109TH CONGRESS 
2D SESSION 
H. R. 3505
AN ACT 
To provide regulatory relief and improve produc-
tivity for insured depository institutions, and for 
other purposes.
109TH CONGRESS 
2D SESSION 
H. R. 3505
AN ACT 
To provide regulatory relief and improve productivity for 
insured depository 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; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Financial Services Regulatory Relief Act of 2005’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows:
Sec. 1. Short title; table of contents. 
TITLE I—NATIONAL BANK PROVISIONS 
Sec. 101. National bank directors. 
Sec. 102. Voting in shareholder elections. 
Sec. 103. Simplifying dividend calculations for national banks. 
Sec. 104. Repeal of obsolete limitation on removal authority of the Comptroller 
of the Currency. 
Sec. 105. Repeal of intrastate branch capital requirements. 
Sec. 106. Clarification of waiver of publication requirements for bank merger 
notices. 
Sec. 107. Equal treatment for Federal agencies of foreign banks. 
Sec. 108. Maintenance of a Federal branch and a Federal agency in the same 
State. 
Sec. 109. Business organization flexibility for national banks. 
Sec. 110. Clarification of the main place of business of a national bank. 
Sec. 111. Capital equivalency deposits for Federal branches and agencies of for-
eign banks. 
Sec. 112. Enhancing the authority for national banks to make community de-
velopment investments. 
TITLE II—SAVINGS ASSOCIATION PROVISIONS 
Sec. 201. Parity for savings associations under the Securities Exchange Act of 
1934 and the Investment Advisers Act of 1940. 
Sec. 202. Investments by Federal savings associations authorized to promote 
the public welfare. 
Sec. 203. Mergers and consolidations of Federal savings associations with non-
depository institution affiliates. 
Sec. 204. Repeal of statutory dividend notice requirement for savings associa-
tion subsidiaries of savings and loan holding companies. 
Sec. 205. Modernizing statutory authority for trust ownership of savings asso-
ciations. 
Sec. 206. Repeal of overlapping rules governing purchased mortgage servicing 
rights. 
Sec. 207. Restatement of authority for Federal savings associations to invest in 
small business investment companies. 
Sec. 208. Removal of limitation on investments in auto loans. 
Sec. 209. Selling and offering of deposit products. 
Sec. 210. Funeral- and cemetery-related fiduciary services. 
Sec. 211. Repeal of qualified thrift lender requirement with respect to out-of-
state branches. 
Sec. 212. Small business and other commercial loans.
Sec. 213. Clarifying citizenship of Federal savings associations for Federal 
court jurisdiction. 
Sec. 214. Increase in limits on commercial real estate loans. 
Sec. 215. Repeal of one limit on loans to one borrower. 
Sec. 216. Savings association credit card banks. 
Sec. 217. Interstate acquisitions by S&L holding companies. 
Sec. 218. Business organization flexibility for federal savings associations. 
TITLE III—CREDIT UNION PROVISIONS 
Sec. 301. Privately insured credit unions authorized to become members of a 
Federal home loan bank. 
Sec. 302. Leases of land on Federal facilities for credit unions. 
Sec. 303. Investments in securities by Federal credit unions. 
Sec. 304. Increase in general 12-year limitation of term of Federal credit union 
loans to 15 years. 
Sec. 305. Increase in 1 percent investment limit in credit union service organi-
zations. 
Sec. 306. Member business loan exclusion for loans to nonprofit religious orga-
nizations. 
Sec. 307. Check cashing and money transfer services offered within the field of 
membership. 
Sec. 308. Voluntary mergers involving multiple common-bond credit unions. 
Sec. 309. Conversions involving common-bond credit unions. 
Sec. 310. Credit union governance. 
Sec. 311. Providing the National Credit Union Administration with greater 
flexibility in responding to market conditions. 
Sec. 312. Exemption from pre-merger notification requirement of the Clayton 
Act. 
Sec. 313. Treatment of credit unions as depository institutions under securities 
laws. 
Sec. 314. Clarification of definition of net worth under certain circumstances 
for purposes of prompt corrective action. 
Sec. 315. Amendments relating to nonfederally insured credit unions. 
TITLE IV—DEPOSITORY INSTITUTION PROVISIONS 
Sec. 401. Easing restrictions on interstate branching and mergers. 
Sec. 402. Statute of limitations for judicial review of appointment of a receiver 
for depository institutions. 
Sec. 403. Reporting requirements relating to insider lending. 
Sec. 404. Amendment to provide an inflation adjustment for the small deposi-
tory institution exception under the Depository Institution 
Management Interlocks Act. 
Sec. 405. Enhancing the safety and soundness of insured depository institu-
tions. 
Sec. 406. Investments by insured savings associations in bank service compa-
nies authorized. 
Sec. 407. Cross guarantee authority. 
Sec. 408. Golden parachute authority and nonbank holding companies. 
Sec. 409. Amendments relating to change in bank control. 
Sec. 410. Community reinvestment credit for esops and ewocs. 
Sec. 411. Minority financial institutions. 
TITLE V—DEPOSITORY INSTITUTION AFFILIATES PROVISIONS
Sec. 501. Clarification of cross marketing provision. 
Sec. 502. Amendment to provide the Federal Reserve Board with discretion 
concerning the imputation of control of shares of a company 
by trustees. 
Sec. 503. Eliminating geographic limits on thrift service companies. 
Sec. 504. Clarification of scope of applicable rate provision. 
Sec. 505. Savings associations acting as agents for affiliated depository institu-
tions. 
Sec. 506. Credit card bank investments for the public welfare. 
TITLE VI—BANKING AGENCY PROVISIONS 
Sec. 601. Waiver of examination schedule in order to allocate examiner re-
sources. 
Sec. 602. Interagency data sharing. 
Sec. 603. Penalty for unauthorized participation by convicted individual. 
Sec. 604. Amendment permitting the destruction of old records of a depository 
institution by the FDIC after the appointment of the FDIC as 
receiver. 
Sec. 605. Modernization of recordkeeping requirement. 
Sec. 606. Streamlining reports of condition. 
Sec. 607. Expansion of eligibility for 18-month examination schedule for com-
munity banks. 
Sec. 608. Short form reports of condition for certain community banks. 
Sec. 609. Clarification of extent of suspension, removal, and prohibition author-
ity of Federal banking agencies in cases of certain crimes by 
institution-affiliated parties. 
Sec. 610. Streamlining depository institution merger application requirements. 
Sec. 611. Inclusion of Director of the Office of Thrift Supervision in list of 
banking agencies regarding insurance customer protection reg-
ulations. 
Sec. 612. Protection of confidential information received by Federal banking 
regulators from foreign banking supervisors. 
Sec. 613. Prohibition on participation by convicted individual. 
Sec. 614. Clarification that notice after separation from service may be made 
by an order. 
Sec. 615. Enforcement against misrepresentations regarding FDIC deposit in-
surance coverage. 
Sec. 616. Changes required to small bank holding company policy statement on 
assessment of financial and managerial factors. 
Sec. 617. Exception to annual privacy notice requirement under the Gramm-
Leach-Bliley Act. 
Sec. 618. Biennial reports on the status of agency employment of minorities 
and women. 
Sec. 619. Coordination of State examination authority. 
Sec. 620. Nonwaiver of privileges. 
Sec. 621. Right to Financial Privacy Act of 1978 amendment. 
Sec. 622. Deputy director; succession authority for Director of the Office of 
Thrift Supervision. 
Sec. 623. Limitation on scope of new agency guidelines. 
TITLE VII—‘‘BSA’’ COMPLIANCE BURDEN REDUCTION 
Sec. 701. Exception from currency transaction reports for seasoned customers. 
Sec. 702. Reduction in inconsistencies in monetary transaction recordkeeping 
and reporting enforcement and examination requirements.
Sec. 703. Additional reforms relating to monetary transaction and record-
keeping requirements applicable to financial institutions. 
Sec. 704. Study by Comptroller General. 
Sec. 705. Feasibility study required. 
Sec. 706. Annual report by Secretary of the Treasury. 
Sec. 707. Preservation of money services businesses. 
TITLE VIII—CLERICAL AND TECHNICAL AMENDMENTS 
Sec. 801. Clerical amendments to the Home Owners’ Loan Act. 
Sec. 802. Technical corrections to the Federal Credit Union Act. 
Sec. 803. Other technical corrections. 
Sec. 804. Repeal of obsolete provisions of the Bank Holding Company Act of 
1956. 
TITLE IX—FAIR DEBT COLLECTION PRACTICES ACT 
AMENDMENTS 
Sec. 901. Exception for certain bad check enforcement programs. 
Sec. 902. Other amendments.
TITLE I—NATIONAL BANK 
PROVISIONS 
SEC. 101. NATIONAL BANK DIRECTORS. 
(a) IN GENERAL.—Section 5146 of the Revised Stat-
utes of the United States (12 U.S.C. 72) is amended—
(1) by striking ‘‘SEC. 5146. Every director 
must during’’ and inserting the following: 
‘‘SEC. 5146. REQUIREMENTS FOR BANK DIRECTORS. 
‘‘(a) RESIDENCY REQUIREMENTS.—Every director of 
a national bank shall, during’’; 
(2) by striking ‘‘total number of directors. 
Every director must own in his or her own right’’ 
and inserting ‘‘total number of directors. 
‘‘(b) INVESTMENT REQUIREMENT.—
‘‘(1) IN
GENERAL.—Every director of a na-
tional bank shall own, in his or her own right,’’; and
(3) by adding at the end the following new 
paragraph: 
‘‘(2) EXCEPTION FOR SUBORDINATED DEBT IN 
CERTAIN
CASES.—In lieu of the requirements of 
paragraph (1) relating to the ownership of capital 
stock in the national bank, the Comptroller of the 
Currency may, by regulation or order, permit an in-
dividual to serve as a director of a national bank 
that has elected, or notifies the Comptroller of the 
bank’s intention to elect, to operate as a S corpora-
tion pursuant to section 1362(a) of the Internal 
Revenue Code of 1986, if that individual holds debt 
of at least $1,000 issued by the national bank that 
is subordinated to the interests of depositors and 
other general creditors of the national bank.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for chapter one of title LXII of the Revised Statutes of 
the United States (12 U.S.C. 21 et seq.) is amended by 
striking the item relating to section 5146 and inserting 
the following new item:
‘‘5146. Requirements for bank directors.’’.
SEC. 102. VOTING IN SHAREHOLDER ELECTIONS. 
Section 5144 of the Revised Statutes of the United 
States (12 U.S.C. 61) is amended—
(1) by striking ‘‘or to cumulate’’ and inserting 
‘‘or, if so provided by the articles of association of 
the national bank, to cumulate’’; 
(2) by striking the comma after ‘‘his shares 
shall equal’’; and 
(3) by adding at the end the following new sen-
tence: ‘‘The Comptroller of the Currency may pre-
scribe such regulations to carry out the purposes of 
this section as the Comptroller determines to be ap-
propriate.’’. 
SEC. 103. SIMPLIFYING DIVIDEND CALCULATIONS FOR NA-
TIONAL BANKS. 
(a) IN GENERAL.—Section 5199 of the Revised Stat-
utes of the United States (12 U.S.C. 60) is amended to 
read as follows: 
‘‘SEC. 5199. NATIONAL BANK DIVIDENDS. 
‘‘(a) IN GENERAL.—Subject to subsection (b), the di-
rectors of any national bank may declare a dividend of 
so much of the undivided profits of the bank as the direc-
tors judge to be expedient. 
‘‘(b) APPROVAL REQUIRED UNDER CERTAIN CIR-
CUMSTANCES.—A national bank may not declare and pay 
dividends in any year in excess of an amount equal to the 
sum of the total of the net income of the bank for that 
year and the retained net income of the bank in the pre-
ceding two years, minus any transfers required by the 
Comptroller of the Currency (including any transfers re-
quired to be made to a fund for the retirement of any 
preferred stock), unless the Comptroller of the Currency 
approves the declaration and payment of dividends in ex-
cess of such amount.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for chapter three of title LXII of the Revised Statutes of 
the United States is amended by striking the item relating 
to section 5199 and inserting the following new item:
‘‘5199. National bank dividends.’’.
SEC. 104. REPEAL OF OBSOLETE LIMITATION ON REMOVAL 
AUTHORITY OF THE COMPTROLLER OF THE 
CURRENCY. 
Section 8(e)(4) of the Federal Deposit Insurance Act 
(12 U.S.C. 1818(e)(4)) is amended by striking the 5th 
sentence. 
SEC. 105. REPEAL OF INTRASTATE BRANCH CAPITAL RE-
QUIREMENTS. 
Section 5155(c) of the Revised Statutes of the United 
States (12 U.S.C. 36(c)) is amended—
(1) in the 2nd sentence, by striking ‘‘, without 
regard to the capital requirements of this section,’’; 
and 
(2) by striking the last sentence.
SEC. 106. CLARIFICATION OF WAIVER OF PUBLICATION RE-
QUIREMENTS FOR BANK MERGER NOTICES. 
The last sentence of sections 2(a) and 3(a)(2) of the 
National Bank Consolidation and Merger Act (12 U.S.C. 
215(a) and 215a(a)(2), respectively) are each amended by 
striking ‘‘Publication of notice may be waived, in cases 
where the Comptroller determines that an emergency ex-
ists justifying such waiver, by unanimous action of the 
shareholders of the association or State bank’’ and insert-
ing ‘‘Publication of notice may be waived if the Comp-
troller determines that an emergency exists justifying such 
waiver or if the shareholders of the association or State 
bank agree by unanimous action to waive the publication 
requirement for their respective institutions’’. 
SEC. 107. EQUAL TREATMENT FOR FEDERAL AGENCIES OF 
FOREIGN BANKS. 
The 1st sentence of section 4(d) of the International 
Banking Act of 1978 (12 U.S.C. 3102(d)) is amended by 
inserting ‘‘from citizens or residents of the United States’’ 
after ‘‘deposits’’. 
SEC. 108. MAINTENANCE OF A FEDERAL BRANCH AND A 
FEDERAL AGENCY IN THE SAME STATE. 
Section 4(e) of the International Banking Act of 
1978 (12 U.S.C. 3102(e)) is amended by inserting ‘‘if the 
maintenance of both an agency and a branch in the State
is prohibited under the law of such State’’ before the pe-
riod at the end. 
SEC. 109. BUSINESS ORGANIZATION FLEXIBILITY FOR NA-
TIONAL BANKS. 
(a) IN GENERAL.—Chapter one of title LXII of the 
Revised Statutes of the United States (12 U.S.C. 21 et 
seq.) is amended by inserting after section 5136B the fol-
lowing new section: 
‘‘SEC. 5136C. ALTERNATIVE BUSINESS ORGANIZATION. 
‘‘(a) IN GENERAL.—The Comptroller of the Currency 
may prescribe regulations—
‘‘(1) to permit a national bank to be organized 
other than as a body corporate; and 
‘‘(2) to provide requirements for the organiza-
tional characteristics of a national bank organized 
and operating other than as a body corporate, con-
sistent with the safety and soundness of the national 
bank. 
‘‘(b) EQUAL TREATMENT.—Except as provided in 
regulations prescribed under subsection (a), a national 
bank that is operating other than as a body corporate shall 
have the same rights and privileges and shall be subject 
to the same duties, restrictions, penalties, liabilities, condi-
tions, and limitations as a national bank that is organized 
as a body corporate.’’.