II

Calendar No. 177

104TH CONGRESS

1ST SESSION S. 883

[Report No. 104–133]

To amend the Federal Credit Union Act to enhance the safety and soundness

of federally insured credit unions, to protect the National Credit Union

Share Insurance Fund, and for other purposes.

IN THE SENATE OF THE UNITED STATES

JUNE 6 (legislative day, JUNE 5), 1995

Mr. D’AMATO (for himself and Mr. SARBANES) introduced the following bill;

which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs

AUGUST 9 (legislative day, JULY 10), 1995

Reported by Mr. D’AMATO, without amendment

A BILL

To amend the Federal Credit Union Act to enhance the

safety and soundness of federally insured credit unions,

to protect the National Credit Union Share Insurance

Fund, 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,
2

•S 883 RS

1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Credit Union Reform

3 and Enhancement Act’’.

4 SEC. 2. INSURED CREDIT UNION INVESTMENTS IN OTHER

5 CREDIT UNIONS.

6 (a) AMENDMENTS TO SECTION 107.—Section 107(7)

7 of the Federal Credit Union Act (12 U.S.C. 1757(7)) is

8 amended—

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

10 (2) by redesignating subparagraphs (H)

11 through (K) as subparagraphs (G) through (J), re12 spectively.

13 (b) AMENDMENT TO SECTION 205.—Section 205 of

14 the Federal Credit Union Act (12 U.S.C. 1785) is amend15 ed by adding at the end the following new subsection:

16 ‘‘(j) INSURED CREDIT UNION INVESTMENTS IN

17 OTHER CREDIT UNIONS.—An insured credit union may

18 invest in shares, deposits, notes, or other instruments of

19 another credit union only if such other credit union is also

20 insured pursuant to this title.’’.

21 SEC. 3. ACTIVITIES OF INSURED STATE-CHARTERED CRED22 IT UNIONS.

23 Section 205 of the Federal Credit Union Act (12

24 U.S.C. 1785) is amended by adding at the end the follow25 ing new subsection:
3

•S 883 RS

1 ‘‘(k) ACTIVITIES OF INSURED STATE-CHARTERED

2 CREDIT UNIONS.—

3 ‘‘(1) IN GENERAL.—A State-chartered insured

4 credit union may not exercise asset powers of a type,

5 or in an amount, not authorized for Federal credit

6 unions, unless either—

7 ‘‘(A) the asset power was—

8 ‘‘(i) authorized pursuant to the laws

9 of the State in which the credit union is

10 chartered; and

11 ‘‘(ii) being utilized by one or more

12 credit unions in that State on May 1,

13 1995; or

14 ‘‘(B) the Board determines that the exer15 cise of the asset power would pose no signifi16 cant risk to the Fund.

17 ‘‘(2) CONTINUED RULEMAKING AUTHORITY.—

18 Nothing in this subsection shall restrict or limit in

19 any way the general rulemaking authority of the

20 Board.

21 ‘‘(3) DEFINITION.—For purposes of this sub22 section, the term ‘asset powers’ refers to any item

23 or activity properly reflected on the asset side of the

24 financial statements of a credit union, as may be
4

•S 883 RS

1 more specifically defined by regulation of the

2 Board.’’.

3 SEC. 4. CORPORATE CREDIT UNIONS.

4 (a) IN GENERAL.—Section 120(a) of the Federal

5 Credit Union Act (12 U.S.C. 1766(a)) is amended—

6 (1) in the second sentence, by striking ‘‘central

7 credit union’’ and inserting ‘‘corporate credit

8 union’’; and

9 (2) by adding at the end the following: ‘‘The

10 Board shall, by regulation, establish limits on loans

11 and investments by a corporate credit union to a

12 single obligor and minimum capital requirements for

13 corporate credit unions.’’.

14 (b) DEFINITION.—Section 101 of the Federal Credit

15 Union Act (12 U.S.C. 1752) is amended by adding at the

16 end the following new paragraph:

17 ‘‘(10) The term ‘corporate credit union’ has the

18 meaning given to that term under the rules or regu19 lations of the Board.’’.

20 SEC. 5. AUTHORITY OF THE NCUA BOARD TO PLACE FED21 ERALLY INSURED STATE-CHARTERED CRED22 IT UNIONS INTO LIQUIDATION.

23 Section 207(a)(1) of the Federal Credit Union Act

24 (12 U.S.C. 1787(a)(1)) is amended—
5

•S 883 RS

1 (1) by redesignating subparagraph (B) as sub2 paragraph (C);

3 (2) in subparagraph (C), as redesignated, by

4 striking ‘‘paragraph (1)’’ and inserting ‘‘subpara5 graph (A) or (B)’’; and

6 (3) by inserting after subparagraph (A) the fol7 lowing new subparagraph:

8 ‘‘(B) Notwithstanding any other provision of this Act

9 or other law, the Board may, after prior consultation with

10 the appropriate State credit union supervisory authority,

11 appoint itself as a liquidating agent for any State-char12 tered credit union that is insured under this title, and may

13 close such credit union, if the Board determines that the

14 credit union is insolvent or bankrupt. In any such case,

15 the Board shall have all of the rights, privileges, powers,

16 and duties specified in this section as applicable to the

17 liquidation of Federal credit unions.’’.

18 SEC. 6. CONSULTATION FOR CONSERVATORSHIPS OF FED19 ERALLY INSURED STATE-CHARTERED CRED20 IT UNIONS.

21 Section 206(h)(2) of the Federal Credit Union Act

22 (12 U.S.C. 1786(h)(2)) is amended to read as follows:

23 ‘‘(2) In the case of a State-chartered insured

24 credit union, the authority conferred by paragraph

25 (1) shall not be exercised without prior consultation
6

•S 883 RS

1 with the appropriate State credit union supervisory

2 authority.’’.

Calendar No. 177

104TH CONGRESS

1ST SESSION S. 833

[Report No. 104–133]

A BILL

To amend the Federal Credit Union Act to enhance

poses.Union Share Insurance Fund, and for other purcredit unions, to protect the National Creditthe safety and soundness of federally insured

AUGUST 9 (legislative day, JULY 10), 1995

Reported without amendment