I
104TH CONGRESS
1ST SESSION
H. R. 2158
To streamline the regulatory treatment of financial institutions, and for
other purposes.
IN THE HOUSE OF REPRESENTATIVES
AUGUST 1, 1995
Mr. VENTO (for himself, Mr. GONZALEZ, Mr. FRANK of Massachusetts, Mr.
KENNEDY of Massachusetts, Mr. MFUME, Mrs. MALONEY, Mr. BARRETT
of Wisconsin, Mr. HINCHEY, and Mr. BENTSEN) introduced the following
bill; which was referred to the Committee on Banking and Financial
Services
A BILL
To streamline the regulatory treatment of financial
institutions, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Financial Institutions
Streamlined Regulatory Treatment Act of 1995’’.
TITLE 
I—STREAMLINING 
CON-
SUMER 
PROTECTION 
RE-
QUIREMENTS
SEC. 101. JOINT STUDY AND RECOMMENDATIONS REGARD-
ING LENDING PROCESS WITH RESPECT TO
HOME FINANCE.
(a) STUDY.—The Board of Governors of the Federal
Reserve, the Secretary of Housing and Urban Develop-
ment, and the Secretary of the Treasury shall jointly—
(1) study the lending process as it relates to
home finance; and
(2) develop recommendations for appropriate
changes in Federal laws, including the Truth in
Lending Act and the Real Estate Settlement Proce-
dures Act, to—
(A) improve, harmonize, and simplify dis-
closures to consumers regarding home finance
loans, including the timing of such disclosures;
(B) to minimize burdens imposed on finan-
cial institutions under those laws; and
(C) improve requirements under section
106 of the Truth in Lending Act relating to de-
termination of finance charges, to ensure that
finance charges are more reflective of the cost
of credit and include costs currently excluded.
(b) REPORT.—Not later than 12 months after the
date of the enactment of this Act, the Board of Governors
and the Secretaries shall submit a report to the Congress
containing the findings and recommendations of the study
required by this section.
SEC. 102. STUDY AND RECOMMENDATIONS REGARDING EX-
EMPTION OF TRANSACTIONS FROM TRUTH IN
LENDING ACT REQUIREMENTS.
(a) STUDY.—The Board of Governors of the Federal
Reserve System (hereafter in this section referred to as
the ‘‘Board’’) shall conduct a study and develop rec-
ommendations regarding classes of transactions, if any,
which should not be subject to the requirements under the
Truth in Lending Act because application of those require-
ments do not provide a benefit to consumers in the form
of useful information or protection. In studying and deter-
mining those classes of transactions, the Board shall con-
sider, among other factors, loan size, status of the bor-
rower (including the sophistication of the borrower relative
to the complexity of the transaction), and whether the re-
quirements of the Truth in Lending Act make the credit
extension process more complicated or expensive for var-
ious classes of transactions.
(b) REPORT.—Not later than 12 months after the
date of the enactment of this Act, the Board shall submit
a report to the Congress containing the findings and rec-
ommendations of the study required by this section.
SEC. 103. REDUCTION OF RESPA DISCLOSURE REQUIRE-
MENT BURDEN.
Section 6(a) of the Real Estate Settlement Proce-
dures Act (12 U.S.C. 2605), is amended to read as fol-
lows:
‘‘(a) DISCLOSURE TO APPLICANT RELATING TO AS-
SIGNMENT, SALE, OR TRANSFER OF LOAN SERVICING.—
‘‘(1) IN GENERAL.—Each person who makes a
federally related mortgage loan shall disclose to each
person who applies for any such loan, at the time of
application for the loan, whether the servicing of any
such loan may be assigned, sold, or transferred to
any other person at any time while such loan is out-
standing.
‘‘(2) SIGNATURE OF APPLICANT.—Any disclo-
sure of the information required under paragraph
(1) shall not be effective for purposes of this section
unless the disclosure is accompanied by a written
statement, in such form as the Secretary shall de-
velop before the expiration of the 180-day period be-
ginning on the date of enactment, that the applicant
has read and understood the disclosure and that is
evidenced by the signature of the applicant at the
place where such statement appears in the applica-
tion.’’.
SEC. 104. ALTERNATIVE DISCLOSURES FOR ADJUSTABLE
RATE MORTGAGES.
(a) Section 127A(a)(2)(G) of the Truth in Lending
Act (15 U.S.C. 1637a(a)(2)(G)) is amended by inserting
before the semicolon the following: ‘‘, or a statement of
the maximum periodic payment amount that may be re-
quired under the terms of the plan’’.
(b) Section 128(a) of the Truth in Lending Act (15
U.S.C. 1638(a)) is amended by inserting at the end the
following new paragraph:
‘‘(14) In any variable rate residential mortgage
transaction, at the creditors’ option—
‘‘(A) an historical example illustrating the
effects of interest rate changes implemented ac-
cording to the loan program; or
‘‘(B) a statement indicating the maximum
periodic payment amount that may be required
under the terms of the plan.’’.
SEC. 105. HOME MORTGAGE DISCLOSURE ACT.
Section 309 of the Home Mortgage Disclosure Act
of 1975 (12 U.S.C. 2808) is amended—
(1) by inserting ‘‘(a) IN GENERAL.—’’ after the
section designation;
(2) in the 2d sentence, by inserting before the
period at the end the following: ‘‘, except that the
Board shall adjust the maximum dollar amount limi-
tation under this sentence on January 1, 1996, and
January 1 of every 5th year thereafter, as provided
in subsection (b)’’; and
(3) by adding at the end the following new sub-
section:
‘‘(b) ADJUSTMENT
OF DOLLAR AMOUNT LIMITA-
TION.—The adjustment of the dollar amount limitation
under subsection (a) made for any year shall be made by
adjusting such limitation as then in effect (as it may pre-
viously have been adjusted) to reflect the percent change,
if any, in the Consumer Price Index prepared by the Bu-
reau of Labor Statistics, Department of Labor, as re-
ported on June 1 of the year preceding such adjustment
over such index as reported on June 1 of the year preced-
ing the last such adjustment, except that the adjustment
made on January 1, 1996, shall be made by adjusting the
dollar amount specified in subsection (a) to reflect the per-
cent change in such Consumer Price Index as reported on
June 1, 1995, over such index as reported on June 1,
1990.’’.
SEC. 106. TRUTH IN SAVINGS ACT AMENDMENTS.
(a) EXEMPTION FROM CIVIL LIABILITY FOR CER-
TAIN ADVERTISING VIOLATIONS.—Section 271(a) of the
Truth and Savings Act (12 U.S.C. 271(a)) is amended
in the matter preceding paragraph (1) by inserting after
‘‘prescribed under this Act’’ the following: ‘‘, other than
a requirement regarding advertisements,’’.
(b) REPORT ON APPROPRIATENESS OF ANNUAL PER-
CENTAGE YIELD DISCLOSURE FORMULA.—Not later than
6 months after the date of the enactment of this Act, the
Board of Governors of the Federal Reserve System shall
submit to the Congress a report on the types of accounts,
if any, to which the application of the annual percentage
yield formula under section 263 of the Truth in Savings
Act is not appropriate. The report shall include for each
such type of account specified in the report (if any) rec-
ommendations regarding changes in law that are nec-
essary to provide for an appropriate calculation of interest
for purposes of disclosures under that section.
SEC. 107. ELECTRONIC FUND TRANSFER ACT CLARIFICA-
TION.
(a) Section 903(1) of the Electronic Fund Transfer
Act (15 U.S.C. 1693a(1)) is amended by inserting before
the semicolon the following: ‘‘, but such term does not in-
clude a card, device, or computer that a person may use
to pay for transactions through use of value stored on,
or assigned to, the card, device, or computer, except for
those transactions where such card, device, or computer
is actually used to access an account to effect such trans-
action’’.
(b) Section 903(2) of the Electronic Fund Transfer
Act (15 U.S.C. 1693a(2)) is amended by inserting before
the semicolon the following: ‘‘and does not include any
value which is stored on, or assigned to, a card, device,
or computer that enables a person to pay for transactions
through use of that stored value’’.
SEC. 108. INCENTIVES FOR SELF-TESTING.
(a) SELF-TESTING PURSUANT TO EQUAL CREDIT
OPPORTUNITY ACT.—
(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. ENCOURAGING SELF-TESTING FOR COMPLI-
ANCE.
‘‘(a) Except as provided in subsection (b), a creditor
that conducts self-testing of its lending operations to
measure compliance with this title shall not be required
to disclose the results of the self-testing to any department
or agency authorized to enforce this title.
‘‘(b) Nothing in this section shall prevent a depart-
ment or agency from obtaining the results of self-testing
by a creditor—
‘‘(1) if the creditor conducted the self-testing at
the specific request of a department or agency;
‘‘(2) if the creditor, or a person acting on its
behalf—
‘‘(A) voluntarily releases or discloses all or
part of such results to the department or agen-
cy or to the general public, or
‘‘(B) seeks to use the results, in the course
of a judicial or administrative proceeding or an
investigation of a department or agency, as evi-
dence of compliance by the creditor with this
title; or
‘‘(3) through a discovery request made in the
course of a judicial or administrative proceeding that
is—
‘‘(A) based on evidence obtained independ-
ently of the self-testing, and
‘‘(B) filed after making a reasonable effort
to notify the creditor about the nature of the
dispute and attempting to achieve a settlement.
‘‘(c) For purposes of this section, the term ‘self-test-
ing’ means the practice of hiring or otherwise arranging
for individuals to pose as applicants of the creditor to as-
certain how the creditor treats applicants.’’.
(2) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of that Act is amended by in-
serting after the item relating to section 704 the fol-
lowing new item:
‘‘704A. Encouraging self-testing for compliance.’’.
(b) SELF-TESTING PURSUANT TO FAIR HOUSING
ACT.—The Fair Housing Act (42 U.S.C. 3601 et seq.)
is amended by inserting after section 814 the following
new section:
‘‘ENCOURAGING SELF-TESTING FOR COMPLIANCE
‘‘SEC. 814A. (a) Except as provided in subsection (b),
a person that conducts self-testing of its residential real
estate transactions described in section 805(b)(1) to meas-
ure compliance with this title shall not be required to dis-
close the results of the self-testing to any department or
agency authorized to enforce this title.
‘‘(b) Nothing in this section shall prevent a depart-
ment or agency from obtaining the results of self-testing
by a person or other entity—
‘‘(1) if the creditor conducted the self-testing at
the specific request of a department or agency;
‘‘(2) if the creditor, or a person acting on its
behalf—
‘‘(A) voluntarily releases or discloses all or
part of such results to the department or agen-
cy or to the general public, or
‘‘(B) seeks to use the results, in the course
of a judicial or administrative proceeding or an
investigation of a department of agency, as evi-
dence of compliance by the creditor with this
title; or
‘‘(3) through a discovery request made in the
course of a judicial or administrative proceeding that
is—
‘‘(A) based on evidence obtained independ-
ently of the self-testing, and
‘‘(B) filed after making a reasonable effort
to notify the creditor about the nature of the
dispute and attempting to achieve a settlement.
‘‘(c) For purposes of this section—
‘‘(1) the term ‘creditor’ has the meaning that
term has in the Equal Credit Opportunity Act; and
‘‘(2) the term ‘self-testing’ means the practice
of hiring or otherwise arranging for individuals to
pose as applicants of the creditor to ascertain how
the creditor treats applicants for credit.’’.
SEC. 109. CONSUMER LEASING REQUIREMENTS.
(a) ADJUSTMENT OF DOLLAR AMOUNT IN DEFINI-
TION OF CONSUMER LEASE.—Section 181(1) of the Truth
in Lending Act (15 U.S.C. 1667(1)) is amended—
(1) by striking ‘‘$25,000’’ and inserting
‘‘$50,000’’; and
(2) by adding at the end the following: ‘‘The
dollar amount specified in this paragraph shall be
adjusted by the Board on January 1 of every fifth
year after the year in which this sentence becomes
effective to reflect changes in the Consumer Price
Index prepared by the Bureau of Labor Statistics,
Department of Labor, as such index is reported on
June 1 of the year preceding such adjustment, over
such index as reported on June 1 of the year preced-
ing the last such adjustment.’’.
(b) AMENDMENTS TO CONSUMER LEASE DISCLO-
SURE REQUIREMENTS.—Section 182 of the Truth in
Lending Act (15 U.S.C. 1667a)) is amended—
(1) in the 1st sentence by inserting ‘‘(a)’’ before
‘‘Each lessor’’;
(2) in subsection (a) (as designated by para-
graph (1) of this subsection), in paragraph (10) by
striking ‘‘and’’ after the semicolon, in paragraph
(11) by striking the period and inserting a semi-
colon, and by adding at the end the following new
paragraphs:
‘‘(12) Capitalized cost; and
‘‘(13) Residual value.’’; and
(3) by adding at the end the following new sub-
sections:
‘‘(b)(1) The lessor shall, to the extent applicable, sep-
arately disclose in a format described by the Board—
‘‘(A) the information specified in subsections
(a) (2), (3), (4), (9), (12), and (13);
‘‘(B) whether or not the lessee has the option
to purchase the leased property (pursuant to sub-
section (a)(5)); and
‘‘(C) in the case of such an option that must
be exercised at the end of the lease term, the price
at which the property may be purchased under the
option.
‘‘(2) The Board shall prescribe the format for disclo-
sures under paragraph (1). The Board shall prescribe a
format that minimizes lessee confusion about the terms
of leases and avoids duplicating disclosures under this sec-
tion.
‘‘(c) The Board may, by regulation, require the dis-
closure of information in addition to information otherwise
required to be disclosed under this section, and may mod-
ify any disclosure requirement under this subsection, if the
Board determines that such regulations are necessary to
carry out the purposes of, or prevent evasions of, this
chapter.’’.
SEC. 110. CERTAIN CHARGES.
(a) THIRD PARTY FEES.—Section 106(a) of the
Truth in Lending Act (15 U.S.C. 1605(a)) is amended
by adding after the 2d sentence the following new sen-
tence: ‘‘The finance charge shall not include fees and
amounts imposed by third party closing agents (including
settlement agents, attorneys, and escrow and title compa-
nies) if the creditor does not expressly require the imposi-
tion of the charges or the services provided and does not
retain the charges.’’.
(b) MORTGAGE BROKER FEES.—Section 106(a) of
the Truth in Lending Act (15 U.S.C. 1605(a)) is amended
by adding at the end the following new paragraph:
‘‘(6) Mortgage broker fees.’’.
(c) TAXES
ON SECURITY INSTRUMENTS
OR EVI-
DENCES
OF
INDEBTEDNESS.—Section 106(d) of the
Truth in Lending Act (15 U.S.C. 1605(d)) is amended
by adding at the end the following new paragraph:
‘‘(3) Any tax levied on security instruments or
on documents evidencing indebtedness if the pay-
ment of such taxes is a precondition for recording
the instrument securing the evidence of indebted-
ness.’’.
(d) PREPARATION OF LOAN DOCUMENTS.—Section
106(e)(2) of the Truth in Lending Act (15 U.S.C.
1605(e)(2)) is amended to read as follows:
‘‘(2) Fees for preparation of loan-related docu-
ments and for attending or conducting settlement.’’.
(e) FEES RELATING TO PEST INFESTATIONS, IN-
SPECTIONS, AND HAZARDS.—Section 106(e)(5) of the
Truth in Lending Act (15 U.S.C. 1605(e)(5)) is amended
by inserting ‘‘, including fees related to pest infestations,
premises and structural inspections, and flood hazards’’
before the period.
(f) ENSURING FINANCE CHARGES REFLECT COST OF
CREDIT.—
(1) REPORT.—
(A) IN
GENERAL.—Not later than 6
months after the date of the enactment of this
Act, the Board of Governors of the Federal Re-
serve System shall submit to the Congress a re-
port containing recommendations on any regu-
latory or statutory changes necessary—
(i) to ensure that finance charges im-
posed in connection with consumer credit
transactions more accurately reflect the
cost of providing credit; and
(ii) to address abusive refinancing
practices engaged in solely for the purpose
of avoiding rescission.
(B) REPORT REQUIREMENTS.—In prepar-
ing the report under this paragraph, the Board
shall—
(i) consider the extent to which it is
feasible to include in finance charges all
charges payable directly or indirectly by
the consumer to whom credit is extended,
and imposed directly or indirectly by the
creditor as an incident to the extension of
credit (especially those charges currently
excluded from finance charges under sec-
tion 106 of the Truth in Lending Act), ex-
cepting only those charges which are pay-
able in a comparable cash transaction; and
(ii) consult with and consider the
views of affected industries and consumer
groups.
(2) REGULATIONS.—The Board of Governors of
the Federal Reserve System shall prescribe any ap-
propriate regulation in order to effect any change in-
cluded in the report under paragraph (1), and shall
publish the regulation in the Federal Register before
the end of the 1-year period beginning on the date
of enactment of this Act.
SEC. 111. EXEMPTIONS FROM RESCISSION.
(a) CERTAIN REFINANCING.—Section 125(e) of the
Truth in Lending Act (15 U.S.C. 1635(e)) is amended—
(1) by striking ‘‘or’’ at the end of paragraph
(3);
(2) by striking the period at the end of para-
graph (4) and inserting ‘‘; or’’; and
(3) by adding at the end the following new
paragraph:
‘‘(5) a transaction, other than a mortgage re-
ferred to in section 103(aa), which—
‘‘(A) is a refinancing of the principal bal-
ance then due and any accrued and unpaid fi-
nance charges of a residential mortgage trans-
action as defined in section 103(w), or is any
subsequent refinancing of such a transaction;
and
‘‘(B) does not provide any new consolida-
tion or new advance.’’.
(b) TECHNICAL AND CONFORMING AMENDMENT.—
Section 125(e)(2) of the Truth in Lending Act (15 U.S.C.
1635(e)(2)) is amended by inserting ‘‘, other than a trans-
action described in subsection (e)(5),’’ after ‘‘a refinancing
or consolidation (with no new advances).’’.
SEC. 112. TOLERANCES; BASIS OF DISCLOSURES.
(a) TOLERANCES FOR ACCURACY.—Section 106 of
the Truth in Lending Act (15 U.S.C. 1605) is amended
by adding at the end the following new subsection:
‘‘(f) TOLERANCES FOR ACCURACY.—In connection
with credit transactions not under an open end credit plan
that are secured by real property or a dwelling, the disclo-
sure of the finance charge and other disclosures affected
by any finance charge—
‘‘(1) except as provided in paragraph (2), shall
be treated as being accurate for purposes of this
title if the amount disclosed as the finance charge—
‘‘(A) does not vary from the actual finance
charge by more than an amount equal to one-
half of the numerical tolerance corresponding
to, and generated by, the tolerance provided by
section 107(c) with respect to the annual per-
centage rate, but in no case may the tolerance
under this paragraph be less than $25 nor
greater than $200; or
‘‘(B) is greater than the amount required
to be disclosed under this title; and
‘‘(2) shall be treated as being accurate for pur-
poses of section 125 if the amount disclosed as the
finance charge does not vary from the actual finance
charge by more than an amount equal to one-half of
one percent of the total amount of credit extended.’’.
(b) BASIS OF DISCLOSURE FOR PER DIEM INTER-
EST.—Section 121(c) of the Truth in Lending Act (15
U.S.C. 1631(c)) is amended by adding at the end the fol-
lowing new sentence: ‘‘In the case of any consumer credit
transaction a portion of the interest on which is deter-
mined on a per diem basis and is to be collected upon
the consummation of such transaction, any disclosure with
respect to such portion of interest shall be deemed to be
accurate for purposes of this title if the disclosure is based
on information actually known to the creditor at the time
that the disclosure documents are being prepared for the
consummation of the transaction.’’.
SEC. 113. LIMITATION ON LIABILITY.
(a) IN GENERAL.—Chapter 2 of the Truth in Lend-
ing Act (15 U.S.C. 1631 et seq.) is amended by adding
at the end the following new section:
‘‘SEC. 139. CERTAIN LIMITATIONS ON LIABILITY.
‘‘(a) 
LIMITATIONS
ON
LIABILITY.—For 
any
consumer credit transaction subject to this title that is
consummated before the date of the enactment of the Fi-
‘‘(h) LIMITATION ON RESCISSION.—An obligor shall
have no rescission rights arising from the form of written
notice used by the creditor to inform the obligor of the
rights of the obligor under this section, if the creditor pro-
vided the obligor the appropriate form of written notice
published and adopted by the Board, or a comparable
written notice of the rights of the obligor, that was prop-
erly completed by the creditor.’’.
SEC. 115. CALCULATION OF DAMAGES.
Section 130(a)(2)(A) of the Truth in Lending Act
(15 U.S.C. 1640(a)(2)(A)) is amended—
(1) by striking ‘‘or (ii)’’ and inserting ‘‘(ii)’’;
and
(2) by inserting before the semicolon at the end
the following: ‘‘, or in the case of an individual ac-
tion relating to a credit transaction not under an
open end credit plan that is secured by real property
or a dwelling, not less than $250 nor greater than
$2,500’’.
SEC. 116. ASSIGNEE LIABILITY.
(a) VIOLATIONS APPARENT ON THE FACE OF TRANS-
ACTION DOCUMENTS.—Section 131 of the Truth in Lend-
ing Act (15 U.S.C. 1641) is amended by adding at the
end the following new subsection:
‘‘(e) LIABILITY OF ASSIGNEE FOR CONSUMER CRED-
IT TRANSACTIONS SECURED BY REAL PROPERTY.—
‘‘(1) IN GENERAL.—Except as otherwise specifi-
cally provided in this title, any civil action against
a creditor for a violation of this title, and any pro-
ceeding under section 108 against a creditor, with
respect to a consumer credit transaction secured by
real property may be maintained against any as-
signee of such creditor only if—
‘‘(A) the violation for which such action or
proceeding is brought is apparent on the face of
the disclosure statement, any itemization of the
amount financed, or any other disclosure of dis-
bursement, provided in connection with such
transaction pursuant to this title; and
‘‘(B) the assignment to the assignee was
voluntary.
‘‘(2) VIOLATION APPARENT ON THE FACE OF
THE DISCLOSURE DESCRIBED.—For the purpose of
this section, a violation is apparent on the face of
the disclosure statement if—
‘‘(A) the disclosure can be determined to
be incomplete or inaccurate from the face of the
disclosure statement; or
‘‘(B) the disclosure does not use the terms
or format required to be used by this title.’’.
(b) SERVICER NOT TREATED AS ASSIGNEE.—Section
131 of the Truth in Lending Act (15 U.S.C. 1641) is
amended by adding at the end the following new sub-
section:
‘‘(d) TREATMENT OF SERVICER.—
‘‘(1) IN GENERAL.—A servicer of a consumer
obligation arising from a consumer credit trans-
action shall not be treated as an assignee of such ob-
ligation for purposes of this section unless the
servicer is the owner of the obligation.
‘‘(2) SERVICER NOT TREATED AS OWNER ON
BASIS OF ASSIGNMENT FOR ADMINISTRATIVE CON-
VENIENCE.—A servicer of a consumer obligation
arising from a consumer credit transaction shall not
be treated as the owner of the obligation for pur-
poses of this section on the basis of an assignment
of the obligation from the creditor or another as-
signee to the servicer solely for the administrative
convenience of the servicer in servicing the obliga-
tion. Upon written request by the obligor, the
servicer shall provide the obligor, to the best knowl-
edge of the servicer, with the name, address, and
telephone number of the owner of the obligation or
the master servicer of the obligation.
‘‘(3) SERVICER DEFINED.—For purposes of this
subsection, the term ‘servicer’ has the same meaning
as in section 6(i)(2) of the Real Estate Settlement
Procedures Act of 1974.’’.
SEC. 117. RESCISSION RIGHTS IN FORECLOSURE.
Section 125 of the Truth in Lending Act (15 U.S.C.
1635), as amended by section 114, is further amended by
adding at the end the following new subsection:
‘‘(i) RESCISSION RIGHTS IN FORECLOSURE.—
‘‘(1) IN
GENERAL.—Notwithstanding section
139, and subject to the time period provided in sub-
section (f), in addition to any other right of rescis-
sion available under this section for a transaction,
upon an action of a creditor to execute foreclosure
on the primary dwelling of an obligor securing an
extension of credit the obligor shall have a right to
rescind the transaction equivalent to other rescission
rights provided by this section, if—
‘‘(A) a mortgage brokers fee is not in-
cluded in the finance charge in accordance with
the laws and regulations in effect at the time
the consumer credit transaction was con-
summated; or
‘‘(B) the form of notice of rescission for
the transaction is not the appropriate form of
written notice published and adopted by the
Board or a comparable written notice, or was
not properly completed by the creditor.
‘‘(2) TOLERANCE FOR DISCLOSURES.—Notwith-
standing section 106(f), and subject to the time pe-
riod provided in subsection (f), for the purposes of
exercising any rescission rights following an action
by a creditor to foreclose on the principal dwelling
of the obligor securing an extension of credit, the
disclosure of the finance charge and other disclo-
sures affected by any finance charge shall be treated
as being accurate for purposes of this section if the
amount disclosed as the finance charge does not
vary from the actual finance charge by more than
$35.’’.
SEC. 118. APPLICABILITY.
The amendments made by subsections (a), (c), (d),
and (e) of section 110 and sections 112, 116, and 117
shall apply to all consumer credit transactions in existence
or consummated after the date of the enactment of this
Act.
TITLE II—STREAMLINING MIS-
CELLANEOUS 
DEPOSITORY
INSTITUTION REQUIREMENTS
SEC. 201. 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 as follows—
(1) in paragraph (1), strike ‘‘No’’ and insert in
its place ‘‘Except as provided in paragraph (3), no’’;
and
(2) add at the end the following new para-
graphs:
‘‘(3) NO
NOTICE
REQUIRED
FOR
CERTAIN
TRANSACTIONS.—No notice under paragraph (1) or
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.—
‘‘(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.—
‘‘(I) IN
GENERAL.—No insured
depository institution controlled by
the acquiring bank holding company
has received one of the lowest two
composite ratings at the later of the
institution’s most recent examination
or subsequent review.
‘‘(II) RECENTLY
ACQUIRED
IN-
STITUTIONS.—Insured depository in-
stitutions acquired by the bank hold-
ing company within the previous
twelve months may be excluded for
purposes of subclause (I) if—
‘‘(aa) the bank holding com-
pany has developed a plan ac-
ceptable to the appropriate Fed-
eral banking agency (as defined
in section 3 of the Federal De-
posit Insurance Act) for the insti-
tution to restore the capital and
management of the institution;
and
‘‘(bb) all such insured depos-
itory institutions represent, in
the aggregate, less than 10 per-
cent of the aggregate total risk-
weighted assets of all insured de-
pository institutions controlled by
the bank holding company.
‘‘(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,
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 acquired does not exceed
10 percent of the consolidated total risk-
weighted assets of the acquiring bank hold-
ing 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, prior to the
conclusion of the period provided in paragraph
(5)(B), advised the bank holding company that
a notice under paragraph (1) is required.
‘‘(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 10 business days after commencing
the activity.
‘‘(B) ACTIVITIES
PERMITTED
BY
ORDER
AND
ACQUISITIONS.—At least twelve business
days prior to commencing any activity pursuant
to paragraph (3) other than an activity de-
scribed in subparagraph (A) or acquiring shares
or assets of any company pursuant to para-
graph (3), the bank holding company must pro-
vide the Board written notification of the pro-
posal, unless the Board determines that no no-
tice or a shorter notice period is appropriate. A
notification under this subparagraph must in-
clude a description of the proposed activities
and the terms of any proposed acquisition.
‘‘(C) ACQUISITIONS OF SAVINGS ASSOCIA-
TIONS.—
‘‘(i) IN
GENERAL.—Notwithstanding
subparagraphs (A) and (B), a bank hold-
ing company that qualifies under para-
graph (4) and that proposes to acquire the
shares or assets of a savings association,
shall, at least thirty days prior to the ac-
quisition—
‘‘(I) provide the Board written
notification of the proposal, and
‘‘(II) publish notice of the pro-
posal in a newspaper of general cir-
culation in the affected communities
for the purpose of soliciting comments
on performance under the Community
Reinvestment Act of 1977.
‘‘(ii) CONTENTS OF NOTICE.—Notifi-
cation to the Board under this subpara-
graph must include a description of the
proposed activities and the terms of any
proposed acquisition.
‘‘(iii) APPLICATION
REQUIRED.—The
Board shall require an application under
paragraph (1) or subsections (c)(8) or
(a)(2)(B) for the purpose of reviewing the
application pursuant to the Community
Reinvestment Act of 1977 if it receives an
adverse public comment during the notice
period that raises relevant issues, as deter-
mined by the Board, under the Community
Reinvestment Act of 1977.’’.
(b) DEFINITIONS.—Section 2(o) of the Bank Holding
Company Act (12 U.S.C. 1841) 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-
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.—
‘‘(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.—A company or deposi-
tory institution is ‘well managed’ if, at its most re-
cent examination or subsequent review, the company
or institution received—
‘‘(A) one of the highest two composite rat-
ings; and
‘‘(B) at least a satisfactory rating for man-
agement, if such rating is given.’’.
SEC. 202. STREAMLINED BANK ACQUISITIONS BY WELL
CAPITALIZED AND WELL MANAGED BANKING
ORGANIZATIONS.
(a) BANK HOLDING COMPANY ACT AMENDMENTS.—
Section 3 of the Bank Holding Company Act (12 U.S.C.
1842) is amended by adding at the end the following new
subsection:
‘‘(h) NO APPROVAL REQUIRED FOR CERTAIN TRANS-
ACTIONS.—Notwithstanding subsection (a)(3) or (a)(5),
an acquisition of shares by a registered bank holding com-
pany, or a merger or consolidation between registered
bank holding companies, shall be deemed approved at the
conclusion of the period specified in paragraph (7) if the
following conditions are met:
‘‘(1) FINANCIAL AND MANAGERIAL CRITERIA.—
‘‘(A) WELL CAPITALIZED BANK HOLDING
COMPANY.—Both at the time of and imme-
diately after the proposed transaction, the ac-
quiring bank holding company is well capital-
ized.
‘‘(B) WELL CAPITALIZED LEAD INSURED
DEPOSITORY INSTITUTION.—Both at the time
of and immediately after the proposed trans-
action, the lead insured depository institution of
the acquiring bank holding company is well cap-
italized.
‘‘(C) CAPITAL OF OTHER INSURED DEPOSI-
TORY INSTITUTIONS.—At the time of the trans-
action, well capitalized insured depository insti-
tutions control at least 80 percent of the aggre-
gate total risk-weighted assets of insured depos-
itory institutions controlled by the acquiring
bank holding company.
‘‘(D) NO
UNDERCAPITALIZED
INSURED
DEPOSITORY INSTITUTIONS.—At the time of the
transaction, no insured depository institution
controlled by the acquiring bank holding com-
pany is undercapitalized.
‘‘(E) WELL MANAGED.—
‘‘(i) IN GENERAL.—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) NO POORLY MANAGED INSTITU-
TIONS.—
‘‘(I) IN
GENERAL.—No insured
depository institution controlled by
the acquiring bank holding company
has received one of the lowest two
composite ratings at the later of the
institution’s most recent examination
or subsequent review.
‘‘(II) RECENTLY
ACQUIRED
IN-
STITUTIONS.—Insured depository in-
stitutions acquired by the bank hold-
ing company within the previous
twelve months may be excluded for
purposes of subclause (I) if—
‘‘(aa) the bank holding com-
pany has developed a plan ac-
ceptable to the appropriate Fed-
eral banking agency (as defined
in section 3 of the Federal De-
posit Insurance Act) for the insti-
tution to restore the capital and
management of the institution;
and
‘‘(bb) all such insured depos-
itory institutions represent, in
the aggregate, less than 10 per-
cent of the aggregate total risk-
weighted assets of all insured de-
pository institutions controlled by
the holding company.
‘‘(2) NO UNSATISFACTORY CRA RATINGS.—
‘‘(A) IN GENERAL.—No insured depository
institution controlled by the acquiring bank
holding company has received a ‘needs to im-
prove’ or ‘substantial noncompliance’ composite
rating at its most recent examination under the
Community Reinvestment Act of 1977.
‘‘(B) 
RECENTLY
ACQUIRED
INSTITU-
TIONS.—Insured depository institutions ac-
quired by such bank holding company within
the previous twelve months may be excluded for
purposes of subparagraph (A) if the bank hold-
ing company has developed a plan acceptable to
the appropriate Federal banking agency (as de-
fined in section 3 of the Federal Deposit Insur-
ance Act) to restore the performance of the in-
stitution to at least a ‘satisfactory’ rating under
the Community Reinvestment Act of 1977.
‘‘(3) COMPETITIVE
CRITERIA.—Consummation
of the proposal complies with guidelines 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 competition in any relevant market.
‘‘(4) SIZE OF ACQUISITION.—
‘‘(A) LIMITATION
ON
ASSET
SIZE.—The
book value of the total assets acquired does not
exceed 10 percent of the consolidated total risk
weighted assets of the acquiring bank holding
company.
‘‘(B) ADJUSTMENT TO LIMITATIONS.—The
Board may by regulation adjust the limitations
established in this paragraph in a manner con-
sistent with safety and soundness and the pur-
poses of this Act.
‘‘(5) INTERSTATE
ACQUISITIONS.—Board ap-
proval of the transaction is not prohibited under
subsection (d).
‘‘(6) OTHER
CONSIDERATIONS.—Board ap-
proval of the transaction is not prohibited under
subsection (c)(3).
‘‘(7) NOTIFICATION.—
‘‘(A) IN
GENERAL.—The acquiring bank
holding company publishes notice of the appli-
cation in a newspaper of general circulation in
the affected communities and provides the
Board and the Attorney General with written
notice of the transaction, including a descrip-
tion of the terms of the transaction, at least
30 business days before consummation of the
transaction, and, prior to the conclusion of that
period, the Board has not required an applica-
tion under subsection (a) and the Attorney
General has not objected to the transaction.
‘‘(B) 
APPLICATION
REQUIRED.—The
Board shall have the discretion to require an
application under subsection (a) as the Board
deems appropriate, except that the Board shall
require an application under subsection (a) for
the purpose of reviewing the application pursu-
ant to the Community Reinvestment Act of
1977 if the Board receives an adverse public
comment during the notice period that raises
relevant issues, as determined by the Board,
under the Community Reinvestment Act of
1977.’’
SEC. 203. STREAMLINING BANK MERGERS.
Section 18(c) of the Federal Deposit Insurance Act
(12 U.S.C. 1828(c)) is amended—
(1) in paragraph (4), by striking all that follows
after ‘‘report on the competitive factors involved
from the Attorney General and’’ and inserting the
following: ‘‘give notice to the other agencies that are
referred to in paragraph (2) that such a report has
been requested. The responsible agency shall not be
required to request a report or give notice with re-
spect to: (A) a merger with an interim institution or-
ganized solely to facilitate a corporate reorganization
that does not result in a change in control of an in-
stitution; or (B) a merger transaction involving only
insured depository institutions that are subsidiaries
of the same depository institution holding company.
The Attorney General shall furnish the report within
30 calendar days of the date on which it is re-
quested, or within 10 calendar days if the respon-
sible agency advises the Attorney General that an
emergency exists requiring expeditious action. If the
Attorney General determines that a proposed trans-
action raises a significant competitive issue, the At-
torney General shall provide all agencies defined in
paragraph (2) with a copy of the report. Nothing in
this subsection shall prohibit an agency that has re-
ceived notice that a report has been requested from
the Attorney General from also furnishing a report
to the responsible agency within the same time pe-
riod as provided for the Attorney General.’’; and
(2) by striking paragraph (6) and inserting the
following new paragraph:
‘‘(6) The responsible agency shall immediately
notify the Attorney General of any approval by it
pursuant to this subsection of a proposed merger
transaction, provided that such notification shall not
be required with respect to a merger involving an in-
terim or affiliated institution as described in sub-
paragraph (A) or (B) of paragraph (4). If a report
on the competitive factors is not necessary pursuant
to any such subparagraph, or if the agency has
found that it must act immediately in order to pre-
vent the probable failure of one of the banks or sav-
ings associations involved and the report has been
dispensed with, the transaction may be con-
summated immediately upon approval by the agency.
If the agency has advised the Attorney General of
the existence of an emergency requiring expeditious
action and has requested a report on the competitive
factors within 10 days and given notice to the other
agencies that a report was requested, the transaction
may be consummated after the 5th calendar day
after the date of approval by the agency. In all other
cases, the transaction may not be consummated be-
fore the 30th calendar day after the date of approval
by the agency, or such shorter period of time as may
be prescribed by the agency with the concurrence of
the Attorney General, but in no event less than 15
calendar days after the date of approval.’’.
SEC. 204. ELIMINATE REDUNDANT APPROVAL REQUIRE-
MENT FOR OAKAR TRANSACTIONS.
Section 5(d)(3) of the Federal Deposit Insurance Act
(12 U.S.C. 1815(d)(3)) is amended—
(1) in subparagraph (A), by striking ‘‘with the
prior written approval of the responsible agency
under section 18(c)(2)’’ and inserting ‘‘if the trans-
action is approved under section 18(c)(2) by the re-
sponsible agency (as defined in paragraph (2) of
such section)’’;
(2) in subparagraph (E)—
(A) by striking clause (iv) and inserting
the following new clause:
‘‘(iv) A transaction described in this
paragraph shall not be approved unless the
acquiring, assuming, or resulting deposi-
tory institution will meet all applicable cap-
ital requirements upon consummation of
the transaction.’’;
(B) by striking clause (ii); and
(C) by redesignating clauses (iii) and (iv)
as clauses (ii) and (iii), respectively; and
(3) by striking subparagraph (G) and redesig-
nating the subsequent subparagraphs accordingly.
SEC. 205. REGULATION OF HOLDING COMPANIES CON-
TROLLING BANKS AND SAVINGS ASSOCIA-
TIONS.
(a) HOME OWNERS’ LOAN ACT.—Section 10 of the
Home Owners’ Loan Act (12 U.S.C. 1467a) is amended
by adding the following new subsection:
‘‘(t) COORDINATED AND UNIFIED REQUIREMENTS
FOR DUAL HOLDING COMPANIES.—Not later than 1 year
after the date of the enactment of the Financial Institu-
tions Regulatory Relief Act of 1995, the Director and the
Board of Governors of the Federal Reserve System shall
jointly issue regulations for coordinating and unifying re-
quirements that are imposed on companies that are sub-
ject both to this section and the Bank Holding Company
Act of 1956, consistent with the requirements of existing
law, including a system for the coordination of examina-
tions and oversight of companies that are subject to both
Acts and a unified application requirement that applies
to bank holding company acquisitions of savings associa-
tions.’’.
(b) BANK HOLDING COMPANY ACT OF 1956.—Sec-
tion 3 of the Bank Holding Company Act of 1956 (12
U.S.C. 1842) is amended by adding at the end the follow-
ing new subsection:
‘‘(h) COORDINATED AND UNIFIED REQUIREMENTS
FOR DUAL HOLDING COMPANIES.—Not later than 1 year
after the date of the enactment of the Financial Institu-
tions Regulatory Relief Act of 1995, the Board and the
Director of the Office of Thrift Supervision shall jointly
issue regulations for coordinating and unifying require-
ments that are imposed on companies that are subject
both to this Act and section 10 of the Home Owners’ Loan
Act, consistent with the requirements of existing law, in-
cluding a system for the coordination of examinations and
oversight of companies that are subject to both Acts and
a unified application requirement that applies to bank
holding company acquisitions of savings associations.’’.
SEC. 206. ELIMINATE REQUIREMENT THAT APPROVAL BE
OBTAINED FOR DIVESTITURES.
Section 2(g) of the Bank Holding Company Act (12
U.S.C. 1841(g)) is amended—
(1) by striking paragraph (3);
(2) by inserting ‘‘and’’ after paragraph (1); and
(3) by striking ‘‘; and’’ at the end of paragraph
(2) and inserting a period.
SEC. 207. ELIMINATE UNNECESSARY BRANCH APPLICA-
TIONS.
(a) NATIONAL BANK BRANCH APPLICATIONS.—Sec-
tion 5155(i) of the Revised Statutes (12 U.S.C. 36(i)) is
amended—
(1) by striking ‘‘No branch’’ and inserting the
following:
‘‘(1) APPROVAL
REQUIRED.—Except as pro-
vided in paragraph (2), no branch’’; and
(2) by adding at the end the following new
paragraphs:
‘‘(2) NO
APPROVAL
REQUIRED
FOR
CERTAIN
BRANCHES.—Notwithstanding this subsection or
subsection (b) or (c) and subject to paragraph (3),
the consent and approval of the Comptroller of the
Currency shall not be required for a national bank-
ing association to establish and operate, or to retain
and operate, a branch or seasonal agency if—
‘‘(A) the association is well capitalized, as
that term is defined in section 38 of the Fed-
eral Deposit Insurance Act and regulations pre-
scribed by the Comptroller of the Currency
under such section;
‘‘(B) the association received a composite
CAMEL rating of ‘1’ or ‘2’ under the Uniform
Financial Institutions Rating System (or an
equivalent rating under a comparable rating
system) as of its most recent examination;
‘‘(C) the association did not receive a
‘needs to improve’ or substantial noncompliance
composite rating at its most recent examination
under the Community Reinvestment Act of
1977;
‘‘(D) the association publishes a notice of
the proposed branch in a newspaper of general
circulation in the affected community, in ac-
cordance with the Comptroller of the Currency’s
rules governing the establishment of branches,
which shall invite interested parties to submit
comments to the Comptroller on the perform-
ance of the association under the Community
Reinvestment Act of 1977; and
‘‘(E) the Comptroller of the Currency may
grant approval under this section to such asso-
ciation to establish and operate, or to retain
and operate, a branch or seasonal agency at the
proposed location and the Comptroller does not
determine, prior to the expiration of the com-
ment period provided in subparagraph (D), that
the association is not meeting the credit needs
of its entire community consistent with the safe
and sound operation of such institution.
‘‘(3) EXCEPTION.—Paragraph (2) shall not
apply if the Comptroller receives an adverse public
comment during the notice period provided in (2)(D)
that raises relevant issues, as determined by the
Comptroller, under the Community Reinvestment
Act of 1977.
‘‘(4) A branch or seasonal agency established by
a national banking association under paragraph (2)
shall be deemed to have been established and oper-
ated pursuant to an application approved under this
section.’’.
(b) STATE
MEMBER
BANK
BRANCH
APPLICA-
TIONS.—The 3d undesignated paragraph of section 9 of
the Federal Reserve Act (12 U.S.C. 321) is amended by
adding at the end the following: ‘‘Notwithstanding the pre-
vious two sentences, the approval of the Board shall not
be required for a State member bank to establish and op-
erate a branch or seasonal agency if—
‘‘(A) the State member bank is well cap-
italized, as that term is defined in section 38 of
the Federal Deposit Insurance Act and regula-
tions prescribed by the Board under such sec-
tion;
‘‘(B) the State member bank received a
composite CAMEL rating of ‘1’ or ‘2’ under the
Uniform Financial Institutions Rating System
(or an equivalent rating under a comparable
rating system);
‘‘(C) the State member bank did not re-
ceive a ‘needs to improve’ or substantial non-
compliance composite rating at its most recent
examination under the Community Reinvest-
ment Act of 1977;
‘‘(D) the State member bank publishes a
notice of the proposed branch in a newspaper of
general circulation in the affected community,
in accordance with the Board’s rules governing
the establishment of branches, which shall in-
vite interested parties to submit comments to
the Board on the performance of the State
member bank under the Community Reinvest-
ment Act of 1977; and
‘‘(E) the Board is authorized to grant ap-
proval under this section to such State member
bank to establish and operate a branch or sea-
sonal agency at the proposed location and the
Board does not determine, before the expiration
of the comment period provided in subpara-
graph (D), that the State member bank is not
meeting the credit needs of its entire commu-
nity consistent with its the safe and sound oper-
ation.
The preceding sentence shall not apply if the Board
receives an adverse public comment during the no-
tice period referred to in subparagraph (D) that
raises relevant substantive issues, as determined by
the Board, under the Community Reinvestment Act
of 1977. A branch or seasonal agency established by
a State member bank under the 2d preceding sen-
tence shall be deemed to have been established and
operated pursuant to an application approved under
this section.’’.
(c) STATE NONMEMBER BANK BRANCH APPLICA-
TIONS.—Section 18(d) of the Federal Deposit Insurance
Act (12 U.S.C. 1828(d)) is amended by adding at the end
the following new paragraphs:
‘‘(5) APPLICATION
EXEMPTION
FOR
CERTAIN
BANKS.—Notwithstanding paragraph (1), the con-
sent of the Corporation shall not be required for a
State nonmember insured bank to establish and op-
erate any domestic branch if—
‘‘(A) the bank is well capitalized, as that
term is defined in section 38 and regulations
prescribed by the Corporation under such sec-
tion;
‘‘(B) the bank received a composite
CAMEL rating of ‘1’ or ‘2’ under the Uniform
Financial Institutions Rating System (or an
equivalent rating under a comparable rating
system) as of its most recent examination;
‘‘(C) the bank did not receive a ‘needs to
improve’ or substantial noncompliance compos-
ite rating at its most recent examination under
the Community Reinvestment Act of 1977;
‘‘(D) the bank publishes a notice of the
proposed branch in a newspaper of general cir-
culation in the affected community, in accord-
ance with the Corporation’s rules governing the
establishment of branches, which shall invite in-
terested parties to submit comments to the Cor-
poration on the performance of the bank under
the Community Reinvestment Act of 1977; and
‘‘(E) the Corporation is authorized to give
consent under this section to such bank to es-
tablish and operate a domestic branch at the
proposed location and the Corporation does not
determine, prior to the expiration of the com-
ment period provided in subparagraph (D), that
the bank is not meeting the credit needs of its
entire community consistent with the safe and
sound operation of such institution.
‘‘(6) EXCEPTION.—Paragraph (5) shall not
apply if the Corporation receives an adverse public
comment during the notice period provided in (5)(D)
that raises relevant issues, as determined by the
Corporation, under the Community Reinvestment
Act of 1977.
‘‘(7) APPROVAL
GRANTED.—A branch estab-
lished by a State member bank under paragraph (5)
shall be deemed to have been established and oper-
ated pursuant to an application approved under this
section.’’.
SEC. 208. ELIMINATE BRANCH APPLICATIONS AND RE-
QUIREMENTS FOR ATMs AND SIMILAR FA-
CILITIES.
(a) DEFINITION
OF BRANCH UNDER NATIONAL
BANK ACT.—Section 5155(j) of the Revised Statutes (12
U.S.C. 36(j)) is amended by adding at the end the follow-
ing: ‘‘The term ‘branch’ does not include automated teller
machines or remote service units.’’.
(b) DEFINITION OF BRANCH UNDER FEDERAL DE-
POSIT INSURANCE ACT.—Section 3(o) of the Federal De-
posit Insurance Act (12 U.S.C. 1813(o)) is amended by
striking ‘‘lent; and the’’ and inserting ‘‘lent. The term ‘do-
mestic branch’ does not include automated teller machines
or remote service units. The’’.
SEC. 209. AGENCY WAIVER AUTHORITY FOR OFFICER AND
DIRECTOR FILINGS.
Section 32(d) of the Federal Deposit Insurance Act
(12 U.S.C. 1831i(d)) is amended to read as follows:
‘‘(d) ADDITIONAL INFORMATION.—
‘‘(1) IN GENERAL.—Any notice submitted to an
appropriate Federal banking agency with respect to
an individual by any insured depository institution
or depository institution holding company pursuant
to subsection (a) shall include—
‘‘(A) the information described in section
7(j)(6)(A) about the individual; and
‘‘(B) such other information as the agency
may prescribe by regulation.
‘‘(2) WAIVER ON CASE BY CASE BASIS.—An ap-
propriate Federal banking agency may waive the re-
quirement of this subsection with respect to informa-
tion described in paragraph (1) on a case-by-case
basis.’’.
SEC. 210. ELIMINATE THE PER-BRANCH CAPITAL REQUIRE-
MENT FOR NATIONAL BANKS AND STATE
MEMBER BANKS.
Section 5155 of the Revised Statutes (12 U.S.C. 36)
is amended by striking subsection (h).
SEC. 
211. 
EXPANDED 
REGULATORY 
DISCRETION 
FOR
SMALL BANK EXAMINATIONS.
Section 10(d)(8) of the Federal Deposit Insurance
Act (12 U.S.C. 1820(d)(8)) is amended by striking
‘‘$175,000,000’’ and inserting ‘‘$250,000,000’’.
SEC. 212. IDENTIFICATION OF FOREIGN NONBANK FINAN-
CIAL INSTITUTION CUSTOMERS.
(a) IN GENERAL.—Section 5327(a)(1) of title 31,
United States Code, is amended to read as follows:
‘‘(1) is a financial institution (other than a for-
eign bank (as defined in section 101(b) of the Inter-
national Banking Act of 1978)) which is a foreign
person; and’’.
(b) TECHNICAL AND CONFORMING AMENDMENT.—
The heading for section 5327 of title 31, United States
Code, is amended by inserting ‘‘FOREIGN NONBANK’’
after ‘‘OF’’.
(c) CLERICAL AMENDMENT.—The table of sections
for chapter 53 of title 31, United States Code, is amended
by striking the item relating to section 5327 and inserting
the following new item:
‘‘5327. Identification of foreign nonbank financial institutions.’’.
SEC. 213. REQUIRED REGULATORY REVIEW OF REGULA-
TIONS.
(a) IN GENERAL.—The Financial Institutions Exam-
ination Council, each appropriate Federal banking agency,
and the National Credit Union Administration Board
shall, within every 10-year period, conduct a review of all
of the regulations issued pursuant to the Council’s author-
ity or the authority of any such agency or the Board to
identify outdated or otherwise unnecessary regulatory re-
quirements imposed upon insured depository institutions.
(b) PROCESS.—In conducting the review required
under subsection (a), the Council, each appropriate Fed-
eral banking agency, and the National Credit Union Ad-
ministration Board shall—
(1) categorize such regulations by type (such as
consumer regulations, safety and soundness regula-
tions, or such other designation as determined by
the Council); and
(2) at regular intervals, provide notice and so-
licit public comment on a particular category or cat-
egories of regulations, requesting commentators to
identify areas of such regulations considered out-
dated, unnecessary, or unduly burdensome.
The Council, each appropriate Federal banking agency,
and the National Credit Union Administration Board
shall, over a 10-year period, ensure that all categories of
regulations have been set out for notice and comment.
(c) REGULATORY RESPONSE.—The Council, the ap-
propriate Federal banking agency, or the National Credit
Union Administration Board shall—
(1) publish in the Federal Register a summary
of the comments received pursuant to this section,
identifying significant issues raised and providing
comment on such issues; and
(2) eliminate unnecessary regulations wherever
appropriate.
(d) REPORT TO CONGRESS.—The Council shall, with-
in 30 days of publishing the summary required under sub-
section (c)(1), provide a report to the Congress summariz-
ing any significant issues raised during such comment pe-
riod, the relative merits of such issues, and whether the
appropriate Federal banking agency involved can address
the regulatory burdens associated with such issues by reg-
ulation, or whether such concerns can only be addressed
by legislation.
(e) DEFINITIONS.—For purposes of this section, the
terms ‘‘insured depository institution’’ and ‘‘appropriate
Federal banking agency’’ have the same meanings as in
section 3 of the Federal Deposit Insurance Act.
SEC. 214. FOREIGN BANK APPLICATIONS.
(a) IN GENERAL.—Section 7(d) of the International
Banking Act of 1978 (12 U.S.C. 3105(d)) is amended—
(1) by striking paragraphs (1) and (2) and in-
serting the following new paragraphs:
‘‘(1) PRIOR REVIEW REQUIRED.—
‘‘(A) IN GENERAL.—After the appropriate
State Bank supervisor or the Comptroller of the
Currency has approved an application of a for-
eign bank to establish a branch or an agency,
or acquire ownership or control of a commercial
lending company, the application shall be re-
viewed by the Board for a period of not more
than 60 days.
‘‘(B) REFERRAL
TO
THE
BOARD.—Upon
receiving an application of a foreign bank to es-
tablish a State branch or State agency or com-
mercial lending company, the appropriate State
bank supervisor shall forward a copy of the ap-
plication to the Board for review.
‘‘(C) REQUIRED
STANDARDS
FOR
AP-
PROVAL.—Except as provided by subparagraphs
(D) and (E), the Board may not approve or
recommend approval of an application of a for-
eign bank unless it determines that—
‘‘(i) the foreign bank engages directly
in the business of banking outside the
United States and is subject to comprehen-
sive supervision or regulation on a consoli-
dated basis by the appropriate authorities
in its home country; and
‘‘(ii) the foreign bank has furnished to
the Board the information it needs to ade-
quately assess the application.
‘‘(D) LIMITED EXCEPTION FOR FOREIGN
BANKS NOT SUBJECT TO COMPREHENSIVE SU-
PERVISION.—The Board, in its discretion, may
approve or recommend approval of an applica-
tion of a foreign bank that the Board deter-
mines is not subject to comprehensive super-
vision or regulation on a consolidated basis if—
‘‘(i) the foreign bank engages directly
in the business of banking outside the
United States and has, as of the date of
the application, established and operated a
branch, agency, or commercial lending
company in the United States that is not
the subject of an ongoing enforcement ac-
tion by any State or Federal bank regu-
latory agency;
‘‘(ii) the Board determines that the
foreign bank will make adequate financial
resources available to support the proposed
operation of the applicant; and
‘‘(iii) the Board determines that the
foreign bank is subject to substantial su-
pervision or regulation on a consolidated
basis by the appropriate authorities in its
home country, and continues to make de-
monstrable progress toward establishing
arrangements for comprehensive super-
vision or regulation of its banks on a con-
solidated basis.
‘‘(E) EXEMPTION.—The Board, in its dis-
cretion, may approve or recommend approval of
an application without applying the criteria in
subparagraph (C)(i) which requires the Board
to determine that the foreign bank application
is subject to comprehensive supervision or regu-
lation on a consolidated basis if—
‘‘(i) the Board has previously ap-
proved or recommended approval of an ap-
plication of a foreign bank that is from the
same country and is of the same class of
banking entities as the current applicant;
and
‘‘(ii) at the time it approved or rec-
ommended approval of the previous appli-
cation, the Board made the determination
required in subparagraph (C)(i).
‘‘(2) AUTHORITY OF THE BOARD.—
‘‘(A) DECISION ON APPLICATION.—Based
on its review of an application submitted to it
pursuant to paragraph (1)(A), the Board
may—
‘‘(i) with respect to an application
submitted to it for review by the appro-
priate State bank supervisor, confirm the
approval of or deny the application; or
‘‘(ii) with respect to an application
submitted to it for review by the Comptrol-
ler of the Currency, recommend to the
Comptroller that the approval be confirmed
or denied.
‘‘(B) EXTENSION
OF
REVIEW
PERIOD.—
The Board is authorized to extend the review
period provided in paragraph (1)(A) for an ad-
ditional 60 days after providing notice of and
the reasons for the extension to the applicant
and any appropriate State bank supervisor or
the Comptroller of the Currency.
‘‘(C) REASONS FOR DISAPPROVAL.—If the
Board denies an application or recommends
that an application be denied, the Board shall
provide an explanation of its reasons to the ap-
propriate State bank supervisor or the Comp-
troller of the Currency, as appropriate.’’.
(b) REGULATORY SIMPLIFICATION.—Section 4 of the
International Banking Act of 1978 (12 U.S.C. 3102) is
amended—
(1) in subsection (a)—
(A) by amending paragraph (2) to read as
follows:
‘‘(2) REVIEW BY THE BOARD.—Upon receipt of
an application for approval under this subsection,
the Comptroller shall forward the application to the
Board for its review in accordance with section
7(d).’’; and
(B) by adding at the end the following new
paragraph:
‘‘(3) BOARD RECOMMENDATIONS REQUIRED TO
BE CONSIDERED.—In considering an application for
approval under this subsection, the Comptroller of
the Currency shall consider any recommendation
made by the Board under section 7(d).’’;
(2) in subsection (c)—
(A) by striking ‘‘(c) In acting on any appli-
cation’’ and inserting ‘‘(c) ADDITIONAL FAC-
TORS.—
‘‘(1) IN GENERAL.—In acting on any applica-
tion’’; and
(B) by adding at the end the following new
paragraph:
‘‘(2) ADDITIONAL CRITERIA.—In act-
ing on any application to establish a Fed-
eral branch or agency, the Comptroller also
shall apply the standards that the Board
applies under section 7(d).’; and
(3) by striking subsection (d) and inserting the
following new subsection:
‘‘(d) FEDERAL AGENCIES.—
‘‘(1) IN GENERAL.—Notwithstanding any other
provisions of this section, a foreign bank shall not
receive deposits from citizens or residents of the
United States or exercise fiduciary powers at any
Federal agency.
‘‘(2) EXCEPTION.—A foreign bank may main-
tain at a Federal agency for the account of others
‘‘(B) RELIANCE
ON
PRIMARY
SUPER-
VISOR.—In order to avoid unnecessary duplica-
tion and cost, the Board shall, to the extent
practicable, rely upon the reports of examina-
tions made by the Comptroller, the Federal De-
posit Insurance Corporation, or the appropriate
State bank supervisor in achieving the purposes
of this subsection.’’
‘‘(C) 
ON-SITE
EXAMINATION.—Each
branch or agency of a foreign bank shall be
subject to on-site examination on the same
schedule that a comparable national or State
nonmember bank would be examined by the
Comptroller of the Currency or the Federal De-
posit Insurance Corporation.’’.
SEC. 216. AMENDMENTS TO THE DEPOSITORY INSTITU-
TIONS MANAGEMENT INTERLOCKS ACT.
(a) DUAL SERVICE OF OUTSIDE COUNSEL AND AC-
COUNTANTS ON BOARD OF DIRECTORS PROHIBITED.—
The Depository Institution Management Interlocks Act
(12 U.S.C. 3201 et seq.) is amended by adding at the end
the following new section:
‘‘SEC. 211. DUAL SERVICE OF OUTSIDE COUNSEL AND AC-
COUNTANTS ON BOARD OF DIRECTORS PRO-
HIBITED.
‘‘(a) IN GENERAL.—No individual who is an outside
counsel or outside accountant of a depository institution
or a depository holding company may serve as a member
of board of directors of that depository institution or de-
pository holding company or of any affiliate of any such
institution or company.
‘‘(b) EXCEPTION FOR SMALL INSTITUTIONS.—This
section shall not apply with respect to any depository insti-
tution the total assets of which do not exceed
$250,000,000.’’.
(b) OWNERSHIP DISCLOSURES TO BOARD OF DIREC-
TORS.—The Depository Institution Management Inter-
locks Act (12 U.S.C. 3201 et seq.) is amended by inserting
after section 211 (as added by subsection (a) of this sec-
tion) the following new section:
‘‘SEC. 212. OWNERSHIP DISCLOSURES TO BOARD OF DIREC-
TORS.
‘‘Not less than once each calendar year, each deposi-
tory institution and depository holding company shall pro-
vide to each member of its board of directors, and to each
member of the board of directors of any depository institu-
tion or depository holding company it controls, a list of
the names and principal places of business of each individ-
ual or company which directly or indirectly owns, controls,
or has power to vote 5 percent or more of any class of
voting securities of the depository institution or depository
holding company, and such other information as the ap-
propriate Federal depository institutions regulatory agen-
cy shall prescribe by regulation.’’.
(c) BOARD OF DIRECTORS CONTROL BY OUTSIDE DI-
RECTORS.—The 
Depository 
Institution 
Management
Interlocks Act (12 U.S.C. 3201 et seq.) is amended by
inserting after section 212 (as added by subsection (b) of
this section) the following new section:
‘‘SEC. 213. BOARD OF DIRECTORS CONTROL BY OUTSIDE DI-
RECTORS.
‘‘A majority of the voting members of the board of
directors of each depository institution and each deposi-
tory holding company shall be outside directors.’’.
(d) DEFINITIONS.—Section 202 of the Depository In-
stitution Management Interlocks Act (12 U.S.C. 3201) is
amended—
(1) in paragraph (5), by striking ‘‘and’’;
(2) in paragraph (6), by striking the period and
inserting ‘‘; and’’; and
(3) by adding at the end the following new
paragraphs:
‘‘(7) the term ‘outside counsel’ means any indi-
vidual who is not a full time employee of the deposi-
tory institution or depository holding company and
who receives compensation, either directly or
through a law firm, partnership, or corporation, for
legal services or advice rendered to the depository in-
stitution or depository holding company or any of its
subsidiaries, affiliates, or holding companies;
‘‘(8) the term ‘outside accountant’ means any
individual who is not a full time employee of the de-
pository institution or depository holding company
and who receives compensation, either directly or
through an accounting firm, partnership, or corpora-
tion, for accounting services or advice rendered to
the depository institution or any of its subsidiaries,
affiliates, or holding companies;
‘‘(9) the term ‘outside director’ means an indi-
vidual who is a member of the board of directors
who is not an employee or officer with management
functions of either the depository institution or de-
pository holding company, or any of its subsidiaries,
affiliates, or holding companies; and
‘‘(10) the term ‘control’ has the meaning given
to such term in section 2 of the Bank Holding Com-
pany Act of 1956, for bank holding companies and
section 10(a)(2) of the Home Owners’ Loan Act for
savings and loan holding companies.’’.
SEC. 217. ELECTRONIC FUND TRANSFER FEE DISCLOSURES
AT ELECTRONIC TERMINALS.
Section 904 of the Electronic Fund Transfer Act (15
U.S.C. 1693b) is amended—
(1) by striking ‘‘(d) In the event’’ and inserting
‘‘(d) 
APPLICABILITY
TO
SERVICE
PROVIDERS
OTHER
THAN
CERTAIN
FINANCIAL
INSTITU-
TIONS.—
‘‘(1) IN GENERAL.—In the event’’; and
(2) by adding at the end the following new
paragraphs:
‘‘(2) FEE DISCLOSURES AT ELECTRONIC TERMI-
NALS.—The regulations prescribed under paragraph
(1) shall require any person who operates an elec-
tronic terminal at which electronic fund transfer
services are made available to any consumer to pro-
vide notice to the consumer (at the time the service
is provided at any such terminal) of the amount of
any fee imposed by such person for providing the
service.’’.
SEC. 218. BRANCH CLOSURES.
(a) IN GENERAL.—Section 42 of the Federal Deposit
Insurance Act (12 U.S.C. 1831r-1) is amended by adding
at the end the following new subsection:
‘‘(e) SCOPE OF APPLICATION.—
‘‘(1) IN GENERAL.—This section shall not apply
with respect to—
‘‘(A) an automated teller machine;
‘‘(B) a branch which—
‘‘(i) has been acquired through merg-
er, consolidation, purchase, assumption, or
other method; and
‘‘(ii) is located—
‘‘(I) within 2.5 miles of another
branch of the acquiring institution; or
‘‘(II) within a neighborhood cur-
rently being served by another branch
of the acquiring institution,
if such other branch of the acquiring institution
is expected to continue to provide banking serv-
ices to substantially all of the customers cur-
rently served by the branch acquired;
‘‘(C) a branch which is closing and reopen-
ing at a location which is—
‘‘(i) within 2.5 miles of the location of
the branch being closed; or
‘‘(ii) within the same neighborhood as
the branch being closed,
if the branch at the new location is expected to
continue to provide banking services to substan-
tially all of the customers served by the branch
at the former location;
‘‘(D) a branch that is closed in connection
with—
‘‘(i) an emergency acquisition under—
‘‘(I) section 11(n); or
‘‘(II) subsections (f) or (k) of
section 13; or
‘‘(ii) any assistance provided by the
Corporation under section 13(c); and
‘‘(E) any other branch closure whose ex-
emption from the notice requirements of this
section would not produce a result inconsistent
with the purposes of this section.
‘‘(2) REGULATIONS.—The appropriate Federal
banking agency shall, by regulation, determine the
circumstances under which any exemption under
paragraph(1)(E) may be granted.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply as if such amendment had been
included in section 42 of the Federal Deposit Insurance
Act as of the date of the enactment of the Federal Deposit
Insurance Corporation Improvement Act of 1991.
SEC. 219. ANNUAL STUDY AND REPORT.
Not later than 12 months after the date of the enact-
ment of this Act, and annually thereafter, the Board of
Governors of the Federal Reserve System, the Director of
the Office of Thrift Supervision, the Comptroller of the
Currency, and the Board of Directors of the Federal De-
posit Insurance Corporation shall jointly conduct a study
and submit to the Congress a report on the extent to
which this Act and the amendments made by this Act
have, through reductions in regulatory burdens, resulted
in increased lending to small businesses.
TITLE III—LENDER LIABILITY
SEC. 301. LENDER LIABILITY.
(a) IN GENERAL.—The Federal Deposit Insurance
Act (12 U.S.C. 1811 et seq.) is amended by adding after
section 44, the following new section:
‘‘SEC. 45. LENDER, FIDUCIARY AND GOVERNMENT AGENCY
ENVIRONMENTAL LIABILITIES.
‘‘(a) LENDER ENVIRONMENTAL LIABILITY.—
‘‘(1) IN GENERAL.— Notwithstanding any other
provision or rule of Federal law, no lender, acting as
defined in this section, shall be liable pursuant to a
Federal environmental law, except as provided in
this section.
‘‘(2) ACTUAL
PARTICIPATION
REQUIRED.—A
lender shall only be liable pursuant to a Federal en-
vironmental law when the lender actually partici-
pates in management of another person’s activities
which create liability under the same Federal envi-
ronmental law.
‘‘(3) DEFINITIONS.—The following definitions
shall apply for purposes of this section—
‘‘(A) the term ‘participate in management’
means actually participating in the management
or operational affairs of other persons’ activi-
ties, and does not include merely having the ca-
pacity to influence, or the unexercised right to
control such activities;
‘‘(B) a person shall be considered to ‘par-
ticipate in management’ while a borrower is still
in possession of property, only if such person—
‘‘(i) exercises decision-making control
over the environmental compliance of a
borrower, such that the person has under-
taken responsibility for the hazardous sub-
stance handling or disposal practices of the
borrower; or
‘‘(ii) exercises control at a level com-
parable to that of a manager of the enter-
prise of the borrower, such that the person
has assumed or manifested responsibility
for the overall management of the enter-
prise encompassing day-to-day decision-
making with respect to environmental com-
pliance, or with respect to substantially all
of the operational aspects (as distinguished
from financial or administrative aspects) of
the enterprise, other than environmental
compliance;
‘‘(C) the term ‘participate in management’
does not include engaging in an act or failing
to act before the time that an extension of cred-
it is made or a security interest is created in
property; and
‘‘(D) the term ‘participate in management’
does not include, unless such actions rise to the
level of participating in management (as de-
fined in subparagraphs (A) and (B))—
‘‘(i) holding an extension of credit or
a security interest or abandoning or releas-
ing an extension of credit or a security in-
terest;
‘‘(ii) including in the terms of an ex-
tension of credit, or in a contract or secu-
rity agreement relating to such an exten-
sion, covenants, warranties, or other terms
and conditions that relate to environmental
compliance;
‘‘(iii) monitoring or enforcing the
terms and conditions of an extension of
credit or security interest;
‘‘(iv) monitoring or undertaking 1 or
more inspections of property, except that
monitoring or undertaking any such in-
spection, although not required by this
subsection, shall provide probative evidence
that a holder of a security interest is act-
ing to preserve and protect the property
during the time the holder may have pos-
session or control of such property;
‘‘(v) requiring or conducting a re-
sponse action or other lawful means of ad-
dressing the release or threatened release
of a hazardous substance in connection
with property prior to, during, or upon the
expiration of the term of an extension of
credit;
‘‘(vi) providing financial or other ad-
vice or counseling in an effort to mitigate,
prevent, or cure default or diminution in
the value of the property;
‘‘(vii) restructuring, renegotiating, or
otherwise agreeing to alter the terms and
conditions of an extension of credit or se-
curity interest, or exercising forbearance;
or
‘‘(viii) exercising other remedies that
may be available under applicable law for
the breach of any term or condition of the
extension of credit or security agreement.
‘‘(E) When a lender did not participate in
management of property prior to foreclosure,
then the lender shall not be liable even if such
person forecloses on property, sells, releases, or
liquidates property, maintains business activi-
ties, winds up operations, or undertakes any re-
sponse action with respect to property, or takes
other measures to preserve, protect, or prepare
property prior to sale or disposition, if—
‘‘(i) such person seeks to sell, release,
or otherwise divest the property at the ear-
liest practical, commercially reasonable
time, on commercially reasonable terms,
taking into account market conditions and
legal and regulatory requirements; and
‘‘(ii) such person preserves the prop-
erty until such sale, release, or divestiture.
‘‘(4) A lender shall be liable for the cost of any
response action or corrective action only to the ex-
tent that the action required is directly attributable
to the lender’s activities. A lender shall not be liable
for the cost of any response action or corrective ac-
tion relating to the release of a hazardous substance
which commences before, and continues after the
lender’s involvement.
‘‘(5) No provision of this subsection shall be
construed as exempting from liability any lender
whose intentional act or omission causes the release
of a hazardous substance, pollutant, or contaminant,
or the violation of any environmental law. The liabil-
ity of any lender that is liable under any federal en-
vironmental law shall be limited to the unpaid bal-
ance of any outstanding extension of credit related
to the property or activities forming the basis for the
liability.
‘‘(b) FIDUCIARY ENVIRONMENTAL LIABILITY.—
‘‘(1) IN GENERAL.— Notwithstanding any other
provision or rule of Federal law, no fiduciary, acting
as defined in this section, shall be liable pursuant to
any Federal environmental law, except as provided
in this section.
‘‘(2) LIABILITY OF FIDUCIARY.—
‘‘(A) Subject to subparagraphs (B) and
(C), a fiduciary holding title to property or oth-
erwise affiliated with property solely in a fidu-
ciary capacity shall be personally subject to the
obligations and liabilities of any person under
any Federal environmental law, to the same ex-
tent as if the property were held by the fidu-
ciary free of trust.
‘‘(B) The personal obligations and liabil-
ities of a fiduciary referred to in subparagraph
(A) shall be limited to the extent to which the
assets of the trust or estate are sufficient to in-
demnify the fiduciary, unless—
‘‘(i) the obligations and liabilities
would have arisen even if the person had
not served as a fiduciary;
‘‘(ii) the fiduciary’s own failure to ex-
ercise due care with respect to property
caused or contributed to the release of haz-
and incidental benefits, permitted under other
applicable laws.
‘‘(c) DEFINITIONS.—For purposes of subsections (a)
and (b):
‘‘(1) The term ‘Federal environmental law’
means any Federal statute or rule of common law
with the purpose of protection of the environment
and any Federal regulation promulgated thereunder
and any State statute or regulation created as a fed-
erally approved or delegated program implementing
these laws, including the following:
‘‘(A) The Federal Insecticide, Fungicide,
and Rodenticide Act (7 U.S.C. 136 et seq.).
‘‘(B) The Toxic Substances Control Act
(15 U.S.C. 2601 et seq.).
‘‘(C) The Federal Water Pollution Control
Act (33 U.S.C. 1251 et seq.).
‘‘(D) The Oil Pollution Act of 1990 (33
U.S.C. 2701 et seq.).
‘‘(E) The Clean Air Act (42 U.S.C. 7401
et seq.).
‘‘(F) The Solid Waste Disposal Act (42
U.S.C. 6901 et seq.).
‘‘(G) The Comprehensive Environmental
Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9601 et seq.).
‘‘(H) The Pollution Prevention Act of
1990 (42 U.S.C. 13101 et seq.).
‘‘(2) The term ‘extension of credit’ means the
making or renewal of any loan, a granting of a line
of credit or extending credit in any manner, such as
an advance by means of an overdraft or the issuance
of a standby letter of credit, and a lease finance
transaction—
‘‘(A) in which the lessor does not initially
select the leased property and does not, during
the lease term, control the daily operation or
maintenance of the property; or
‘‘(B) that conforms with regulations issued
by the appropriate Federal banking agency or
the appropriate State bank supervisory (as
these terms are defined in section 3 of the Fed-
eral Deposit Insurance Act or with regulations
issued by the National Credit Union Adminis-
tration Board, as appropriate.
‘‘(3) The term ‘fiduciary’ means a person who
acts for the exclusive benefit of another person as a
bona fide fiduciary within the meaning of section
3(21) of the Employee Retirement Income Security
Act of 1974, trustee, executor, administrator, custo-
dian, guardian, conservator, receiver, committee of
estates of lunatics or other disabled persons, or per-
sonal representative; except, that the term ‘fiduciary’
does not include any person—
‘‘(A) who owns, or controls, is affiliated
with or takes any action with respect to prop-
erty on behalf of or for the benefit of a lender
or takes any action to protect a lender’s exten-
sion of credit or security interest (any such per-
son shall be treated as a lender under sub-
section (a) of this section); or
‘‘(B) who is acting as a fiduciary with re-
spect to a trust or other fiduciary estate that—
‘‘(i) was not created as part of, or to
facilitate, one or more estate plans or pur-
suant to the incapacity of a natural per-
son; and
‘‘(ii) was organized for the primary
purpose of, or is engaged in, actively carry-
ing on a trade or business for profit.
‘‘(4) The term ‘financial or administrative as-
pect’ means a function such as a credit manager, ac-
counts payable officer, accounts receivable officer,
personnel manager, comptroller, or chief financial of-
ficer, or any similar function.
‘‘(5) The terms ‘foreclosure’ and ‘foreclose’
means, respectively, acquiring, and to acquire, prop-
erty through—
‘‘(A) purchase at sale under a judgment or
decree, a power of sale, a nonjudicial fore-
closure sale, or from a trustee, deed in lieu of
foreclosure, or similar conveyance, or through
repossession, if such property was security for
an extension of credit previously contracted;
‘‘(B) conveyance pursuant to an extension
of credit previously contracted, including the
termination of a lease agreement; or
‘‘(C) any other formal or informal manner
by which the person acquires, for subsequent
disposition, possession of collateral in order to
protect the security interest of the person.
‘‘(6) The term ‘hazardous substance’ means any
chemical, biological, organic, inorganic, or radio-
active pollutants, contaminants, materials, waste or
other substances regulated under, defined, listed or
included in any Federal environmental law.
‘‘(7) The term ‘lender’ means—
‘‘(A) a person that makes a bona fide ex-
tension of credit to or takes a security interest
from another person and includes a successor
or assign of the person which makes the exten-
sion of credit or takes the security interest;
‘‘(B) the Federal National Mortgage Asso-
ciation, the Federal Home Loan Mortgage Cor-
poration, the Federal Agricultural Mortgage
Corporation, or other entity that in a bona fide
manner is engaged in the business of buying or
selling loans on interests therein;
‘‘(C) any person engaged in the business of
insuring or guaranteeing against a default in
the repayment of an extension of credit, or act-
ing as a surety with respect to an extension of
credit, to other persons; or
‘‘(D) any person regularly engaged in the
business of providing title insurance who ac-
quires property as a result of assignment or
conveyance in the course of underwriting claims
and claims settlement.
‘‘(8) The term ‘operational aspect’ means a
function such as a facility or plant manager, oper-
ations manager, chief operating officer, or chief ex-
ecutive officer.
‘‘(9) The term ‘person’ means an individual,
firm, corporation, association, partnership, consor-
tium, joint venture, commercial entity, United States
Government, State, municipality, commission, politi-
cal subdivision of a State, or any interstate body.
‘‘(10) The term ‘property’ means real, personal
and mixed property.
‘‘(11) The term ‘response action’ shall have the
same meaning as that term is defined in section 101
of the Comprehensive Environmental Response,
Compensation and Liability Act.
‘‘(12) The term ‘security interest’ means a
right under a mortgage, deed of trust, assignment,
judgment lien, pledge, security agreement, factoring
agreement, or lease, or any other right accruing to
a person to secure the repayment of money, the per-
formance of a duty, or some other obligation.
‘‘(d) SAVINGS CLAUSE.—Nothing in subsections (a),
(b), or (c), shall—
‘‘(1) affect the rights or immunities or other de-
fenses that are already available to lenders or fidu-
ciaries under any Federal environmental law;
‘‘(2) be construed to create any liability for any
lender or fiduciary; or
‘‘(3) create a private right of action against any
lender or fiduciary.
‘‘(e) FEDERAL BANKING AND LENDING AGENCY EN-
VIRONMENTAL LIABILITY.—
‘‘(1) GOVERNMENTAL ENTITIES.—
‘‘(A) BANKING AND LENDING AGENCIES.—
Except as provided in paragraph (C), a Federal
banking or lending agency shall not be liable
under any law imposing strict liability for the
release or threatened release of petroleum or a
hazardous substance at or from property (in-
cluding any right or interest therein) ac-
quired—
‘‘(i) in connection with the exercise of
receivership or conservatorship authority,
or the liquidation or winding up of the af-
fairs of an insured depository institution,
including any of its subsidiaries, and
bridge bank;
‘‘(ii) in connection with the provision
of loans, discounts, advances, guarantees,
insurance or other financial assistance; or
‘‘(iii) in connection with property re-
ceived in any civil or criminal proceeding,
or 
administrative 
enforcement 
action,
whether by settlement or order.
‘‘(B) APPLICATION OF STATE LAW.—Noth-
ing in paragraph (e) shall be construed as pre-
empting, affecting, applying to, or modifying
any State law, or any rights, actions, cause of
action, or obligations under State law, except
that liability under State law shall not exceed
the value of the agency’s interest in the asset
giving rise to such liability. Nothing in this sec-
tion shall be construed to prevent a Federal
banking or lending agency from agreeing with
a State to transfer property to such State in
lieu of any liability that might otherwise be im-
posed under State law.
‘‘(C) LIMITATION.—Notwithstanding para-
graph (A), and subject to section 107(d) of the
Comprehensive Environmental Response, Com-
pensation, and Liability Act of 1980, a Federal
banking or lending agency that directly caused
or materially contributed to the release of pe-
troleum or a hazardous substance may be liable
for removal, remedial, or other response action
pertaining to that release.
‘‘(D) SUBSEQUENT PURCHASER.—The im-
munity provided by paragraphs (A) and (B)
shall extend to the first subsequent purchaser
of property described in such paragraph from a
Federal banking or lending agency, unless such
purchaser—
‘‘(i) would otherwise be liable or po-
tentially liable for all or part of the costs
of the removal, remedial, or other response
action due to a prior relationship with the
property;
‘‘(ii) is or was affiliated with or relat-
ed to a party described in subparagraph
(i);
‘‘(iii) fails to agree to take reasonable
steps necessary to abate the release or
threatened release or to protect public
health and safety in a manner consistent
with the purposes of applicable Federal en-
vironmental laws; or
‘‘(iv) directly causes or significantly
and materially contributes to any addi-
tional release or threatened release on the
property.
‘‘(E) FEDERAL OR STATE ACTION.—Not-
withstanding subparagraph (D), if a Federal
agency or State environmental agency is re-
quired to take remedial action due to the failure
of a subsequent purchaser to carry out, in good
faith, the agreement described in subparagraph
(D)(iii), such subsequent purchaser shall reim-
burse the Federal or State environmental agen-
cy for the costs of such remedial action. Any
such reimbursement shall not exceed the in-
crease in the fair market value of the property
attributable to the remedial action.
‘‘(2) LIEN EXEMPTION.—Notwithstanding any
other provision of law, any property held by a subse-
quent purchaser referred to in paragraph (1)(D) or
held by a Federal banking or lending agency shall
not be subject to any lien for costs or damages asso-
ciated with the release or threatened release of pe-
troleum or a hazardous substance existing at the
time of the transfer.
‘‘(3) EXEMPTION FROM COVENANTS TO REME-
DIATE.—A Federal banking or lending agency shall
be exempt from any law requiring such agency to
grant covenants warranting that a removal, reme-
dial, or other response action has been, or will in the
future be, taken with respect to property acquired in
the manner described in paragraph (e)(1)(A).
‘‘(4) DEFINITIONS.—For purposes of subsection
(e), the following definitions shall apply:
‘‘(A) The term ‘Federal banking or lending
agency’ means the Corporation, the Resolution
Trust Corporation, the Board of Governors of
the Federal Reserve System, the Comptroller of
the Currency, the Office of Thrift Supervision,
a Federal Reserve Bank, a Federal Home Loan
Bank, the Department of Housing and Urban
Development, the National Credit Union Ad-
ministration Board, the Farm Credit Adminis-
tration, the Farm Credit System Insurance
Corporation, the Farm Credit System Assist-
ance Board, the Farmers Home Administration,
the Rural Electrification Administration, the
Small Business Administration, and any other
Federal agency acting in a similar capacity, in
any of their capacities, and their agents or ap-
pointees.
‘‘(B) The term ‘hazardous substance’ has
the same meaning as in section 101(14) of the
Comprehensive Environmental Response, Com-
pensation, and Liability Act of 1980.
‘‘(C) The term ‘release’ has the same
meaning as in section 101(22) of the Com-
prehensive Environmental Response, Compensa-
tion, and Liability Act of 1980, and includes
the use, storage, disposal, treatment, genera-
tion, or transportation of a hazardous sub-
stance.
‘‘(5) SAVINGS CLAUSE.—Nothing in subsection
(e) shall—
‘‘(A) affect the rights or immunities or
other defenses that are available under this Act
or other applicable law to any party, subject to
the provisions of this section;
‘‘(B) be construed to create any liability
for any party; or
‘‘(C) create a private right of action
against an insured depository institution or
lender or against a Federal banking or lending
agency.’’.
(b) EFFECTIVE DATE.—This section shall take effect
upon the date of enactment and shall apply to any claim
against any lender, fiduciary or government agency under
any Federal environmental law that has not been finally
resolved by adjudication or settlement prior to enactment.
Æ