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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2235 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 2235

To amend the Bank Holding Company Act of 1956, the Revised Statutes of 
the United States, and the Federal Deposit Insurance Act to provide for 
                   interstate banking and branching.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                              May 20, 1993

 Mr. Vento (for himself, Mr. Neal of North Carolina, and Mr. McCollum) 
 introduced the following bill; which was referred to the Committee on 
                   Banking, Finance and Urban Affairs

_______________________________________________________________________

                                 A BILL

 
To amend the Bank Holding Company Act of 1956, the Revised Statutes of 
the United States, and the Federal Deposit Insurance Act to provide for 
                   interstate banking and branching.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Interstate Banking Efficiency Act of 
1993''.

               TITLE I--INTERSTATE BANKING AND BRANCHING

SEC. 101. NATIONWIDE BANKING.

    (a) Interstate Acquisitions.--Section 3(d) of the Bank Holding 
Company Act of 1956 (12 U.S.C. 1842(d)) is amended to read as follows:
    ``(d) Interstate Acquisitions and Branching.--
            ``(1) In general.--Subject to paragraphs (4), (5), (6), and 
        (7), the Board may approve an application under this section by 
        a bank holding company or foreign bank to acquire, directly or 
        indirectly, any voting shares of, interest in, or all or 
        substantially all of the assets of any additional insured 
        depository institution or bank holding company located in any 
        State.
            ``(2) State law.--Subject to paragraphs (3), (5), and (6), 
        any acquisition described in paragraph (1) that has been 
        approved under this section may be consummated notwithstanding 
        any State law that would prohibit or otherwise limit such 
        acquisition on the basis of--
                    ``(A) the location or size of the acquiring 
                company, foreign bank, or subsidiary of such company or 
                foreign bank;
                    ``(B) the number of insured depository institution 
                subsidiaries of such company or foreign bank; or
                    ``(C) any other factor that, directly or indirectly 
                has the effect of prohibiting or limiting the 
                acquisition of shares or control of an insured 
                depository institution or bank holding company located 
                in that State by an out-of-State bank holding company 
                or foreign bank if such factor is not applied with 
                similar effect in the case of acquisitions of insured 
                depository institutions or bank holding companies 
                located in such State by bank holding companies located 
                in the State.
            ``(3) State taxation authority not affected.--No provision 
        of this subsection shall be construed as affecting the 
        authority of any State or political subdivision of any State to 
        apply any tax or method of taxation to any national bank, or a 
        bank holding company which controls a national bank, when such 
        tax or tax method is otherwise permissible by or under the 
        Constitution of the United States or other Federal law.
            ``(4) Concentration limits.--The Board may not approve an 
        application under paragraph (1) if--
                    ``(A) the applicant controls, or upon completion of 
                the acquisition would control, more than 10 percent of 
                the total amount of insured depository institution 
                deposits in the United States, as determined under 
                regulations of the Board; or
                    ``(B) the applicant controls, or upon completion of 
                the acquisition would control, 30 percent or more of 
                the total amount of insured depository institution 
                deposits in the State in which the bank to be acquired 
                is located, as determined under regulations of the 
                Board, except that a State may waive the applicability 
                of this subparagraph.
            ``(5) Applicability of deposit caps and antitrust laws.--No 
        provision of this subsection shall be construed as affecting--
                    ``(A) the authority of any State to limit the 
                percentage of the total amount of insured depository 
                institution deposits in the State which may be held or 
                controlled by any bank to the extent the application of 
                such limitation does not discriminate against out-of-
                State banks or bank holding companies; or
                    ``(B) the applicability of any Federal antitrust 
                law or any State antitrust law that does not 
                discriminate against out-of-State banks or bank holding 
                companies.
            ``(6) Limitations on consolidations.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), any insured depository institution 
                acquired after the date of the enactment of the 
                Interstate Banking Efficiency Act of 1993 pursuant to 
                paragraph (1) may not be a party to any transaction 
                under subsection (h) before the end of the 3-year 
                period beginning on such date of enactment.
                    ``(B) Provision applicable to certain 
                institutions.--Subparagraph (A) shall not apply with 
                respect to any insured depository institution the 
                acquisition of which occurs after the date of the 
                enactment of the Interstate Banking Efficiency Act of 
                1993 pursuant to an application or notice filed before 
                such date with any appropriate Federal banking agency 
                or State bank supervisor.
            ``(7) Applicability of state law on the form of 
        acquisition.--
                    ``(A) In general.--Notwithstanding the preceding 
                paragraphs of this subsection and subject to 
                subparagraph (B), any law of a host State which--
                            ``(i) is in existence on the date of the 
                        enactment of the Interstate Banking Efficiency 
                        Act of 1993 or is enacted after such date; and
                            ``(ii) allows an out-of-State bank or bank 
                        holding company to establish a bank in the host 
                        State only by acquiring an existing bank in the 
                        host State,
                shall apply with respect to the establishment or 
                acquisition of a bank in the host State under this 
                subsection.
                    ``(B) Inapplicability of certain provision of state 
                law.--In the case of any State law referred to in 
                subparagraph (A) which is enacted after the date of the 
                enactment of the Interstate Banking Efficiency Act of 
                1993, such subparagraph shall not apply with respect to 
                any provision of such law which allows the 
                establishment of a bank through an acquisition referred 
                to in such subparagraph only if the bank to be acquired 
                has been in existence for more than 5 years as of the 
                date of the transaction.''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on July 1, 1994.

SEC. 102. INTERSTATE BRANCHING BY NATIONAL BANKS.

    Section 5155 of the Revised Statutes (12 U.S.C. 36) is amended--
            (1) by redesignating subsections (d) through (h) as 
        subsections (e) through (i), respectively; and
            (2) by inserting after subsection (c) the following:
    ``(d) Interstate Branching by National Banks.--
            ``(1) In general.--
                    ``(A) Approvals authorized.--Beginning 3 years 
                after the date of the enactment of the Interstate 
                Banking Efficiency Act of 1993, the Comptroller of the 
                Currency may approve an application under this section 
                to allow a national bank that is adequately capitalized 
                (as defined under section 38 of the Federal Deposit 
                Insurance Act) and adequately managed to establish or 
                acquire, and operate, a branch located outside the 
                State in which the main office of such bank is located, 
                subject to paragraphs (3), (4), (7), and (8).
                    ``(B) Conditions.--In determining whether to grant 
                approval under subparagraph (A), the Comptroller of the 
                Currency shall consider the views of the appropriate 
                State bank officials regarding the bank's compliance 
                with applicable State community reinvestment laws.
                    ``(C) Applicable law.--
                            ``(i) In general.--Subject to paragraphs 
                        (2), (7), and (8), any branch established or 
                        acquired under subparagraph (A) shall be 
                        subject to the laws of the host State with 
                        respect to intrastate branching, consumer 
                        protection, fair lending, and community 
                        reinvestment as if it were a branch of a bank 
                        chartered by that State, unless such State law, 
                        is preempted by Federal law regarding the same 
                        subject. There shall be no discriminatory 
                        effect in the application of such laws between 
                        a branch of a bank chartered by the host State 
                        and in-State branches of out-of-State national 
                        banks. Such State laws shall be enforced, with 
                        respect to branches of national banks by the 
                        Comptroller of the Currency. All other laws of 
                        the host State shall apply as if the branch was 
                        a national bank situated in that State.
                            ``(ii) Filing requirement.--A host State 
                        may require any national bank that has its main 
                        office in another State that wishes to 
                        establish a branch within the host State to 
                        comply with filing requirements that are not 
                        discriminatory in nature and that are similar 
                        in their effect to those that are imposed on a 
                        corporation from another State that is not 
                        engaged in the business of banking and that 
                        seeks to engage in business in the host State. 
                        The host State may preclude any national bank 
                        the main office of which is located in another 
                        State from establishing or operating a branch 
                        within the host State if that national bank or 
                        its branch materially fails to comply with the 
                        filing requirements.
            ``(2) State taxation authority not affected.--No provision 
        of this subsection shall be construed as affecting the 
        authority of any State or political subdivision of any State to 
        apply any tax or method of taxation to any national bank, 
        including any branch of a national bank, or any bank holding 
        company which controls a national bank to the extent such tax 
        or tax method is otherwise permissible by or under the 
        Constitution of the United States of America or other Federal 
        law.
            ``(3) State election to prohibit interstate branching.--
                    ``(A) In general.--The provisions of paragraph (1) 
                shall not apply to branches to be located in a State 
                which has enacted, during the period beginning on 
                January 1, 1990, and ending 3 years after the date of 
                the enactment of this subsection, a law that applies 
                equally to national and State banks and that expressly 
                prohibits all out-of-State banks from establishing or 
                acquiring branches located in that State.
                    ``(B) Effect of prohibition.--A national bank that 
                has its main office in a State that has in effect a 
                prohibition under subparagraph (A) may not acquire or 
                establish a branch located in any other State under the 
                provisions of this subsection.
            ``(4) State election to permit interstate branching.--
                    ``(A) During the 3-year period following 
                enactment.--The Comptroller of the Currency may approve 
                an application under paragraph (1)(A) before the 
                expiration of the 3-year period described in paragraph 
                (1)(A), if the State in which the branch is or will be 
                located enacts a law during that period expressly 
                permitting interstate branching by all national and 
                State banks before the expiration of the time period 
                described in paragraph (1)(A).
                    ``(B) After the 3-year period following 
                enactment.--A State that originally elected, pursuant 
                to paragraph (3), to prohibit interstate branching may 
                nonetheless elect at any later time to permit 
                interstate branching if such State enacts a law 
                expressly permitting interstate branching by all 
                national and State banks.
            ``(5) State imposed conditions on interstate branching.--
                    ``(A) Filing with state bank authority.--A State 
                may require a copy of an application submitted under 
                this section to be filed with the host State banking 
                authority in a timely manner (and the Comptroller of 
                the Currency shall consider any timely comments of the 
                host State prior to approving that application).
                    ``(B) Other nondiscriminatory conditions.--Subject 
                to paragraph (7) a State may impose other conditions on 
                a branch established or acquired under paragraph (1)(A) 
                if--
                            ``(i) the conditions do not discriminate 
                        against out-of-State banks or bank holding 
                        companies; and
                            ``(ii) the imposition of the conditions is 
                        not preempted by Federal law regarding the same 
                        subject.
            ``(6) Concentration limits.--
                    ``(A) In general.--The Comptroller may not approve 
                an acquisition under paragraph (1)(A) by a bank of a 
                branch located in another State if--
                            ``(i) the bank controls, or upon completion 
                        of the acquisition would control, more than 10 
                        percent of the total amount of insured 
                        depository institution deposits in the United 
                        States, as determined under regulations of the 
                        Board of Governors of the Federal Reserve 
                        System; or
                            ``(ii) the bank controls, or upon 
                        completion of the acquisition would control, 30 
                        percent or more of the total amount of insured 
                        depository institution deposits in the State in 
                        which the branch to be acquired is located, as 
                        determined under regulations of the Board of 
                        Governors of the Federal Reserve System,
                except that a State may waive the applicability of this 
                subparagraph.
                    ``(B) Not applicable to out-of-state branching.--
                Subparagraph (A) shall not apply to the establishment 
                of new branches located outside the State where the 
                main office of the bank is located.
            ``(7) Applicability of deposit caps and antitrust laws.--No 
        provision of this subsection shall be construed as affecting--
                    ``(A) the authority of any State to limit the 
                percentage of the total amount of insured depository 
                institution deposits in the State which may be held or 
                controlled by any bank to the extent the application of 
                such limitation does not discriminate against out-of-
                State banks or bank holding companies; or
                    ``(B) the applicability of any Federal antitrust 
                law or any State antitrust law that does not 
                discriminate against out-of-State banks or bank holding 
                companies.
            ``(8) Applicability of state law on the form of 
        acquisition.--
                    ``(A) In general.--Notwithstanding the preceding 
                paragraphs of this subsection and subject to 
                subparagraph (B), any law of a host State which--
                            ``(i) is in existence on the date of the 
                        enactment of the Interstate Banking Efficiency 
                        Act of 1993 or is enacted after such date; and
                            ``(ii) allows an out-of-State bank to 
                        establish a branch in the host State only by 
                        acquiring an existing bank or branch in the 
                        host State,
                shall apply with respect to the establishment or 
                acquisition of a branch in the host State under this 
                subsection.
                    ``(B) Inapplicability of certain provisions of 
                state law.--In the case of any State law referred to in 
                subparagraph (A) which is enacted after the date of the 
                enactment of the Interstate Banking Efficiency Act of 
                1993, such subparagraph shall not apply with respect to 
                any provision of such law which allows the 
                establishment of a branch through an acquisition 
                referred to in such subparagraph only if the bank to be 
                acquired has been in existence for more than 5 years as 
                of the date of the transaction.
                    ``(C) State laws on banks apply to branches.--For 
                purposes of this paragraph, any law of a host State 
                which--
                            ``(i) is in existence on the date of the 
                        enactment of the Interstate Banking Efficiency 
                        Act of 1993; and
                            ``(ii) allows an out-of-State bank to 
                        establish a bank in the host State only by 
                        acquiring an existing bank in the host State,
                shall be deemed to apply to the establishment of a 
                branch in the host State by an out-of-State bank.
            ``(9) Definitions.--For purposes of this subsection--
                    ``(A) Host state.--The term `host State' means the 
                State in which a national bank establishes or maintains 
                a branch other than the State in which the bank has its 
                main office and is engaging in banking business.
                    ``(B) Insured depository institution.--The term 
                `insured depository institution' has the meaning given 
                to such term in section 3(c)(2) of the Federal Deposit 
                Insurance Act.
                    ``(C) Out-of-state bank.--The term `out-of-State 
                bank' means, with respect to any State, a bank the main 
                office of which is located outside the State.''.

SEC. 103. INTERSTATE BRANCHING BY STATE BANKS.

    Section 18(d) of the Federal Deposit Insurance Act (12 U.S.C. 
1828(d)) is amended by adding at the end the following:
            ``(3) Interstate branching by state banks.--Beginning 3 
        years after the date of enactment of the Interstate Banking 
        Efficiency Act of 1993, an insured State bank that is 
        adequately capitalized (as defined under section 38 of the 
        Federal Deposit Insurance Act) and adequately managed may 
        establish or acquire, and operate, a branch located outside the 
        State in which the bank is chartered if authorized by the law 
        of the State in which the bank is chartered, subject to 
        paragraphs (5), (6), (9), and (10).
            ``(4) Applicable law.--
                    ``(A) In general.--Subject to paragraph (10), any 
                branch of an out-of-State bank shall be subject to the 
                laws of the host State as if such branch were a branch 
                of a bank chartered by that State.
                    ``(B) Activities of branches.--An insured State 
                bank that establishes a branch or branches pursuant to 
                paragraph (3) may not conduct any activity at such 
                branch that is not permissible for a bank chartered by 
                the host State.
                    ``(C) Filing requirement.--A host State may require 
                any insured bank chartered by another State that wishes 
                to establish a branch within the host State to comply 
                with filing requirements that are not discriminatory in 
                nature and that are similar in their effect to those 
                that are imposed on a corporation from another State 
                that is not engaged in the business of banking and that 
                seeks to engage in business in the host State. The host 
                State may preclude any State bank chartered by another 
                State from establishing or operating a branch within 
                the host State if that State bank or its branch 
                materially fails to comply with the filing 
                requirements.
                    ``(D) Reservation of certain rights to states.--No 
                provision of this subsection shall be construed as 
                limiting in any way the right of a State to--
                            ``(i) determine the authority of State 
                        banks chartered in that State to establish and 
                        maintain branches; or
                            ``(ii) supervise, regulate, and examine 
                        State banks chartered by that State.
            ``(5) State election to prohibit interstate branching.--
                    ``(A) In general.--The provisions of paragraph (3) 
                shall not apply to branches to be located in a State 
                which has enacted, during the period beginning on 
                January 1, 1990, and ending 3 years after the date of 
                enactment of this subsection, a law that applies 
                equally to national and State banks and that expressly 
                prohibits all out-of-State banks from establishing or 
                acquiring branches located in that State.
                    ``(B) Effect of prohibition.--A State bank that is 
                chartered by a State that has in effect a prohibition 
                under subparagraph (A) may not acquire or establish a 
                branch located in any other State under the provisions 
                of this subsection.
            ``(6) State election to permit interstate branching.--
                    ``(A) During the 3-year period following 
                enactment.--A State bank may establish or acquire, and 
                operate, a branch outside the State in which the main 
                office of the bank is located, subject to the 
                provisions of this subsection, before the expiration of 
                the 3-year period described in paragraph (3), if the 
                State in which the branch will be located enacts a law 
                during that period expressly permitting interstate 
                branching by all national and State banks before the 
                expiration of the time period described in paragraph 
                (3).
                    ``(B) After the 3-year period following 
                enactment.--A State that originally elected, pursuant 
                to paragraph (5), to prohibit interstate branching may 
                nonetheless elect at any later time to permit 
                interstate branching if such State enacts a law 
                expressly permitting interstate branching by all 
                national and State banks.
            ``(7) State imposed conditions on interstate branching.--
                    ``(A) Filing with state bank authority.--A State 
                may require a copy of an application submitted under 
                this section to be filed with the host State banking 
                authority in a timely manner (and the home State 
                banking authority and the appropriate Federal banking 
                agency shall consider any timely comments of the host 
                State prior to approving that application).
                    ``(B) Other nondiscriminatory conditions.--Subject 
                to paragraph (10), a State may impose other conditions 
                on a branch established or acquired under paragraph (3) 
                if--
                            ``(i) the conditions do not discriminate 
                        against out-of-State banks or bank holding 
                        companies; and
                            ``(ii) the imposition of the conditions is 
                        not preempted by Federal law regarding the same 
                        subject.
            ``(8) Concentration limits.--
                    ``(A) In general.--The home State banking authority 
                and the appropriate Federal banking agency may not 
                approve an acquisition under paragraph (1)(A) by a bank 
                of a branch located in another State if--
                            ``(i) the bank controls, or upon completion 
                        of the acquisition would control, more than 10 
                        percent of the total amount of insured 
                        depository institution deposits in the United 
                        States, as determined under regulations of the 
                        Board of Governors of the Federal Reserve 
                        System; or
                            ``(ii) the bank controls, or upon 
                        completion of the acquisition would control, 30 
                        percent or more of the total amount of insured 
                        depository institution deposits in the State in 
                        which the branch to be acquired is located, as 
                        determined under regulations of the Board of 
                        Governors of the Federal Reserve System,
                except that a State may waive the applicability of this 
                subparagraph.
                    ``(B) Not applicable to out-of-state branching.--
                Subparagraph (A) shall not apply to the establishment 
                of new branches located outside the State where the 
                main office of the bank is located.
            ``(9) Applicability of deposit caps and antitrust laws.--No 
        provision of this subsection shall be construed as affecting--
                    ``(A) the authority of any State to limit the 
                percentage of the total amount of insured depository 
                institution deposits in the State which may be held or 
                controlled by any bank to the extent the application of 
                such limitation does not discriminate against out-of-
                State banks or bank holding companies; or
                    ``(B) the applicability of any Federal antitrust 
                law or any State antitrust law that does not 
                discriminate against out-of-State banks or bank holding 
                companies.
            ``(10) Applicability of state law on the form of 
        acquisition.--
                    ``(A) In general.--Notwithstanding the preceding 
                paragraphs of this subsection and subject to 
                subparagraph (B), any law of a host State which--
                            ``(i) is in existence on the date of the 
                        enactment of the Interstate Banking Efficiency 
                        Act of 1993 or is enacted after such date; and
                            ``(ii) allows an out-of-State bank to 
                        establish a branch in the host State only by 
                        acquiring an existing bank or branch in the 
                        host State,
                shall apply with respect to the establishment or 
                acquisition of a branch in the host State in accordance 
                with this subsection.
                    ``(B) Inapplicability of certain provisions of 
                state law.--In the case of any State law referred to in 
                subparagraph (A) which is enacted after the date of the 
                enactment of the Interstate Banking Efficiency Act of 
                1993, such subparagraph shall not apply with respect to 
                any provision of such law which allows the 
                establishment of a branch through an acquisition 
                referred to in such subparagraph only if the bank has 
                been in existence for more than 5 years as of the date 
                of the transaction.
                    ``(C) State laws on banks apply to branches.--For 
                purposes of this paragraph, any law of a host State 
                which--
                            ``(i) is in existence on the date of the 
                        enactment of the Interstate Banking Efficiency 
                        Act of 1993; and
                            ``(ii) allows an out-of-State bank to 
                        establish a bank in the host State only by 
                        acquiring an existing bank in the host State,
                shall be deemed to apply to the establishment of a 
                branch in the host State by an out-of-State bank.
            ``(11) Coordination of examination authority.--
                    ``(A) In general.--A host State bank supervisory or 
                regulatory authority may examine a branch established 
                in the host State by banks chartered by another State 
                for the purpose of determining compliance with host 
                State laws regarding banking, taxation, community 
                reinvestment, fair lending, consumer protection, and 
                permissible activities and to ensure that the 
                activities of the branch are conducted in a manner 
                consistent with sound banking principles and do not 
                constitute a serious risk to the safety and sound 
                operation of the branch.
                    ``(B) Enforcement.--In the event that a host State 
                bank authority as described in subparagraph (A) 
                determines that there is a violation of host State law 
                concerning the activities being conducted by the branch 
                or that the branch is being operated in a manner not 
                consistent with sound banking principles or in an 
                unsafe and unsound manner, such host State bank 
                authority may undertake such enforcement actions or 
                proceedings as would be permitted under host State law 
                if the branch in question were a bank chartered by that 
                host State.
                    ``(C) Cooperative agreement.--The State bank 
                authorities from one or more States are authorized to 
                enter into cooperative agreements to facilitate State 
                regulatory supervision of State banks, including 
                cooperative agreements relating to the coordination of 
                examinations and joint participation in examinations.
                    ``(D) Federal regulatory authority.--
                            ``(i) In general.--No provision of this 
                        subsection shall be construed as limiting in 
                        any way the authority of the appropriate 
                        Federal banking agency to examine any bank or 
                        branch of a bank for which the agency is the 
                        appropriate Federal banking agency.
                            ``(ii) Review of interstate agreements.--If 
                        the appropriate Federal banking authority 
                        determines that the States have failed to reach 
                        an agreement under subparagraph (C), or that 
                        such an agreement fails to adequately protect 
                        the Federal Deposit Insurance Fund, the 
                        appropriate Federal banking authority shall not 
                        defer to State examinations of the out-of-State 
                        branches.
            ``(12) Definitions.--For purposes of this subsection--
                    ``(A) Host state.--The term `host State' means the 
                State in which a bank establishes or maintains a branch 
                other than the State in which the bank is chartered and 
                engaging in banking business.
                    ``(B) Out-of-state bank.--The term `out-of-State 
                bank' means, with respect to any State, a bank the main 
                office of which is located outside the State.''.

SEC. 104. BRANCHING BY FOREIGN BANKS.

    (a) In General.--Section 5(a) of the International Banking Act of 
1978 (12 U.S.C. 3103(a)) is amended to read as follows:
    ``(a) Interstate Banking Operations.--
            ``(1) In general.--A foreign bank may establish and 
        operate--
                    ``(A) a Federal branch or agency, with the approval 
                of the Board and the Comptroller of the Currency, in 
                any State outside the branch's or agency's home State 
                to the extent that such establishment and operation 
                would be permitted under section 5155 of the Revised 
                Statutes for a national bank; or
                    ``(B) a State branch or agency, with the approval 
                of the Board and the appropriate regulatory authority 
                of the State, in any State outside the branch's or 
                agency's home State to the extent that such 
                establishment and operation would be permitted under 
                section 18(d) of the Federal Deposit Insurance Act for 
                a State bank,
        as if the foreign bank were a national bank the main office of 
        which is in the home State of the foreign bank or a State bank 
        chartered in such home State, as the case may be.
            ``(2) Criteria for determination.--In approving an 
        application under paragraph (1), the Board and the Comptroller 
        of the Currency--
                    ``(A) shall apply the standards for establishment 
                of a foreign bank office in the United States under 
                section 7(e); and
                    ``(B) may not approve an application unless the 
                Board or the Comptroller of the Currency--
                            ``(i) determines that the foreign bank's 
                        financial resources, including the capital 
                        level, are equivalent to those required for a 
                        domestic bank to be approved for branching 
                        under section 5155 of the Revised Statutes and 
                        section 18(d) of the Federal Deposit Insurance 
                        Act; and
                            ``(ii) in the case of the 1st application 
                        by such foreign bank under paragraph (1), 
                        consults with the Secretary of the Treasury 
                        regarding capital equivalency.
            ``(3) Requirement for a separate subsidiary.--If the 
        Comptroller of the Currency or the Board, taking into account 
        differing regulatory or accounting standards, finds that 
        adherence to capital requirements equivalent to those imposed 
        under section 5155 of the Revised Statutes and by section 18(d) 
        of the Federal Deposit Insurance Act can be verified only if 
        banking activities are carried out in a domestic banking 
        subsidiary within the United States, the Board or the 
        Comptroller of the Currency may approve an application under 
        paragraph (1) subject to a requirement that the foreign bank or 
        company controlling the foreign bank establish a domestic 
        banking subsidiary in the United States.
            ``(4) Additional authority for interstate branches and 
        agencies of foreign banks.--Notwithstanding paragraph (1) and 
        section 4(h), a foreign bank may, with the approval of the 
        Comptroller of the Currency, establish and operate a Federal 
        branch or Federal agency or, with the approval of the Board and 
        the appropriate State bank supervisor, a State branch or State 
        agency in any State outside the foreign bank's home State if--
                    ``(A) the establishment and operation of a branch 
                or agency is expressly permitted by the State in which 
                the branch or agency is to be established; and
                    ``(B) in the case of a Federal or State branch, the 
                branch receives only such deposits as would be 
                permissible for a corporation organized under section 
                25A of the Federal Reserve Act.''.
    (b) Treatment of United States Banking Subsidiaries.--Section 5 of 
the International Banking Act of 1978 (12 U.S.C. 3103) is amended by 
adding at the end the following:
    ``(d) Treatment of United States Subsidiary of a Foreign Bank.--A 
foreign bank that has a domestic subsidiary within the United States 
may establish Federal and State branches and agencies outside the 
bank's home State to the extent permitted under section 5155(d) of the 
Revised Statutes and section 18(d) of the Federal Deposit Insurance 
Act.''.
    (c) Home State Determinations.--
            (1) Method of determining.--Section 4(h) of the 
        International Banking Act of 1978 (12 U.S.C. 3102(h)) is 
        amended--
                    (A) by striking the phrase ``in the State in which 
                such branch or agency is located''; and
                    (B) by adding at the end the following sentence: 
                ``For the purposes of section 5155(c) of the Revised 
                Statutes, the home State of a foreign bank shall be the 
                bank's home State as determined under section 5(c).''.
            (2) Single state determinations.--Section 5(c) of the Bank 
        Holding Company Act of 1956 (12 U.S.C. 3103(c)) is amended to 
        read as follows:
    ``(c) Determination of Home State of Foreign Bank.--For the 
purposes of this section--
            ``(1) the home State of a foreign bank that has branches, 
        agencies, subsidiary commercial lending companies, or 
        subsidiary banks, or any combination thereof, in more than 1 
        State, is the 1 State of such States which is selected by the 
        foreign bank or, in default of any such selection, by the 
        Board; and
            ``(2) the home State of a foreign bank that has branches, 
        agencies, subsidiary commercial lending companies, or 
        subsidiary banks, or any combination thereof, in only 1 State, 
        is that State.''.

SEC. 105. PERMISSIBLE CONSOLIDATION.

    Section 3 of the Bank Holding Company Act of 1956 (12 U.S.C. 1842) 
is amended by adding at the end the following subsection:
    ``(h) Permissible Consolidation.--
            ``(1) In general.--Except as provided in subsection (d)(1) 
        and with the approval of the Board, a bank holding company 
        having subsidiary banks located in more than 1 State may 
        combine 2 or more of such banks into a single bank by means of 
        merger, consolidation, or other transaction. Notwithstanding 
        any other provision of Federal law or any provision of State 
        law, any consolidation effected in accordance with this 
        subsection shall be permissible within a State, unless such 
        State has enacted a law in accordance with section 
        5155(d)(2)(A) of the Revised Statutes or section 18(d)(5)(A) of 
        the Federal Deposit Insurance Act that applies equally to 
        national and State banks and that expressly prohibits all out-
        of-State banks from establishing or acquiring branches located 
        in that State.
            ``(2) Additional branches.--The consolidated bank may, 
        subject to compliance with all applicable Federal or State laws 
        relating to the establishment, acquisition or operation of a 
        branch, establish, acquire, and operate additional branches at 
        any location where the consolidated bank or a preexisting bank 
        could, if the consolidated or preexisting bank had not been a 
        party to such consolidation, have established or acquired and 
        operated a branch, unless precluded by any provision of State 
        law in existence on the date of the enactment of the Interstate 
        Banking Efficiency Act of 1993.
            ``(3) Effect of state prohibition of branching.--If, during 
        the period beginning on the date of the enactment of the 
        Interstate Banking Efficiency Act of 1993 and ending on the 
        expiration of 3 years from such date of enactment, a 
        consolidation authorized by paragraph (1) is effected resulting 
        in the conversion of a bank into a branch located in a State 
        which, after such consolidation, has enacted a law that applies 
        equally to national and State banks and that expressly 
        prohibits all out-of-State banks from establishing or acquiring 
        branches located in that State, then such branch shall, under 
        regulations of the Federal or State banking authority having 
        jurisdiction of the bank prior to its conversion into a branch, 
        be promptly converted back into the bank as it existed prior to 
        such consolidation.
            ``(4) Applicable law.--Any branch of a national bank 
        established or acquired in connection with a consolidation or 
        other transaction under paragraph (1) shall be subject to the 
        laws of the host State with respect to intrastate branching, 
        consumer protection, fair lending, and community reinvestment 
        as if it were a branch of a bank chartered by that State, 
        unless such State law, is preempted by Federal law regarding 
        the same subject. There shall be no discriminatory effect in 
        the application of such laws between a branch of a bank 
        chartered by the host State and in-State branches of out-of-
        State national banks. Such State laws shall be enforced, with 
        respect to branches of national banks by the Comptroller of the 
        Currency. All other laws of the host State shall apply as if 
        the branch was a national bank situated in that State.
            ``(5) Plan on meeting local credit needs.--The Board may 
        not approve any application for any consolidation or other 
        transaction under this subsection unless the Board has 
        considered a plan submitted by the applicant bank holding 
        company for meeting local credit needs in the communities 
        served by any bank or savings association subsidiary of the 
        company which is involved in the proposed consolidation or 
        transaction, including the extent to which the amount of the 
        anticipated savings attributable to the proposed consolidation 
        or other transaction will be available to meet such local 
        credit needs.''.

SEC. 106. MINIMUM CAPITAL REQUIREMENT FOR NEW INTERSTATE BANKING AND 
              BRANCHING POWERS.

    (a) In General.--Except as provided in subsection (b), the 
amendments made by sections 101, 102, 103, 104, and 105 shall not apply 
with respect to any insured depository institution (as defined in 
section 3(c) of the Federal Deposit Insurance Act) which is not an 
adequately capitalized institution (as defined under section 38 of the 
Federal Deposit Insurance Act).
    (b) Regulator Discretion.--
            (1) In general.--Subject to paragraph (2) and with the 
        approval of the Federal Deposit Insurance Corporation and the 
        appropriate Federal banking agency, any financial services 
        holding company which controlled any full-service bank 
        subsidiary on May 15, 1992, may convert such bank into a branch 
        of any out-of-State bank pursuant to the amendments made by 
        this title without regard to the minimum capital requirements 
        of this section.
            (2) Restrictions.--No branch of a bank which results from a 
        conversion described in paragraph (1) may have total assets in 
        excess of the average amount held by such branch during May 
        1992, so long as such bank fails to meet the minimum capital 
        requirement established by this section.

SEC. 107. PROHIBITION AGAINST DEPOSIT PRODUCTION OFFICES.

    (a) Regulations.--Before the end of the 120-day period beginning on 
the date of the enactment of the Interstate Banking Efficiency Act of 
1993, the appropriate Federal banking agency shall prescribe 
regulations which prohibit any person from using any authority to 
engage in interstate branching pursuant to this title or any amendment 
made by this title to any other provision of law primarily for the 
purpose of deposit production.
    (b) Guidelines for Meeting Credit Needs.--Regulations issued under 
subsection (a) shall include guidelines to ensure that each interstate 
branch meets the credit needs of the community and market area in which 
the branch operates.
    (c) Limitation on Out-of-State Loans.--
            (1) Limitation.--Regulations issued under subsection (a) 
        shall require that if the percentage of outstanding loans made 
        by an interstate branch to borrowers located in the host State 
        of, or market area served by, the branch is less than half the 
        average of such percentage for all Federal depository 
        institutions and State depository institutions having their 
        principal place of operations in the host State or that market 
        area--
                    (A) the appropriate Federal banking agency for the 
                branch shall review the loan portfolio of the branch 
                and determine whether the branch is reasonably meeting 
                the credit needs of the community and market area in 
                which the branch operates; and
                    (B) if the agency determines that the branch is not 
                reasonably meeting those needs--
                            (i) the branch shall be closed, and
                            (ii) the person which established the 
                        branch may not open a new branch in that State 
                        unless the person provides reasonable 
                        assurances to the satisfaction of the 
                        appropriate Federal banking agency that the new 
                        branch will reasonably meet the credit needs of 
                        the community and market area in which the new 
                        branch will operate.
            (2) Considerations.--In making a determination under 
        paragraph (1)(A) regarding an interstate branch, the 
        appropriate Federal banking agency shall consider--
                    (A) whether the branch was acquired as part of the 
                purchase of a failed or failing depository institution;
                    (B) whether the branch has a higher concentration 
                of commercial and credit card lending; and
                    (C) the ratings received by the branch in 
                evaluations under the Community Reinvestment Act of 
                1977.
    (d) Application.--This section shall not apply to any interstate 
branch acquired before January 1, 1992, as part of any consolidation or 
merger of depository institutions.
    (e) Definitions.--For the purposes of this section--
            (1) Appropriate federal banking agency.--The term 
        ``appropriate Federal banking agency'' has the meaning that 
        term has in section 3 of the Federal Deposit Insurance Act.
            (2) Branch.--The term ``branch'' means any office, agency, 
        or other place of business located in any State at which 
        deposits are received, checks paid, or money lent.
            (3) Federal depository institutions and state depository 
        institution.--Each of the terms ``Federal depository 
        institution'' and ``State depository institution'' has the 
        meaning given that term in section 3 of the Federal Deposit 
        Insurance Act.
            (4) Host state defined.--The term ``host State'' means the 
        State in which a bank establishes or maintains a branch, other 
        than--
                    (A) the State in which the bank is chartered and 
                engaging in banking business, or
                    (B) in the case of--
                            (i) a national bank, the State in which the 
                        principal place of business of such association 
                        is located, and
                            (ii) a bank holding company, the State in 
                        which the total deposits of all bank 
                        subsidiaries of such company is the largest,
        as applicable under the amendments made by this title.
            (5) Interstate branch.--The term ``interstate branch'' 
        means a branch established pursuant to the authority referred 
        to in subsection (a).
            (6) Principal place of operations.--The term ``principal 
        place of operations'' means the State in which the total 
        deposits of all bank subsidiaries of a person are largest.
            (7) State defined.--The term ``State'' has the meaning 
        given to such term in section 3 of the Federal Deposit 
        Insurance Act.

SEC. 108. RESTATEMENT OF EXISTING LAW.

    No provision of this title and no amendment made by this title to 
any other provision of law shall be construed as affecting in any way 
the right of any State, or any political subdivision of any State, to 
impose or maintain a nondiscriminatory franchise tax or other 
nonproperty tax instead of a franchise tax in accordance with section 
3124 of title 31, United States Code.

SEC. 109. VISITORIAL POWERS.

    Section 5240 of the Revised Statutes (12 U.S.C. 481 et seq.) is 
amended--
            (1) by inserting before the 6th undesignated paragraph (12 
        U.S.C. 484) the following new paragraph heading:
            ``(6) Visitorial powers.--'';
            (2) by moving the left margins of subparagraphs (A) and (B) 
        of paragraph (6) (as so designated by the amendment made by 
        paragraph (1) of this section) 4 ems to the right; and
            (3) by inserting after subparagraph (B) of such paragraph 
        the following new subparagraph:
                            ``(C) State visitations authorized for tax 
                        compliance purposes.--Notwithstanding 
                        subparagraph (A), any lawfully authorized 
                        auditor, examiner, or other representative 
                        acting on behalf of any State agency charged 
                        with the administration and collection of taxes 
                        imposed by a State or any political subdivision 
                        of a State may review at reasonable times those 
                        books and records of any Federal depository 
                        institution (as defined in section 3(c)(4) of 
                        the Federal Deposit Insurance Act) or any 
                        Federal credit union (as defined in section 
                        101(1) of the Federal Credit Union Act) located 
                        in that State which are reasonably necessary to 
                        ensure compliance with the tax laws of the 
                        State or political subdivision.''.

                       TITLE II--CRA EVALUATIONS

SEC. 201. STATE-BY-STATE CRA EVALUATIONS OF DEPOSITORY INSTITUTIONS 
              WITH INTERSTATE BRANCHES.

    Section 807 of the Community Reinvestment Act of 1977 (12 U.S.C. 
2906) is amended by adding at the end the following new subsection:
    ``(d) Institutions With Interstate Branches.--
            ``(1) State-by-state evaluation.--In the case of a 
        regulated financial institution which maintains 1 or more 
        domestic branches located outside the State in which the 
        institution's principal place of business is located (hereafter 
        in this subsection referred to as the `home State'), the 
        appropriate Federal financial supervisory agency shall 
        prepare--
                    ``(A) a written evaluation of the entire 
                institution's record of performance under this Act, as 
                required by subsections (a), (b), and (c) of this 
                section; and
                    ``(B) for each State in which the institution 
                maintains 1 or more domestic branches (including the 
                institution's home State), a separate written 
                evaluation of the institution's record of performance 
                within such State under this Act, as required by 
                subparagraphs (A) and (B) of subsection (b)(1) of this 
                section.
            ``(2) Content of state level evaluation.--A written 
        evaluation prepared pursuant to paragraph (1)(B) of this 
        subsection shall report the information required by such 
        paragraph separately for each metropolitan area (as defined by 
        the appropriate Federal financial supervisory agency) in which 
        the regulated financial institution maintains 1 or more 
        domestic branch offices and separately for the nonmetropolitan 
        portion of the State if the institution maintains 1 or more 
        domestic branch offices in such nonmetropolitan area.''.

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