108
from a person other than a consumer re-
porting agency bearing upon the consum-
er’s credit worthiness, credit standing,
credit capacity, character, general reputa-
tion, personal characteristics or mode of
living, that fact and the right to receive
disclosure of the nature of the information
so received, within a reasonable period of
time, upon the consumer’s written request
for information within 60 days after learn-
ing of such adverse action; and
‘‘(iv) the identity of the person or of-
fice from which such notification may be
obtained.
Such statement of reasons may be given orally
if the written notification advises the applicant
of his right to have the statement of reasons
confirmed in writing on written request.’’.
(b) TECHNICAL AND CONFORMING AMENDMENT.—
Section 701(d)(3) of the Equal Credit Opportunity Act
(15 U.S.C. 1691(d)(3)) is amended by striking the period
at the end and adding the following: ‘‘and, to the extent
applicable, the name, address, and telephone number of
the consumer reporting agency identified in accordance
with the requirements of subsection (d)(3)(ii) and a state-
109
ment of the right to obtain disclosure of the nature of the
information upon which adverse action was taken as re-
quired by such subsection.’’.
(c) REASONABLE PROCEDURES TO ASSURE COMPLI-
ANCE.—Section 706 of the Equal Credit Opportunity Act
(15 U.S.C. 1691e) is amended by adding at the end the
following new subsection:
‘‘(l) REASONABLE PROCEDURES TO ASSURE COM-
PLIANCE.—No person shall be held liable for any violation
of subsection 701(d) if such person shows by a preponder-
ance of the evidence that at the time of the alleged viola-
tion the person maintained reasonable procedures to as-
sure compliance with the provisions of the subsection.’’.
SEC. 354. FAIR CREDIT REPORTING ACT AMENDMENTS.
(a) Section 615(a) of the Fair Credit Reporting Act
(15 U.S.C. 1681m(a)) is amended by striking ‘‘credit or’’
each place such term appears.
(b) Section 615 of the Fair Credit Reporting Act (15
U.S.C. 1681m) is amended by striking subsection (b) and
redesignating subsection (c) as subsection (b).
(c) Section 615(b) (as redesignated by this section)
of the Fair Credit Reporting Act (15 U.S.C. 1681m(b))
is amended by striking ‘‘subsections (a) and (b)’’ and in-
serting ‘‘subsection (a)’’.
110
SEC. 355. INCENTIVES FOR SELF-TESTING.
(a) EQUAL CREDIT OPPORTUNITY.—
(1) IN
GENERAL.—The Equal Credit Oppor-
tunity Act (15 U.S.C. 1691 et seq.) is amended by
inserting after section 704 the following new section:
‘‘SEC. 704A. INCENTIVES FOR SELF-TESTING AND SELF-
CORRECTION.
‘‘(a) IN GENERAL.—If a creditor—
‘‘(1) conducts, or authorizes an independent
third party to conduct, a self-test of the creditor’s
lending or any part of the creditor’s lending oper-
ations in order to determine the level or effectiveness
of compliance with this title by the creditor; and
‘‘(2) has identified discriminatory practices and
has taken or is taking appropriate corrective actions
to address the discrimination,
any report or results of such a self-test may not be ob-
tained or used by any applicant, department, or agency
in any proceeding or civil action brought under this title.
‘‘(b) RESULTS OF SELF-TESTING.—No provision of
this section shall be construed as preventing an applicant,
department, or agency from obtaining and using the re-
sults of any self-testing in any proceeding or civil action
brought under this title if—
111
‘‘(1) the creditor or any other entity conducted
such activity at the request of a department or agen-
cy;
‘‘(2) the creditor or any other entity, or any
person acting on behalf of the creditor or other en-
tity—
‘‘(A) voluntarily releases or discloses all, or
any part of, such results; or
‘‘(B) refers to or describes such results as
a defense to charges of unlawful discrimination
against such creditor, person, or entity; or
‘‘(3) the results are sought by the applicant, de-
partment, or agency by means of a discovery request
for the purposes of determining an appropriate pen-
alty or remedy for a violation of this title.
‘‘(c) REGULATIONS.—The appropriate Federal de-
partment or agency shall prescribe regulations, after no-
tice and opportunity for comment, which determine what
types of ‘self-tests’ are sufficiently extensive so as to con-
stitute a determination of the level or effectiveness of a
creditor’s compliance with this title.’’.
(2) REFERRALS
TO
THE
ATTORNEY
GEN-
ERAL.—Section 706(g) of the Equal Credit Oppor-
tunity Act (15 U.S.C. 1691e(g)) is amended—
112
(A) by striking ‘‘(g) The agencies’’ and in-
serting ‘‘(g) REFERRALS
TO
THE ATTORNEY
GENERAL.—
‘‘(1) IN GENERAL.—The agencies’’; and
(B) by adding at the end the following new
paragraphs:
‘‘(2) LIMITATION
ON
REFERRALS
OF
SELF-
TESTING RESULTS.—
‘‘(A) IN GENERAL.—No agency shall be re-
quired to refer any report or results of a self-
test relating to any creditor to the Attorney
General if the creditor—
‘‘(i) has already identified discrimina-
tory practices as the result of self-testing
instituted by the creditor to determine
compliance with this title; and
‘‘(ii) has taken or is taking appro-
priate corrective actions to address the dis-
crimination.
‘‘(3) ENFORCEMENT UNDER OTHER LAWS.—No
provision of this section shall be construed as limit-
ing the authority of the agency to enforce the provi-
sions of this title under any other provision of law.’’.
(3) REFERRALS TO HUD.—Section 706(k) of
the Equal Credit Opportunity Act (15 U.S.C.
113
1691e(k)) is amended by adding at the end the fol-
lowing: ‘‘No such agency shall be required to notify
the Secretary of Housing and Urban Development or
the applicant that the agency has reason to believe
that a violation of this title or the Fair Housing Act
occurred if the reason is based on a result of self-
testing instituted by the creditor to determine com-
pliance with this title, and the creditor has already
identified the possible violation and has taken or is
taking appropriate corrective actions to address the
possible violation. No provisions of this section shall
be construed as limiting the authority of the agency
to enforce the provisions of this title under any other
provision of law.’’.
(4) CLERICAL AMENDMENT.—The table of sec-
tions for title VII of the Consumer Credit Protection
Act is amended by inserting after the item relating
to section 704 the following new item:
‘‘704A. Incentives for self-testing and self-correction.’’.
(b) FAIR HOUSING.—The Fair Housing Act (42
U.S.C. 3601 et seq.) is amended by inserting after section
814 the following new section:
‘‘SEC. 814A. SELF-TESTING ENHANCEMENT.
‘‘(a) IN GENERAL.—If any person—
‘‘(1) conducts, or authorizes an independent
third party to conduct, a self-test of that person’s
114
residential real estate related lending activities, or
any part of such activities, in order to determine the
level or effectiveness of compliance with this title by
the person; and
‘‘(2) has identified discriminatory practices and
has taken or is taking appropriate corrective actions
to address the discrimination,
any report or results of such a self-test may not be ob-
tained or used by any aggrieved person, complainant, de-
partment, or agency in any proceeding or civil action
brought under this title.
‘‘(b) RESULTS OF SELF-TESTING.—No provision of
this section shall be construed as preventing an aggrieved
person, complainant, department, or agency from obtain-
ing and using the results of any self-testing as described
in subsection (a) in any proceeding or civil action brought
under this title if—
‘‘(1) the creditor or any other entity conducted
such activity at the request of a department or agen-
cy;
‘‘(2) the creditor or any other entity, or any
person acting on behalf of the creditor or other en-
tity—
‘‘(A) voluntarily releases or discloses all, or
any part of, such results; or
115
‘‘(B) refers to or describes such results as
a defense to charges of unlawful discrimination
against such creditor, person, or entity; or
‘‘(3) the results are sought by the aggrieved
person, complainant, department, or agency by
means of a discovery request for the purposes of de-
termining an appropriate penalty or remedy for a
violation of this title.
‘‘(c) REGULATIONS.—The appropriate Federal de-
partment or agency shall prescribe regulations, after no-
tice and opportunity for comment, which determine what
types of ‘self-tests’ are sufficiently extensive so as to con-
stitute a determination of the level or effectiveness of a
creditor’s compliance with this title.’’.
SEC. 356. CREDIT SCORING SYSTEMS.
Section 701 of the Equal Credit Opportunity Act (15
U.S.C. 1691) is amended by adding at the end the follow-
ing new subsection:
‘‘(f) CREDIT SCORING SYSTEM.—
‘‘(1) IN GENERAL.—A creditor shall be deemed
to be in compliance with subsection (a) with respect
to any credit decision made by the creditor which is
based solely on the use of an empirically derived, de-
monstrably and statistically sound, credit scoring
116
system (as defined by the Board in regulations pre-
scribed under this title) if such system—
‘‘(A) does not utilize any category pro-
tected under subsection (a);
‘‘(B) does not use as a factor in such sys-
tem any criterion which is so directly associated
with such a category as to be the functional
equivalent of such a category; and
‘‘(C) does not use as a factor in such sys-
tem any criterion that has a disparate impact
on a category protected under subsection (a)
unless use of the criterion is justified by busi-
ness necessity and there is no less discrimina-
tory alternative available.
‘‘(2) AGE AS A FACTOR.—No provision of this
subsection shall be construed as precluding a credi-
tor from using age as a factor in a credit scoring
system under paragraph (1) to the extent otherwise
permitted under this title.’’.
SEC. 357. CONSULTATION BY ATTORNEY GENERAL RE-
QUIRED IN NONREFERRAL CASES.
(a) EQUAL CREDIT OPPORTUNITY.—Section 706(h)
of the Equal Credit Opportunity Act (15 U.S.C. 1691e(h))
is amended by adding at the end the following new sen-
tence: ‘‘Before bringing a civil action against any creditor
117
described in paragraph (1), (2), or (3) of section 704(a),
the Attorney General shall consult with the appropriate
agency under such paragraph.’’.
(b) FAIR HOUSING ACT.—Section 814(a) of the Fair
Housing Act (42 U.S.C. 3614(a)) is amended by adding
at the end the following new sentence: ‘‘Before bringing
a civil action under the preceding sentence against any
person or group of persons described in paragraph (1),
(2), or (3) of section 704(a) of the Equal Credit Oppor-
tunity Act with respect to a violation of 805(a) of this
title, the Attorney General shall consult with the appro-
priate agency under such paragraph.’’.
SEC. 358. EFFECTIVE DATE.
(a) IN GENERAL.—Except with respect to the re-
quirements of subsection (b), this Act shall take effect at
the end of the 270-day period beginning on the date of
the enactment of this Act.
(b) IMPLEMENTING REGULATIONS.—The Board of
Governors of the Federal Reserve System shall prescribe
regulations to implement this Act and such regulations
shall be published in final form before the end of the 180-
day period beginning on the date of the enactment of this
Act.
118
Subtitle E—Consumer Leasing Act
Amendments
SEC. 361. SHORT TITLE.
This subtitle may be cited as the ‘‘Consumer Leasing
Act Amendments of 1995’’.
SEC. 362. CONGRESSIONAL FINDINGS AND DECLARATION
OF PURPOSE.
(a) FINDINGS.—The Congress finds the following:
(1) Competition among the various financial in-
stitutions and other firms engaged in the business of
consumer leasing is greatest when there is informed
use of leasing. The informed use of leasing results
from an awareness of the cost of leasing by consum-
ers.
(2) There has been a continued trend toward
leasing automobiles and other durable goods for
consumer use as an alternative to installment credit
sales and that leasing product advances have oc-
curred such that lessors have been unable to provide
consistent industry-wide disclosures to fully account
for the competitive progress that has occurred.
(b) PURPOSES.—
(1) It is the purpose of this subtitle to assure
a simple, meaningful disclosure of leasing terms so
that the consumer will be able to compare more
119
readily the various leasing terms available to the
consumer and avoid the uninformed use of leasing,
and to protect the consumer against inaccurate and
unfair leasing practices.
(2) To provide for adequate cost disclosures
that reflect the marketplace without impairing com-
petition and the development of new leasing prod-
ucts, it is the purpose of this subtitle to provide the
Board with the regulatory authority to assure a sim-
plified, meaningful definition and disclosure of the
terms of certain leases of personal property for per-
sonal, family, or household purposes so as to enable
the lessee to compare more readily the various lease
terms available to the lessee, enable comparison of
lease terms with credit terms where appropriate and
to assure meaningful and accurate disclosures of
lease terms in advertisements.
SEC. 363. REGULATIONS.
(a) IN GENERAL.—Chapter 5 of title I of the
Consumer Credit Protection Act (15 U.S.C. 1601 et seq.)
is amended by adding at the end the following new section:
‘‘SEC. 187. REGULATIONS.
‘‘(a) REGULATIONS AUTHORIZED.—
‘‘(1) IN GENERAL.—The Board shall write reg-
ulations or staff commentary, if appropriate, to up-
120
date and clarify the requirements and definitions for
lease disclosures, contracts, and any other specific
issues related to consumer leasing which would carry
out the purposes of this chapter, to prevent any cir-
cumvention of the chapter, and to facilitate compli-
ance with the requirements of the chapter.
‘‘(2) CLASSIFICATIONS, 
ADJUSTMENTS.—The
regulations prescribed under paragraph (1) may con-
tain classifications and differentiations and may pro-
vide for adjustments and exceptions for any class of
transaction.
‘‘(b) MODEL DISCLOSURES.—The Board shall pub-
lish model disclosure forms and clauses to facilitate com-
pliance with the disclosure requirements and to aid the
consumer in understanding the transaction. In designing
forms, the Board shall consider the use by lessors of data
processing or similar automated equipment. Use of the
models shall be optional. A lessor who properly uses the
material aspects of the models shall be deemed to be in
compliance with the disclosure requirements.
‘‘(c) EFFECTIVE DATES.—
‘‘(1) IN
GENERAL.—Any regulation of the
Board, or any amendment or interpretation of any
regulation of the Board, that requires a disclosure
different from the disclosures previously required
121
shall have an effective date of the October 1 that
follows the date of promulgation by at least 6
months.
‘‘(2) LONGER PERIOD.—The Board may, in the
Board’s discretion, lengthen the period of time re-
ferred to in paragraph (1) to permit lessors to ad-
just their forms to accommodate new requirements.
‘‘(3) SHORTER PERIOD.—The Board may also
shorten the period of time referred to in paragraph
(1) if the Board makes a specific finding that such
action is necessary to comply with the findings of a
court or to prevent unfair or deceptive practices.
‘‘(4) COMPLIANCE BEFORE EFFECTIVE DATE.—
Lessors may comply with any newly promulgated
disclosure requirement before the effective date of
such requirement.’’.
(b) CLERICAL AMENDMENT.—The table of sections
for chapter 5 of title I of the Consumer Credit Protection
Act (15 U.S.C. 1601 et seq.) is amended by inserting after
the item relating to section 186 the following new item:
‘‘187. Regulations.’’.
SEC. 364. CONSUMER LEASE ADVERTISING.
Section 184 of the Consumer Credit Protection Act
(15 U.S.C. 1667c) is amended to read as follows:
122
‘‘SEC. 184. CONSUMER LEASE ADVERTISING.
‘‘(a) IN
GENERAL.—If an advertisement for a
consumer lease states the amount of any payment or
states that any or no initial payment is required, the ad-
vertisement must also clearly and conspicuously state the
following terms, as applicable:
‘‘(1) That the transaction advertised is a lease.
‘‘(2) The total of initial payments required at
or before consummation of the lease or delivery of
the property, whichever is later.
‘‘(3) That a security deposit is required.
‘‘(4) The number, amounts, and timing of
scheduled payments.
‘‘(5) For a lease in which the consumer’s liabil-
ity at the end of the lease term is based on the an-
ticipated residual value of the property, that an
extra charge may be imposed at the end of the lease
term.
‘‘(b) ADVERTISING
MEDIUM
NOT
LIABLE.—Any
owner or personnel of any medium in which an advertise-
ment appears or through which it is disseminated shall
not be liable under this section.’’.
SEC. 365. STATUTORY PENALTIES.
Section 185(a) of the Consumer Credit Protection
Act (15 U.S.C. 1667d(a)) is amended by adding at the
end the following new sentence: ‘‘Notwithstanding the pre-
123
ceding sentence, a creditor shall only have liability deter-
mined under section 130(a)(2) for failing to comply with
the requirements of paragraph (2), (8), (9), or (10) of sec-
tion 182 or for failing to comply with disclosure require-
ments under State law for any term which the Board has
determined to be substantially the same in meaning under
section 186 as any of the terms referred to in section
182.’’.
TITLE IV—STREAMLINING
GOVERNMENT REGULATIONS
Subtitle A—Regulatory Approval
Issues
SEC. 401. STREAMLINED NONBANKING ACQUISITIONS BY
WELL CAPITALIZED AND WELL MANAGED
BANKING ORGANIZATIONS.
(a) NOTICE REQUIREMENTS.—Section 4(j) of the
Bank Holding Company Act of 1956 (12 U.S.C. 1843(j)
is amended—
(1) in paragraph (1)(A), by striking ‘‘No’’ and
inserting ‘‘Except as provided in paragraph (3), no’’;
and
(2) by adding at the end the following new
paragraphs:
‘‘(3) NO
NOTICE
REQUIRED
FOR
CERTAIN
TRANSACTIONS.—No notice under paragraph (1) or
124
subsections (c)(8) or (a)(2)(B) is required for a pro-
posal by a bank holding company to engage in any
activity or acquire the shares or assets of any com-
pany if the proposal qualifies under paragraph (4).
‘‘(4) CRITERIA FOR STATUTORY APPROVAL.—A
proposal qualifies under this paragraph if all of the
following criteria are met:
‘‘(A) FINANCIAL
CRITERIA.—Both before
and immediately after the proposed trans-
action—
‘‘(i) the acquiring bank holding com-
pany is well capitalized;
‘‘(ii) the lead insured depository insti-
tution of such holding company is well cap-
italized;
‘‘(iii) well capitalized insured deposi-
tory institutions control at least 80 percent
of the aggregate total risk-weighted assets
of insured depository institutions controlled
by such holding company; and
‘‘(iv) no insured depository institution
controlled by such holding company is
undercapitalized.
‘‘(B) MANAGERIAL CRITERIA.—
125
‘‘(i) WELL MANAGED.—At the time of
the transaction, the acquiring bank holding
company, its lead insured depository insti-
tution, and insured depository institutions
that control at least 90 percent of the ag-
gregate total risk-weighted assets of in-
sured depository institutions controlled by
such holding company are well managed.
‘‘(ii) LIMITATION
ON
POORLY
MAN-
AGED INSTITUTIONS.—Except with respect
to insured depository institutions described
in paragraph (6), no insured depository in-
stitution controlled by the acquiring bank
holding company has received 1 of the 2
lowest composite ratings at the later of the
institution’s most recent examination or
subsequent review.
‘‘(C) ACTIVITIES PERMISSIBLE.—Following
consummation of the proposal, the bank holding
company engages directly or through a subsidi-
ary solely in—
‘‘(i) activities that are permissible
under subsection (c)(8), as determined by
the Board by regulation or order there-
under, subject to all of the restrictions,
126
terms and conditions of such subsection
and such regulation or order; and
‘‘(ii) such other activities as are other-
wise permissible under this section, subject
to the restrictions, terms and conditions,
including any prior notice or approval re-
quirements, provided in this section.
‘‘(D) SIZE OF ACQUISITION.—
‘‘(i) ASSET SIZE.—The book value of
the total assets to be acquired does not ex-
ceed 10 percent of the consolidated total
risk-weighted assets of the acquiring bank
holding company; and
‘‘(ii) 
CONSIDERATION.—The 
gross
consideration to be paid for the securities
or assets does not exceed 15 percent of the
consolidated Tier 1 capital of the acquiring
bank holding company.
‘‘(E) NOTICE
NOT
OTHERWISE
WAR-
RANTED.—For proposals described in para-
graph (5)(B), the Board has not, before the
conclusion of the period provided in paragraph
(5)(B), advised the bank holding company that
a notice under paragraph (1) is required.
127
‘‘(F) COMPLIANCE
CRITERION.—During
the 12-month period ending on the date on
which the bank holding company proposes to
commence an activity or acquisition, no admin-
istrative enforcement action has been com-
menced, and no cease and desist order has been
issued pursuant to section 8 of the Federal De-
posit Insurance Act, against the bank holding
company or any depository institution subsidi-
ary of the holding company and no such en-
forcement action, order, or other administrative
enforcement proceeding is pending as of such
date.
‘‘(5) NOTIFICATION.—
‘‘(A) COMMENCEMENT OF ACTIVITIES AP-
PROVED BY RULE.—A bank holding company
that qualifies under paragraph (4) and that
proposes to engage de novo, directly or through
a subsidiary, in any activity that is permissible
under subsection (c)(8), as determined by the
Board by regulation, may commence that activ-
ity without prior notice to the Board and must
provide written notification to the Board no
later than ten business days after commencing
the activity.
128
‘‘(B) ACTIVITIES
PERMITTED
BY
ORDER
AND ACQUISITIONS.—
‘‘(i) IN GENERAL.—At least 12 busi-
ness days before commencing any activity
pursuant to paragraph (3) (other than an
activity described in subparagraph (A)) or
acquiring shares or assets of any company
pursuant to paragraph (3), the bank hold-
ing company shall provide written notice of
the proposal to the Board, unless the
Board determines that no notice or a
shorter notice period is appropriate.
‘‘(ii) DESCRIPTION
OF
ACTIVITIES
AND
TERMS.—A notification under this
subparagraph shall include a description of
the proposed activities and the terms of
any proposed acquisition.
‘‘(6) RECENTLY ACQUIRED INSTITUTIONS.—In-
sured depository institutions which have been ac-
quired by a bank holding company during the 12-
month period preceding the date on which the com-
pany proposes to commence an activity or acquisi-
tion pursuant to paragraph (3) may be excluded for
purposes of paragraph (4)(B)(ii) if—
129
‘‘(A) the bank holding company has devel-
oped a plan for the institution to restore the
capital and management of the institution
which is acceptable to the appropriate Federal
banking agency; and
‘‘(B) all such insured depository institu-
tions represent, in the aggregate, less than 10
percent of the aggregate total risk-weighted as-
sets of all insured depository institutions con-
trolled by the bank holding company.
‘‘(7) ADJUSTMENT
OF
PERCENTAGES.—The
Board may, by regulation, adjust the percentages
and the manner in which the percentages of insured
depository institutions are calculated under para-
graph (4)(B)(i), (4)(D), or paragraph (6)(B) if the
Board determines that any such adjustment is con-
sistent with safety and soundness and the purposes
of this Act.’’.
(b) DEFINITIONS.—Section 2(o) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1841(o)) is amended—
(1) by striking paragraph (1) and inserting the
following new paragraph:
‘‘(1) CAPITAL TERMS.—
‘‘(A) 
INSURED
DEPOSITORY
INSTITU-
TIONS.—With respect to insured depository in-
130
stitutions, the terms ‘well-capitalized’, ‘ade-
quately capitalized’, and ‘uncapitalized’ have
the meaning given those terms in section 38(b)
of the Federal Deposit Insurance Act.
‘‘(B) BANK HOLDING COMPANY.—
‘‘(i) 
ADEQUATELY
CAPITALIZED.—
The term ‘adequately capitalized’ means a
level of capitalization which meets or ex-
ceeds all applicable Federal regulatory cap-
ital standards.
‘‘(ii) WELL
CAPITALIZED.—A bank
holding company is ‘well capitalized’ if it
meets the required capital levels for well
capitalized bank holding companies estab-
lished by the Board.
‘‘(C) OTHER CAPITAL TERMS.—The terms
‘Tier 1’ and ‘risk-weighted assets’ have the
meaning given those terms in the capital guide-
lines or regulations established by the Board for
bank holding companies.’’; and
(2) by adding at the end the following new
paragraphs:
‘‘(8) LEAD
INSURED
DEPOSITORY
INSTITU-
TIONS.—
131
‘‘(A) IN
GENERAL.—The term ‘lead in-
sured depository institution’ means the largest
insured depository institution controlled by the
bank holding company at any time, based on
a comparison of the average total risk-weighted
assets controlled by each insured depository in-
stitution during the previous 12-month period.
‘‘(B) BRANCH OR AGENCY.—For purposes
of this paragraph and section 4(j)(4), the term
‘insured depository institution’ shall also in-
clude any branch or agency operated in the
United States by a foreign bank.
‘‘(9) WELL MANAGED.—The term ‘well man-
aged’ means—
‘‘(A) in the case of any company or deposi-
tory institution which receives examinations, the
achievement of—
‘‘(i) a CAMEL composite rating of 1
or 2 (or an equivalent rating under an
equivalent rating system) in connection
with the most recent examination or subse-
quent review of such company or institu-
tion; and
‘‘(ii) at least a satisfactory rating for
management, if such rating is given; or
132
‘‘(B) in the case of a company or deposi-
tory institution that has not received an exam-
ination rating, the existence and use of manage-
rial resources which the Board determines are
satisfactory.’’.
SEC. 402. STREAMLINED BANK ACQUISITIONS BY WELL
CAPITALIZED AND WELL MANAGED BANKING
ORGANIZATIONS.
Section 3 of the Bank Holding Company Act (12
U.S.C. 1842) is amended by adding at the end the follow-
ing new subsection:
‘‘(h) NO APPROVAL REQUIRED FOR CERTAIN TRANS-
ACTIONS.—
‘‘(1) IN GENERAL.—Notwithstanding paragraph
(3) or (5) of subsection (a) and subject to para-
graphs (5) and (6), an acquisition of shares by a
registered bank holding company, or a merger or
consolidation between registered bank holding com-
panies, shall be deemed approved at the conclusion
of the period specified in subparagraph (G) if all of
the following conditions have been met:
‘‘(A) FINANCIAL
AND
MANAGERIAL
CRI-
TERIA.—
‘‘(i) WELL CAPITALIZED BANK HOLD-
ING COMPANY.—Both at the time of and
133
immediately after the proposed trans-
action, the acquiring bank holding com-
pany is well capitalized.
‘‘(ii) WELL
CAPITALIZED
LEAD
IN-
SURED
DEPOSITORY
INSTITUTION.—Both
at the time of and immediately after the
proposed transaction, the lead insured de-
pository institution of the acquiring bank
holding company is well capitalized.
‘‘(iii) CAPITAL
OF
OTHER
INSURED
DEPOSITORY INSTITUTIONS.—At the time
of the transaction, well capitalized insured
depository institutions control at least 80
percent of the aggregate total risk-weight-
ed assets of insured depository institutions
controlled by the acquiring bank holding
company.
‘‘(iv) 
NO
UNDERCAPITALIZED
IN-
SURED
DEPOSITORY
INSTITUTIONS.—At
the time of the transaction, no insured de-
pository institution controlled by the ac-
quiring bank holding company is under-
capitalized.
‘‘(v) WELL MANAGED.—
134
‘‘(I) IN GENERAL.—At the time
of the transaction, the acquiring bank
holding company, its lead insured de-
pository institution, and insured de-
pository institutions that control at
least 90 percent of the aggregate total
risk-weighted assets of insured deposi-
tory institutions controlled by such
holding company are well managed.
‘‘(II) NO POORLY MANAGED IN-
STITUTIONS.—Except with respect to
insured depository institutions de-
scribed in paragraph (2), no insured
depository institution controlled by
the acquiring bank holding company
has received 1 of the 2 lowest compos-
ite ratings at the later of the institu-
tion’s most recent examination or sub-
sequent review.
‘‘(B) NO
UNSATISFACTORY
CRA
RAT-
INGS.—Except with respect to insured deposi-
tory institutions described in paragraph (3), no
insured depository institution controlled by the
acquiring bank holding company has received a
‘needs to improve’ or ‘substantial noncompli-
135
ance’ composite rating as a result of the institu-
tion’s most recent examination under the Com-
munity Reinvestment Act of 1977.
‘‘(C) 
COMPETITIVE
CRITERIA.—Con-
summation of the proposal complies with guide-
lines established by the Board by regulation,
after consultation with the Attorney General,
that identify proposals that are not likely to
have a significantly adverse effect on competi-
tion in any relevant market.
‘‘(D) SIZE OF ACQUISITION.—
‘‘(i) ASSET SIZE.—The book value of
the total assets to be acquired does not ex-
ceed 10 percent of the consolidated total
risk weighted assets of the acquiring bank
holding company.
‘‘(ii) 
CONSIDERATION.—The 
gross
consideration to be paid for the securities
or assets does not exceed 15 percent of the
consolidated Tier 1 capital of the acquiring
bank holding company.
‘‘(E) INTERSTATE
ACQUISITIONS.—Board
approval of the transaction is not prohibited
under subsection (d).
136
‘‘(F) COMPLIANCE
CRITERION.—During
the 12-month period ending on the date of the
transaction, no administrative enforcement ac-
tion has been commenced, and no cease and de-
sist order has been issued pursuant to section
8 of the Federal Deposit Insurance Act, against
any bank holding company involved in the
transaction or any depository institution sub-
sidiary of any such holding company and no
such enforcement action, order, or other admin-
istrative enforcement proceeding is pending as
of such date.
‘‘(G) 
OTHER
CONSIDERATIONS.—Board
approval of the transaction is not prohibited
under subsection (c)(3).
‘‘(H) NOTIFICATION.—The acquiring bank
holding company provides written notice of the
transaction, including a description of the terms
of the transaction, to the Board and the Attor-
ney General, simultaneously, at least 15 busi-
ness days (or such shorter period as permitted
by the Board) before the transaction is con-
summated.
‘‘(I) NO BOARD DISAPPROVAL.—Before the
end of the 15-day period (or the shorter period)
137
referred to in subparagraph (H), the Board has
not required an application under subsection
(a).
‘‘(2) SPECIAL
RULE
RELATING
TO
THE
RE-
QUIREMENT FOR WELL MANAGED INSTITUTIONS.—
Insured depository institutions which have been ac-
quired by a bank holding company during the 12-
month period preceding the date of the transaction
may be excluded for purposes of paragraph
(1)(A)(v)(II) if—
‘‘(A) the bank holding company has devel-
oped a plan for the institution to restore the
capital and management of the institution
which is acceptable to the appropriate Federal
banking agency; and
‘‘(B) all such insured depository institu-
tions represent, in the aggregate, less than 10
percent of the aggregate total risk-weighted as-
sets of all insured depository institutions con-
trolled by the holding company.
‘‘(3) SPECIAL
RULE
RELATING
TO
THE
RE-
QUIREMENT
FOR
COMMUNITY
INVESTMENT.—In-
sured depository institutions acquired during the 12-
month period preceding the date of the transaction
may be excluded for purposes of paragraph (1)(B)
138
if the bank holding company has developed a plan to
restore the performance of the institution to at least
a ‘satisfactory’ rating under the Community Rein-
vestment Act of 1977 which is acceptable to the ap-
propriate Federal banking agency.
‘‘(4) ADJUSTMENT
OF
PERCENTAGES.—The
Board may by regulation adjust the percentages and
the manner in which the percentages of insured de-
pository institutions are calculated under subpara-
graph (A)(v)(I) or (D) of paragraph (1) or para-
graph (2)(B) if the Board determines that such ad-
justment is consistent with safety and soundness
and the purposes of this Act.
‘‘(5) ADVICE
OF
ATTORNEY
GENERAL.—The
Attorney General shall advise the Board during the
period referred to in paragraph (1)(H) in writing if
any competitive concerns exist with respect to the
transaction.
‘‘(6) WAIVER OF POSTAPPROVAL WAITING PE-
RIOD.—If the Attorney General advises the Board
that no competitive concerns exist with respect to
the transaction, the provisions of section 11(b) relat-
ing to a postapproval waiting shall not apply with
respect to such transaction.’’.
139
SEC. 403. ELIMINATE FILING AND APPROVAL REQUIRE-
MENTS FOR INSURED DEPOSITORY INSTITU-
TIONS ALREADY CONTROLLED BY THE SAME
HOLDING COMPANY.
(a) BANK MERGER ACT.—Section 18(c) of the Fed-
eral Deposit Insurance Act (12 U.S.C. 1828(c)) is amend-
ed by adding at the end the following new paragraph:
‘‘(12) The provisions of this subsection shall
not apply to any merger, consolidation, acquisition
of assets or assumption of liabilities involving only
insured depository institutions that are subsidiaries
of the same depository institution holding company
if—
‘‘(A) the responsible agency would not be
prohibited from approving the transaction
under section 44, if applicable;
‘‘(B) the acquiring, assuming, or resulting
institution complies with all applicable provi-
sions of section 44, if any, as if the merger,
consolidation, or acquisition were approved
under this subsection;
‘‘(C) the acquiring, assuming, or resulting
institution provides written notification of the
transaction to the appropriate Federal banking
agency for the institution at least 10 days prior
to consummation of the transaction; and
140
‘‘(D) after receiving such notice, the agen-
cy does not require the institution to submit an
application with respect to such transaction and
so notifies the institution.’’.
(b) NATIONAL BANK CONSOLIDATION AND MERGER
ACT.—
(1) CONSOLIDATIONS.—Section 2 of the Na-
tional Bank Consolidation and Merger Act (12
U.S.C. 215) is amended—
(A) in subsection (a), by adding at the end
the following new sentence:
‘‘No approval by the Comptroller of the Currency is re-
quired under this subsection for a transaction which in-
volves the consolidation of banks that, at the time of the
consolidation, are all subsidiaries (as defined in section 3
of the Federal Deposit Insurance Act) of the same com-
pany.’’; and
(B) in subsection (b)—
(i) by striking ‘‘, and thereafter the
consolidation shall be approved by the
Comptroller’’; and
(ii) by striking ‘‘when such consolida-
tion is approved by the Comptroller’’.
141
(2) MERGERS.—Section 3 of the National Bank
Consolidation and Merger Act (12 U.S.C. 215a) is
amended—
(A) in subsection (a), by adding at the end
the following new sentence:
‘‘No approval by the Comptroller of the Currency is re-
quired under this subsection for a transaction which in-
volves the merger of banks that, at the time of the merger,
are all subsidiaries (as defined in section 3 of the Federal
Deposit Insurance Act) of the same company.’’; and
(B) in subsection (b)—
(i) by striking ‘‘, and thereafter the
merger shall be approved by the Comptrol-
ler’’; and
(ii) by striking ‘‘when such merger
shall be approved by the Comptroller’’.
SEC. 404. ELIMINATE REDUNDANT APPROVAL REQUIRE-
MENT FOR OAKAR TRANSACTIONS.
(a) IN GENERAL.—Section 5(d)(3) of the Federal
Deposit Insurance Act (12 U.S.C. 1815(d)(3)) is amend-
ed—
(1) in subparagraph (A), by striking ‘‘with the
prior written approval of the responsible agency
under section 18(c)(2)’’;
(2) in subparagraph (E)—
142
(A) by striking clause (iv) and inserting
the following new clause:
‘‘(iv) A transaction shall not be au-
thorized under this paragraph unless the
acquiring, assuming, or resulting deposi-
tory institution will meet all applicable cap-
ital requirements upon consummation of
the transaction.’’;
(B) by striking clauses (i) and (ii); and
(C) by redesignating clauses (iii) and (iv)
(as amended by subparagraph (A) of this para-
graph) as clauses (i) and (ii), respectively; and
(3) by striking subparagraph (G) and redesig-
nating the subsequent subparagraphs accordingly.
(b) TECHNICAL AND CONFORMING AMENDMENT.—
Section 5156A(b)(1) of the Revised Statutes of the United
States (12 U.S.C. 215c(b)(1)) is amended by striking
‘‘section 5(d)(3) of the Federal Deposit Insurance Act or’’.
(c) CLERICAL AMENDMENT.—The heading for sec-
tion 5(d)(3)(E) of the Federal Deposit Insurance Act (12
U.S.C. 1815(d)(3)(E)) is amended by striking ‘‘FOR AP-
PROVAL, GENERALLY’’.
143
SEC. 405. ELIMINATION OF DUPLICATIVE REQUIREMENTS
IMPOSED UPON BANK HOLDING COMPANIES
AND OTHER REGULATORY RELIEF UNDER
THE HOME OWNERS’ LOAN ACT.
(a) EXEMPTION FOR BANK HOLDING COMPANIES.—
Section 10 of the Home Owners’ Loan Act (12 U.S.C.
1467a) is amended by adding at the end the following new
subsection:
‘‘(t) EXEMPTION
FOR
BANK
HOLDING
COMPA-
NIES.—This section shall not apply to a bank holding com-
pany that is subject to the Bank Holding Company Act
of 1956 or any company controlled by such bank holding
company (other than a savings association).’’.
(b) DEFINITION OF SAVINGS AND LOAN HOLDING
COMPANY.—Section 10(a)(1)(D) of the Home Owners’
Loan Act (12 U.S.C. 1467a(a)(1)(D)) is amended to read
as follows:
‘‘(D) SAVINGS AND LOAN HOLDING COM-
PANY.—
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (ii), the term ‘savings and
loan holding company’ means any company
which directly or indirectly controls a sav-
ings association or controls any other com-
pany which is a savings and loan holding
company.