IIB 

115TH CONGRESS 

2D SESSION H. R. 1426 

IN THE SENATE OF THE UNITED STATES 

JANUARY 30, 2018 

Received; read twice and referred to the Committee on Banking, Housing, and 

Urban Affairs 

AN ACT 

To amend the Home Owners’ Loan Act to allow Federal 

savings associations to elect to operate as national banks, 

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. 

2 This Act may be cited as the ‘‘Federal Savings Asso3 ciation Charter Flexibility Act of 2017’’. 

4 SEC. 2. OPTION FOR FEDERAL SAVINGS ASSOCIATIONS TO 

5 OPERATE AS A COVERED SAVINGS ASSOCIA6 TION. 

7 The Home Owners’ Loan Act is amended by inserting 

8 after section 5 (12 U.S.C. 1464) the following: 

9 ‘‘SEC. 5A. ELECTION TO OPERATE AS A COVERED SAVINGS 

10 ASSOCIATION. 

11 ‘‘(a) DEFINITION.—In this section, the term ‘covered 

12 savings association’ means a Federal savings association 

13 that makes an election approved under subsection (b). 

14 ‘‘(b) ELECTION.— 

15 ‘‘(1) IN GENERAL.—Upon issuance of the rules 

16 described in subsection (f), a Federal savings asso17 ciation may elect to operate as a covered savings as18 sociation by submitting a notice to the Comptroller 

19 of such election. 

20 ‘‘(2) APPROVAL.—A Federal savings association 

21 shall be deemed to be approved to operate as a cov22 ered savings association on the date that is 60 days 

23 after the date on which the Comptroller receives the 

24 notice under paragraph (1), unless the Comptroller 

25 notifies the Federal savings association otherwise. 


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1 ‘‘(c) RIGHTS AND DUTIES.—Notwithstanding any 

2 other provision of law and except as otherwise provided 

3 in this section, a covered savings association shall— 

4 ‘‘(1) have the same rights and privileges as a 

5 national bank that has its main office situated in the 

6 same location as the home office of the covered sav7 ings association; and 

8 ‘‘(2) be subject to the same duties, restrictions, 

9 penalties, liabilities, conditions, and limitations that 

10 would apply to such a national bank. 

11 ‘‘(d) TREATMENT OF COVERED SAVINGS ASSOCIA12 TIONS.—A covered savings association shall be treated as 

13 a Federal savings association for the purposes— 

14 ‘‘(1) of governance of the covered savings asso15 ciation, including incorporation, bylaws, boards of 

16 directors, shareholders, and distribution of divi17 dends; 

18 ‘‘(2) of consolidation, merger, dissolution, con19 version (including conversion to a stock bank or to 

20 another charter), conservatorship, and receivership; 

21 and 

22 ‘‘(3) determined by regulation of the Comp23 troller. 

24 ‘‘(e) EXISTING BRANCHES.—A covered savings asso25 ciation may continue to operate any branch or agency the 


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1 covered savings association operated on the date on which 

2 an election under subsection (b) is approved. 

3 ‘‘(f) RULEMAKING.—The Comptroller shall issue 

4 rules to carry out this section— 

5 ‘‘(1) that establish streamlined standards and 

6 procedures that clearly identify required documenta7 tion or timelines for an election under subsection 

8 (b); 

9 ‘‘(2) that require a Federal savings association 

10 that makes an election under subsection (b) to iden11 tify specific assets and subsidiaries— 

12 ‘‘(A) that do not conform to the require13 ments for assets and subsidiaries of a national 

14 bank; and 

15 ‘‘(B) that are held by the Federal savings 

16 association on the date on which the Federal 

17 savings association submits a notice of such 

18 election; 

19 ‘‘(3) that establish— 

20 ‘‘(A) a transition process for bringing such 

21 assets and subsidiaries into conformance with 

22 the requirements for a national bank; and 

23 ‘‘(B) procedures for allowing the Federal 

24 savings association to provide a justification for 

25 grandfathering such assets and subsidiaries 


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1 after electing to operate as a covered savings 

2 association; 

3 ‘‘(4) that establish standards and procedures to 

4 allow a covered savings association to terminate an 

5 election under subsection (b) after an appropriate 

6 period of time or to make a subsequent election; 

7 ‘‘(5) that clarify requirements for the treatment 

8 of covered savings associations, including the provi9 sions of law that apply to covered savings associa10 tions; and 

11 ‘‘(6) as the Comptroller deems necessary and in 

12 the interests of safety and soundness.’’. 

Passed the House of Representatives January 29, 

2018. 

Attest: KAREN L. HAAS, 

Clerk. 


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