository Insurance Cor18 poration Improvement Act of 1991 (12 U.S.C. 1828 note)

19 is amended—

20 (1) in subsection (a)(1), by inserting ‘‘(or such

21 other percentage exceeding 90 percent but not ex22 ceeding 100 percent, as may be determined under

23 subsection (b))’’ after ‘‘90 percent’’; and
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1 (2) by redesignating subsections (b) and (c) as

2 subsections (c) and (d), respectively, and by insert3 ing after subsection (a) the following new subsection:

4 ‘‘(b) AUTHORITY TO DETERMINE PERCENTAGE BY

5 WHICH TO DISCOUNT VALUE OF SERVICING RIGHTS.—

6 The appropriate Federal banking agencies may allow read7 ily marketable purchased mortgage servicing rights to be

8 valued at more than 90 percent of their fair market value

9 but at not more than 100 percent of such value, if such

10 agencies jointly make a finding that such valuation would

11 not have an adverse effect on the deposit insurance funds

12 or the safety and soundness of insured depository institu13 tions.’’.

14 SEC. 116. CROSS MARKETING RESTRICTION; LIMITED PUR15 POSE BANK RELIEF.

16 (a) CROSS MARKETING RESTRICTION.—Section 4(f)

17 of the Bank Holding Company Act of 1956 (12 U.S.C.

18 1843(f)) is amended by striking paragraph (3).

19 (b) DAYLIGHT OVERDRAFTS.—Section 4(f) of the

20 Bank Holding Company Act of 1956 (12 U.S.C. 1843(f))

21 is amended by inserting after paragraph (2) the following

22 new paragraph:

23 ‘‘(3) PERMISSIBLE OVERDRAFTS DESCRIBED.—

24 For purposes of paragraph (2)(C), an overdraft is

25 described in this paragraph if—
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1 ‘‘(A) such overdraft results from an inad2 vertent computer or accounting error that is be3 yond the control of both the bank and the affili4 ate;

5 ‘‘(B) such overdraft—

6 ‘‘(i) is permitted or incurred on behalf

7 of an affiliate that is monitored by, reports

8 to, and is recognized as a primary dealer

9 by the Federal Reserve Bank of New York;

10 and

11 ‘‘(ii) is fully secured, as required by

12 the Board, by bonds, notes, or other obli13 gations that are direct obligations of the

14 United States or on which the principal

15 and interest are fully guaranteed by the

16 United States or by securities and obliga17 tions eligible for settlement on the Federal

18 Reserve book entry system; or

19 ‘‘(C) such overdraft—

20 ‘‘(i) is permitted or incurred by, or on

21 behalf of, an affiliate that is engaged in ac22 tivities that are so closely related to bank23 ing, or managing or controlling banks, as

24 to be a proper incident thereto; and
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1 ‘‘(ii) does not cause the bank to vio2 late any provision of section 23A or 23B of

3 the Federal Reserve Act, either directly, in

4 the case of a bank that is a member of the

5 Federal Reserve System, or by virtue of

6 section 18(j) of the Federal Deposit Insur7 ance Act, in the case of a bank that is not

8 a member of the Federal Reserve Sys9 tem.’’.

10 (c) ACTIVITIES LIMITATIONS.—Section 4(f)(2) of the

11 Bank Holding Company Act of 1956 (12 U.S.C.

12 1843(f)(2)) is amended—

13 (1) by striking ‘‘Paragraph (1) shall cease to

14 apply to any company described in such paragraph

15 if—’’ and inserting ‘‘Subject to paragraph (3), a

16 company described in paragraph (1) shall no longer

17 qualify for the exemption provided under that para18 graph if—’’;

19 (2) in subparagraph (A)—

20 (A) in clause (ii)(IX), by striking ‘‘and’’ at

21 the end;

22 (B) in clause (ii)(X), by inserting ‘‘and’’

23 after the semicolon;

24 (C) in clause (ii), by inserting after sub25 clause (X) the following:
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1 ‘‘(XI) assets that are derived

2 from, or incidental to, consumer lend3 ing activities in which institutions de4 scribed in section 2(c)(2)(F) or sec5 tion 2(c)(2)(H) are permitted to en6 gage;’’; and

7 (D) by striking ‘‘or’’ at the end; and

8 (3) by striking subparagraph (B) and inserting

9 the following:

10 ‘‘(B) any bank subsidiary of such

11 company—

12 ‘‘(i) accepts demand deposits or de13 posits that the depositor may withdraw by

14 check or similar means for payment to

15 third parties; and

16 ‘‘(ii) engages in the business of mak17 ing commercial loans (except that, for pur18 poses of this clause, loans made in the or19 dinary course of a credit card operation

20 shall not be treated as commercial loans);

21 or

22 ‘‘(C) after the date of enactment of the

23 Competitive Equality Amendments of 1987, any

24 bank subsidiary of such company permits any

25 overdraft (including any intraday overdraft), or
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1 incurs any such overdraft in the account of the

2 bank at a Federal reserve bank, on behalf of an

3 affiliate, other than an overdraft described in

4 paragraph (3).’’.

5 SEC. 117. DIVESTITURE REQUIREMENT.

6 Section 4(f)(4) of the Bank Holding Company Act

7 of 1956 (12 U.S.C. 1843(f)(4)) is amended to read as fol8 lows:

9 ‘‘(4) DIVESTITURE IN CASE OF LOSS OF EX10 EMPTION.—If any company described in paragraph

11 (1) fails to qualify for the exemption provided under

12 such paragraph by operation of paragraph (2), such

13 exemption shall cease to apply to such company and

14 such company shall divest control of each bank it

15 controls before the end of the 180-day period begin16 ning on the date that the company receives notice

17 from the Board that the company has failed to con18 tinue to qualify for such exemption, unless before

19 the end of such 180-day period, the company has—

20 ‘‘(A) either—

21 ‘‘(i) corrected the condition or ceased

22 the activity that caused the company to

23 fail to continue to qualify for the exemp24 tion; or
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1 ‘‘(ii) submitted a plan to the Board

2 for approval to cease the activity or correct

3 the condition in a timely manner (which

4 shall not exceed 1 year); and

5 ‘‘(B) implemented procedures that are rea6 sonably adapted to avoid the reoccurrence of

7 such condition or activity.’’.

8 TITLE II—STREAMLINING

9 ACTIVITIES OF INSTITUTIONS

10 SEC. 201. UPDATING OF AUTHORITY FOR COMMUNITY DE11 VELOPMENT INVESTMENTS.

12 Section 5(c)(3)(A) of the Home Owners’ Loan Act

13 (12 U.S.C. 1464(c)(3)(A)) is amended by striking ‘‘lo14 cated’’ and all that follows through ‘‘1974’’ and inserting

15 ‘‘for the primary purpose of promoting the public welfare,

16 including the welfare of low- and moderate-income com17 munities or families (including the provision of housing,

18 services, or jobs)’’.

19 SEC. 202. FEDERAL RESERVE ACT LENDING LIMITS.

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

21 248) is amended—

22 (1) by striking subsection (m); and

23 (2) by redesignating subsection (o) as sub24 section (m).
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1 SEC. 203. BUSINESS PURPOSE CREDIT EXTENSIONS.

2 Section 4 of the Bank Holding Company Act of 1956

3 (12 U.S.C. 1843) is amended by adding at the end the

4 following new subsection:

5 ‘‘(k) BUSINESS PURPOSE CREDIT EXTENSIONS.—

6 ‘‘(1) IN GENERAL.—An institution referred to

7 in section 2(c)(2)(F) or 4(f)(3) may engage in the

8 provision of credit card accounts for business pur9 poses, including the issuance of such accounts to

10 small businesses.

11 ‘‘(2) DEFINITION.—For purposes of this sub12 section, the term ‘credit card’ has the same meaning

13 as in section 103 of the Truth In Lending Act (15

14 U.S.C. 1602).’’.

15 SEC. 204. AFFINITY GROUPS.

16 (a) SECTION 3 OF RESPA.—Section 3 of the Real

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

18 2602) is amended—

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

20 end;

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

22 the end and inserting ‘‘; and’’; and

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

24 ‘‘(9) the term ‘affinity group’ means any per25 son, other than an individual, that—
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1 ‘‘(A) is established for a common objective

2 or purpose;

3 ‘‘(B) is not established directly or indi4 rectly by 1 or more settlement service providers

5 for the principal purpose of endorsing the prod6 ucts or services of a settlement service provider;

7 ‘‘(C) the common objective or purpose of

8 which is not principally the conduct of settle9 ment services; and

10 ‘‘(D) does not consist of or is not estab11 lished by any member organization (or any af12 filiate, parent, or subsidiary thereof), the prin13 cipal business of which is providing settlement

14 services.’’.

15 (b) SECTION 8 OF RESPA.—Section 8(c) of the Real

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

17 2607(c)) is amended—

18 (1) by striking ‘‘prohibiting (1) the’’ and insert19 ing ‘‘prohibiting—

20 ‘‘(1) the’’;

21 (2) by striking ‘‘loan, (2) the’’ and inserting

22 ‘‘loan;

23 ‘‘(2) the’’;

24 (3) by striking ‘‘performed, (3) payments’’ and

25 inserting ‘‘performed;
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1 ‘‘(3) payments’’;

2 (4) by striking ‘‘brokers, (4) affiliated’’ and in3 serting ‘‘brokers;

4 ‘‘(4) affiliated’’; and

5 (5) by striking ‘‘relationship, or (5) such’’ and

6 inserting ‘‘relationship;

7 ‘‘(5) the payment or other transfer of any thing

8 of value to an affinity group for or in connection

9 with a written endorsement, either through an ad10 vertisement or through a communication addressed

11 to a consumer by name or by mailing address, of the

12 products or services of a settlement service provider

13 other than as to a federally related mortgage loan,

14 the proceeds of which are used to acquire the prop15 erty securing the loan, if—

16 ‘‘(A) the consumer will receive a direct fi17 nancial benefit from the endorsement; and

18 ‘‘(B) the disclosure is clearly made at the

19 time of the first written communication with

20 the consumer of the fact that a payment has

21 been made or may be made or any other thing

22 of value may accrue to the affinity group for

23 the endorsement; or

24 ‘‘(6) such’’.
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1 SEC. 205. FAIR DEBT COLLECTION PRACTICES.

2 (a) UNFAIR PRACTICES.—Section 808(1) of the Fair

3 Debt Collection Practices Act (15 U.S.C. 1692f(1)) is

4 amended by striking ‘‘unless’’ and all that follows through

5 the period and inserting the following: ‘‘unless such

6 amount—

7 ‘‘(A) is expressly authorized by the agree8 ment creating the debt;

9 ‘‘(B) is permitted by law; or

10 ‘‘(C) is reasonable, does not exceed $25,

11 results from the collection of a check returned

12 for insufficient funds, and notice of the charge

13 was conspicuously posted at the place where the

14 check was written, in a State in which the law

15 does not address the collection of such

16 amounts.’’.

17 (b) COLLECTION ACTIVITY FOLLOWING INITIAL NO18 TICE.—Section 809 of the Fair Debt Collection Practices

19 Act (15 U.S.C. 1692g) is amended by adding at the end

20 the following new subsection:

21 ‘‘(d) CONTINUATION DURING PERIOD.—Except as

22 provided in subsection (b), collection activities and legal

23 proceedings may continue during the 30-day period de24 scribed in subsection (a) to the extent that the activities

25 and communications do not overshadow or contradict the

26 information provided in accordance with subsection (a).’’.
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1 (c) CERTAIN STUDENT LOANS.—Section 805(b) of

2 the Fair Debt Collection Practices Act (15 U.S.C.

3 1692c(b)) is amended by inserting ‘‘or a prejudgment ad4 ministrative wage garnishment permitted under section

5 488A of the Higher Education Act of 1965 (20 U.S.C.

6 1095a),’’ after ‘‘remedy,’’.

7 SEC. 206. RESTRICTION ON ACQUISITIONS OF OTHER IN8 SURED DEPOSITORY INSTITUTIONS.

9 Section 4(f)(12) of the Bank Holding Company Act

10 of 1956 (12 U.S.C. 1843(f)(12)) is amended—

11 (1) in subparagraph (A), by striking ‘‘or’’ at

12 the end;

13 (2) in subparagraph (B), by striking the period

14 at the end and inserting ‘‘; or’’; and

15 (3) by adding at the end the following new sub16 paragraph:

17 ‘‘(C) in an acquisition in which the insured

18 institution has been found to be undercapital19 ized by the appropriate Federal or State au20 thority.’’.

21 SEC. 207. MUTUAL HOLDING COMPANIES.

22 Section 10(o) of the Home Owners’ Loan Act (12

23 U.S.C. 1467a(o)) is amended—

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

25 following:
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1 ‘‘(1) REORGANIZATION.—A savings association

2 operating in mutual form may reorganize so as to

3 become a holding company—

4 ‘‘(A) by chartering a savings association,

5 the stock of which is to be wholly owned, except

6 as otherwise provided in this section, directly or

7 indirectly by the mutual association and by

8 transferring the substantial part of its assets

9 and liabilities, by merger or otherwise, including

10 all of its insured liabilities, to the interim sav11 ings association;

12 ‘‘(B) by converting to a stock association

13 charter and simultaneously forming a subsidi14 ary stock holding company that owns 100 per15 cent of the voting stock of the converting asso16 ciation; or

17 ‘‘(C) in any other manner approved by the

18 Director, including by the formation of a sub19 sidiary stock holding company, transferring as20 sets and liabilities by merger or otherwise to

21 the subsidiary stock holding company, or

22 through the use of one or more interim institu23 tions.’’;

24 (2) in paragraph (3)(D)—
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1 (A) by striking ‘‘a savings association’’ and

2 inserting ‘‘the mutual holding company or sub3 sidiary stock holding company’’;

4 (B) by striking ‘‘such capital’’ and insert5 ing ‘‘the capital of the association’’;

6 (C) by striking ‘‘association’s’’; and

7 (D) by inserting ‘‘of the association’’ be8 fore ‘‘established’’;

9 (3) in paragraph (5)—

10 (A) by inserting ‘‘or subsidiary stock hold11 ing company’’ before ‘‘may engage’’;

12 (B) in subparagraph (A)—

13 (i) by inserting ‘‘or acquiring’’ after

14 ‘‘Investing in’’; and

15 (ii) by inserting ‘‘, savings bank, or

16 bank’’ before the period; and

17 (C) in subparagraph (C), by inserting ‘‘or

18 bank’’ before the period;

19 (4) by striking paragraph (7) and inserting the

20 following:

21 ‘‘(7) CHARTERING AND REGULATION.—

22 ‘‘(A) IN GENERAL.—A mutual holding

23 company shall be chartered by the Director,

24 and a subsidiary stock holding company may be

25 chartered under State law, and such holding
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1 companies shall be subject to such regulations

2 as the Director may prescribe. Unless the con3 text otherwise requires, a mutual holding com4 pany shall be subject to the other requirements

5 of this section regarding regulation of holding

6 companies.

7 ‘‘(B) CONVERSION TO STATE CHARTER.—

8 A mutual holding company organized pursuant

9 to paragraph (1) may convert its charter to a

10 State mutual holding company charter.

11 ‘‘(C) CONVERSION TO FEDERAL CHAR12 TER.—Notwithstanding any other provision of

13 Federal law, a mutual holding company orga14 nized under State law may convert its State

15 mutual holding company charter to a Federal

16 mutual holding company charter.’’;

17 (5) in paragraph (8)—

18 (A) in subparagraph (A), by inserting ‘‘or

19 subsidiary stock holding company’’ after ‘‘com20 pany’’; and

21 (B) by striking subparagraph (B) and in22 serting the following:

23 ‘‘(B) ISSUANCE OF SHARES.—This section

24 does not prohibit a savings association or sub25 sidiary stock holding company chartered as part
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1 of a transaction described in paragraph (1)

2 from—

3 ‘‘(i) issuing any nonvoting shares or

4 less than 50 percent of the voting share of

5 such association or subsidiary stock hold6 ing company to any person other than the

7 mutual holding company;

8 ‘‘(ii) issuing all of the voting shares of

9 such association to a subsidiary stock hold10 ing company, if more than 50 percent of

11 the voting shares of the subsidiary stock

12 holding company are owned by the mutual

13 holding company; or

14 ‘‘(iii) issuing to any person other than

15 the mutual holding company, in connection

16 with the formation of the mutual holding

17 company or at a later date, a separate

18 class of voting shares, the rights and pref19 erences of which are identical to those of

20 the class of voting shares issued to the mu21 tual holding company, except with respect

22 to the payment of dividends.

23 ‘‘(C) MUTUAL SAVINGS ASSOCIATION.—In

24 the case of a mutual savings association in

25 which holders of accounts or obligors exercise
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1 voting rights, such holders of accounts or obli2 gors shall have the right to subscribe on a pri3 ority basis for voting shares of the subsidiary

4 stock holding company or savings association

5 chartered pursuant to paragraph (1), pursuant

6 to regulations of the Director, but only with re7 spect to the voting shares issued in connection

8 with the initial reorganization pursuant to para9 graph (1). The priority subscription rights ap10 plicable to voting shares issued to the mutual

11 holding company in connection with the initial

12 reorganization pursuant to paragraph (1) shall

13 be exercisable at such time as the shares are

14 subsequently sold by the subsidiary savings as15 sociation or subsidiary stock holding com16 pany.’’;

17 (6) in paragraph (9)(A)(i)(I), by inserting ‘‘, di18 rectly or indirectly,’’ after ‘‘owned’’; and

19 (7) in paragraph (10)—

20 (A) by striking ‘‘subsection—’’ and insert21 ing ‘‘subsection, the following definitions shall

22 apply:’’; and

23 (B) by adding at the end the following:

24 ‘‘(D) SUBSIDIARY STOCK HOLDING COM25 PANY.—The term ‘subsidiary stock holding
33

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1 company’ means a stock holding company orga2 nized under applicable State law, that is wholly3 owned, except as otherwise provided in this sec4 tion, by the mutual holding company.’’.

5 SEC. 208. CALL REPORT SIMPLIFICATION.

6 (a) MODERNIZATION OF CALL REPORT FILING AND

7 DISCLOSURE SYSTEM.—In order to reduce the adminis8 trative requirements pertaining to bank reports of condi9 tion, savings association financial reports, and bank hold10 ing company consolidated and parent-only financial state11 ments, and to improve the timeliness of such reports and

12 statements, the Federal banking agencies shall—

13 (1) work jointly to develop a system under

14 which—

15 (A) insured depository institutions and

16 their affiliates may file such reports and state17 ments electronically; and

18 (B) the Federal banking agencies may

19 make such reports and statements available to

20 the public electronically; and

21 (2) not later than 1 year after the date of en22 actment of this Act, report to the Congress and

23 make recommendations for legislation that would en24 hance efficiency for filers and users of such reports

25 and statements.
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1 (b) UNIFORM REPORTS AND SIMPLIFICATION OF IN2 STRUCTIONS.—The Federal banking agencies shall, con3 sistent with the principles of safety and soundness, work

4 jointly—

5 (1) to adopt a single form for the filing of core

6 information required to be submitted under Federal

7 law to all such agencies in the reports and state8 ments referred to in subsection (a); and

9 (2) to simplify instructions accompanying such

10 reports and statements and to provide an index to

11 the instructions that is adequate to meet the needs

12 of both filers and users.

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

14 Federal banking agency shall—

15 (1) review the information required by sched16 ules supplementing the core information referred to

17 in subsection (b); and

18 (2) eliminate requirements that are not war19 ranted for reasons of safety and soundness or other

20 public purposes.
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1 TITLE III—STREAMLINING

2 AGENCY ACTIONS

3 SEC. 301. ELIMINATION OF DUPLICATIVE DISCLOSURE OF

4 FAIR MARKET VALUE OF ASSETS AND LIABIL5 ITIES.

6 Section 37(a)(3) of the Federal Deposit Insurance

7 Act (12 U.S.C. 1831n(a)(3)) is amended by striking sub8 paragraph (D).

9 SEC. 302. PAYMENT OF INTEREST IN RECEIVERSHIPS WITH

10 SURPLUS FUNDS.

11 Section 11(d)(10) of the Federal Deposit Insurance

12 Act (12 U.S.C. 1821(d)(10)) is amended by adding at the

13 end the following new subparagraph:

14 ‘‘(C) RULEMAKING AUTHORITY OF COR15 PORATION.—The Corporation may prescribe

16 such rules, including definitions of terms, as it

17 deems appropriate to establish the interest rate

18 for or to make payments of post insolvency in19 terest to creditors holding proven claims against

20 the receivership estates of insured Federal or

21 State depository institutions following satisfac22 tion by the receiver of the principal amount of

23 all creditor claims.’’.
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1 SEC. 303. REPEAL OF REPORTING REQUIREMENT ON DIF2 FERENCES IN ACCOUNTING STANDARDS.

3 Section 37(c) of the Federal Deposit Insurance Act

4 (12 U.S.C. 1831n(c)) is amended—

5 (1) in paragraph (1), by striking ‘‘Each’’ and

6 all that follows through ‘‘a report’’ and inserting

7 ‘‘The Federal banking agencies shall jointly submit

8 an annual report’’; and

9 (2) by inserting ‘‘any’’ before ‘‘such agency’’

10 each place that term appears.

11 SEC. 304. AGENCY REVIEW OF COMPETITIVE FACTORS IN

12 BANK MERGER ACT FILINGS.

13 (a) REPORT REQUIRED.—Section 18(c)(4) of the

14 Federal Deposit Insurance Act (12 U.S.C. 1828(c)(4)) is

15 amended by striking ‘‘request reports’’ and all that follows

16 through the period at the end of the paragraph and insert17 ing the following: ‘‘request a report on the competitive fac18 tors involved from the Attorney General. The report shall

19 be furnished not later than 30 calendar days after the date

20 on which it is requested, or not later than 10 calendar

21 days after such date if the requesting agency advises the

22 Attorney General that an emergency exists requiring expe23 ditious action.’’.

24 (b) TIMING OF TRANSACTION.—Section 18(c)(6) of

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

26 is amended by striking the third sentence and inserting
37

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1 the following: ‘‘If the agency has advised the Attorney

2 General of the existence of an emergency requiring expedi3 tious action and has requested a report on the competitive

4 factors within 10 days, the transaction may not be con5 summated before the fifth calendar day after the date of

6 approval by the agency.’’.

7 (c) EVALUATION OF COMPETITIVE EFFECT.—

8 (1) AMENDMENTS TO THE BANK HOLDING

9 COMPANY ACT OF 1956.—Section 3(c) of the Bank

10 Holding Company Act of 1956 (12 U.S.C. 1842(c))

11 is amended—

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

13 paragraph:

14 ‘‘(6) EVALUATION OF COMPETITIVE EFFECT.—

15 The Board may not disapprove of a transaction pur16 suant to paragraph (1)(B) unless the Board takes

17 into account, to the extent that data are readily

18 available—

19 ‘‘(A) competition from institutions, other

20 than depository institutions (as defined in sec21 tion 3 of the Federal Deposit Insurance Act),

22 that provide financial services;

23 ‘‘(B) efficiencies and cost savings that the

24 transaction may create;
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1 ‘‘(C) deposits of the participants in the

2 transaction that are not derived from the rel3 evant market;

4 ‘‘(D) the capacity of savings associations

5 to make small business loans;

6 ‘‘(E) lending by institutions other than de7 pository institutions to small businesses; and

8 ‘‘(F) such other factors as the Board

9 deems relevant.’’; and

10 (B) in paragraph (1)(B), by striking ‘‘re11 straint or trade’’ and inserting ‘‘restraint of

12 trade’’.

13 (2) AMENDMENTS TO THE FEDERAL DEPOSIT

14 INSURANCE ACT.—Section 18(c)(5) of the Federal

15 Deposit Insurance Act (12 U.S.C. 1828(c)(5)) is

16 amended—

17 (A) by redesignating subparagraphs (A)

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

19 (B) by inserting ‘‘(A)’’ after ‘‘(5)’’;

20 (C) by striking ‘‘In every case’’ and insert21 ing the following:

22 ‘‘(B) In every case under this subsection’’; and

23 (D) by adding at the end the following:
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1 ‘‘(C) The responsible agency may not dis2 approve of a transaction pursuant to subparagraph

3 (A), unless the agency takes into account—

4 ‘‘(i) competition from institutions that pro5 vide financial services;

6 ‘‘(ii) efficiencies and cost savings that the

7 transaction may create;

8 ‘‘(iii) deposits of the participants in the

9 transaction that are not derived from the rel10 evant markets;

11 ‘‘(iv) the capacity of the institutions to

12 make small business loans;

13 ‘‘(v) lending by institutions other than de14 pository institutions to small businesses; and

15 ‘‘(vi) such other factors as the responsible

16 agency deems relevant.’’.

17 SEC. 305. ELIMINATION OF SAIF AND DIF SPECIAL RE18 SERVES.

19 (a) SAIF SPECIAL RESERVES.—Section 11(a)(6) of

20 the Federal Deposit Insurance Act (12 U.S.C. 1821(a)(6))

21 is amended by striking subparagraph (L).

22 (b) DIF SPECIAL RESERVES.—Section 2704 of the

23 Deposit Insurance Funds Act of 1996 (12 U.S.C. 1821

24 note) is amended—

25 (1) by striking subsection (b); and
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1 (2) in subsection (d)—

2 (A) by striking paragraph (4);

3 (B) in paragraph (6)(C)(i), by striking

4 ‘‘(6) and (7)’’ and inserting ‘‘(5), (6), and (7)’’;

5 and

6 (C) in paragraph (6)(C), by striking clause

7 (ii) and inserting the following:

8 ‘‘(ii) by redesignating paragraph (8)

9 as paragraph (5).’’.

10 TITLE IV—MISCELLANEOUS

11 SEC. 401. ALTERNATIVE COMPLIANCE METHODS FOR AD12 VERTISING CREDIT TERMS.

13 Chapter 3 of the Truth in Lending Act (15 U.S.C.

14 1661 et seq.) is amended by adding at the end the follow15 ing new section:

16 ‘‘SEC. 148. ALTERNATIVE DISCLOSURES.

17 ‘‘(a) IN GENERAL.—A radio or television advertise18 ment to aid, promote, or assist, directly or indirectly, any

19 extension of consumer credit may satisfy the disclosure re20 quirements in sections 143, 144(d), 147(a), or 147(e), by

21 complying with all of the requirements in subsections (b)

22 and (c) of this section.

23 ‘‘(b) INFORMATION TO BE DISCLOSED.—A radio or

24 television advertisement referred to in subsection (a) com25 plies with this subsection if it clearly and conspicuously
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1 sets forth, in such form and manner as the Board may

2 require—

3 ‘‘(1) the annual percentage rate of any finance

4 charge and, at the option of the creditor, the simple

5 interest rate with respect to closed-end credit, or the

6 periodic rate with respect to an open-end credit plan;

7 ‘‘(2) whether the interest rate may vary;

8 ‘‘(3) if the advertisement states an introductory

9 rate (or states with respect to a variable-rate plan

10 an initial rate that is not based on the index and

11 margin used to make later rate adjustments)—

12 ‘‘(A) with equal prominence, the annual

13 percentage rate that will be in effect after the

14 introductory or initial rate period expires (or

15 for a variable-rate plan, a reasonably current

16 annual percentage rate that would have been in

17 effect using the index and margin); and

18 ‘‘(B) the period during which the introduc19 tory or initial rate will remain in effect;

20 ‘‘(4) the amount of any annual fee for an open21 end credit plan;

22 ‘‘(5) a telephone number established in accord23 ance with subsection (c) that may be used by con24 sumers to obtain all of the information otherwise re25 quired to be disclosed pursuant to sections 143 and
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1 144(d), and subsections (a) and (e) of section 147;

2 and

3 ‘‘(6) a statement that the consumer may use

4 the telephone number established in accordance with

5 subsection (c) to obtain further details about addi6 tional terms and costs associated with the offer of

7 credit.

8 ‘‘(c) REQUIREMENTS FOR TELEPHONE NUMBERS.—

9 In the case of an advertisement described in subsection

10 (b) that refers to a telephone number—

11 ‘‘(1) the creditor shall establish the telephone

12 number for a broadcast area not later than the date

13 on which the advertisement is first broadcast in that

14 area;

15 ‘‘(2) the required information shall be available

16 by telephone for a broadcast area for a period of not

17 less than 10 days following the date of the final

18 broadcast of the advertisement in that area;

19 ‘‘(3) the creditor shall provide all of the infor20 mation that is otherwise required pursuant to sec21 tions 143 and 144(d), and subsections (a) and (e)

22 of section 147 orally by telephone or, if requested by

23 the consumer, in written form; and
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1 ‘‘(4) the consumer shall obtain the required in2 formation by telephone without incurring any long3 distance charges.’’.

4 SEC. 402. POSITIONS OF BOARD OF GOVERNORS OF FED5 ERAL RESERVE SYSTEM ON THE EXECUTIVE

6 SCHEDULE.

7 (a) IN GENERAL.—

8 (1) POSITIONS AT LEVEL I OF THE EXECUTIVE

9 SCHEDULE.—Section 5312 of title 5, United States

10 Code, is amended by adding at the end the follow11 ing:

12 ‘‘Chairman, Board of Governors of the Federal

13 Reserve System.’’.

14 (2) POSITIONS AT LEVEL II OF THE EXECUTIVE

15 SCHEDULE.—Section 5313 of title 5, United States

16 Code, is amended—

17 (A) by striking ‘‘Chairman, Board of Gov18 ernors of the Federal Reserve System.’’; and

19 (B) by adding at the end the following:

20 ‘‘Members, Board of Governors of the Federal

21 Reserve System.’’.

22 (3) POSITIONS AT LEVEL III OF THE EXECU23 TIVE SCHEDULE.—Section 5314 of title 5, United

24 States Code, is amended by striking ‘‘Members,
44

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1 Board of Governors of the Federal Reserve Sys2 tem.’’.

3 (b) EFFECTIVE DATE.—This section and the amend4 ments made by this section shall take effect on the first

5 day of the first pay period for the Chairman and Members

6 of the Board of Governors of the Federal Reserve System

7 beginning on or after the date of enactment of this section.

8 SEC. 403. FEDERAL HOUSING FINANCE BOARD.

9 Section 2A(b)(2) of the Federal Home Loan Bank

10 Act (12 U.S.C. 1422a(b)(2)) is amended—

11 (1) by striking subparagraph (B); and

12 (2) by redesignating subparagraphs (C) and

13 (D) as subparagraphs (B) and (C), respectively.

14 SEC. 404. CRA FLEXIBILITY FOR CREDIT CARD BANKS.

15 Section 2(c)(2)(F) of the Bank Holding Company Act

16 of 1956 (12 U.S.C. 1841(c)(2)(F)) is amended—

17 (1) in clause (i), by striking ‘‘in credit card op18 erations;’’ and inserting ‘‘in—

19 ‘‘(I) credit card operations; and

20 ‘‘(II) making and purchasing

21 loans, in an aggregate amount not to

22 exceed 1 percent of the total assets of

23 the institution, which loans help to

24 meet the credit needs of low- and

25 moderate-income persons and neigh-
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1 borhoods or promote economic devel2 opment by financing small businesses

3 or farms, consistent with the safe and

4 sound operation of the institution;’’;

5 and

6 (2) in clause (v), by inserting before the period

7 ‘‘, other than making or purchasing loans for the

8 purposes described in and to the extent permitted in

9 clause (i)(II)’’.

10 TITLE V—TECHNICAL

11 CORRECTIONS

12 SEC. 501. TECHNICAL CORRECTION RELATING TO DEPOSIT

13 INSURANCE FUNDS.

14 (a) IN GENERAL.—Section 2707 of the Deposit In15 surance Funds Act of 1996 (Public Law 104–208; 110

16 Stat. 3009–496) is amended—

17 (1) by striking ‘‘7(b)(2)(C)’’ and inserting

18 ‘‘7(b)(2)(E)’’; and

19 (2) by striking ‘‘, as redesignated by section

20 2704(d)(6) of this subtitle’’.

21 (b) EFFECTIVE DATE.—The amendments made by

22 subsection (a) shall be deemed to have the same effective

23 date as section 2707 of the Deposit Insurance Funds Act

24 of 1996.
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1 SEC. 502. RULES FOR CONTINUATION OF DEPOSIT INSUR2 ANCE FOR MEMBER BANKS CONVERTING

3 CHARTERS.

4 Section 8(o) of the Federal Deposit Insurance Act

5 (12 U.S.C. 1818(o)) is amended in the second sentence,

6 by striking ‘‘subsection (d) of section 4’’ and inserting

7 ‘‘subsection (c) or (d) of section 4’’.

8 SEC. 503. AMENDMENTS TO THE REVISED STATUTES.

9 (a) WAIVER OF CITIZENSHIP REQUIREMENT FOR

10 NATIONAL BANK DIRECTORS.—Section 5146 of the Re11 vised Statutes of the United States (12 U.S.C. 72) is

12 amended in the first sentence, by inserting before the pe13 riod ‘‘, and waive the requirement of citizenship in the case

14 of not more than a minority of the total number of direc15 tors’’.

16 (b) TECHNICAL AMENDMENT TO THE REVISED

17 STATUTES.—Section 329 of the Revised Statutes of the

18 United States (12 U.S.C. 11) is amended by striking ‘‘to

19 be interested in any association issuing national currency

20 under the laws of the United States’’ and inserting ‘‘to

21 hold an interest in any national bank’’.

22 (c) REPEAL OF UNNECESSARY CAPITAL AND SUR23 PLUS REQUIREMENT.—Section 5138 of the Revised Stat24 utes of the United States (12 U.S.C. 51) is repealed.
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1 SEC. 504. CONFORMING CHANGE TO THE INTERNATIONAL

2 BANKING ACT OF 1978.

3 Section 4(b) of the International Banking Act of

4 1978 (12 U.S.C. 3102(b)) is amended in the second sen5 tence, by striking paragraph (1) and by redesignating

6 paragraphs (2) through (4) as paragraphs (1) through

7 (3), respectively.