I 

111TH CONGRESS 

2D SESSION H. R. 5942 

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

IN THE HOUSE OF REPRESENTATIVES 

JULY 29, 2010 

Mr. BACA (for himself, Mr. CLAY, Ms. JACKSON LEE of Texas, Mr. JOHNSON

of Georgia, Mr. GRAYSON, and Ms. RICHARDSON) introduced the following bill; which was referred to the Committee on Financial Services 

A BILL 

To create a charter for Federal Financial Services and Credit 

Companies. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘FFSCC Act of 2010’’. 

5 SEC. 2. FINDINGS; PURPOSE. 

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

7 (1) According to the Federal Deposit Insurance 

8 Corporation, more than 60 million low- and mod9 erate-income consumers in America remain 

10 unbanked, underbanked, or underserved. 


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1 (2) The proportion of United States households 

2 that are unbanked varies considerably across racial 

3 and ethnic groups with certain racial and ethnic 

4 groups being more likely to be unbanked than the 

5 population as a whole. Minorities more likely to be 

6 unbanked include Blacks (21.7 percent of Black 

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

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

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

10 Whites (3.3 percent). 

11 (3) Certain racial and ethnic minorities are 

12 more likely to be underbanked than the population 

13 as a whole. Minorities more likely to be underbanked 

14 include Blacks (an estimated 31.6 percent), Amer15 ican Indian/Alaskans (28.9 percent), and Hispanics 

16 (24.0 percent). Asians and Whites are less likely to 

17 be underbanked (7.2 percent and 14.9 percent, re18 spectively). 

19 (4) Households with income under $30,000 ac20 count for at least 71 percent of unbanked house21 holds. As income increases, the share of households 

22 that are unbanked declines considerably. Nationally, 

23 nearly 20 percent of lower-income United States 

24 households—almost 7 million households earning 

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


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1 bank account. In contrast, only 4.2 percent of house2 holds with annual income between $30,000 and 

3 $50,000 and less than 1 percent of households with 

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

5 (5) Lack of access to affordable banking prod6 ucts and services deters the economic advancement 

7 of low- and moderate-income consumers and stunts 

8 the economic growth of communities in which they 

9 live. 

10 (b) PURPOSE.—The purpose of this Act is to estab11 lish a vibrant, safe, and commercially viable market for 

12 underbanked and unbanked individuals to gain access to 

13 financial services and products. 

14 SEC. 3. FEDERAL FINANCIAL SERVICES AND CREDIT COM15 PANY. 

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

17 is authorized, under such regulations as the Comptroller 

18 of the Currency may prescribe, to provide for the organiza19 tion, incorporation, examination, operation, regulation, 

20 and chartering of companies to be known as Federal Fi21 nancial Services and Credit Companies (hereinafter in this 

22 Act referred to as ‘‘FFSCCs’’). 

23 (b) ELIGIBILITY.— 

24 (1) IN GENERAL.—The Comptroller of the Cur25 rency may not issue an FFSCC charter to a comVerDate Mar 15 2010 00:27 Jul 31, 2010 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5942.IH H5942

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1 pany unless the company satisfies the following re2 quirements, as determined by the Comptroller of the 

3 Currency: 

4 (A) The company has at least 10 years of 

5 experience in providing underbanked persons 

6 with at least three of the following services: 

7 (i) Installment loans extended to con8 sumers or, in an amount less than 

9 $10,000, to small businesses. 

10 (ii) Open-end credit extended to con11 sumers or, in an amount less than 

12 $10,000, to small businesses. 

13 (iii) Non-recourse credit extended to 

14 consumers and secured by personal prop15 erty. 

16 (iv) The issuing of reloadable stored 

17 value cards to consumers or small busi18 nesses. 

19 (v) Ancillary financial services ex20 tended to consumers or small businesses, 

21 including issuing money orders, sending 

22 and receiving wire transfers, check cashing 

23 services, bill payment services, and tax 

24 preparation services. 


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1 (vi) Such other short-term consumer 

2 credit services as the Comptroller of the 

3 Currency determines appropriate. 

4 (B) The company is not a depository insti5 tution or a credit union. 

6 (C) The company submits a business plan 

7 or operating plan that adequately addresses the 

8 appropriate statutory and policy considerations. 

9 Such plan shall— 

10 (i) reflect sound financial principles 

11 and demonstrate realistic assessments of 

12 risk in light of economic and competitive 

13 conditions in the market for serving under14 banked and unbanked populations; 

15 (ii) include information sufficient to 

16 permit the Comptroller of the Currency to 

17 evaluate the overall management ability of 

18 the company, especially the ability to pro19 vide financial services to the underbanked 

20 and unbanked population; and 

21 (iii) demonstrate that the company is 

22 aware of, and understands, Federal and 

23 State banking laws and sound banking op24 erations and practices in the context of 


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1 serving the needs of the underbanked and 

2 unbanked populations. 

3 (D) The company has senior management 

4 officials who are familiar with applicable Fed5 eral and State banking laws and regulations, 

6 and the credit and training needs of under7 banked and unbanked customers 

8 (E) The company has competent manage9 ment, with ability and experience relevant to 

10 the types of services to be provided, especially 

11 the ability and experience to design and provide 

12 financial services to the underbanked and 

13 unbanked consumer population. 

14 (2) COMPANY DEFINED.—For purposes of this 

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

16 (A) the entity applying for an FFSCC 

17 charter; 

18 (B) any wholly-owned subsidiary of such 

19 entity applying for an FFSCC charter; and 

20 (C) any other entity that is part of an af21 filiated control group with such entity applying 

22 for an FFSCC charter. 

23 (c) REQUIREMENTS PLACED ON FFSCCS.— 

24 (1) CREDIT DISCLOSURES.— 


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

2 to an extension of short-term credit by an 

3 FFSCC, the FFSCC shall provide the person to 

4 whom credit is being extended a clear and 

5 prominent statement in the loan agreement that 

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

7 actual finance charge per dollar of credit ex8 tended to such person instead of the annual 

9 percentage rate disclosure required under the 

10 Truth in Lending Act. 

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

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

13 the FFSCC shall provide the person to whom 

14 credit is being extended a disclosure of the fi15 nance charge to be paid by the person, ex16 pressed as an ‘‘annual percentage rate’’, using 

17 that term. 

18 (2) ACCOUNT ACCESS.—Each FFSCC shall 

19 provide continuous account access to the customers 

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

21 number, the Internet, or both. 

22 (3) FINANCIAL LITERACY PROGRAMS.—Each 

23 FFSCC shall implement a financial literacy pro24 gram, which shall include— 


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1 (A) making financial literacy materials 

2 available to its customers; and 

3 (B) assisting customers in building and 

4 improving their credit scores. 

5 (4) ADDITIONAL REQUIREMENTS.—Each 

6 FFSCC shall comply with the following: 

7 (A) Have a primary mission of providing a 

8 comprehensive array of financial services to the 

9 underbanked, unbanked, and consumers with 

10 low credit scores. 

11 (B) Serve as a vehicle for providing access 

12 to credit products predominately to consumers 

13 who are consider unbanked or underbanked. 

14 (C) File articles of association, articles of 

15 incorporation, or other appropriate organiza16 tional documents with the Comptroller of the 

17 Currency. 

18 (D) Submit to the Comptroller of the Cur19 rency for approval a business plan which, 

20 among other things, provides in reasonable de21 tail evidence of the knowledge, understanding, 

22 and experience of the institution and senior 

23 management of the unique challenges that 

24 unbanked and underbanked individuals face 

25 with respect to access to financial credit. 


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

2 the Comptroller of the Currency may issue, in addition 

3 to general corporate powers, an FFSCC shall have the 

4 power to provide the services described under each clause 

5 of subsection (b)(1)(A). 

6 (e) PENALTY.—Whoever knowingly violates any pro7 vision of this section, or any regulation issued pursuant 

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

9 each day such violation continues or imprisoned for not 

10 more than 3 years, or both. 

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

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

13 the Comptroller of the Currency determines is sufficient, 

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

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

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

17 or political subdivision thereof is preempted if the applica18 tion of such law would have a discriminatory effect on a 

19 company because such company is chartered as an 

20 FFSCC. 

21 SEC. 4. RATES AND TERMS STUDY; DEVELOPMENT OF FI22 NANCIAL PRODUCTS. 

23 The Comptroller of the Currency shall— 

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

25 the extension of credit; and 


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1 (2) develop a suite of financial products that 

2 FFSCCs may offer to underbanked persons, that 

3 will— 

4 (A) be fair to such persons; and 

5 (B) economically viable for FFSCCs to 

6 offer. 

7 SEC. 5. DEFINITIONS. 

8 For purposes of this Act: 

9 (1) CONSUMER.—The term ‘‘consumer’’ shall 

10 have the meaning given such term under section 

11 103(h) of the Truth in Lending Act (15 U.S.C. 

12 1602(h)). 

13 (2) DEPOSITORY INSTITUTION DEFINITIONS.— 

14 The terms ‘‘depository institution’’ and ‘‘insured de15 pository institution’’ shall have the meaning given 

16 such terms under section 3(c) of the Federal Deposit 

17 Insurance Act. 

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

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

22 (4) LONG-TERM CREDIT.—The term ‘‘long-term 

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

24 term of one year or more. 


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1 (5) SHORT-TERM CREDIT.—The term ‘‘short2 term credit’’ means an extension of credit with an 

3 initial term of less than one year. 

4 (6) SMALL BUSINESS.—The term ‘‘small busi5 ness’’ means a company with no more than 500 em6 ployees. 

7 (7) UNDERBANKED.—The term ‘‘underbanked’’ 

8 means a natural person or a small business that— 

9 (A) has a deposit account with an insured 

10 depository institution or an insured credit 

11 union; and 

12 (B) has limited or no ability to access non13 depository services from insured depository in14 stitutions or insured credit unions. 

15 (8) UNDERBANKED PERSON.—The term 

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

17 small business that is underbanked, unbanked, or 

18 has a low credit score. 

19 (9) OTHER TERMS.—The Comptroller of the 

20 Currency may issue regulations to define such other 

21 terms as the Comptroller of the Currency determines 

22 necessary to carry out this Act. 

Æ 


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