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103D CONGRESS

1ST SESSION H. R. 256

To amend the Bank Holding Company Act of 1956.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 5, 1993

Mr. NEAL of North Carolina introduced the following bill; which was referred

to the Committee on Banking, Finance and Urban Affairs

JULY 26, 1993

Additional sponsor: Mr. VALENTINE

A BILL

To amend the Bank Holding Company Act of 1956.

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 ‘‘Bank Efficiency Act’’.

5 SEC. 2. PURPOSES.

6 The purposes of this Act are—

7 (1) to facilitate the efficient operation of banks

8 that are subsidiaries of multistate bank holding com9 panies;
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1 (2) to enhance the interstate delivery of bank2 ing services to both consumers and businesses; and

3 (3) to strengthen generally the operation of the

4 banking system.

5 SEC. 3. AMENDMENTS TO THE BANK HOLDING COMPANY

6 ACT.

7 (a) DEFINITIONS.—Section 2 of the Bank Holding

8 Company Act of 1956 (12 U.S.C. 1841) is amended by

9 adding at the end the following new subsection:

10 ‘‘(n) APPROPRIATE FEDERAL BANKING AGENCY.—

11 For purposes of this Act, the term ‘appropriate Federal

12 banking agency’ shall have the same meaning as such term

13 is given in section 3(q) of the Federal Deposit Insurance

14 Act.’’.

15 (b) INTERSTATE BANKING.—Section 3(d) of the

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

17 is amended—

18 (1) by striking ‘‘(d)’’ and inserting the follow19 ing:

20 ‘‘(d) LIMITATION BY STATE BOUNDARIES.—

21 ‘‘(1) IN GENERAL.—’’; and

22 (2) by adding at the end the following new

23 paragraph:

24 ‘‘(2) INTERSTATE COMBINATION.—
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1 ‘‘(A) A bank holding company having sub2 sidiary banks located in more than one State

3 may combine two or more of such banks into a

4 single bank by means of merger, consolidation,

5 or other transaction.

6 ‘‘(B) Nothing in this paragraph shall be

7 deemed to authorize—

8 ‘‘(i) a national bank to operate

9 branches at locations in a State unless a

10 national bank having offices only in such

11 State could operate branches at such loca12 tions;

13 ‘‘(ii) a State-chartered bank to oper14 ate branches at locations in a State unless

15 a State-chartered bank having branches

16 only in such State could operate branches

17 at such locations; or

18 ‘‘(iii) a State-chartered bank to oper19 ate branches at locations outside its char20 tering State in contravention of such char21 tering State’s laws.

22 ‘‘(C) This paragraph does not affect any

23 other requirement for regulatory approval or

24 any other procedures that are applicable under
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1 Federal or State law to a combination author2 ized by subparagraph (A).

3 ‘‘(D) A bank resulting from a combination

4 authorized by subparagraph (A) may retain and

5 operate all existing main offices and branches

6 in each bank involved in such combination and

7 in existence at the time of such combination.

8 ‘‘(E) A national bank resulting from a

9 combination authorized under subparagraph

10 (A) may establish additional branches in any

11 State in which it has branches to the same ex12 tent and same manner that a national bank

13 having branches only in such State, may estab14 lish branches in such State.

15 ‘‘(F) A national bank resulting from a

16 combination authorized by subparagraph (A)

17 shall be entitled to exercise at each of its

18 branches, all powers and privileges conferred by

19 Federal law. To the extent that Federal law ref20 erences State law, the applicable State law for

21 each branch shall be the law of the State in

22 which the branch is located, except that for

23 purposes of section 5197 of the Revised Stat24 utes, the appropriate State law shall be the law
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1 of the State in which the main office named in

2 the bank’s organization certificate is located.

3 ‘‘(G) A State-chartered bank resulting

4 from a combination authorized under subpara5 graph (A) may, subject to the approval of the

6 appropriate State regulatory authority, estab7 lish additional branches in any State in which

8 it has branches, to the extent and in the same

9 manner as a State bank chartered in such State

10 and having branches only in such State. For

11 purposes of this subparagraph, the appropriate

12 State regulatory authority is solely the State

13 bank supervisor for the State in which the

14 branch is proposed to be established.

15 ‘‘(H) A State-chartered bank resulting

16 from a combination authorized by subparagraph

17 (A) shall be entitled to exercise at each of its

18 branches, all powers and privileges conferred by

19 the law of its chartering State and Federal law.

20 However, a branch of such bank located in a

21 State other than the chartering State of the

22 bank, may not exercise any power or privilege

23 that is not permitted under the laws of the

24 State in which the branch is located, for a

25 branch located within such State of a bank
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1 chartered by such State. The State bank super2 visor of the State in which the bank is char3 tered shall have authority to determine whether

4 an activity of a branch is permissible as a mat5 ter of State law. If a branch is located in a

6 State other than the chartering State, the State

7 bank regulator for the State in which the

8 branch is located may independently determine

9 whether an activity of the branch is permissible

10 under the law of such State.

11 ‘‘(I) A State-chartered bank resulting from

12 a combination authorized by subparagraph (A)

13 shall be subject to State supervision only by the

14 State bank supervisor for the State in which

15 the bank is chartered. The State bank super16 visor for the State in which a branch is located

17 may enter into a cooperative agreement with

18 the supervisor for the chartering State to facili19 tate supervision of the bank and its branches.

20 Nothing in this subparagraph shall affect the

21 jurisdiction or authority of the appropriate Fed22 eral banking agency to supervise or examine a

23 State chartered bank and all of its branches.

24 ‘‘(J) A bank may not participate in a com25 bination otherwise authorized by subparagraph
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1 (A) if, as of the date of the filing with the ap2 propriate Federal banking agency of an applica3 tion for approval of such combination, the State

4 in which such bank is located has a statute, en5 acted within 2 years following the effective date

6 of this paragraph, that provides by express lan7 guage and not merely by implication that no

8 bank located in such State may combine with

9 any other bank pursuant to the authority con10 ferred by subparagraph (A).

11 ‘‘(K) If a bank resulting from a combina12 tion authorized by subparagraph (A) ceases to

13 be a subsidiary of a bank holding company, it

14 shall, within 2 years after the date on which it

15 is no longer a subsidiary of a bank holding com16 pany, no longer be entitled to the benefits of

17 this paragraph, and shall comply with all provi18 sions of Federal or State law restricting the ge19 ographic location of its branches. The appro20 priate Federal banking agency may, upon appli21 cation by a bank, extend the 2-year period de22 scribed in this subparagraph, for not more than

23 one year at a time, if such extension would not

24 be detrimental to the public interest. No such
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1 extensions shall, in the aggregate, exceed 3

2 years.

3 ‘‘(L) If a bank that is combined with an4 other bank pursuant to subparagraph (A) is

5 subject to conditions imposed by State law pur6 suant to paragraph (1), the resulting bank shall

7 comply with such conditions to the same extent

8 that the bank originally subject to such condi9 tions was obligated to do so.

10 ‘‘(M) For purposes of this paragraph—

11 ‘‘(i) a national bank is located in the

12 State named in its organization certificate,

13 and a State-chartered bank is located in

14 the State in which it is chartered; and

15 ‘‘(ii) when a bank seeks pursuant to

16 this paragraph to operate branches in a

17 State other than the State in which the

18 bank is located, the first location in such

19 other State at which the bank seeks to op20 erate a branch shall be considered to be

21 the main office of the bank located in such

22 other State.’’.

23 SEC. 4. NATIONAL BANK ACT AMENDMENTS.

24 (a) CONVERSIONS TO NATIONAL BANKS.—Section

25 5154 of the Revised Statutes (12 U.S.C. 35) is amended
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1 in the first sentence by inserting before the period ‘‘unless

2 said conversion is undertaken in connection with a com3 bination authorized by section 3(d)(2) of the Bank Hold4 ing Company Act of 1956’’.

5 (b) DIRECTOR QUALIFICATIONS.—Section 5146 of

6 the Revised Statutes (12 U.S.C. 72) is amended in the

7 first sentence by striking ‘‘and at least two-thirds’’ and

8 all that follows through ‘‘continuance in office,’’.

9 SEC. 5. EMERGENCY ACQUISITION AUTHORITY.

10 Notwithstanding any other provision of this Act—

11 (1) the amendments made by this Act shall not

12 be construed to limit or otherwise impair the author13 ity of the Federal Deposit Insurance Corporation to

14 authorize extraordinary or emergency acquisitions

15 under section 11(n)(8)(B) or subsections (f) or (k)

16 of section 13 of the Federal Deposit Insurance Act;

17 and

18 (2) no bank holding company that has acquired

19 a bank in accordance with section 11(n)(8)(B) or

20 section 13(f) of the Federal Deposit Insurance Act

21 shall, by reason of the combination of such bank

22 with any other bank in accordance with section

23 3(d)(2) of the Bank Holding Company Act of 1956,

24 as amended by this Act, lose or otherwise be de25 prived of any rights or privileges provided to the
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1 bank holding company under Federal law by virtue

2 of the acquisition, including rights or privileges pro3 vided under section 13(f) of the Federal Deposit In4 surance Act.

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