Calendar No. 602

105TH CONGRESS

2D SESSION S. 1405

[Report No. 105–346]

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

SEPTEMBER 24, 1998

Reported with an amendment
II

Calendar No. 602

105TH CONGRESS

2D SESSION S. 1405

[Report No. 105–346]

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

NOVEMBER 7, 1997

Mr. SHELBY (for himself, Mr. MACK, Mr. FAIRCLOTH, Mr. D’AMATO, Mr.

BRYAN, Mr. GRAMS, Mr. KERRY, Mr. BENNETT, Mr. GRAMM, Mr.

HAGEL, Mr. ALLARD, Mr. ENZI, Ms. MOSELEY-BRAUN, and Mr. COCHRAN) introduced the following bill; which was read twice and referred to

the Committee on Banking, Housing, and Urban Affairs

SEPTEMBER 24, 1998

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 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.
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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 ‘‘Financial Regulatory Relief and Economic Efficiency Act

6 of 1997’’.

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

8 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 savings and demand deposit 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.

Sec. 118. Daylight overdrafts incurred by Federal home loan banks.

Sec. 119. Federal home loan bank governance amendments.

Sec. 120. Collateralization of advances to members.

TITLE II—STREAMLINING ACTIVITIES OF INSTITUTIONS

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

Sec. 202. Acceptance of brokered deposits.

Sec. 203. Federal Reserve Act lending limits.

Sec. 204. Eliminate unnecessary restrictions on product marketing.

Sec. 205. Business purpose credit extensions.

Sec. 206. Affinity groups.

Sec. 207. Fair debt collection practices.

Sec. 208. Restriction on acquisitions of other insured depository institutions.

Sec. 209. Mutual holding companies.

Sec. 210. Call report simplification.
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TITLE III—STREAMLINING AGENCY ACTIONS

Sec. 301. Scheduled meetings of Affordable Housing Advisory Board.

Sec. 302. Elimination of duplicative disclosure of fair market value of assets

and liabilities.

Sec. 303. Payment of interest in receiverships with surplus funds.

Sec. 304. Repeal of reporting requirement on differences in accounting standards.

Sec. 305. Agency review of competitive factors in Bank Merger Act filings.

Sec. 306. Termination of the Thrift Depositor Protection Oversight Board.

TITLE IV—DISCLOSURE SIMPLIFICATION

Sec. 401. Alternative compliance method for APR disclosure.

Sec. 402. Alternative compliance methods for advertising credit terms.

TITLE V—MISCELLANEOUS

Sec. 501. Positions of Board of Governors of Federal Reserve System on the

Executive Schedule.

Sec. 502. Consistent coverage for individuals enrolled in a health plan administered by the Federal banking agencies.

Sec. 503. Federal Housing Finance Board.

TITLE VI—TECHNICAL CORRECTIONS

Sec. 601. Technical correction relating to deposit insurance funds.

Sec. 602. Rules for continuation of deposit insurance for member banks converting charters.

Sec. 603. Amendments to the Revised Statutes.

Sec. 604. Conforming change to the International Banking Act.

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
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1 depository institution to meet the reserve re2 quirements of this subsection applicable with re3 spect to such depository institution may receive

4 earnings to be paid by the Federal reserve bank

5 at least once each calendar quarter at a rate or

6 rates not to exceed the general level of short7 term interest rates.

8 ‘‘(B) REGULATIONS RELATING TO PAY9 MENTS AND DISTRIBUTION.—The Board may

10 prescribe regulations concerning—

11 ‘‘(i) the payment of earnings in ac12 cordance with this paragraph;

13 ‘‘(ii) the distribution of such earnings

14 to the depository institutions which main15 tain balances at such banks or on whose

16 behalf such balances are maintained; and

17 ‘‘(iii) the responsibilities of depository

18 institutions, Federal home loan banks, and

19 the National Credit Union Administration

20 Central Liquidity Facility with respect to

21 the crediting and distribution of earnings

22 attributable to balances maintained, in ac23 cordance with subsection (c)(1)(B), in a

24 Federal reserve bank by any such entity on
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1 behalf of depository institutions which are

2 not member banks.’’.

3 (b) AUTHORIZATION FOR PASS THROUGH RESERVES

4 FOR MEMBER BANKS.—Section 19(c)(1)(B) of the Fed5 eral Reserve Act (12 U.S.C. 461(c)(1)(B)) is amended by

6 striking ‘‘which is not a member bank’’.

7 (c) TECHNICAL AND CONFORMING AMENDMENTS.—

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

9 is amended—

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

11 by striking subparagraph (C) and redesignating sub12 paragraphs (D) and (E) as subparagraphs (C) and

13 (D), respectively; and

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

15 461(c)(1)(A)), by striking ‘‘subsection (b)(4)(C)’’

16 and inserting ‘‘subsection (b)’’.

17 SEC. 102. AMENDMENTS RELATING TO SAVINGS AND DE18 MAND DEPOSIT ACCOUNTS AT DEPOSITORY

19 INSTITUTIONS.

20 (a) NOW ACCOUNTS AUTHORIZED FOR ALL BUSI21 NESSES.—Section 2 of Public Law 93–100 (12 U.S.C.

22 1832) is amended to read as follows:
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1 ‘‘SEC. 2. WITHDRAWALS BY NEGOTIABLE OR TRANSFER2 ABLE INSTRUMENTS FOR TRANSFERS TO

3 THIRD PARTIES.

4 ‘‘Notwithstanding any other provision of law, any de5 pository institution (as defined in section 3 of the Federal

6 Deposit Insurance Act) may permit the owner of any de7 posit or account to make withdrawals from such deposit

8 or account by negotiable or transferable instruments for

9 the purpose of making payments to third parties.’’.

10 (b) REPEAL OF PROHIBITIONS ON PAYMENT OF IN11 TEREST ON DEMAND DEPOSITS.—

12 (1) FEDERAL RESERVE ACT.—Section 19 of the

13 Federal Reserve Act (12 U.S.C. 371a) is amended

14 by striking subsection (i).

15 (2) HOME OWNERS’ LOAN ACT.—The first sen16 tence of section 5(b)(1)(B) of the Home Owners’

17 Loan Act (12 U.S.C. 1464(b)(1)(B)) is amended by

18 striking ‘‘savings association may not—’’ and all

19 that follows through ‘‘(ii) permit any’’ and inserting

20 ‘‘savings association may not permit any’’.

21 (3) FEDERAL DEPOSIT INSURANCE ACT.—Sec22 tion 18 of the Federal Deposit Insurance Act (12

23 U.S.C. 1828) is amended by striking subsection (g).
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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 (a) STREAMLINING THRIFT SERVICE COMPANY IN26 VESTMENT REQUIREMENTS.—Section 5(c)(4)(B) of the
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1 Home Owners’ Loan Act (12 U.S.C. 1464(c)(4)(B)) is

2 amended—

3 (1) in the subparagraph heading, by striking

4 ‘‘CORPORATIONS’’ and inserting ‘‘COMPANIES’’; and

5 (2) in the first sentence, by striking ‘‘corpora6 tion organized’’ and all that follows through ‘‘such

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

8 engages or will engage only in activities reasonably

9 related to the activities of financial institutions, as

10 the Director may determine and approve. For pur11 poses of this subparagraph, the term ‘company’ in12 cludes any corporation and any limited liability com13 pany (as defined in section 1(b)(7) of the Bank

14 Service Company Act).’’.

15 (b) REGULATION AND EXAMINATION OF SERVICE

16 PROVIDERS.—Section 5(d) of the Home Owners’ Loan

17 Act (12 U.S.C. 1464(d)) is amended by adding at the end

18 the following new paragraphs:

19 ‘‘(7) REGULATION AND EXAMINATION OF SAV20 INGS ASSOCIATION SERVICE COMPANIES.—

21 ‘‘(A) SERVICE PERFORMED BY CONTRACT

22 OR OTHERWISE.—If a savings association, sub23 sidiary, or any savings and loan affiliate or en24 tity, as identified by section 8(b)(9) of the Fed25 eral Deposit Insurance Act, that is regularly ex-
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1 amined or subject to examination by the Direc2 tor, causes to be performed for itself, by con3 tract or otherwise, any services authorized

4 under this Act or other applicable Federal law,

5 whether on or off its premises—

6 ‘‘(i) such performance shall be subject

7 to regulation and examination by the Di8 rector to the same extent as if such serv9 ices were being performed by the savings

10 association on its own premises;

11 ‘‘(ii) the Director may authorize any

12 other Federal banking agency (as defined

13 in section 3 of the Federal Deposit Insur14 ance Act) that supervises such subsidiary,

15 savings and loan affiliate, or entity to per16 form an examination referred to in clause

17 (i); and

18 ‘‘(iii) the savings association shall no19 tify the Director of the existence of the

20 service relationship not later than 30 days

21 after the earlier of the date of the making

22 of such service contract or the date of initi23 ation of the service.

24 ‘‘(B) ADMINISTRATION BY THE DIREC25 TOR.—The Director may issue such regulations
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1 and orders, including those issued pursuant to

2 section 8 of the Federal Deposit Insurance Act,

3 as may be necessary to enable the Director to

4 administer and carry out this paragraph and to

5 prevent evasion of this paragraph.’’.

6 (c) CONFORMING AMENDMENTS TO SECTION 8 OF

7 THE FEDERAL DEPOSIT INSURANCE ACT.—Section 8 of

8 the Federal Deposit Insurance Act (12 U.S.C. 1818) is

9 amended—

10 (1) in subsection (b)(9), by striking ‘‘to any

11 service corporation of a savings association and to

12 any subsidiary of such service corporation’’; and

13 (2) in subsection (e)(7)(A)(ii), by striking

14 ‘‘(b)(8)’’ and inserting ‘‘(b)(9)’’.

15 SEC. 106. ELIMINATION OF THRIFT MULTISTATE MULTIPLE

16 HOLDING COMPANY RESTRICTIONS.

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

18 U.S.C. 1467a(e)) is amended—

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

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

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

22 SEC. 107. NONCONTROLLING INVESTMENTS BY SAVINGS

23 ASSOCIATION HOLDING COMPANIES.

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

25 Act (12 U.S.C. 1467a(e)(1)(A)(iii)) is amended—
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1 (1) by inserting ‘‘, except with the prior ap2 proval of the Director,’’ after ‘‘or to retain’’; and

3 (2) by striking ‘‘to so acquire or retain’’ and in4 serting ‘‘to acquire, by purchase or otherwise, or to

5 retain’’.

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 SEC. 111. NATIONAL BANK DIRECTORS.

2 (a) AMENDMENTS TO THE REVISED STATUTES.—

3 Section 5145 of the Revised Statutes (12 U.S.C. 71) is

4 amended—

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

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

7 (2) by adding at the end the following: ‘‘In ac8 cordance with regulations issued by the Comptroller

9 of the Currency, an association may adopt bylaws

10 that provide for staggering the terms of its direc11 tors.’’.

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

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

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

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

16 by regulation or order, exempt a national banking associa17 tion from the 25-member limit established by this sec18 tion’’.

19 SEC. 112. AMENDMENT TO BANK CONSOLIDATION AND

20 MERGER ACT.

21 The National Bank Consolidation and Merger Act

22 (12 U.S.C. 215 et seq.) is amended by inserting after sec23 tion 5, as added by section 110 of this Act, the following

24 new section:
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1 ‘‘SEC. 6. MERGERS AND CONSOLIDATIONS WITH SUBSIDI2 ARIES AND NONBANK AFFILIATES.

3 ‘‘(a) IN GENERAL.—Upon the approval of the Comp4 troller, a national banking association may merge with 1

5 or more of its subsidiaries or nonbank affiliates.

6 ‘‘(b) SCOPE.—Nothing in this section shall be con7 strued—

8 ‘‘(1) to affect the applicability of section

9 18(c)(1) of the Federal Deposit Insurance Act; or

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

11 any power or authority that is not permissible for a

12 national banking association under other applicable

13 provisions of law.

14 ‘‘(c) REGULATIONS.—The Comptroller shall promul15 gate regulations to implement this section.’’.

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

17 THEIR OWN STOCK; AFFILIATIONS.

18 (a) AMENDMENT TO REVISED STATUTES.—Section

19 5201 of the Revised Statutes of the United States (12

20 U.S.C. 83) is amended to read as follows:

21 ‘‘SEC. 5201. LOANS BY BANK ON ITS OWN STOCK.

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

23 association shall make any loan or discount on the security

24 of the shares of its own capital stock.

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

26 association shall not be deemed to be making a loan or
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1 discount on the security of the shares of its own capital

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

3 contracted for in good faith before the date of the loan

4 or discount transaction.’’.

5 (b) AMENDMENT TO FEDERAL DEPOSIT INSURANCE

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

7 (12 U.S.C. 1828) is amended by adding at the end the

8 following new subsection:

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

10 OWN STOCK.—

11 ‘‘(1) GENERAL PROHIBITION.—No insured de12 pository institution shall make any loan or discount

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

14 ‘‘(2) EXCLUSION.—For purposes of this sub15 section, an insured depository institution shall not be

16 deemed to be making a loan or discount on the secu17 rity of the shares of its own capital stock if it ac18 quires the stock to prevent loss upon a debt con19 tracted for in good faith before the date of the loan

20 or discount transaction.’’.

21 (c) REMOVAL OF PROHIBITION ON CERTAIN AFFILI22 ATIONS.—Section 18(s)(1) of the Federal Deposit Insur23 ance Act (12 U.S.C. 1828(s)) is amended by striking ‘‘be

24 an affiliate of,’’.
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1 SEC. 114. DEPOSITORY INSTITUTION MANAGEMENT INTER2 LOCKS.

3 Section 205(8) of the Depository Institution Manage4 ment Interlocks Act (12 U.S.C. 3204(8)) is amended by

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

6 ‘‘management official’’.

7 SEC. 115. PURCHASED MORTGAGE SERVICING RIGHTS.

8 Section 475(a) of the Federal Deposit Insurance Cor9 poration Improvement Act of 1991 (12 U.S.C. 1828 note)

10 is amended—

11 (1) by striking ‘‘purchased’’;

12 (2) by striking ‘‘rights’’ each place it appears

13 and inserting ‘‘assets’’; and

14 (3) by striking ‘‘90’’ and inserting ‘‘100’’.

15 SEC. 116. CROSS MARKETING RESTRICTION; LIMITED PUR16 POSE BANK RELIEF.

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

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

19 1843(f)) is amended by striking paragraph (3).

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

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

22 is amended by inserting after paragraph (2) the following:

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) CONFORMING AMENDMENT.—Section 4(f)(2) of

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

12 1843(f)(2)) is amended by striking ‘‘Paragraph (1) shall

13 cease to apply to any company described in such para14 graph if—’’ and inserting ‘‘Subject to paragraph (3), a

15 company described in paragraph (1) shall no longer qual16 ify for the exemption provided under that paragraph

17 if—’’.

18 (d) ACTIVITIES LIMITATIONS.—Section 4(f)(2) of the

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

20 1843(f)(2)) is amended by striking subparagraph (B) and

21 inserting the following:

22 ‘‘(B) any bank subsidiary of such company

23 engages in any activity in which the bank was

24 not lawfully engaged as of March 5, 1987;
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1 ‘‘(C) any bank subsidiary of such company

2 that—

3 ‘‘(i) accepts demand deposits or de4 posits that the depositor may withdraw by

5 check or similar means for payment to

6 third parties; and

7 ‘‘(ii) engages in the business of mak8 ing commercial loans (and, for purposes of

9 this clause, loans made in the ordinary

10 course of a credit card operation shall not

11 be treated as commercial loans); or

12 ‘‘(D) after the date of enactment of the

13 Competitive Equality Amendments of 1987, any

14 bank subsidiary of such company permits any

15 overdraft (including any intraday overdraft), or

16 incurs any such overdraft in the account of the

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

18 affiliate, other than an overdraft described in

19 paragraph (3).’’.

20 SEC. 117. DIVESTITURE REQUIREMENT.

21 (a) IN GENERAL.—Section 4(f)(4) of the Bank Hold22 ing Company Act of 1956 (12 U.S.C. 1843(f)(4)) is

23 amended to read as follows:

24 ‘‘(4) DIVESTITURE IN CASE OF LOSS OF EX25 EMPTION.—If any company described in paragraph
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1 (1) fails to qualify for the exemption provided under

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

3 exemption shall cease to apply to such company and

4 such company shall divest control of each bank it

5 controls before the end of the 180-day period begin6 ning on the date that the company receives notice

7 from the Board that the company has failed to con8 tinue to qualify for such exemption, unless before

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

10 ‘‘(A) either—

11 ‘‘(i) corrected the condition or ceased

12 the activity that caused the company to

13 fail to continue to qualify for the exemp14 tion; or

15 ‘‘(ii) submitted a plan to the Board

16 for approval to cease the activity or correct

17 the condition in a timely manner (which

18 shall not exceed 1 year); and

19 ‘‘(B) implemented procedures that are rea20 sonably adapted to avoid the reoccurrence of

21 such condition or activity.’’.

22 (b) TECHNICAL AND CONFORMING AMENDMENT.—

23 Section 4(f)(2) of the Bank Holding Company Act of 1956

24 (12 U.S.C. 1843(f)(2)) is amended by striking ‘‘Para25 graph (1) shall cease to apply to any company described
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1 in such paragraph if—’’ and inserting ‘‘A company de2 scribed in paragraph (1) shall no longer qualify for the

3 exemption provided under such paragraph if—’’.

4 SEC. 118. DAYLIGHT OVERDRAFTS INCURRED BY FEDERAL

5 HOME LOAN BANKS.

6 The Federal Reserve Act (12 U.S.C. 221 et seq.) is

7 amended by inserting after section 11A the following new

8 section:

9 ‘‘SEC. 11B. DAYLIGHT OVERDRAFTS INCURRED BY FED10 ERAL HOME LOAN BANKS.

11 ‘‘(a) IN GENERAL.—Any policy or regulation adopted

12 by the Board governing payment system risk or intraday

13 credit shall—

14 ‘‘(1) include—

15 ‘‘(A) the establishment of net debit caps

16 appropriate to the credit quality of each Fed17 eral Home Loan Bank; and

18 ‘‘(B) the imposition of normal fees for day19 light overdrafts, calculated in the same manner

20 as fees for other users; or

21 ‘‘(2) exempt Federal Home Loan Banks from

22 such policy or regulation.

23 ‘‘(b) DEFINITION.—For purposes of this section, the

24 term ‘Federal Home Loan Bank’ has the same meaning

25 as in section 2 of the Federal Home Loan Bank Act.’’.
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1 SEC. 119. FEDERAL HOME LOAN BANK GOVERNANCE

2 AMENDMENTS.

3 The Federal Home Loan Bank Act (12 U.S.C. 1421

4 et seq.) is amended—

5 (1) in section 7(i) (12 U.S.C. 1427(i)), by strik6 ing ‘‘, subject to the approval of the board’’;

7 (2) in section 12(a) (12 U.S.C. 1432(a))—

8 (A) by striking ‘‘, but, except’’ and all that

9 follows through ‘‘ten years’’;

10 (B) by striking ‘‘and by its board of direc11 tors’’ and all that follows through ‘‘enjoyed sub12 ject to the approval of the Board’’ and inserting

13 ‘‘and, by its board of directors, to prescribe,

14 amend, and repeal bylaws governing the man15 ner in which its affairs may be administered,

16 consistent with this Act’’; and

17 (C) by adding at the end the following: ‘‘A

18 Federal home loan bank shall not be required

19 to submit to the board of directors of the bank

20 for its approval, budget or business plans, in21 cluding annual operating and capital budgets,

22 strategic plans, or business plans.’’;

23 (3) in section 9 (12 U.S.C. 1429)—

24 (A) in the second sentence, by striking

25 ‘‘with the approval of the Board’’; and
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1 (B) in the third sentence, by striking ‘‘,

2 subject to the approval of the Board,’’;

3 (4) in section 10(a)(5) (12 U.S.C.

4 1430(a)(5))—

5 (A) by striking ‘‘and the Board’’; and

6 (B) by striking ‘‘by the Board’’ and insert7 ing ‘‘by the Federal home loan bank’’.

8 (5) in section 10(c) (12 U.S.C. 1430(c)), by

9 striking ‘‘Board’’ and inserting ‘‘Federal home loan

10 bank’’;

11 (6) in section 10(d) (12 U.S.C. 1430(d))—

12 (A) by striking ‘‘and the approval of the

13 Board’’; and

14 (B) by striking ‘‘Subject to the approval of

15 the Board, any’’ and inserting ‘‘Any’’; and

16 (7) in section 16(a) (12 U.S.C. 1436(a)), by

17 striking ‘‘, and then only with the approval of the

18 Federal Housing Finance Board’’.

19 SEC. 120. COLLATERALIZATION OF ADVANCES TO MEM20 BERS.

21 Section 10(a) of the Federal Home Loan Bank Act

22 (12 U.S.C. 1430(a)) is amended—

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

24 following:
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1 ‘‘(1) Fully disbursed, whole first mortgages on

2 improved residential property that are not more than

3 90 days delinquent, mortgages on improved residen4 tial property insured or guaranteed by the United

5 States Government or any agency thereof, or securi6 ties representing a whole interest in such mort7 gages.’’; and

8 (2) in paragraph (4), by striking ‘‘If an ad9 vance’’ and all that follows through ‘‘is appro10 priate.’’.

11 TITLE II—STREAMLINING

12 ACTIVITIES OF INSTITUTIONS

13 SEC. 201. UPDATING OF AUTHORITY FOR COMMUNITY DE14 VELOPMENT INVESTMENTS.

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

16 (12 U.S.C. 1464(c)(3)(A)) is amended by striking ‘‘lo17 cated’’ and all that follows through ‘‘1974’’ and inserting

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

19 including the welfare of low- and moderate-income com20 munities or families (including the provision of housing,

21 services, or jobs)’’.

22 SEC. 202. ACCEPTANCE OF BROKERED DEPOSITS.

23 Section 29 of the Federal Deposit Insurance Act (12

24 U.S.C. 1831f) is amended—

25 (1) by striking subsections (e) and (h);
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•S 1405 RS

1 (2) by redesignating subsections (f) through (g)

2 as subsections (e) through (f), respectively;

3 (3) in subsection (f), as redesignated, by strik4 ing paragraph (3) and redesignating paragraph (4)

5 as paragraph (3); and

6 (4) by adding at the end the following new sub7 section:

8 ‘‘(g) DEPOSIT SOLICITATIONS RESTRICTED.—

9 ‘‘(1) IN GENERAL.—An insured depository in10 stitution may not solicit deposits by offering rates of

11 interest that are significantly higher than the na12 tional rate of interest on insured deposits, as estab13 lished by the Corporation, if—

14 ‘‘(A) the institution is undercapitalized or

15 adequately capitalized, as those terms are de16 fined in section 38; or

17 ‘‘(B) the Corporation has been appointed

18 conservator for the institution.

19 ‘‘(2) EXCLUSION.—Paragraph (1) does not

20 apply to an insured depository institution that is

21 well capitalized, as defined in section 38.’’.

22 SEC. 203. FEDERAL RESERVE ACT LENDING LIMITS.

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

24 248) is amended—

25 (1) by striking subsection (m); and
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1 (2) by redesignating subsection (o) as sub2 section (m).

3 SEC. 204. ELIMINATE UNNECESSARY RESTRICTIONS ON

4 PRODUCT MARKETING.

5 Section 106(b) of the Bank Holding Company Act

6 Amendments of 1970 (12 U.S.C. 1972) is amended—

7 (1) by striking paragraph (1);

8 (2) in paragraph (2)—

9 (A) by striking ‘‘(2)’’; and

10 (B) by redesignating subparagraphs (A)

11 through (I) as paragraphs (1) through (9), re12 spectively;

13 (3) in paragraph (6), as redesignated—

14 (A) by redesignating clauses (i) through

15 (ix) as subparagraphs (A) through (I), respec16 tively;

17 (B) by striking ‘‘clause (i)’’ each place it

18 appears and inserting ‘‘subparagraph (A)’’;

19 (C) in subparagraph (B), as redesig20 nated—

21 (i) by redesignating subclauses (I) and

22 (II) as clauses (i) and (ii), respectively;

23 (ii) by striking ‘‘(aa)’’ each place it

24 appears and inserting ‘‘(I)’’;
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1 (iii) by striking ‘‘(bb)’’ each place it

2 appears and inserting ‘‘(II)’’; and

3 (iv) by striking ‘‘(cc)’’ each place it

4 appears and inserting ‘‘(III)’’;

5 (D) in subparagraph (C), as redesig6 nated—

7 (i) by striking ‘‘clauses (i) and (ii)’’

8 and inserting ‘‘subparagraphs (A) and

9 (B)’’;

10 (ii) by redesignating subclauses (I)

11 and (II) as clauses (i) and (ii), respec12 tively;

13 (iii) in clause (i), as redesignated, by

14 redesignating items (aa) through (cc) as

15 subclauses (I) through (III), respectively;

16 and

17 (iv) by striking ‘‘clause (iv)’’ and in18 serting ‘‘subparagraph (D)’’;

19 (E) in subparagraph (D), as redesig20 nated—

21 (i) by striking ‘‘clause (iii)’’ each place

22 it appears and inserting ‘‘subparagraph

23 (C)’’;
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1 (ii) by redesignating subclauses (I)

2 and (II) as clauses (i) and (ii), respec3 tively;

4 (iii) by striking ‘‘(aa)’’ and inserting

5 ‘‘(I)’’; and

6 (iv) by striking ‘‘(bb)’’ and inserting

7 ‘‘(II)’’; and

8 (F) in subparagraph (E), as redesig9 nated—

10 (i) by striking ‘‘(ii) or (iii)’’ and in11 serting ‘‘(B), or (C)’’; and

12 (ii) by redesignating subclauses (I)

13 through (III) as clauses (i) through (iii),

14 respectively;

15 (4) in paragraph (7), as redesignated—

16 (A) by redesignating clauses (i) and (ii) as

17 subparagraphs (A) and (B), respectively; and

18 (B) in subparagraph (A), as redesig19 nated—

20 (i) by redesignating paragraphs (1)

21 through (4) as clauses (i) through (iv), re22 spectively;

23 (ii) by striking ‘‘(a)’’ each place it ap24 pears and inserting ‘‘(I)’’;
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1 (iii) by striking ‘‘(b)’’ each place it ap2 pears and inserting ‘‘(II)’’; and

3 (iv) by striking ‘‘(c)’’ each place it ap4 pears and inserting ‘‘(III)’’;

5 (5) by striking ‘‘this paragraph’’ each place it

6 appears and inserting ‘‘this subsection’’; and

7 (6) by striking ‘‘this subparagraph’’ each place

8 it appears and inserting ‘‘this paragraph’’.

9 SEC. 205. BUSINESS PURPOSE CREDIT EXTENSIONS.

10 Section 4 of the Bank Holding Company Act of 1956

11 (12 U.S.C. 1843) is amended by adding at the end the

12 following new subsection:

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

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

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

16 provision of credit card accounts for business pur17 poses, including the issuance of such accounts to

18 small businesses.

19 ‘‘(2) DEFINITION.—For purposes of this sub20 section, the term ‘credit card’ has the same meaning

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

22 U.S.C. 1602).’’.

23 SEC. 206. AFFINITY GROUPS.

24 (a) DEFINITIONS.—For purposes of this section—
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1 (1) the term ‘‘affinity group’’ means any per2 son, other than an individual, that—

3 (A) is established for a common objective

4 or purpose;

5 (B) is not established by 1 or more settle6 ment service providers for the principal purpose

7 of endorsing the products or services of a settle8 ment service provider;

9 (C) the common objective or purpose of

10 which is not principally the conduct of settle11 ment services; and

12 (D) does not consist of member organiza13 tions whose principal business is providing set14 tlement services; and

15 (2) the terms ‘‘person’’, ‘‘settlement services’’,

16 and ‘‘thing of value’’ have the meanings given those

17 terms in section 3 of the Real Estate Settlement

18 Procedures Act of 1974 (12 U.S.C. 2602).

19 (b) MARKETING MODERNIZATION.—Notwithstanding

20 any other provision of law, it shall not be unlawful to make

21 a payment or otherwise transfer any thing of value to an

22 affinity group for or in connection with an endorsement

23 (written or oral), either through an advertisement or

24 through a communication addressed to a consumer by

25 name or by mailing address, of the products or services
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1 of a settlement service provider, if disclosure is clearly

2 made at the time of the first written communication with

3 the consumer of the fact that a payment has been made

4 or may be made or any other thing of value may accrue

5 to the affinity group for the endorsement.

6 SEC. 207. FAIR DEBT COLLECTION PRACTICES.

7 (a) EXEMPTION FOR COMMUNICATIONS INVOLVING

8 LEGAL PROCEEDINGS.—Section 803 of the Fair Debt Col9 lection Practices Act (15 U.S.C. 1692a) is amended—

10 (1) in paragraph (2)—

11 (A) by striking ‘‘communication’ means

12 the’’ and inserting the following: ‘‘communica13 tion’—

14 ‘‘(A) means the’’; and

15 (B) by striking the period at the end and

16 inserting the following: ‘‘; and

17 ‘‘(B) does not include communications

18 made pursuant to the Federal Rules of Civil

19 Procedure, in the case of a proceeding in a

20 State court, the rules of civil procedure avail21 able under the laws of that State, or a non22 judicial foreclosure proceeding.’’; and

23 (2) in paragraph (5)—

24 (A) by striking ‘‘debt’ means any’’ and in25 serting the following: ‘‘debt’—
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•S 1405 RS

1 ‘‘(A) means any’’;

2 (B) by striking the period at the end and

3 inserting the following: ‘‘; and

4 ‘‘(B) does not include a draft drawn on a

5 bank for a sum certain, payable on demand and

6 signed by the maker.’’.

7 (b) COLLECTION ACTIVITY FOLLOWING INITIAL NO8 TICE.—Section 809 of the Fair Debt Collection Practices

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

10 the following new subsection:

11 ‘‘(d) CONTINUATION DURING PERIOD.—Collection

12 activities and communications may continue during the

13 30-day period described in subsection (a) unless the con14 sumer requests the cessation of such activities.’’.

15 (c) DEFINITION OF ‘‘COMMUNICATION’’.—Section

16 803 of the Fair Debt Collection Practices Act (15 U.S.C.

17 1692a) is amended—

18 (1) by striking ‘‘title—’’ and inserting ‘‘title,

19 the following definitions shall apply:’’; and

20 (2) in paragraph (2)—

21 (A) by striking ‘‘term ‘communication’

22 means’’ and inserting ‘‘term ‘communication’—

23 ‘‘(A) means’’;

24 (B) by striking the period at the end and

25 inserting ‘‘; and
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1 ‘‘(B) does not include any communication

2 made or action taken to collect on loans made,

3 insured, or guaranteed under the Higher Edu4 cation Act of 1965.’’.

5 SEC. 208. RESTRICTION ON ACQUISITIONS OF OTHER IN6 SURED DEPOSITORY INSTITUTIONS.

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

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

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

10 the end;

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

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

13 (3) by adding at the end the following new sub14 paragraph:

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

16 institution has been found to be undercapital17 ized by the appropriate Federal or State au18 thority.’’.

19 SEC. 209. MUTUAL HOLDING COMPANIES.

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

21 U.S.C. 1467a(o)) is amended—

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

23 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 ‘‘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 shall 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; and

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
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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. 210. 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. SCHEDULED MEETINGS OF AFFORDABLE HOUS4 ING ADVISORY BOARD.

5 Section 14(b)(6)(A) of the Resolution Trust Corpora6 tion Completion Act (12 U.S.C. 1831q note) is amended—

7 (1) by striking ‘‘4 times a year, or more fre8 quently if requested’’ and inserting ‘‘2 times a year,

9 or as requested’’; and

10 (2) by striking ‘‘In each year’’ and all that fol11 lows through ‘‘located.’’.

12 SEC. 302. ELIMINATION OF DUPLICATIVE DISCLOSURE OF

13 FAIR MARKET VALUE OF ASSETS AND LIABIL14 ITIES.

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

16 Act (12 U.S.C. 1831n(a)(3)) is amended by striking sub17 paragraph (D).

18 SEC. 303. PAYMENT OF INTEREST IN RECEIVERSHIPS WITH

19 SURPLUS FUNDS.

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

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

22 end the following new subparagraph:

23 ‘‘(C) RULEMAKING AUTHORITY OF COR24 PORATION.—The Corporation may prescribe

25 such rules, including definitions of terms, as it
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1 deems appropriate to establish the interest rate

2 for or to make payments of postinsolvency in3 terest to creditors holding proven claims against

4 the receivership estates of insured Federal or

5 State depository institutions following satisfac6 tion by the receiver of the principal amount of

7 all creditor claims.’’.

8 SEC. 304. REPEAL OF REPORTING REQUIREMENT ON DIF9 FERENCES IN ACCOUNTING STANDARDS.

10 Section 37 of the Federal Deposit Insurance Act (12

11 U.S.C. 1831n) is amended by striking subsection (c).

12 SEC. 305. AGENCY REVIEW OF COMPETITIVE FACTORS IN

13 BANK MERGER ACT FILINGS.

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

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

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

17 through the end of the paragraph and inserting the follow18 ing: ‘‘request a report on the competitive factors involved

19 from the Attorney General. The report shall be furnished

20 not later than 30 calendar days after the date on which

21 it is requested, or not later than 10 calendar days after

22 such date if the requesting agency advises the Attorney

23 General that an emergency exists requiring expeditious ac24 tion.’’.
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1 (b) TIMING OF TRANSACTION.—Section 18(c)(6) of

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

3 is amended by striking the third sentence and inserting

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

5 General of the existence of an emergency requiring expedi6 tious action and has requested a report on the competitive

7 factors within 10 days, the transaction may not be con8 summated before the fifth calendar day after the date of

9 approval by the agency.’’.

10 (c) EVALUATION OF COMPETITIVE EFFECT.—

11 (1) AMENDMENTS TO BANK HOLDING COMPANY

12 ACT OF 1956.—Section 3(c) of the Bank Holding

13 Company Act of 1956 (12 U.S.C. 1842(c)) is

14 amended—

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

16 paragraph:

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

18 The Board may not disapprove of a transaction pur19 suant to paragraph (1)(B) unless the Board takes

20 into account—

21 ‘‘(A) competition from institutions, other

22 than depository institutions (as defined in sec23 tion 3 of the Federal Deposit Insurance Act),

24 that provide financial services;
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1 ‘‘(B) efficiencies and cost savings that the

2 transaction may create;

3 ‘‘(C) deposits of the participants in the

4 transaction that are not derived from the rel5 evant market;

6 ‘‘(D) the capacity of savings associations

7 to make small business loans;

8 ‘‘(E) lending by institutions other than de9 pository institutions to small businesses; and

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

11 deems relevant.’’; and

12 (B) in paragraph (1), by striking ‘‘re13 straint or trade’’ and inserting ‘‘restraint of

14 trade’’.

15 (2) AMENDMENTS TO FEDERAL DEPOSIT IN16 SURANCE ACT.—Section 18(c)(5) of the Federal De17 posit Insurance Act (12 U.S.C. 1828(c)(5)) is

18 amended—

19 (A) by redesignating subparagraphs (A)

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

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

22 (C) by striking ‘‘In every case’’ and insert23 ing the following:

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

25 (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. 306. TERMINATION OF THE THRIFT DEPOSITOR PRO18 TECTION OVERSIGHT BOARD.

19 (a) IN GENERAL.—Effective 3 months after the date

20 of enactment of this Act, the Thrift Depositor Protection

21 Oversight Board established under section 21A of the

22 Federal Home Loan Bank Act (hereafter in this section

23 referred to as the ‘‘Board’’) is terminated.

24 (b) DISPOSITION OF AFFAIRS.—
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1 (1) IN GENERAL.—Effective on the date of en2 actment of this Act, the Chairman of the Board (or

3 the designee of the Chairman) may exercise on be4 half of the Board any power of the Board necessary

5 to settle and conclude the affairs of the Board.

6 (2) AVAILABILITY OF FUNDS.—Funds available

7 to the Board shall be available to the Chairman of

8 the Board to pay expenses incurred in carrying out

9 paragraph (1).

10 (c) SAVINGS PROVISION.—

11 (1) EXISTING RIGHTS, DUTIES, AND OBLIGA12 TIONS NOT AFFECTED.—Nothing in this Act affects

13 the validity of any right, duty, or obligation of the

14 United States, the Board, the Resolution Trust Cor15 poration, or any other person, that—

16 (A) arises under or pursuant to the Fed17 eral Home Loan Bank Act, or any other provi18 sion of law applicable with respect to the

19 Board; and

20 (B) existed on the day before the effective

21 date of the termination of the Board under this

22 Act.

23 (2) CONTINUATION OF SUITS.—No action or

24 other proceeding commenced by or against the
48

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1 Board with respect to any function of the Board

2 shall abate by reason of the enactment of this Act.

3 (3) LIABILITIES.—All liabilities arising out of

4 the operation of the Board during the period begin5 ning on August 9, 1989, and ending on the date

6 that is 3 months after the date of enactment of this

7 Act shall remain the direct liabilities of the United

8 States. The Secretary of the Treasury shall not be

9 substituted for the Board as a party to any such ac10 tion or proceeding.

11 (4) CONTINUATIONS OF ORDERS, RESOLUTIONS,

12 DETERMINATIONS, AND REGULATIONS PERTAINING

13 TO THE RESOLUTION FUNDING CORPORATION.—

14 (A) IN GENERAL.—Each order, resolution,

15 determination, and regulation regarding the

16 Resolution Funding Corporation shall continue

17 in effect according to its terms until modified,

18 terminated, set aside, or superseded in accord19 ance with applicable law, if such order, resolu20 tion, determination, or regulation—

21 (i) was issued, made, and prescribed,

22 or allowed to become effective by the

23 Board or by a court of competent jurisdic24 tion, in the performance of functions trans25 ferred by this Act; and
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1 (ii) is in effect on the date that is 3

2 months after the date of enactment of this

3 Act.

4 (B) ENFORCEABILITY.—All orders, resolu5 tions, determinations, and regulations pertain6 ing to the Resolution Funding Corporation are

7 enforceable by and against—

8 (i) the United States prior to the ef9 fective date of the transfer of responsibil10 ities to the Secretary of the Treasury

11 under this Act; and

12 (ii) the Secretary of the Treasury on

13 and after the effective date of the transfer

14 of responsibilities to the Secretary of the

15 Treasury under this Act.

16 (d) TRANSFER OF CERTAIN RESOLUTION FUNDING

17 CORPORATION RESPONSIBILITIES TO SECRETARY OF

18 TREASURY.—Effective 3 months after the date of enact19 ment of this Act, the authorities and duties of the Board

20 under sections 21A(a)(6)(I) and 21B of the Federal Home

21 Loan Bank Act are transferred to the Secretary of the

22 Treasury (or the designee of the Secretary).

23 (e) MEMBERSHIP OF THE AFFORDABLE HOUSING

24 ADVISORY BOARD.—Effective on the date of enactment of

25 this Act, section 14(b)(2) of the Resolution Trust Cor-
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1 poration Completion Act (12 U.S.C. 1831q note) is

2 amended by striking subparagraph (C) and redesignating

3 subparagraphs (D) and (E) as subparagraphs (C) and

4 (D), respectively.

5 TITLE IV—DISCLOSURE

6 SIMPLIFICATION

7 SEC. 401. ALTERNATIVE COMPLIANCE METHOD FOR APR

8 DISCLOSURE.

9 Section 127A(a)(2)(G) of the Truth in Lending Act

10 (15 U.S.C. 1637a(a)(2)(G)) is amended by inserting be11 fore the semicolon ‘‘or, at the option of the creditor, a

12 statement that the periodic payments may increase or de13 crease substantially’’.

14 SEC. 402. ALTERNATIVE COMPLIANCE METHODS FOR AD15 VERTISING CREDIT TERMS.

16 (a) DOWNPAYMENT AMOUNTS.—Section 144(d) of

17 the Truth in Lending Act (15 U.S.C. 1664(d)) is amend18 ed—

19 (1) by striking ‘‘or the number of installments

20 or the period of repayment, then’’; and

21 (2) by inserting ‘‘or’’ before ‘‘the dollar’’.

22 (b) ALTERNATIVE DISCLOSURES.—Chapter 3 of the

23 Truth in Lending Act (15 U.S.C. 1661 et seq.) is amended

24 by adding at the end the following new section:
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1 ‘‘SEC. 148. ALTERNATIVE DISCLOSURES.

2 ‘‘(a) IN GENERAL.—A radio or television advertise3 ment to aid, promote, or assist, directly or indirectly, any

4 extension of consumer credit may satisfy the disclosure re5 quirements in sections 143, 144(d), 147(a), or 147(e), by

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

7 and (c) of this section.

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

9 television advertisement referred to in subsection (a) com10 plies with this subsection if it clearly and conspicuously

11 sets forth, in such form and manner as the Board may

12 require—

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

14 charge, and with respect to an open-end credit plan,

15 the simple interest rate or the periodic rate in addi16 tion to the annual percentage rate;

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

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

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

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

21 margin used to make later rate adjustments)—

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

23 percentage rate that will be in effect after the

24 introductory or initial rate period expires (or

25 for a variable-rate plan, a reasonably current
52

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1 annual percentage rate that would have been in

2 effect using the index and margin); and

3 ‘‘(B) the period during which the introduc4 tory or initial rate will remain in effect;

5 ‘‘(4) the amount of any annual fee for an open6 end credit plan;

7 ‘‘(5) a telephone number established in accord8 ance with subsection (c) that may be used by con9 sumers to obtain all of the information otherwise re10 quired to be disclosed pursuant to sections 143 and

11 144(d), and subsections (a) and (e) of section 147;

12 and

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

14 the telephone number established in accordance with

15 subsection (c) to obtain further details about addi16 tional terms and costs associated with the offer of

17 credit.

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

19 In the case of an advertisement described in subsection

20 (b) that refers to a telephone number—

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

22 number for a broadcast area not later than the date

23 on which the advertisement is first broadcast in that

24 area;
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1 ‘‘(2) the required information shall be available

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

3 less than 10 days following the date of the final

4 broadcast of the advertisement in that area;

5 ‘‘(3) the creditor shall provide all of the infor6 mation that is otherwise required pursuant to sec7 tions 143 and 144(d), and subsections (a) and (e)

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

9 the consumer, in written form; and

10 ‘‘(4) the consumer shall obtain the required in11 formation by telephone without incurring any long12 distance charges.’’.

13 TITLE V—MISCELLANEOUS

14 SEC. 501. POSITIONS OF BOARD OF GOVERNORS OF FED15 ERAL RESERVE SYSTEM ON THE EXECUTIVE

16 SCHEDULE.

17 (a) IN GENERAL.—

18 (1) POSITIONS AT LEVEL I OF THE EXECUTIVE

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

20 Code, is amended by adding at the end the follow21 ing:

22 ‘‘Chairman, Board of Governors of the Federal

23 Reserve System.’’.
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1 (2) POSITIONS AT LEVEL II OF THE EXECUTIVE

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

3 Code, is amended—

4 (A) by striking ‘‘Chairman, Board of Gov5 ernors of the Federal Reserve System.’’; and

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

7 ‘‘Members, Board of Governors of the Federal

8 Reserve System.’’.

9 (3) POSITIONS AT LEVEL III OF THE EXECU10 TIVE SCHEDULE.—Section 5314 of title 5, United

11 States Code, is amended by striking ‘‘Members,

12 Board of Governors of the Federal Reserve Sys13 tem.’’.

14 (b) EFFECTIVE DATE.—This section and the amend15 ments made by this section shall take effect on the first

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

17 of the Board of Governors of the Federal Reserve System

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

19 SEC. 502. CONSISTENT COVERAGE FOR INDIVIDUALS EN20 ROLLED IN A HEALTH PLAN ADMINISTERED

21 BY THE FEDERAL BANKING AGENCIES.

22 (a) ENROLLMENT IN CHAPTER 89 PLAN.—For pur23 poses of chapter 89 of title 5, United States Code, any

24 period of enrollment shall be deemed to be a period of en-
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1 rollment in a health benefits plan under chapter 89 of such

2 title, if such enrollment is—

3 (1) in a health benefits plan administered by

4 the Federal Deposit Insurance Corporation before

5 the termination of such plan on January 3, 1998; or

6 (2) subject to subsection (c), in a health bene7 fits plan (not under chapter 89 of such title) with

8 respect to which the eligibility of any employees or

9 retired employees of the Board of Governors of the

10 Federal Reserve System terminates on January 3,

11 1998.

12 (b) ENROLLMENT; CONTINUED COVERAGE.—

13 (1) ENROLLMENT.—Subject to subsection (c),

14 any individual who, on January 3, 1998, is enrolled

15 in a health benefits plan described in paragraph (1)

16 or (2) of subsection (a) may enroll in an approved

17 health benefits plan under chapter 89 of title 5,

18 United States Code, either as an individual or for

19 self and family, if, after taking into account the pro20 visions of subsection (a), such individual—

21 (A) meets the requirements of that chapter

22 89 for eligibility to become so enrolled as an

23 employee, annuitant, or former spouse (within

24 the meaning of that chapter); or
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1 (B) would meet the requirements of that

2 chapter 89 if, to the extent such requirements

3 involve either retirement system under such

4 title 5, such individual satisfies similar require5 ments or provisions of the Retirement Plan for

6 Employees of the Federal Reserve System.

7 (2) DETERMINATIONS.—Any determination

8 under paragraph (1)(B) shall be made under guide9 lines established by the Office of Personnel Manage10 ment in consultation with the Board of Governors of

11 the Federal Reserve System.

12 (3) CONTINUED COVERAGE.—Subject to sub13 section (c), any individual who, on January 3, 1998,

14 is entitled to continued coverage under a health ben15 efits plan described in paragraph (1) or (2) of sub16 section (a) shall be deemed to be entitled to contin17 ued coverage under section 8905a of title 5, United

18 States Code, but only for the same remaining period

19 as would have been allowable under the health bene20 fits plan in which such individual was enrolled on

21 January 3, 1998, if—

22 (A) the individual had remained enrolled in

23 that plan; and

24 (B) that plan did not terminate, or the eli25 gibility of such individual with respect to that
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1 plan did not terminate, as described in sub2 section (a).

3 (4) COMPARABLE TREATMENT.—Subject to

4 subsection (c), any individual (other than an individ5 ual under paragraph (3)) who, on January 3, 1998,

6 is covered under a health benefits plan described in

7 paragraph (1) or (2) of subsection (a) as an unmar8 ried dependent child, but who does not then qualify

9 for coverage under chapter 89 of title 5, United

10 States Code, as a family member (within the mean11 ing of that chapter) shall be deemed to be entitled

12 to continued coverage under section 8905a of that

13 title, to the same extent and in the same manner as

14 if such individual had, on January 3, 1998, ceased

15 to meet the requirements for being considered an

16 unmarried dependent child of an enrollee under such

17 chapter.

18 (5) EFFECTIVE DATE.—Coverage under chapter

19 89 of title 5, United States Code, pursuant to an en20 rollment under this section shall become effective on

21 January 4, 1998.

22 (c) ELIGIBILITY FOR FEHBP LIMITED TO INDIVID23 UALS LOSING ELIGIBILITY UNDER FORMER HEALTH

24 PLAN.—Nothing in subsection (a)(2) or any paragraph of

25 subsection (b) (to the extent that paragraph (2) relates
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1 to the plan described in subsection (a)(2)) shall be consid2 ered to apply with respect to any individual whose eligi3 bility for coverage under the plan does not involuntarily

4 terminate on January 3, 1998.

5 (d) TRANSFERS TO THE EMPLOYEES HEALTH BENE6 FITS FUND.—The Federal Deposit Insurance Corporation

7 and the Board of Governors of the Federal Reserve Sys8 tem shall transfer to the Employees Health Benefits

9 Fund, under section 8909 of title 5, United States Code,

10 amounts determined by the Director of the Office of Per11 sonnel Management, after consultation with the Federal

12 Deposit Insurance Corporation and the Board of Gov13 ernors of the Federal Reserve System, to be necessary to

14 reimburse the Fund for the cost of providing benefits

15 under this section not otherwise paid for by the individuals

16 covered by this section. The amounts so transferred shall

17 be held in the Fund and used by the Office of Personnel

18 Management in addition to amounts available under sec19 tion 8906(g)(1) of title 5, United States Code.

20 (e) ADMINISTRATION AND REGULATIONS.—The Of21 fice of Personnel Management—

22 (1) shall administer the provisions of this sec23 tion to provide for—

24 (A) a period of notice and open enrollment

25 for individuals affected by this section; and
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1 (B) no lapse of health coverage for individ2 uals who enroll in a health benefits plan under

3 chapter 89 of title 5, United States Code, in ac4 cordance with this section; and

5 (2) may prescribe regulations to implement this

6 section.

7 SEC. 503. FEDERAL HOUSING FINANCE BOARD.

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

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

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

11 (2) by redesignating subparagraphs (C) and

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

13 TITLE VI—TECHNICAL

14 CORRECTIONS

15 SEC. 601. TECHNICAL CORRECTION RELATING TO DEPOSIT

16 INSURANCE FUNDS.

17 (a) IN GENERAL.—Section 2707 of the Deposit In18 surance Funds Act of 1996 (Public Law 104–208; 110

19 Stat. 3009–496) is amended by striking ‘‘7(b)(2)(C)’’ and

20 inserting ‘‘7(b)(2)(E)’’.

21 (b) EFFECTIVE DATE.—The amendment 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. 602. 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. 603. 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. 604. CONFORMING CHANGE TO THE INTERNATIONAL

2 BANKING ACT.

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.

8 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

9 (a) SHORT TITLE.—This Act may be cited as the ‘‘Fi10 nancial Regulatory Relief and Economic Efficiency Act of

11 1998’’.

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

13 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.
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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.

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. Consistent coverage for individuals enrolled in a health plan administered by the Federal banking agencies.

Sec. 404. Federal Housing Finance Board.

Sec. 405. Reports by indenture trustee.

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 the

9 end the following new paragraph:

10 ‘‘(12) EARNINGS ON RESERVES.—
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1 ‘‘(A) IN GENERAL.—Balances maintained

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

3 depository institution may receive earnings, to

4 be paid by the Federal reserve bank at least once

5 in each calendar quarter, at a rate or rates not

6 to exceed the general level of short-term interest

7 rates.

8 ‘‘(B) REGULATIONS RELATING TO PAY9 MENTS AND DISTRIBUTION.—The Board may

10 prescribe regulations concerning—

11 ‘‘(i) the payment of earnings in ac12 cordance with this paragraph;

13 ‘‘(ii) the distribution of such earnings

14 to the depository institutions which main15 tain balances at such banks, or on behalf of

16 which such balances are maintained; and

17 ‘‘(iii) the responsibilities of depository

18 institutions, Federal home loan banks, and

19 the National Credit Union Administration

20 Central Liquidity Facility with respect to

21 the crediting and distribution of earnings

22 attributable to balances maintained, in ac23 cordance with subsection (c)(1)(B), in a

24 Federal reserve bank by any such entity on
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1 behalf of depository institutions which are

2 not member banks.’’.

3 (b) AUTHORIZATION FOR PASS THROUGH RESERVES

4 FOR MEMBER BANKS.—Section 19(c)(1)(B) of the Federal

5 Reserve Act (12 U.S.C. 461(c)(1)(B)) is amended by strik6 ing ‘‘which is not a member bank’’.

7 (c) TECHNICAL AND CONFORMING AMENDMENTS.—

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

9 amended—

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

11 striking subparagraph (C) and redesignating sub12 paragraphs (D) and (E) as subparagraphs (C) and

13 (D), respectively; and

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

15 461(c)(1)(A)), by striking ‘‘subsection (b)(4)(C)’’ and

16 inserting ‘‘subsection (b)’’.

17 SEC. 102. AMENDMENTS RELATING TO INTEREST ON CER18 TAIN ACCOUNTS AT DEPOSITORY INSTITU19 TIONS.

20 (a) INTEREST-BEARING TRANSACTION ACCOUNTS AU21 THORIZED FOR ALL BUSINESSES.—Section 2 of Public

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

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

24 subsections (c) and (d), respectively; and
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1 (2) by inserting after subsection (a) the follow2 ing:

3 ‘‘(b) Notwithstanding any other provision of law, any

4 depository institution may, before January 1, 2001, permit

5 the owner of any deposit or account on which interest or

6 dividends are paid to make up to 24 transfers per month,

7 for any purpose, to another account of the owner in the

8 same institution. Nothing in this subsection shall be con9 strued to prevent an account offered pursuant to this sub10 section from being considered a transaction account (as de11 fined in section 19(b) of the Federal Reserve Act (12 U.S.C.

12 461(b)) for purposes of that Act.’’.

13 (b) AMENDMENTS RELATING TO SAVINGS AND DE14 MAND DEPOSIT ACCOUNTS AT DEPOSITORY INSTITU15 TIONS.—

16 (1) NOW ACCOUNTS AUTHORIZED FOR ALL BUSI17 NESSES.—Section 2 of Public Law 93–100 (12 U.S.C.

18 1832(a)(2)) is amended to read as follows:

19 ‘‘SEC. 2. WITHDRAWALS BY NEGOTIABLE OR TRANSFER20 ABLE INSTRUMENTS FOR TRANSFERS TO

21 THIRD PARTIES.

22 ‘‘Notwithstanding any other provision of law, any de23 pository institution (as defined in section 3 of the Federal

24 Deposit Insurance Act) may permit the owner of any de25 posit or account to make withdrawals from such deposit or
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1 account by negotiable or transferable instruments for the

2 purpose of making payments to third parties.’’.

3 (2) REPEAL OF PROHIBITION ON PAYMENT OF IN4 TEREST ON DEMAND DEPOSITS.—

5 (A) FEDERAL RESERVE ACT.—Section 19(i)

6 of the Federal Reserve Act (12 U.S.C. 371a(i)) is

7 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 Home

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

8 amended to read as follows:

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

11 funds on deposit at a Federal reserve bank or a

12 Federal home loan bank, or bankers’ accept13 ances.’’.

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

15 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,’’ and

18 inserting ‘‘cash and marketable securities identified

19 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 (a) STREAMLINING THRIFT SERVICE COMPANY IN26 VESTMENT REQUIREMENTS.—Section 5(c)(4)(B) of the
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1 Home Owners’ Loan Act (12 U.S.C. 1464(c)(4)(B)) is

2 amended—

3 (1) in the subparagraph heading, by striking

4 ‘‘CORPORATIONS’’ and inserting ‘‘COMPANIES’’; and

5 (2) in the first sentence, by striking ‘‘corporation

6 organized’’ and all that follows through ‘‘such State.’’

7 and inserting ‘‘company, if such company engages or

8 will engage only in activities reasonably related to the

9 activities of financial institutions, as the Director

10 may determine and approve. For purposes of this sub11 paragraph, the term ‘company’ includes any corpora12 tion and any limited liability company (as defined in

13 section 1(b)(7) of the Bank Service Company Act).’’.

14 (b) CONFORMING AMENDMENTS TO SECTION 8 OF THE

15 FEDERAL DEPOSIT INSURANCE ACT.—Section 8 of the Fed16 eral Deposit Insurance Act (12 U.S.C. 1818) is amended—

17 (1) in subsection (b)(9), by striking ‘‘to any serv18 ice corporation of a savings association and to any

19 subsidiary of such service corporation’’; and

20 (2) in subsection (e)(7)(A)(ii), by striking

21 ‘‘(b)(8)’’ and inserting ‘‘(b)(9)’’.

22 SEC. 106. ELIMINATION OF THRIFT MULTISTATE MULTIPLE

23 HOLDING COMPANY RESTRICTIONS.

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

25 U.S.C. 1467a(e)) is amended—
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1 (1) by striking paragraph (3); and

2 (2) by redesignating paragraphs (4), (5), and (6)

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

4 SEC. 107. NONCONTROLLING INVESTMENTS BY SAVINGS

5 ASSOCIATION HOLDING COMPANIES.

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

7 (12 U.S.C. 1467a(e)(1)(A)(iii) is amended—

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

9 approval of the Director’’ after ‘‘or to retain’’;

10 (2) by striking ‘‘so acquire or retain’’ and insert11 ing ‘‘acquire or retain, and the Director may not au12 thorize acquisition or retention of,’’; and

13 (3) by striking ‘‘(c)(2). This clause’’ and insert14 ing ‘‘(c)(2), except that this clause’’.

15 SEC. 108. REPEAL OF DEPOSIT BROKER NOTIFICATION AND

16 RECORDKEEPING REQUIREMENT.

17 Section 29A of the Federal Deposit Insurance Act (12

18 U.S.C. 1831f–1) is repealed.

19 SEC. 109. UNIFORM REGULATION OF EXTENSIONS OF CRED20 IT TO EXECUTIVE OFFICERS.

21 Section 22(g)(4) of the Federal Reserve Act (12 U.S.C.

22 375a(4)) is amended by striking ‘‘member bank’s appro23 priate Federal banking agency’’ and inserting ‘‘Board’’.
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1 SEC. 110. EXPEDITED PROCEDURES FOR CERTAIN REORGA2 NIZATIONS.

3 The National Bank Consolidation and Merger Act (12

4 U.S.C. 215 et seq.) is amended—

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

6 (2) by inserting after section 4 the following new

7 section:

8 ‘‘SEC. 5. EXPEDITED PROCEDURES FOR CERTAIN REORGA9 NIZATIONS.

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

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

12 rules and regulations promulgated by the Comptroller, and

13 upon the affirmative vote of the shareholders of such associa14 tion owning at least two-thirds of its capital stock outstand15 ing, reorganize so as to become a subsidiary of a bank hold16 ing company or a company that will, upon consummation

17 of such reorganization, become a bank holding company.

18 ‘‘(b) REORGANIZATION PLAN.—A reorganization au19 thorized under subsection (a) shall be carried out in accord20 ance with a reorganization plan that—

21 ‘‘(1) specifies the manner in which the reorga22 nization shall be carried out;

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

24 board of directors of the association;

25 ‘‘(3) specifies—
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1 ‘‘(A) the amount of cash or securities of the

2 bank holding company, or both, or other consid3 eration, to be paid to the shareholders of the re4 organizing association in exchange for their

5 shares of stock of the association;

6 ‘‘(B) the date as of which the rights of each

7 shareholder to participate in such exchange will

8 be determined; and

9 ‘‘(C) the manner in which the exchange will

10 be carried out; and

11 ‘‘(4) is submitted to the shareholders of the reor12 ganizing association at a meeting to be held on the

13 call of the directors in accordance with the procedures

14 prescribed in connection with a merger of a national

15 bank under section 3.

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

17 pursuant to this section, a reorganization plan has been

18 approved by the shareholders and the Comptroller, any

19 shareholder of the association who has voted against the re20 organization at the meeting referred to in subsection (b)(4),

21 or has given notice in writing at or prior to that meeting

22 to the presiding officer that the shareholder dissents from

23 the reorganization plan, shall be entitled to receive the value

24 of his or her shares, as provided by section 3 for the merger

25 of a national bank.
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1 ‘‘(d) EFFECT OF REORGANIZATION.—The corporate ex2 istence of an association that reorganizes in accordance

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

4 in any way by reason of such reorganization.

5 ‘‘(e) APPROVAL UNDER THE BANK HOLDING COMPANY

6 ACT.—This section does not affect in any way the applica7 bility of the Bank Holding Company Act of 1956 to a trans8 action described in subsection (a).’’.

9 SEC. 111. NATIONAL BANK DIRECTORS.

10 (a) AMENDMENTS TO THE REVISED STATUTES.—Sec11 tion 5145 of the Revised Statutes of the United States (12

12 U.S.C. 71) is amended—

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

14 a period of not more than 3 years,’’; and

15 (2) by adding at the end the following: ‘‘In ac16 cordance with regulations issued by the Comptroller

17 of the Currency, an association may adopt bylaws

18 that provide for staggering the terms of its directors.’’.

19 (b) AMENDMENT TO THE BANKING ACT OF 1933.—Sec20 tion 31 of the Banking Act of 1933 (12 U.S.C. 71a) is

21 amended in the first sentence, by inserting before the period

22 ‘‘, except that the Comptroller of the Currency may, by reg23 ulation or order, exempt a national banking association

24 from the 25-member limit established by this section’’.
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1 SEC. 112. AMENDMENT TO BANK CONSOLIDATION AND

2 MERGER ACT.

3 The National Bank Consolidation and Merger Act (12

4 U.S.C. 215 et seq.) is amended by inserting after section

5 5, as added by section 110 of this Act, the following new

6 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 con13 strued—

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

15 the Federal Deposit Insurance Act; or

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

17 power or authority that is not permissible for a na18 tional 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 U.S.C.

26 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 as6 sociation shall not be deemed to be making a loan or dis7 count on the security of the shares of its own capital stock

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

9 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 following

13 new subsection:

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

15 STOCK.—

16 ‘‘(1) GENERAL PROHIBITION.—No insured depos17 itory institution shall make any loan or discount on

18 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 previously

24 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 ‘‘(5) CERTAIN INVESTMENTS.—Paragraph (1)

4 does not apply with respect to investments lawfully

5 made prior to April 11, 1996, by a depository institu6 tion in any Government-sponsored enterprise (as de7 fined in section 1404(e)(1) of the Financial Institu8 tions Reform, Recovery, and Enforcement Act of 1989

9 (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 exceed22 ing 100 percent, as may be determined under sub23 section (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 inserting

3 after subsection (a) the following new subsection:

4 ‘‘(b) AUTHORITY TO DETERMINE PERCENTAGE BY

5 WHICH TO DISCOUNT VALUE OF SERVICING RIGHTS.—The

6 appropriate Federal banking agencies may allow readily

7 marketable purchased mortgage servicing rights to be valued

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

9 not more than 100 percent of such value, if such agencies

10 jointly make a finding that such valuation would not have

11 an adverse affect on the deposit insurance funds or the safe12 ty and soundness of insured depository institutions.’’.

13 SEC. 116. CROSS MARKETING RESTRICTION; LIMITED PUR14 POSE BANK RELIEF.

15 (a) CROSS MARKETING RESTRICTION.—Section 4(f) of

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

17 1843(f)) is amended by striking paragraph (3).

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

19 Holding Company Act of 1956 (12 U.S.C. 1843(f)) is

20 amended by inserting after paragraph (2) the following:

21 ‘‘(3) PERMISSIBLE OVERDRAFTS DESCRIBED.—

22 For purposes of paragraph (2)(C), an overdraft is de23 scribed in this paragraph if—

24 ‘‘(A) such overdraft results from an inad25 vertent computer or accounting error that is be-
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1 yond the control of both the bank and the affili2 ate;

3 ‘‘(B) such overdraft—

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

5 of an affiliate that is monitored by, reports

6 to, and is recognized as a primary dealer

7 by the Federal Reserve Bank of New York;

8 and

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

10 the Board, by bonds, notes, or other obliga11 tions that are direct obligations of the

12 United States or on which the principal

13 and interest are fully guaranteed by the

14 United States or by securities and obliga15 tions eligible for settlement on the Federal

16 Reserve book entry system; or

17 ‘‘(C) such overdraft—

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

19 behalf of, an affiliate that is engaged in ac20 tivities that are so closely related to bank21 ing, or managing or controlling banks, as to

22 be a proper incident thereto; and

23 ‘‘(ii) does not cause the bank to violate

24 any provision of section 23A or 23B of the

25 Federal Reserve Act, either directly, in the
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1 case of a bank that is a member of the Fed2 eral Reserve System, or by virtue of section

3 18(j) of the Federal Deposit Insurance Act,

4 in the case of a bank that is not a member

5 of the Federal Reserve System.’’.

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

7 Bank Holding Company Act of 1956 (12 U.S.C. 1843(f)(2))

8 is amended—

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

10 apply to any company described in such paragraph

11 if—’’ and inserting ‘‘Subject to paragraph (3), a com12 pany described in paragraph (1) shall no longer qual13 ify for the exemption provided under that paragraph

14 if—’’;

15 (2) in subparagraph (A), by striking ‘‘or’’ at the

16 end; and

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

18 the following:

19 ‘‘(B) any bank subsidiary of such com20 pany—

21 ‘‘(i) accepts demand deposits or depos22 its that the depositor may withdraw by

23 check or similar means for payment to

24 third parties; and
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1 ‘‘(ii) engages in the business of making

2 commercial loans (except that, for purposes

3 of this clause, loans made in the ordinary

4 course of a credit card operation shall not

5 be treated as commercial loans); or

6 ‘‘(C) after the date of enactment of the Com7 petitive Equality Amendments of 1987, any bank

8 subsidiary of such company permits any over9 draft (including any intraday overdraft), or in10 curs any such overdraft in the account of the

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

12 affiliate, other than an overdraft described in

13 paragraph (3).’’.

14 SEC. 117. DIVESTITURE REQUIREMENT.

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

16 1956 (12 U.S.C. 1843(f)(4)) is amended to read as follows:

17 ‘‘(4) DIVESTITURE IN CASE OF LOSS OF EXEMP18 TION.—If any company described in paragraph (1)

19 fails to qualify for the exemption provided under such

20 paragraph by operation of paragraph (2), such ex21 emption shall cease to apply to such company and

22 such company shall divest control of each bank it con23 trols before the end of the 180-day period beginning

24 on the date that the company receives notice from the

25 Board that the company has failed to continue to
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1 qualify for such exemption, unless before the end of

2 such 180-day period, the company has—

3 ‘‘(A) either—

4 ‘‘(i) corrected the condition or ceased

5 the activity that caused the company to fail

6 to continue to qualify for the exemption; or

7 ‘‘(ii) submitted a plan to the Board for

8 approval to cease the activity or correct the

9 condition in a timely manner (which shall

10 not exceed 1 year); and

11 ‘‘(B) implemented procedures that are rea12 sonably adapted to avoid the reoccurrence of such

13 condition or activity.’’.

14 TITLE II—STREAMLINING

15 ACTIVITIES OF INSTITUTIONS

16 SEC. 201. UPDATING OF AUTHORITY FOR COMMUNITY DE17 VELOPMENT INVESTMENTS.

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

19 U.S.C. 1464(c)(3)(A)) is amended by striking ‘‘located’’ and

20 all that follows through ‘‘1974’’ and inserting ‘‘for the pri21 mary purpose of promoting the public welfare, including

22 the welfare of low- and moderate-income communities or

23 families (including the provision of housing, services, or

24 jobs)’’.
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1 SEC. 202. FEDERAL RESERVE ACT LENDING LIMITS.

2 Section 11 of the Federal Reserve Act (12 U.S.C. 248)

3 is amended—

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

5 (2) by redesignating subsection (o) as subsection

6 (m).

7 SEC. 203. BUSINESS PURPOSE CREDIT EXTENSIONS.

8 Section 4 of the Bank Holding Company Act of 1956

9 (12 U.S.C. 1843) is amended by adding at the end the fol10 lowing new subsection:

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

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

13 section 2(c)(2)(F) or 4(f)(3) may engage in the provi14 sion of credit card accounts for business purposes, in15 cluding the issuance of such accounts to small busi16 nesses.

17 ‘‘(2) DEFINITION.—For purposes of this sub18 section, the term ‘credit card’ has the same meaning

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

20 U.S.C. 1602).’’.

21 SEC. 204. AFFINITY GROUPS.

22 (a) SECTION 3 OF RESPA.—Section 3 of the Real Es23 tate Settlement Procedures Act of 1974 (12 U.S.C. 2602)

24 is amended—

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

26 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:

4 ‘‘(9) the term ‘affinity group’ means any person,

5 other than an individual, that—

6 ‘‘(A) is established for a common objective

7 or purpose;

8 ‘‘(B) is not established directly or indirectly

9 by 1 or more settlement service providers for the

10 principal purpose of endorsing the products or

11 services of a settlement service provider;

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

13 which is not principally the conduct of settle14 ment services; and

15 ‘‘(D) does not consist of or is not established

16 by any member organization (or any affiliate,

17 parent, or subsidiary thereof), the principal busi18 ness of which is providing settlement services.’’.

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

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

21 2607(c)) is amended—

22 (1) by striking ‘‘prohibiting (1) the’’ and insert23 ing ‘‘prohibiting—

24 ‘‘(1) the’’;
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1 (2) by striking ‘‘loan, (2) the’’ and inserting

2 ‘‘loan;

3 ‘‘(2) the’’;

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

5 inserting ‘‘performed;

6 ‘‘(3) payments’’;

7 (4) by striking ‘‘brokers, (4) affiliated’’ and in8 serting ‘‘brokers;

9 ‘‘(4) affiliated’’; and

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

11 inserting ‘‘relationship;

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

13 of value to an affinity group for or in connection

14 with a written endorsement, either through an adver15 tisement or through a communication addressed to a

16 consumer by name or by mailing address, of the prod17 ucts or services of a settlement service provider other

18 than as to a federally related mortgage loan, the pro19 ceeds of which are used to acquire the property secur20 ing the loan, if—

21 ‘‘(A) the consumer will receive a direct fi22 nancial benefit from the endorsement; and

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

24 time of the first written communication with the

25 consumer of the fact that a payment has been
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1 made or may be made or any other thing of

2 value may accrue to the affinity group for the

3 endorsement; or

4 ‘‘(6) such’’.

5 SEC. 205. FAIR DEBT COLLECTION PRACTICES.

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

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

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

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

10 amount—

11 ‘‘(A) is expressly authorized by the agree12 ment creating the debt;

13 ‘‘(B) is permitted by law; or

14 ‘‘(C) is reasonable, does not exceed $25, re15 sults from the collection of a check returned for

16 insufficient funds, and notice of the charge was

17 conspicuously posted at the place where the check

18 was written, in a State in which the law does

19 not address the collection of such amounts.’’.

20 (b) COLLECTION ACTIVITY FOLLOWING INITIAL NO21 TICE.—Section 809 of the Fair Debt Collection Practices

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

23 the following new subsection:

24 ‘‘(d) CONTINUATION DURING PERIOD.—Except as pro25 vided in subsection (b), collection activities and legal pro-
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1 ceedings may continue during the 30-day period described

2 in subsection (a) to the extent that the activities and com3 munications do not overshadow or contradict the informa4 tion provided in accordance with subsection (a).’’.

5 (c) CERTAIN STUDENT LOANS.—Section 805(b) of the

6 Fair Debt Collection Practices Act (15 U.S.C. 1692c(b)) is

7 amended by inserting ‘‘or a prejudgment administrative

8 wage garnishment permitted under section 488A of the

9 Higher Education Act of 1965 (20 U.S.C. 1095a),’’ after

10 ‘‘remedy,’’.

11 SEC. 206. RESTRICTION ON ACQUISITIONS OF OTHER IN12 SURED DEPOSITORY INSTITUTIONS.

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

14 1956 (12 U.S.C. 1843(f)(12)) is amended—

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

16 end;

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

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

19 (3) by adding at the end the following new sub20 paragraph:

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

22 institution has been found to be undercapitalized

23 by the appropriate Federal or State authority.’’.
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1 SEC. 207. MUTUAL HOLDING COMPANIES.

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

3 U.S.C. 1467a(o)) is amended—

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

5 following:

6 ‘‘(1) REORGANIZATION.—A savings association

7 operating in mutual form may reorganize so as to be8 come a holding company—

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

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

11 as otherwise provided in this section, directly or

12 indirectly by the mutual association and by

13 transferring the substantial part of its assets and

14 liabilities, by merger or otherwise, including all

15 of its insured liabilities, to the interim savings

16 association;

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

18 charter and simultaneously forming a subsidiary

19 stock holding company that owns 100 percent of

20 the voting stock of the converting association; or

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

22 Director, including by the formation of a sub23 sidiary stock holding company, transferring as24 sets and liabilities by merger or otherwise to the

25 subsidiary stock holding company, or through the

26 use of one or more interim institutions.’’;
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1 (2) in paragraph (3)(D)—

2 (A) by striking ‘‘savings association’’ and

3 inserting ‘‘the mutual holding company or sub4 sidiary stock holding company’’;

5 (B) by striking ‘‘such capital’’ and insert6 ing ‘‘the capital of the association’’;

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

8 (D) by inserting ‘‘of the association’’ before

9 ‘‘established’’;

10 (3) in paragraph (5)—

11 (A) by inserting ‘‘or subsidiary stock hold12 ing company’’ before ‘‘may engage’’;

13 (B) in subparagraph (A)—

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

15 ‘‘Investing in’’; and

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

17 bank’’ before the period; and

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

19 bank’’ before the period;

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

21 following:

22 ‘‘(7) CHARTERING AND REGULATION.—

23 ‘‘(A) IN GENERAL.—A mutual holding com24 pany shall be chartered by the Director, and a

25 subsidiary stock holding company may be char-
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1 tered under State law, and such holding compa2 nies shall be subject to such regulations as the

3 Director may prescribe. Unless the context other4 wise requires, a mutual holding company shall

5 be subject to the other requirements of this sec6 tion regarding regulation of holding companies.

7 ‘‘(B) CONVERSION TO STATE CHARTER.—A

8 mutual holding company organized pursuant to

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

10 mutual holding company charter.

11 ‘‘(C) CONVERSION TO FEDERAL CHARTER.—

12 Notwithstanding any other provision of Federal

13 law, a mutual holding company organized under

14 State law may convert its State mutual holding

15 company charter to a Federal mutual holding

16 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 holding

6 company to any person other than the mu7 tual 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 the

11 voting shares of the subsidiary stock holding

12 company are owned by the mutual holding

13 company; and

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 class

18 of voting shares, the rights and preferences

19 of which are identical to those of the class

20 of voting shares issued to the mutual hold21 ing company, except with respect to the

22 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 vot-
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1 ing rights, such holders of accounts or obligors

2 shall have the right to subscribe on a priority

3 basis for voting shares of the subsidiary stock

4 holding company or savings association char5 tered pursuant to paragraph (1), pursuant to

6 regulations of the Director, but only with respect

7 to the voting shares issued in connection with the

8 initial reorganization pursuant to paragraph

9 (1). The priority subscription rights applicable

10 to voting shares issued to the mutual holding

11 company in connection with the initial reorga12 nization pursuant to paragraph (1) shall be ex13 ercisable at such time as the shares are subse14 quently sold by the subsidiary savings associa15 tion or subsidiary stock holding company.’’;

16 (6) in paragraph (9)(A)(i)(I), by inserting ‘‘, di17 rectly or indirectly,’’ after ‘‘owned’’; and

18 (7) in paragraph (10)—

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

21 apply:’’; and

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

23 ‘‘(D) SUBSIDIARY STOCK HOLDING COM24 PANY.—The term ‘subsidiary stock holding com25 pany’ means a stock holding company organized
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1 under applicable State law, that is wholly2 owned, except as otherwise provided in this sec3 tion, by the mutual holding company.’’.

4 SEC. 208. CALL REPORT SIMPLIFICATION.

5 (a) MODERNIZATION OF CALL REPORT FILING AND

6 DISCLOSURE SYSTEM.—In order to reduce the administra7 tive requirements pertaining to bank reports of condition,

8 savings association financial reports, and bank holding

9 company consolidated and parent-only financial state10 ments, and to improve the timeliness of such reports and

11 statements, the Federal banking agencies shall—

12 (1) work jointly to develop a system under

13 which—

14 (A) insured depository institutions and

15 their affiliates may file such reports and state16 ments electronically; and

17 (B) the Federal banking agencies may make

18 such reports and statements available to the pub19 lic electronically; and

20 (2) not later than 1 year after the date of enact21 ment of this Act, report to the Congress and make rec22 ommendations for legislation that would enhance effi23 ciency for filers and users of such reports and state24 ments.
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1 (b) UNIFORM REPORTS AND SIMPLIFICATION OF IN2 STRUCTIONS.—The Federal banking agencies shall, consist3 ent with the principles of safety and soundness, work joint4 ly—

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 statements

8 referred to in subsection (a); and

9 (2) to simplify instructions accompanying such

10 reports and statements and to provide an index to the

11 instructions that is adequate to meet the needs of both

12 filers and users.

13 (c) REVIEW OF CALL REPORT SCHEDULE.—Each Fed14 eral banking agency shall—

15 (1) review the information required by schedules

16 supplementing the core information referred to in

17 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 Act

7 (12 U.S.C. 1831n(a)(3)) is amended by striking subpara8 graph (D).

9 SEC. 302. PAYMENT OF INTEREST IN RECEIVERSHIPS WITH

10 SURPLUS FUNDS.

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

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

13 the following new subparagraph:

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

16 rules, including definitions of terms, as it deems

17 appropriate to establish the interest rate for or

18 to make payments of post insolvency interest to

19 creditors holding proven claims against the re20 ceivership estates of insured Federal or State de21 pository institutions following satisfaction by the

22 receiver of the principal amount of all creditor

23 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 (12

4 U.S.C. 1831n(c)) is amended—

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

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

7 Federal banking agencies shall jointly submit an an8 nual report’’; and

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

10 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 Fed14 eral Deposit Insurance Act (12 U.S.C. 1828(c)(4)) is

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

16 through the end of the paragraph and inserting the follow17 ing: ‘‘request a report on the competitive factors involved

18 from the Attorney General. The report shall be furnished

19 not later than 30 calendar days after the date on which

20 it is requested, or not later than 10 calendar days after

21 such date if the requesting agency advises the Attorney Gen22 eral that an emergency exists requiring expeditious ac23 tion.’’.

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

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

26 amended by striking the third sentence and inserting the
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1 following: ‘‘If the agency has advised the Attorney General

2 of the existence of an emergency requiring expeditious ac3 tion and has requested a report on the competitive factors

4 within 10 days, the transaction may not be consummated

5 before the fifth calendar day after the date of approval by

6 the agency.’’.

7 (c) EVALUATION OF COMPETITIVE EFFECT.—

8 (1) AMENDMENTS TO THE BANK HOLDING COM9 PANY ACT OF 1956.—Section 3(c) of the Bank Holding

10 Company Act of 1956 (12 U.S.C. 1842(c)) is amend11 ed—

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 to

5 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 deems

9 relevant.’’; and

10 (B) in paragraph (1), by striking ‘‘restraint

11 or trade’’ and inserting ‘‘restraint of trade’’.

12 (2) AMENDMENTS TO THE FEDERAL DEPOSIT IN13 SURANCE ACT.—Section 18(c)(5) of the Federal De14 posit Insurance Act (12 U.S.C. 1828(c)(5)) is amend15 ed—

16 (A) by redesignating subparagraphs (A)

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

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

19 (C) by striking ‘‘In every case’’ and insert20 ing the following:

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

22 (D) by adding at the end the following:

23 ‘‘(C) The responsible agency may not disapprove

24 of a transaction pursuant to subparagraph (A), un25 less the agency takes into account—
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1 ‘‘(i) competition from institutions that pro2 vide financial services;

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

4 transaction may create;

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

6 transaction that are not derived from the rel7 evant markets;

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

9 make small business loans;

10 ‘‘(v) lending by institutions other than de11 pository institutions to small businesses; and

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

13 agency deems relevant.’’.

14 SEC. 305. ELIMINATION OF SAIF AND DIF SPECIAL RE15 SERVES.

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

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

18 is amended by striking subparagraph (L).

19 (b) DIF SPECIAL RESERVES.—Section 2704 of the De20 posit Insurance Funds Act of 1996 (12 U.S.C. 1821 note)

21 is amended—

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

23 (2) in subsection (d)—

24 (A) by striking paragraph (4);
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1 (B) in paragraph (6)(C)(i), by striking ‘‘(6)

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

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

4 (ii) and inserting the following:

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

6 as paragraph (5).’’.

7 TITLE IV—MISCELLANEOUS

8 SEC. 401. ALTERNATIVE COMPLIANCE METHODS FOR AD9 VERTISING CREDIT TERMS.

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

11 1661 et seq.) is amended by adding at the end the following

12 new section:

13 ‘‘SEC. 148. ALTERNATIVE DISCLOSURES.

14 ‘‘(a) IN GENERAL.—A radio or television advertise15 ment to aid, promote, or assist, directly or indirectly, any

16 extension of consumer credit may satisfy the disclosure re17 quirements in sections 143, 144(d), 147(a), or 147(e), by

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

19 and (c) of this section.

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

21 television advertisement referred to in subsection (a) com22 plies with this subsection if it clearly and conspicuously

23 sets forth, in such form and manner as the Board may re24 quire—
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1 ‘‘(1) the annual percentage rate of any finance

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

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

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

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

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

7 rate (or states with respect to a variable-rate plan an

8 initial rate that is not based on the index and margin

9 used to make later rate adjustments)—

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

11 percentage rate that will be in effect after the in12 troductory or initial rate period expires (or for

13 a variable-rate plan, a reasonably current an14 nual percentage rate that would have been in ef15 fect using the index and margin); and

16 ‘‘(B) the period during which the introduc17 tory or initial rate will remain in effect;

18 ‘‘(4) the amount of any annual fee for an open19 end credit plan;

20 ‘‘(5) a telephone number established in accord21 ance with subsection (c) that may be used by consum22 ers to obtain all of the information otherwise required

23 to be disclosed pursuant to sections 143 and 144(d),

24 and subsections (a) and (e) of section 147; and
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1 ‘‘(6) a statement that the consumer may use the

2 telephone number established in accordance with sub3 section (c) to obtain further details about additional

4 terms and costs associated with the offer of credit.

5 ‘‘(c) REQUIREMENTS FOR TELEPHONE NUMBERS.—In

6 the case of an advertisement described in subsection (b) that

7 refers to a telephone number—

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

9 number for a broadcast area not later than the date

10 on which the advertisement is first broadcast in that

11 area;

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

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

14 less than 10 days following the date of the final

15 broadcast of the advertisement in that area;

16 ‘‘(3) the creditor shall provide all of the informa17 tion that is otherwise required pursuant to sections

18 143 and 144(d), and subsections (a) and (e) of section

19 147 orally by telephone or, if requested by the con20 sumer, in written form; and

21 ‘‘(4) the consumer shall obtain the required in22 formation by telephone without incurring any long23 distance charges.’’.
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1 SEC. 402. POSITIONS OF BOARD OF GOVERNORS OF FED2 ERAL RESERVE SYSTEM ON THE EXECUTIVE

3 SCHEDULE.

4 (a) IN GENERAL.—

5 (1) POSITIONS AT LEVEL I OF THE EXECUTIVE

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

7 Code, is amended by adding at the end the following:

8 ‘‘Chairman, Board of Governors of the Federal

9 Reserve System.’’.

10 (2) POSITIONS AT LEVEL II OF THE EXECUTIVE

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

12 Code, is amended—

13 (A) by striking ‘‘Chairman, Board of Gov14 ernors of the Federal Reserve System.’’; and

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

16 ‘‘Members, Board of Governors of the Federal Re17 serve System.’’.

18 (3) POSITIONS AT LEVEL III OF THE EXECUTIVE

19 SCHEDULE.—Section 5314 of title 5, United States

20 Code, is amended by striking ‘‘Members, Board of

21 Governors of the Federal Reserve System.’’.

22 (b) EFFECTIVE DATE.—This section and the amend23 ments made by this section shall take effect on the first day

24 of the first pay period for the Chairman and Members of

25 the Board of Governors of the Federal Reserve System begin26 ning on or after the date of enactment of this section.
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1 SEC. 403. CONSISTENT COVERAGE FOR INDIVIDUALS EN2 ROLLED IN A HEALTH PLAN ADMINISTERED

3 BY THE FEDERAL BANKING AGENCIES.

4 (a) ENROLLMENT IN CHAPTER 89 PLAN.—For pur5 poses of chapter 89 of title 5, United States Code, any pe6 riod of enrollment shall be deemed to be a period of enroll7 ment in a health benefits plan under chapter 89 of such

8 title, if such enrollment is—

9 (1) in a health benefits plan administered by the

10 Federal Deposit Insurance Corporation before the ter11 mination of such plan on or before January 2, 1999;

12 or

13 (2) subject to subsection (c), in a health benefits

14 plan (not under chapter 89 of such title) with respect

15 to which the eligibility of any employees or retired

16 employees of the Board of Governors of the Federal

17 Reserve System terminates on or before January 2,

18 1999.

19 (b) ENROLLMENT; CONTINUED COVERAGE.—

20 (1) ENROLLMENT.—Subject to subsection (c),

21 any individual who, on or before January 2, 1999, is

22 enrolled in a health benefits plan described in para23 graph (1) or (2) of subsection (a) may enroll in an

24 approved health benefits plan under chapter 89 of

25 title 5, United States Code, either as an individual or
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1 for self and family, if, after taking into account the

2 provisions of subsection (a), such individual—

3 (A) meets the requirements of that chapter

4 89 for eligibility to become so enrolled as an em5 ployee, annuitant, or former spouse (within the

6 meaning of that chapter); or

7 (B) would meet the requirements of that

8 chapter 89 if, to the extent that such require9 ments involve either retirement system under

10 such title 5, such individual satisfies similar re11 quirements or provisions of the Retirement Plan

12 for Employees of the Federal Reserve System.

13 (2) DETERMINATIONS.—Any determination

14 under paragraph (1)(B) shall be made under guide15 lines established by the Office of Personnel Manage16 ment in consultation with the Board of Governors of

17 the Federal Reserve System.

18 (3) CONTINUED COVERAGE.—Subject to sub19 section (c), any individual who, on or before January

20 2, 1999, is entitled to continued coverage under a

21 health benefits plan described in paragraph (1) or (2)

22 of subsection (a) shall be deemed to be entitled to con23 tinued coverage under section 8905a of title 5, United

24 States Code, but only for the same remaining period

25 as would have been allowable under the health benefits
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1 plan in which such individual was enrolled on or be2 fore January 2, 1999, if—

3 (A) the individual had remained enrolled in

4 that plan; and

5 (B) that plan did not terminate, or the eli6 gibility of such individual with respect to that

7 plan did not terminate, as described in sub8 section (a).

9 (4) COMPARABLE TREATMENT.—Subject to sub10 section (c), any individual (other than an individual

11 under paragraph (3)) who, on or before January 2,

12 1999, is covered under a health benefits plan de13 scribed in paragraph (1) or (2) of subsection (a) as

14 an unmarried dependent child, but who does not then

15 qualify for coverage under chapter 89 of title 5,

16 United States Code, as a family member (within the

17 meaning of that chapter) shall be deemed to be enti18 tled to continued coverage under section 8905a of that

19 title, to the same extent and in the same manner as

20 if such individual had, on or before January 2, 1999,

21 ceased to meet the requirements for being considered

22 an unmarried dependent child of an enrollee under

23 such chapter.

24 (5) EFFECTIVE DATE.—Coverage under chapter

25 89 of title 5, United States Code, pursuant to an en-
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1 rollment under this section shall become effective on

2 January 3, 1999, or such earlier date, established by

3 the Office of Personnel Management, after consulta4 tion with the Corporation and the Board, as appro5 priate.

6 (c) ELIGIBILITY FOR FEHBP LIMITED TO INDIVID7 UALS LOSING ELIGIBILITY UNDER FORMER HEALTH

8 PLAN.—Nothing in subsection (a)(2) or any paragraph of

9 subsection (b) (to the extent that paragraph (2) relates to

10 the plan described in subsection (a)(2)) shall be considered

11 to apply with respect to any individual whose eligibility

12 for coverage under the plan does not involuntarily termi13 nate on or before January 2, 1999.

14 (d) TRANSFERS TO THE EMPLOYEES HEALTH BENE15 FITS FUND.—The Federal Deposit Insurance Corporation

16 and the Board of Governors of the Federal Reserve System

17 shall transfer to the Employees Health Benefits Fund,

18 under section 8909 of title 5, United States Code, amounts

19 determined by the Director of the Office of Personnel Man20 agement, after consultation with the Federal Deposit Insur21 ance Corporation and the Board of Governors of the Federal

22 Reserve System, to be necessary to reimburse the Fund for

23 the cost of providing benefits under this section not other24 wise paid for by the individuals covered by this section.

25 The amounts so transferred shall be held in the Fund and
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1 used by the Office of Personnel Management in addition

2 to amounts available under section 8906(g)(1) of title 5,

3 United States Code.

4 (e) ADMINISTRATION AND REGULATIONS.—The Office

5 of Personnel Management—

6 (1) shall administer the provisions of this section

7 to provide for—

8 (A) a period of notice and open enrollment

9 for individuals affected by this section; and

10 (B) no lapse of health coverage for individ11 uals who enroll in a health benefits plan under

12 chapter 89 of title 5, United States Code, in ac13 cordance with this section; and

14 (2) may prescribe regulations to implement this

15 section.

16 SEC. 404. FEDERAL HOUSING FINANCE BOARD.

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

18 (12 U.S.C. 1422a(b)(2)) is amended—

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

20 (2) by redesignating subparagraphs (C) and (D)

21 as subparagraphs (B) and (C), respectively.

22 SEC. 405. REPORTS BY INDENTURE TRUSTEE.

23 Section 313 of the Trust Indenture Act of 1939 (15

24 U.S.C. 77mmm) is amended by adding at the end the fol25 lowing:
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1 ‘‘(e) CHANGE OF ADDRESS INFORMATION.—

2 ‘‘(1) FREQUENCY.—Not less frequently than once

3 every 12 months, the indenture trustee shall forward

4 to each indenture security holder a form requesting

5 change of address information.

6 ‘‘(2) PROVISION OF FORMS.—The forms required

7 by paragraph (1) may be provided in conjunction

8 with the reports required by subsection (a) or (b), and

9 transmitted in accordance with subsection (c).’’.

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 Insur15 ance Funds Act of 1996 (Public Law 104–208; 110 Stat.

16 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 sub22 section (a) shall be deemed to have the same effective date

23 as section 2707 of the Deposit Insurance Funds Act 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 (12

5 U.S.C. 1818(o)) is amended in the second sentence, by strik6 ing ‘‘subsection (d) of section 4’’ and inserting ‘‘subsection

7 (c) or (d) of section 4’’.

8 SEC. 503. AMENDMENTS TO THE REVISED STATUTES.

9 (a) WAIVER OF CITIZENSHIP REQUIREMENT FOR NA10 TIONAL BANK DIRECTORS.—Section 5146 of the Revised

11 Statutes of the United States (12 U.S.C. 72) is amended

12 in the first sentence, by inserting before the period ‘‘, and

13 waive the requirement of citizenship in the case of not more

14 than a minority of the total number of directors’’.

15 (b) TECHNICAL AMENDMENT TO THE REVISED STAT16 UTES.—Section 329 of the Revised Statutes of the United

17 States (12 U.S.C. 11) is amended by striking ‘‘to be inter18 ested in any association issuing national currency under

19 the laws of the United States’’ and inserting ‘‘to hold an

20 interest in any national bank’’.

21 (c) REPEAL OF UNNECESSARY CAPITAL AND SURPLUS

22 REQUIREMENT.—Section 5138 of the Revised Statutes of

23 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 1978

4 (12 U.S.C. 3102(b)) is amended in the second sentence, by

5 striking paragraph (1) and by redesignating paragraphs

6 (2) through (4) as paragraphs (1) through (3), respectively.