I

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.

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 ‘‘Interstate Banking Ef5 ficiency Act of 1993’’.
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1 TITLE I—INTERSTATE BANKING

2 AND BRANCHING

3 SEC. 101. NATIONWIDE BANKING.

4 (a) INTERSTATE ACQUISITIONS.—Section 3(d) of the

5 Bank Holding Company Act of 1956 (12 U.S.C. 1842(d))

6 is amended to read as follows:

7 ‘‘(d) INTERSTATE ACQUISITIONS AND BRANCHING.—

8 ‘‘(1) IN GENERAL.—Subject to paragraphs (4),

9 (5), (6), and (7), the Board may approve an applica10 tion under this section by a bank holding company

11 or foreign bank to acquire, directly or indirectly, any

12 voting shares of, interest in, or all or substantially

13 all of the assets of any additional insured depository

14 institution or bank holding company located in any

15 State.

16 ‘‘(2) STATE LAW.—Subject to paragraphs (3),

17 (5), and (6), any acquisition described in paragraph

18 (1) that has been approved under this section may

19 be consummated notwithstanding any State law that

20 would prohibit or otherwise limit such acquisition on

21 the basis of—

22 ‘‘(A) the location or size of the acquiring

23 company, foreign bank, or subsidiary of such

24 company or foreign bank;
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1 ‘‘(B) the number of insured depository in2 stitution subsidiaries of such company or for3 eign bank; or

4 ‘‘(C) any other factor that, directly or indi5 rectly has the effect of prohibiting or limiting

6 the acquisition of shares or control of an in7 sured depository institution or bank holding

8 company located in that State by an out-of9 State bank holding company or foreign bank if

10 such factor is not applied with similar effect in

11 the case of acquisitions of insured depository in12 stitutions or bank holding companies located in

13 such State by bank holding companies located

14 in the State.

15 ‘‘(3) STATE TAXATION AUTHORITY NOT AF16 FECTED.—No provision of this subsection shall be

17 construed as affecting the authority of any State or

18 political subdivision of any State to apply any tax or

19 method of taxation to any national bank, or a bank

20 holding company which controls a national bank,

21 when such tax or tax method is otherwise permis22 sible by or under the Constitution of the United

23 States or other Federal law.
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1 ‘‘(4) CONCENTRATION LIMITS.—The Board

2 may not approve an application under paragraph (1)

3 if—

4 ‘‘(A) the applicant controls, or upon com5 pletion of the acquisition would control, more

6 than 10 percent of the total amount of insured

7 depository institution deposits in the United

8 States, as determined under regulations of the

9 Board; or

10 ‘‘(B) the applicant controls, or upon com11 pletion of the acquisition would control, 30 per12 cent or more of the total amount of insured de13 pository institution deposits in the State in

14 which the bank to be acquired is located, as de15 termined under regulations of the Board, except

16 that a State may waive the applicability of this

17 subparagraph.

18 ‘‘(5) APPLICABILITY OF DEPOSIT CAPS AND

19 ANTITRUST LAWS.—No provision of this subsection

20 shall be construed as affecting—

21 ‘‘(A) the authority of any State to limit the

22 percentage of the total amount of insured de23 pository institution deposits in the State which

24 may be held or controlled by any bank to the

25 extent the application of such limitation does
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1 not discriminate against out-of-State banks or

2 bank holding companies; or

3 ‘‘(B) the applicability of any Federal anti4 trust law or any State antitrust law that does

5 not discriminate against out-of-State banks or

6 bank holding companies.

7 ‘‘(6) LIMITATIONS ON CONSOLIDATIONS.—

8 ‘‘(A) IN GENERAL.—Except as provided in

9 subparagraph (B), any insured depository insti10 tution acquired after the date of the enactment

11 of the Interstate Banking Efficiency Act of

12 1993 pursuant to paragraph (1) may not be a

13 party to any transaction under subsection (h)

14 before the end of the 3-year period beginning

15 on such date of enactment.

16 ‘‘(B) PROVISION APPLICABLE TO CERTAIN

17 INSTITUTIONS.—Subparagraph (A) shall not

18 apply with respect to any insured depository in19 stitution the acquisition of which occurs after

20 the date of the enactment of the Interstate

21 Banking Efficiency Act of 1993 pursuant to an

22 application or notice filed before such date with

23 any appropriate Federal banking agency or

24 State bank supervisor.
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1 ‘‘(7) APPLICABILITY OF STATE LAW ON THE

2 FORM OF ACQUISITION.—

3 ‘‘(A) IN GENERAL.—Notwithstanding the

4 preceding paragraphs of this subsection and

5 subject to subparagraph (B), any law of a host

6 State which—

7 ‘‘(i) is in existence on the date of the

8 enactment of the Interstate Banking Effi9 ciency Act of 1993 or is enacted after such

10 date; and

11 ‘‘(ii) allows an out-of-State bank or

12 bank holding company to establish a bank

13 in the host State only by acquiring an ex14 isting bank in the host State,

15 shall apply with respect to the establishment or

16 acquisition of a bank in the host State under

17 this subsection.

18 ‘‘(B) INAPPLICABILITY OF CERTAIN PROVI19 SION OF STATE LAW.—In the case of any State

20 law referred to in subparagraph (A) which is

21 enacted after the date of the enactment of the

22 Interstate Banking Efficiency Act of 1993, such

23 subparagraph shall not apply with respect to

24 any provision of such law which allows the es25 tablishment of a bank through an acquisition
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1 referred to in such subparagraph only if the

2 bank to be acquired has been in existence for

3 more than 5 years as of the date of the trans4 action.’’.

5 (b) EFFECTIVE DATE.—The amendment made by

6 this section shall take effect on July 1, 1994.

7 SEC. 102. INTERSTATE BRANCHING BY NATIONAL BANKS.

8 Section 5155 of the Revised Statutes (12 U.S.C. 36)

9 is amended—

10 (1) by redesignating subsections (d) through (h)

11 as subsections (e) through (i), respectively; and

12 (2) by inserting after subsection (c) the follow13 ing:

14 ‘‘(d) INTERSTATE BRANCHING BY NATIONAL

15 BANKS.—

16 ‘‘(1) IN GENERAL.—

17 ‘‘(A) APPROVALS AUTHORIZED.—Begin18 ning 3 years after the date of the enactment of

19 the Interstate Banking Efficiency Act of 1993,

20 the Comptroller of the Currency may approve

21 an application under this section to allow a na22 tional bank that is adequately capitalized (as

23 defined under section 38 of the Federal Deposit

24 Insurance Act) and adequately managed to es25 tablish or acquire, and operate, a branch lo-
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1 cated outside the State in which the main office

2 of such bank is located, subject to paragraphs

3 (3), (4), (7), and (8).

4 ‘‘(B) CONDITIONS.—In determining wheth5 er to grant approval under subparagraph (A),

6 the Comptroller of the Currency shall consider

7 the views of the appropriate State bank officials

8 regarding the bank’s compliance with applicable

9 State community reinvestment laws.

10 ‘‘(C) APPLICABLE LAW.—

11 ‘‘(i) IN GENERAL.—Subject to para12 graphs (2), (7), and (8), any branch estab13 lished or acquired under subparagraph (A)

14 shall be subject to the laws of the host

15 State with respect to intrastate branching,

16 consumer protection, fair lending, and

17 community reinvestment as if it were a

18 branch of a bank chartered by that State,

19 unless such State law, is preempted by

20 Federal law regarding the same subject.

21 There shall be no discriminatory effect in

22 the application of such laws between a

23 branch of a bank chartered by the host

24 State and in-State branches of out-of-State

25 national banks. Such State laws shall be
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1 enforced, with respect to branches of na2 tional banks by the Comptroller of the

3 Currency. All other laws of the host State

4 shall apply as if the branch was a national

5 bank situated in that State.

6 ‘‘(ii) FILING REQUIREMENT.—A host

7 State may require any national bank that

8 has its main office in another State that

9 wishes to establish a branch within the

10 host State to comply with filing require11 ments that are not discriminatory in na12 ture and that are similar in their effect to

13 those that are imposed on a corporation

14 from another State that is not engaged in

15 the business of banking and that seeks to

16 engage in business in the host State. The

17 host State may preclude any national bank

18 the main office of which is located in an19 other State from establishing or operating

20 a branch within the host State if that na21 tional bank or its branch materially fails to

22 comply with the filing requirements.

23 ‘‘(2) STATE TAXATION AUTHORITY NOT AF24 FECTED.—No provision of this subsection shall be

25 construed as affecting the authority of any State or
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1 political subdivision of any State to apply any tax or

2 method of taxation to any national bank, including

3 any branch of a national bank, or any bank holding

4 company which controls a national bank to the ex5 tent such tax or tax method is otherwise permissible

6 by or under the Constitution of the United States of

7 America or other Federal law.

8 ‘‘(3) STATE ELECTION TO PROHIBIT INTER9 STATE BRANCHING.—

10 ‘‘(A) IN GENERAL.—The provisions of

11 paragraph (1) shall not apply to branches to be

12 located in a State which has enacted, during

13 the period beginning on January 1, 1990, and

14 ending 3 years after the date of the enactment

15 of this subsection, a law that applies equally to

16 national and State banks and that expressly

17 prohibits all out-of-State banks from establish18 ing or acquiring branches located in that State.

19 ‘‘(B) EFFECT OF PROHIBITION.—A na20 tional bank that has its main office in a State

21 that has in effect a prohibition under subpara22 graph (A) may not acquire or establish a

23 branch located in any other State under the

24 provisions of this subsection.
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1 ‘‘(4) STATE ELECTION TO PERMIT INTERSTATE

2 BRANCHING.—

3 ‘‘(A) DURING THE 3-YEAR PERIOD FOL4 LOWING ENACTMENT.—The Comptroller of the

5 Currency may approve an application under

6 paragraph (1)(A) before the expiration of the 3-

7 year period described in paragraph (1)(A), if

8 the State in which the branch is or will be lo9 cated enacts a law during that period expressly

10 permitting interstate branching by all national

11 and State banks before the expiration of the

12 time period described in paragraph (1)(A).

13 ‘‘(B) AFTER THE 3-YEAR PERIOD FOLLOW14 ING ENACTMENT.—A State that originally elect15 ed, pursuant to paragraph (3), to prohibit

16 interstate branching may nonetheless elect at

17 any later time to permit interstate branching if

18 such State enacts a law expressly permitting

19 interstate branching by all national and State

20 banks.

21 ‘‘(5) STATE IMPOSED CONDITIONS ON INTER22 STATE BRANCHING.—

23 ‘‘(A) FILING WITH STATE BANK AUTHOR24 ITY.—A State may require a copy of an applica25 tion submitted under this section to be filed
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1 with the host State banking authority in a time2 ly manner (and the Comptroller of the Currency

3 shall consider any timely comments of the host

4 State prior to approving that application).

5 ‘‘(B) OTHER NONDISCRIMINATORY CONDI6 TIONS.—Subject to paragraph (7) a State may

7 impose other conditions on a branch established

8 or acquired under paragraph (1)(A) if—

9 ‘‘(i) the conditions do not discriminate

10 against out-of-State banks or bank holding

11 companies; and

12 ‘‘(ii) the imposition of the conditions

13 is not preempted by Federal law regarding

14 the same subject.

15 ‘‘(6) CONCENTRATION LIMITS.—

16 ‘‘(A) IN GENERAL.—The Comptroller may

17 not approve an acquisition under paragraph

18 (1)(A) by a bank of a branch located in another

19 State if—

20 ‘‘(i) the bank controls, or upon com21 pletion of the acquisition would control,

22 more than 10 percent of the total amount

23 of insured depository institution deposits in

24 the United States, as determined under
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1 regulations of the Board of Governors of

2 the Federal Reserve System; or

3 ‘‘(ii) the bank controls, or upon com4 pletion of the acquisition would control, 30

5 percent or more of the total amount of in6 sured depository institution deposits in the

7 State in which the branch to be acquired

8 is located, as determined under regulations

9 of the Board of Governors of the Federal

10 Reserve System,

11 except that a State may waive the applicability

12 of this subparagraph.

13 ‘‘(B) NOT APPLICABLE TO OUT-OF-STATE

14 BRANCHING.—Subparagraph (A) shall not

15 apply to the establishment of new branches lo16 cated outside the State where the main office of

17 the bank is located.

18 ‘‘(7) APPLICABILITY OF DEPOSIT CAPS AND

19 ANTITRUST LAWS.—No provision of this subsection

20 shall be construed as affecting—

21 ‘‘(A) the authority of any State to limit the

22 percentage of the total amount of insured de23 pository institution deposits in the State which

24 may be held or controlled by any bank to the

25 extent the application of such limitation does
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1 not discriminate against out-of-State banks or

2 bank holding companies; or

3 ‘‘(B) the applicability of any Federal anti4 trust law or any State antitrust law that does

5 not discriminate against out-of-State banks or

6 bank holding companies.

7 ‘‘(8) APPLICABILITY OF STATE LAW ON THE

8 FORM OF ACQUISITION.—

9 ‘‘(A) IN GENERAL.—Notwithstanding the

10 preceding paragraphs of this subsection and

11 subject to subparagraph (B), any law of a host

12 State which—

13 ‘‘(i) is in existence on the date of the

14 enactment of the Interstate Banking Effi15 ciency Act of 1993 or is enacted after such

16 date; and

17 ‘‘(ii) allows an out-of-State bank to

18 establish a branch in the host State only

19 by acquiring an existing bank or branch in

20 the host State,

21 shall apply with respect to the establishment or

22 acquisition of a branch in the host State under

23 this subsection.

24 ‘‘(B) INAPPLICABILITY OF CERTAIN PROVI25 SIONS OF STATE LAW.—In the case of any
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1 State law referred to in subparagraph (A)

2 which is enacted after the date of the enact3 ment of the Interstate Banking Efficiency Act

4 of 1993, such subparagraph shall not apply

5 with respect to any provision of such law which

6 allows the establishment of a branch through an

7 acquisition referred to in such subparagraph

8 only if the bank to be acquired has been in ex9 istence for more than 5 years as of the date of

10 the transaction.

11 ‘‘(C) STATE LAWS ON BANKS APPLY TO

12 BRANCHES.—For purposes of this paragraph,

13 any law of a host State which—

14 ‘‘(i) is in existence on the date of the

15 enactment of the Interstate Banking Effi16 ciency Act of 1993; and

17 ‘‘(ii) allows an out-of-State bank to

18 establish a bank in the host State only by

19 acquiring an existing bank in the host

20 State,

21 shall be deemed to apply to the establishment

22 of a branch in the host State by an out-of-State

23 bank.

24 ‘‘(9) DEFINITIONS.—For purposes of this sub25 section—
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1 ‘‘(A) HOST STATE.—The term ‘host State’

2 means the State in which a national bank es3 tablishes or maintains a branch other than the

4 State in which the bank has its main office and

5 is engaging in banking business.

6 ‘‘(B) INSURED DEPOSITORY INSTITU7 TION.—The term ‘insured depository institu8 tion’ has the meaning given to such term in sec9 tion 3(c)(2) of the Federal Deposit Insurance

10 Act.

11 ‘‘(C) OUT-OF-STATE BANK.—The term

12 ‘out-of-State bank’ means, with respect to any

13 State, a bank the main office of which is lo14 cated outside the State.’’.

15 SEC. 103. INTERSTATE BRANCHING BY STATE BANKS.

16 Section 18(d) of the Federal Deposit Insurance Act

17 (12 U.S.C. 1828(d)) is amended by adding at the end the

18 following:

19 ‘‘(3) INTERSTATE BRANCHING BY STATE

20 BANKS.—Beginning 3 years after the date of enact21 ment of the Interstate Banking Efficiency Act of

22 1993, an insured State bank that is adequately cap23 italized (as defined under section 38 of the Federal

24 Deposit Insurance Act) and adequately managed

25 may establish or acquire, and operate, a branch lo-
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1 cated outside the State in which the bank is char2 tered if authorized by the law of the State in which

3 the bank is chartered, subject to paragraphs (5),

4 (6), (9), and (10).

5 ‘‘(4) APPLICABLE LAW.—

6 ‘‘(A) IN GENERAL.—Subject to paragraph

7 (10), any branch of an out-of-State bank shall

8 be subject to the laws of the host State as if

9 such branch were a branch of a bank chartered

10 by that State.

11 ‘‘(B) ACTIVITIES OF BRANCHES.—An in12 sured State bank that establishes a branch or

13 branches pursuant to paragraph (3) may not

14 conduct any activity at such branch that is not

15 permissible for a bank chartered by the host

16 State.

17 ‘‘(C) FILING REQUIREMENT.—A host State

18 may require any insured bank chartered by an19 other State that wishes to establish a branch

20 within the host State to comply with filing re21 quirements that are not discriminatory in na22 ture and that are similar in their effect to those

23 that are imposed on a corporation from another

24 State that is not engaged in the business of

25 banking and that seeks to engage in business in
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1 the host State. The host State may preclude

2 any State bank chartered by another State

3 from establishing or operating a branch within

4 the host State if that State bank or its branch

5 materially fails to comply with the filing re6 quirements.

7 ‘‘(D) RESERVATION OF CERTAIN RIGHTS

8 TO STATES.—No provision of this subsection

9 shall be construed as limiting in any way the

10 right of a State to—

11 ‘‘(i) determine the authority of State

12 banks chartered in that State to establish

13 and maintain branches; or

14 ‘‘(ii) supervise, regulate, and examine

15 State banks chartered by that State.

16 ‘‘(5) STATE ELECTION TO PROHIBIT INTER17 STATE BRANCHING.—

18 ‘‘(A) IN GENERAL.—The provisions of

19 paragraph (3) shall not apply to branches to be

20 located in a State which has enacted, during

21 the period beginning on January 1, 1990, and

22 ending 3 years after the date of enactment of

23 this subsection, a law that applies equally to na24 tional and State banks and that expressly pro-
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1 hibits all out-of-State banks from establishing

2 or acquiring branches located in that State.

3 ‘‘(B) EFFECT OF PROHIBITION.—A State

4 bank that is chartered by a State that has in

5 effect a prohibition under subparagraph (A)

6 may not acquire or establish a branch located

7 in any other State under the provisions of this

8 subsection.

9 ‘‘(6) STATE ELECTION TO PERMIT INTERSTATE

10 BRANCHING.—

11 ‘‘(A) DURING THE 3-YEAR PERIOD FOL12 LOWING ENACTMENT.—A State bank may es13 tablish or acquire, and operate, a branch out14 side the State in which the main office of the

15 bank is located, subject to the provisions of this

16 subsection, before the expiration of the 3-year

17 period described in paragraph (3), if the State

18 in which the branch will be located enacts a law

19 during that period expressly permitting inter20 state branching by all national and State banks

21 before the expiration of the time period de22 scribed in paragraph (3).

23 ‘‘(B) AFTER THE 3-YEAR PERIOD FOLLOW24 ING ENACTMENT.—A State that originally elect25 ed, pursuant to paragraph (5), to prohibit
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1 interstate branching may nonetheless elect at

2 any later time to permit interstate branching if

3 such State enacts a law expressly permitting

4 interstate branching by all national and State

5 banks.

6 ‘‘(7) STATE IMPOSED CONDITIONS ON INTER7 STATE BRANCHING.—

8 ‘‘(A) FILING WITH STATE BANK AUTHOR9 ITY.—A State may require a copy of an applica10 tion submitted under this section to be filed

11 with the host State banking authority in a time12 ly manner (and the home State banking author13 ity and the appropriate Federal banking agency

14 shall consider any timely comments of the host

15 State prior to approving that application).

16 ‘‘(B) OTHER NONDISCRIMINATORY CONDI17 TIONS.—Subject to paragraph (10), a State

18 may impose other conditions on a branch estab19 lished or acquired under paragraph (3) if—

20 ‘‘(i) the conditions do not discriminate

21 against out-of-State banks or bank holding

22 companies; and

23 ‘‘(ii) the imposition of the conditions

24 is not preempted by Federal law regarding

25 the same subject.
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1 ‘‘(8) CONCENTRATION LIMITS.—

2 ‘‘(A) IN GENERAL.—The home State bank3 ing authority and the appropriate Federal

4 banking agency may not approve an acquisition

5 under paragraph (1)(A) by a bank of a branch

6 located in another State if—

7 ‘‘(i) the bank controls, or upon com8 pletion of the acquisition would control,

9 more than 10 percent of the total amount

10 of insured depository institution deposits in

11 the United States, as determined under

12 regulations of the Board of Governors of

13 the Federal Reserve System; or

14 ‘‘(ii) the bank controls, or upon com15 pletion of the acquisition would control, 30

16 percent or more of the total amount of in17 sured depository institution deposits in the

18 State in which the branch to be acquired

19 is located, as determined under regulations

20 of the Board of Governors of the Federal

21 Reserve System,

22 except that a State may waive the applicability

23 of this subparagraph.

24 ‘‘(B) NOT APPLICABLE TO OUT-OF-STATE

25 BRANCHING.—Subparagraph (A) shall not
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1 apply to the establishment of new branches lo2 cated outside the State where the main office of

3 the bank is located.

4 ‘‘(9) APPLICABILITY OF DEPOSIT CAPS AND

5 ANTITRUST LAWS.—No provision of this subsection

6 shall be construed as affecting—

7 ‘‘(A) the authority of any State to limit the

8 percentage of the total amount of insured de9 pository institution deposits in the State which

10 may be held or controlled by any bank to the

11 extent the application of such limitation does

12 not discriminate against out-of-State banks or

13 bank holding companies; or

14 ‘‘(B) the applicability of any Federal anti15 trust law or any State antitrust law that does

16 not discriminate against out-of-State banks or

17 bank holding companies.

18 ‘‘(10) APPLICABILITY OF STATE LAW ON THE

19 FORM OF ACQUISITION.—

20 ‘‘(A) IN GENERAL.—Notwithstanding the

21 preceding paragraphs of this subsection and

22 subject to subparagraph (B), any law of a host

23 State which—

24 ‘‘(i) is in existence on the date of the

25 enactment of the Interstate Banking Effi-
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1 ciency Act of 1993 or is enacted after such

2 date; and

3 ‘‘(ii) allows an out-of-State bank to

4 establish a branch in the host State only

5 by acquiring an existing bank or branch in

6 the host State,

7 shall apply with respect to the establishment or

8 acquisition of a branch in the host State in ac9 cordance with this subsection.

10 ‘‘(B) INAPPLICABILITY OF CERTAIN PROVI11 SIONS OF STATE LAW.—In the case of any

12 State law referred to in subparagraph (A)

13 which is enacted after the date of the enact14 ment of the Interstate Banking Efficiency Act

15 of 1993, such subparagraph shall not apply

16 with respect to any provision of such law which

17 allows the establishment of a branch through an

18 acquisition referred to in such subparagraph

19 only if the bank has been in existence for more

20 than 5 years as of the date of the transaction.

21 ‘‘(C) STATE LAWS ON BANKS APPLY TO

22 BRANCHES.—For purposes of this paragraph,

23 any law of a host State which—
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1 ‘‘(i) is in existence on the date of the

2 enactment of the Interstate Banking Effi3 ciency Act of 1993; and

4 ‘‘(ii) allows an out-of-State bank to

5 establish a bank in the host State only by

6 acquiring an existing bank in the host

7 State,

8 shall be deemed to apply to the establishment

9 of a branch in the host State by an out-of-State

10 bank.

11 ‘‘(11) COORDINATION OF EXAMINATION AU12 THORITY.—

13 ‘‘(A) IN GENERAL.—A host State bank su14 pervisory or regulatory authority may examine

15 a branch established in the host State by banks

16 chartered by another State for the purpose of

17 determining compliance with host State laws re18 garding banking, taxation, community reinvest19 ment, fair lending, consumer protection, and

20 permissible activities and to ensure that the ac21 tivities of the branch are conducted in a man22 ner consistent with sound banking principles

23 and do not constitute a serious risk to the safe24 ty and sound operation of the branch.
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1 ‘‘(B) ENFORCEMENT.—In the event that a

2 host State bank authority as described in sub3 paragraph (A) determines that there is a viola4 tion of host State law concerning the activities

5 being conducted by the branch or that the

6 branch is being operated in a manner not con7 sistent with sound banking principles or in an

8 unsafe and unsound manner, such host State

9 bank authority may undertake such enforce10 ment actions or proceedings as would be per11 mitted under host State law if the branch in

12 question were a bank chartered by that host

13 State.

14 ‘‘(C) COOPERATIVE AGREEMENT.—The

15 State bank authorities from one or more States

16 are authorized to enter into cooperative agree17 ments to facilitate State regulatory supervision

18 of State banks, including cooperative agree19 ments relating to the coordination of examina20 tions and joint participation in examinations.

21 ‘‘(D) FEDERAL REGULATORY AUTHOR22 ITY.—

23 ‘‘(i) IN GENERAL.—No provision of

24 this subsection shall be construed as limit25 ing in any way the authority of the appro-
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1 priate Federal banking agency to examine

2 any bank or branch of a bank for which

3 the agency is the appropriate Federal

4 banking agency.

5 ‘‘(ii) REVIEW OF INTERSTATE AGREE6 MENTS.—If the appropriate Federal bank7 ing authority determines that the States

8 have failed to reach an agreement under

9 subparagraph (C), or that such an agree10 ment fails to adequately protect the Fed11 eral Deposit Insurance Fund, the appro12 priate Federal banking authority shall not

13 defer to State examinations of the out-of14 State branches.

15 ‘‘(12) DEFINITIONS.—For purposes of this sub16 section—

17 ‘‘(A) HOST STATE.—The term ‘host State’

18 means the State in which a bank establishes or

19 maintains a branch other than the State in

20 which the bank is chartered and engaging in

21 banking business.

22 ‘‘(B) OUT-OF-STATE BANK.—The term

23 ‘out-of-State bank’ means, with respect to any

24 State, a bank the main office of which is lo25 cated outside the State.’’.
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1 SEC. 104. BRANCHING BY FOREIGN BANKS.

2 (a) IN GENERAL.—Section 5(a) of the International

3 Banking Act of 1978 (12 U.S.C. 3103(a)) is amended to

4 read as follows:

5 ‘‘(a) INTERSTATE BANKING OPERATIONS.—

6 ‘‘(1) IN GENERAL.—A foreign bank may estab7 lish and operate—

8 ‘‘(A) a Federal branch or agency, with the

9 approval of the Board and the Comptroller of

10 the Currency, in any State outside the branch’s

11 or agency’s home State to the extent that such

12 establishment and operation would be permitted

13 under section 5155 of the Revised Statutes for

14 a national bank; or

15 ‘‘(B) a State branch or agency, with the

16 approval of the Board and the appropriate reg17 ulatory authority of the State, in any State out18 side the branch’s or agency’s home State to the

19 extent that such establishment and operation

20 would be permitted under section 18(d) of the

21 Federal Deposit Insurance Act for a State

22 bank,

23 as if the foreign bank were a national bank the main

24 office of which is in the home State of the foreign

25 bank or a State bank chartered in such home State,

26 as the case may be.
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1 ‘‘(2) CRITERIA FOR DETERMINATION.—In ap2 proving an application under paragraph (1), the

3 Board and the Comptroller of the Currency—

4 ‘‘(A) shall apply the standards for estab5 lishment of a foreign bank office in the United

6 States under section 7(e); and

7 ‘‘(B) may not approve an application un8 less the Board or the Comptroller of the Cur9 rency—

10 ‘‘(i) determines that the foreign

11 bank’s financial resources, including the

12 capital level, are equivalent to those re13 quired for a domestic bank to be approved

14 for branching under section 5155 of the

15 Revised Statutes and section 18(d) of the

16 Federal Deposit Insurance Act; and

17 ‘‘(ii) in the case of the 1st application

18 by such foreign bank under paragraph (1),

19 consults with the Secretary of the Treas20 ury regarding capital equivalency.

21 ‘‘(3) REQUIREMENT FOR A SEPARATE SUBSIDI22 ARY.—If the Comptroller of the Currency or the

23 Board, taking into account differing regulatory or

24 accounting standards, finds that adherence to cap25 ital requirements equivalent to those imposed under
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1 section 5155 of the Revised Statutes and by section

2 18(d) of the Federal Deposit Insurance Act can be

3 verified only if banking activities are carried out in

4 a domestic banking subsidiary within the United

5 States, the Board or the Comptroller of the Cur6 rency may approve an application under paragraph

7 (1) subject to a requirement that the foreign bank

8 or company controlling the foreign bank establish a

9 domestic banking subsidiary in the United States.

10 ‘‘(4) ADDITIONAL AUTHORITY FOR INTERSTATE

11 BRANCHES AND AGENCIES OF FOREIGN BANKS.—

12 Notwithstanding paragraph (1) and section 4(h), a

13 foreign bank may, with the approval of the Comp14 troller of the Currency, establish and operate a Fed15 eral branch or Federal agency or, with the approval

16 of the Board and the appropriate State bank super17 visor, a State branch or State agency in any State

18 outside the foreign bank’s home State if—

19 ‘‘(A) the establishment and operation of a

20 branch or agency is expressly permitted by the

21 State in which the branch or agency is to be es22 tablished; and

23 ‘‘(B) in the case of a Federal or State

24 branch, the branch receives only such deposits

25 as would be permissible for a corporation orga-
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1 nized under section 25A of the Federal Reserve

2 Act.’’.

3 (b) TREATMENT OF UNITED STATES BANKING SUB4 SIDIARIES.—Section 5 of the International Banking Act

5 of 1978 (12 U.S.C. 3103) is amended by adding at the

6 end the following:

7 ‘‘(d) TREATMENT OF UNITED STATES SUBSIDIARY

8 OF A FOREIGN BANK.—A foreign bank that has a domes9 tic subsidiary within the United States may establish Fed10 eral and State branches and agencies outside the bank’s

11 home State to the extent permitted under section 5155(d)

12 of the Revised Statutes and section 18(d) of the Federal

13 Deposit Insurance Act.’’.

14 (c) HOME STATE DETERMINATIONS.—

15 (1) METHOD OF DETERMINING.—Section 4(h)

16 of the International Banking Act of 1978 (12 U.S.C.

17 3102(h)) is amended—

18 (A) by striking the phrase ‘‘in the State in

19 which such branch or agency is located’’; and

20 (B) by adding at the end the following sen21 tence: ‘‘For the purposes of section 5155(c) of

22 the Revised Statutes, the home State of a for23 eign bank shall be the bank’s home State as de24 termined under section 5(c).’’.
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1 (2) SINGLE STATE DETERMINATIONS.—Section

2 5(c) of the Bank Holding Company Act of 1956 (12

3 U.S.C. 3103(c)) is amended to read as follows:

4 ‘‘(c) DETERMINATION OF HOME STATE OF FOREIGN

5 BANK.—For the purposes of this section—

6 ‘‘(1) the home State of a foreign bank that has

7 branches, agencies, subsidiary commercial lending

8 companies, or subsidiary banks, or any combination

9 thereof, in more than 1 State, is the 1 State of such

10 States which is selected by the foreign bank or, in

11 default of any such selection, by the Board; and

12 ‘‘(2) the home State of a foreign bank that has

13 branches, agencies, subsidiary commercial lending

14 companies, or subsidiary banks, or any combination

15 thereof, in only 1 State, is that State.’’.

16 SEC. 105. PERMISSIBLE CONSOLIDATION.

17 Section 3 of the Bank Holding Company Act of 1956

18 (12 U.S.C. 1842) is amended by adding at the end the

19 following subsection:

20 ‘‘(h) PERMISSIBLE CONSOLIDATION.—

21 ‘‘(1) IN GENERAL.—Except as provided in sub22 section (d)(1) and with the approval of the Board,

23 a bank holding company having subsidiary banks lo24 cated in more than 1 State may combine 2 or more

25 of such banks into a single bank by means of merg-
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1 er, consolidation, or other transaction. Notwith2 standing any other provision of Federal law or any

3 provision of State law, any consolidation effected in

4 accordance with this subsection shall be permissible

5 within a State, unless such State has enacted a law

6 in accordance with section 5155(d)(2)(A) of the Re7 vised Statutes or section 18(d)(5)(A) of the Federal

8 Deposit Insurance Act that applies equally to na9 tional and State banks and that expressly prohibits

10 all out-of-State banks from establishing or acquiring

11 branches located in that State.

12 ‘‘(2) ADDITIONAL BRANCHES.—The consoli13 dated bank may, subject to compliance with all ap14 plicable Federal or State laws relating to the estab15 lishment, acquisition or operation of a branch, estab16 lish, acquire, and operate additional branches at any

17 location where the consolidated bank or a preexisting

18 bank could, if the consolidated or preexisting bank

19 had not been a party to such consolidation, have es20 tablished or acquired and operated a branch, unless

21 precluded by any provision of State law in existence

22 on the date of the enactment of the Interstate Bank23 ing Efficiency Act of 1993.

24 ‘‘(3) EFFECT OF STATE PROHIBITION OF

25 BRANCHING.—If, during the period beginning on the
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1 date of the enactment of the Interstate Banking Ef2 ficiency Act of 1993 and ending on the expiration of

3 3 years from such date of enactment, a consolidation

4 authorized by paragraph (1) is effected resulting in

5 the conversion of a bank into a branch located in a

6 State which, after such consolidation, has enacted a

7 law that applies equally to national and State banks

8 and that expressly prohibits all out-of-State banks

9 from establishing or acquiring branches located in

10 that State, then such branch shall, under regulations

11 of the Federal or State banking authority having ju12 risdiction of the bank prior to its conversion into a

13 branch, be promptly converted back into the bank as

14 it existed prior to such consolidation.

15 ‘‘(4) APPLICABLE LAW.—Any branch of a na16 tional bank established or acquired in connection

17 with a consolidation or other transaction under

18 paragraph (1) shall be subject to the laws of the

19 host State with respect to intrastate branching,

20 consumer protection, fair lending, and community

21 reinvestment as if it were a branch of a bank char22 tered by that State, unless such State law, is pre23 empted by Federal law regarding the same subject.

24 There shall be no discriminatory effect in the appli25 cation of such laws between a branch of a bank
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1 chartered by the host State and in-State branches of

2 out-of-State national banks. Such State laws shall be

3 enforced, with respect to branches of national banks

4 by the Comptroller of the Currency. All other laws

5 of the host State shall apply as if the branch was

6 a national bank situated in that State.

7 ‘‘(5) PLAN ON MEETING LOCAL CREDIT

8 NEEDS.—The Board may not approve any applica9 tion for any consolidation or other transaction under

10 this subsection unless the Board has considered a

11 plan submitted by the applicant bank holding com12 pany for meeting local credit needs in the commu13 nities served by any bank or savings association sub14 sidiary of the company which is involved in the pro15 posed consolidation or transaction, including the ex16 tent to which the amount of the anticipated savings

17 attributable to the proposed consolidation or other

18 transaction will be available to meet such local credit

19 needs.’’.

20 SEC. 106. MINIMUM CAPITAL REQUIREMENT FOR NEW

21 INTERSTATE BANKING AND BRANCHING

22 POWERS.

23 (a) IN GENERAL.—Except as provided in subsection

24 (b), the amendments made by sections 101, 102, 103, 104,

25 and 105 shall not apply with respect to any insured depos-
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1 itory institution (as defined in section 3(c) of the Federal

2 Deposit Insurance Act) which is not an adequately capital3 ized institution (as defined under section 38 of the Federal

4 Deposit Insurance Act).

5 (b) REGULATOR DISCRETION.—

6 (1) IN GENERAL.—Subject to paragraph (2)

7 and with the approval of the Federal Deposit Insur8 ance Corporation and the appropriate Federal bank9 ing agency, any financial services holding company

10 which controlled any full-service bank subsidiary on

11 May 15, 1992, may convert such bank into a branch

12 of any out-of-State bank pursuant to the amend13 ments made by this title without regard to the mini14 mum capital requirements of this section.

15 (2) RESTRICTIONS.—No branch of a bank

16 which results from a conversion described in para17 graph (1) may have total assets in excess of the av18 erage amount held by such branch during May

19 1992, so long as such bank fails to meet the mini20 mum capital requirement established by this section.

21 SEC. 107. PROHIBITION AGAINST DEPOSIT PRODUCTION

22 OFFICES.

23 (a) REGULATIONS.—Before the end of the 120-day

24 period beginning on the date of the enactment of the

25 Interstate Banking Efficiency Act of 1993, the appro-
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1 priate Federal banking agency shall prescribe regulations

2 which prohibit any person from using any authority to en3 gage in interstate branching pursuant to this title or any

4 amendment made by this title to any other provision of

5 law primarily for the purpose of deposit production.

6 (b) GUIDELINES FOR MEETING CREDIT NEEDS.—

7 Regulations issued under subsection (a) shall include

8 guidelines to ensure that each interstate branch meets the

9 credit needs of the community and market area in which

10 the branch operates.

11 (c) LIMITATION ON OUT-OF-STATE LOANS.—

12 (1) LIMITATION.—Regulations issued under

13 subsection (a) shall require that if the percentage of

14 outstanding loans made by an interstate branch to

15 borrowers located in the host State of, or market

16 area served by, the branch is less than half the aver17 age of such percentage for all Federal depository in18 stitutions and State depository institutions having

19 their principal place of operations in the host State

20 or that market area—

21 (A) the appropriate Federal banking agen22 cy for the branch shall review the loan portfolio

23 of the branch and determine whether the

24 branch is reasonably meeting the credit needs
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1 of the community and market area in which the

2 branch operates; and

3 (B) if the agency determines that the

4 branch is not reasonably meeting those needs—

5 (i) the branch shall be closed, and

6 (ii) the person which established the

7 branch may not open a new branch in that

8 State unless the person provides reasonable

9 assurances to the satisfaction of the appro10 priate Federal banking agency that the

11 new branch will reasonably meet the credit

12 needs of the community and market area

13 in which the new branch will operate.

14 (2) CONSIDERATIONS.—In making a determina15 tion under paragraph (1)(A) regarding an interstate

16 branch, the appropriate Federal banking agency

17 shall consider—

18 (A) whether the branch was acquired as

19 part of the purchase of a failed or failing depos20 itory institution;

21 (B) whether the branch has a higher con22 centration of commercial and credit card lend23 ing; and
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1 (C) the ratings received by the branch in

2 evaluations under the Community Reinvestment

3 Act of 1977.

4 (d) APPLICATION.—This section shall not apply to

5 any interstate branch acquired before January 1, 1992,

6 as part of any consolidation or merger of depository insti7 tutions.

8 (e) DEFINITIONS.—For the purposes of this sec9 tion—

10 (1) APPROPRIATE FEDERAL BANKING AGEN11 CY.—The term ‘‘appropriate Federal banking agen12 cy’’ has the meaning that term has in section 3 of

13 the Federal Deposit Insurance Act.

14 (2) BRANCH.—The term ‘‘branch’’ means any

15 office, agency, or other place of business located in

16 any State at which deposits are received, checks

17 paid, or money lent.

18 (3) FEDERAL DEPOSITORY INSTITUTIONS AND

19 STATE DEPOSITORY INSTITUTION.—Each of the

20 terms ‘‘Federal depository institution’’ and ‘‘State

21 depository institution’’ has the meaning given that

22 term in section 3 of the Federal Deposit Insurance

23 Act.
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1 (4) HOST STATE DEFINED.—The term ‘‘host

2 State’’ means the State in which a bank establishes

3 or maintains a branch, other than—

4 (A) the State in which the bank is char5 tered and engaging in banking business, or

6 (B) in the case of—

7 (i) a national bank, the State in which

8 the principal place of business of such as9 sociation is located, and

10 (ii) a bank holding company, the

11 State in which the total deposits of all

12 bank subsidiaries of such company is the

13 largest,

14 as applicable under the amendments made by this

15 title.

16 (5) INTERSTATE BRANCH.—The term ‘‘inter17 state branch’’ means a branch established pursuant

18 to the authority referred to in subsection (a).

19 (6) PRINCIPAL PLACE OF OPERATIONS.—The

20 term ‘‘principal place of operations’’ means the State

21 in which the total deposits of all bank subsidiaries

22 of a person are largest.

23 (7) STATE DEFINED.—The term ‘‘State’’ has

24 the meaning given to such term in section 3 of the

25 Federal Deposit Insurance Act.
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1 SEC. 108. RESTATEMENT OF EXISTING LAW.

2 No provision of this title and no amendment made

3 by this title to any other provision of law shall be con4 strued as affecting in any way the right of any State, or

5 any political subdivision of any State, to impose or main6 tain a nondiscriminatory franchise tax or other non7 property tax instead of a franchise tax in accordance with

8 section 3124 of title 31, United States Code.

9 SEC. 109. VISITORIAL POWERS.

10 Section 5240 of the Revised Statutes (12 U.S.C. 481

11 et seq.) is amended—

12 (1) by inserting before the 6th undesignated

13 paragraph (12 U.S.C. 484) the following new para14 graph heading:

15 ‘‘(6) VISITORIAL POWERS.—’’;

16 (2) by moving the left margins of subpara17 graphs (A) and (B) of paragraph (6) (as so des18 ignated by the amendment made by paragraph (1)

19 of this section) 4 ems to the right; and

20 (3) by inserting after subparagraph (B) of such

21 paragraph the following new subparagraph:

22 ‘‘(C) STATE VISITATIONS AUTHOR23 IZED FOR TAX COMPLIANCE PURPOSES.—

24 Notwithstanding subparagraph (A), any

25 lawfully authorized auditor, examiner, or

26 other representative acting on behalf of
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1 any State agency charged with the admin2 istration and collection of taxes imposed by

3 a State or any political subdivision of a

4 State may review at reasonable times those

5 books and records of any Federal deposi6 tory institution (as defined in section

7 3(c)(4) of the Federal Deposit Insurance

8 Act) or any Federal credit union (as de9 fined in section 101(1) of the Federal

10 Credit Union Act) located in that State

11 which are reasonably necessary to ensure

12 compliance with the tax laws of the State

13 or political subdivision.’’.

14 TITLE II—CRA EVALUATIONS

15 SEC. 201. STATE-BY-STATE CRA EVALUATIONS OF DEPOSI16 TORY INSTITUTIONS WITH INTERSTATE

17 BRANCHES.

18 Section 807 of the Community Reinvestment Act of

19 1977 (12 U.S.C. 2906) is amended by adding at the end

20 the following new subsection:

21 ‘‘(d) INSTITUTIONS WITH INTERSTATE

22 BRANCHES.—

23 ‘‘(1) STATE-BY-STATE EVALUATION.—In the

24 case of a regulated financial institution which main25 tains 1 or more domestic branches located outside
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1 the State in which the institution’s principal place of

2 business is located (hereafter in this subsection re3 ferred to as the ‘home State’), the appropriate Fed4 eral financial supervisory agency shall prepare—

5 ‘‘(A) a written evaluation of the entire in6 stitution’s record of performance under this

7 Act, as required by subsections (a), (b), and (c)

8 of this section; and

9 ‘‘(B) for each State in which the institu10 tion maintains 1 or more domestic branches

11 (including the institution’s home State), a sepa12 rate written evaluation of the institution’s

13 record of performance within such State under

14 this Act, as required by subparagraphs (A) and

15 (B) of subsection (b)(1) of this section.

16 ‘‘(2) CONTENT OF STATE LEVEL EVALUA17 TION.—A written evaluation prepared pursuant to

18 paragraph (1)(B) of this subsection shall report the

19 information required by such paragraph separately

20 for each metropolitan area (as defined by the appro21 priate Federal financial supervisory agency) in which

22 the regulated financial institution maintains 1 or

23 more domestic branch offices and separately for the

24 nonmetropolitan portion of the State if the institu-
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1 tion maintains 1 or more domestic branch offices in

2 such nonmetropolitan area.’’.

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