IB
Union Calendar No. 98
104TH CONGRESS
1ST SESSION
H. R. 1858
[Report No. 104–193]
To reduce paperwork and additional regulatory burdens for depository
institutions.
IN THE HOUSE OF REPRESENTATIVES
JUNE 15, 1995
Mr. LEACH introduced the following bill; which was referred to the Committee
on Banking and Financial Services
JULY 18, 1995
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed in italic]
[For text of introduced bill, see copy of bill as introduced on June 15, 1995]
A BILL
To reduce paperwork and additional regulatory burdens for
depository institutions.
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 Institutions Regulatory Relief Act of 1995’’.
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(b) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I—REDUCTIONS IN GOVERNMENT OVERREGULATION
Subtitle A—The Home Mortgage Process
Sec. 101. Regulatory authority over disclosures and escrow accounts under
RESPA transferred to Federal Reserve Board.
Sec. 102. Simplification and unification of disclosures required under RESPA
and TILA for mortgage transactions.
Sec. 103. Increased regulatory flexibility under the Truth in Lending Act.
Sec. 104. Reductions in RESPA regulatory burdens; clarifying amendments.
Sec. 105. Disclosures for adjustable rate mortgages.
Sec. 106. Certain charges.
Sec. 107. Exemptions from rescission.
Sec. 108. Tolerances; basis of disclosures.
Sec. 109. Limitation on liability.
Sec. 110. Limitation on rescission liability.
Sec. 111. Calculation of damages.
Sec. 112. Assignee liability.
Sec. 113. Rescission rights in foreclosure.
Sec. 114. Recovery of fees.
Sec. 115. Home ownership debt counseling notification.
Sec. 116. Home Mortgage Disclosure Act.
Sec. 117. Applicability.
Subtitle B—Community Reinvestment Act Amendments
Sec. 121. Expression of congressional intent.
Sec. 122. Community Reinvestment Act exemption.
Sec. 123. Self-certification of CRA compliance.
Sec. 124. Community input and conclusive rating.
Sec. 125. Special purpose financial institutions.
Sec. 126. Increased incentives for lending to low- and moderate-income
communities.
Sec. 127. Prohibition on additional reporting under CRA.
Sec. 128. Technical amendment.
Sec. 129. Duplicative reporting.
Sec. 130. CRA congressional oversight.
Sec. 131. Consultation among examiners.
Sec. 132. Limitation on regulations.
Subtitle C—Consumer Banking Reforms
Sec. 141. Truth in Savings.
Sec. 142. Information sharing.
Sec. 143. Electronic Fund Transfer Act clarification.
Sec. 144. Limit on restitution for Truth in Lending violations if safety and
soundness of violator would be affected.
Subtitle D—Equal Credit Opportunity Act Amendments
Sec. 151. Short title.
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Sec. 152. Findings and purpose.
Sec. 153. Equal Credit Opportunity Act amendments.
Sec. 154. Fair Credit Reporting Act amendments.
Sec. 155. Incentives for self-testing.
Sec. 156. Credit scoring systems.
Sec. 157. Consultation by Attorney General required in nonreferral cases.
Sec. 158. Effective date.
Subtitle E—Consumer Leasing Act Amendments
Sec. 161. Short title.
Sec. 162. Congressional findings and declaration of purpose.
Sec. 163. Regulations.
Sec. 164. Consumer lease advertising.
Sec. 165. Statutory penalties.
Subtitle F—Federal Home Loan Bank Amendments
Sec. 171. Application for membership in the FHLB System.
Sec. 172. Federal home loan bank external auditors.
TITLE II—STREAMLINING GOVERNMENT REGULATIONS
Subtitle A—Regulatory Approval Issues
Sec. 201. Streamlined nonbanking acquisitions by well capitalized and well man-
aged banking organizations.
Sec. 202. Streamlined bank acquisitions by well capitalized and well managed
banking organizations.
Sec. 203. Eliminate filing and approval requirements for insured depository in-
stitutions already controlled by the same holding company.
Sec. 204. Eliminate redundant approval requirement for Oakar transactions.
Sec. 205. Elimination of duplicative requirements imposed upon bank holding
companies and other regulatory relief under the Home Owners’
Loan Act.
Sec. 206. Eliminate requirement that approval be obtained for divestitures.
Sec. 207. Eliminate unnecessary branch applications.
Sec. 208. Eliminate branch applications and requirements for ATMs and similar
facilities.
Sec. 209. Eliminate requirement for approval of investments in bank premises for
well capitalized and well managed banks.
Sec. 210. Eliminate unnecessary filing for officer and director appointments.
Sec. 211. Streamlining process for determining new nonbanking activities.
Sec. 212. Disposition of foreclosed assets.
Sec. 213. Increase in certain credit union loan ceilings.
Subtitle B—Streamlining of Government Regulations; Miscellaneous Provisions
Sec. 221. Eliminate the per-branch capital requirement for national banks and
State member banks.
Sec. 222. Branch closures.
Sec. 223. Amendments to the Depository Institutions Management Interlocks Act.
Sec. 224. Acceleration of repayment to Treasury.
Sec. 225. Eliminate unnecessary and duplicative recordkeeping and reporting re-
quirements relating to loans to executive officers and permit par-
ticipation in employee benefit plans.
Sec. 226. Expanded regulatory discretion for small bank examinations.
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Sec. 227. Cost reimbursement.
Sec. 228. Identification of foreign nonbank financial institution customers.
Sec. 229. Paperwork reduction review.
Sec. 230. Daily confirmations for hold-in-custody repurchase transactions.
Sec. 231. Required regulatory review of regulations.
Sec. 232. Country risk requirements.
Sec. 233. Audit costs.
Sec. 234. Standards for director and officer liability.
Sec. 235. Foreign bank applications.
Sec. 236. Duplicate examination of foreign banks.
Sec. 237. Second mortgages.
Sec. 238. Streamlining FDIC approval of new State bank powers.
Sec. 239. Repeal of call report attestation requirement.
Sec. 240. Authority of the Comptroller of the Currency.
Sec. 241. National bank community development insurance activities.
Sec. 242. Authorizing bank service companies to organize as limited liability
partnerships.
Sec. 243. Bank investments in Edge Act and agreement corporations.
Sec. 244. Report on the reconciliation of differences between regulatory account-
ing principles and generally accepted accounting principles.
Sec. 245. Waivers authorized for residency requirement for national bank direc-
tors.
TITLE III—LENDER LIABILITY
Sec. 301. Lender liability.
TITLE IV—ANNUAL STUDY AND REPORT ON IMPACT ON LENDING
TO SMALL BUSINESS
Sec. 401. Annual study and report.
TITLE I—REDUCTIONS IN GOV-
ERNMENT OVERREGULATION
Subtitle A—The Home Mortgage
Process
SEC. 101. REGULATORY AUTHORITY OVER DISCLOSURES
AND 
ESCROW 
ACCOUNTS 
UNDER 
RESPA
TRANSFERRED 
TO 
FEDERAL 
RESERVE
BOARD.
(a) IN GENERAL.—Sections 4, 5, 6, and 10(d) of the
Real Estate Settlement Procedures Act of 1974 (12 U.S.C.
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2601 et seq.) are amended by striking ‘‘Secretary’’ each
place such term appears and inserting ‘‘Board’’.
(b) CLARIFICATION OF PURPOSE.—Section 2(b)(2) of
the Real Estate Settlement Procedures Act of 1974 (12
U.S.C. 2601(b)(2)) is amended by inserting the following
before the semicolon at the end: ‘‘without—
‘‘(A) directly regulating settlement services
prices; or
‘‘(B) directly regulating wages to bona fide
employees that are not designed as a subterfuge
to facilitate kickbacks among affiliated compa-
nies’’.
(c) BOARD DEFINED.—Section 3 of the Real Estate
Settlement Procedures Act of 1974 (12 U.S.C. 2602) is
amended—
(1) by striking ‘‘and’’ at the end of paragraph
(7);
(2) by striking the period at the end of para-
graph (8) and inserting ‘‘; and’’; and
(3) by adding at the end the following new para-
graph:
‘‘(9) the term ‘Board’ means the Board of Gov-
ernors of the Federal Reserve System.’’.
(d) NEGOTIATED REGULATIONS UNDER SECTIONS 8
AND 9.—Section 8 of the Real Estate Settlement Procedures
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Act of 1974 (12 U.S.C. 2607) is amended by adding at the
end the following new subsection:
‘‘(e) NEGOTIATED REGULATIONS.—
‘‘(1) IN GENERAL.—The Secretary may not pub-
lish a proposed or final regulation under this section
and section 9 after the date of the enactment of the
Financial Institutions Regulatory Relief Act of 1995
unless the Secretary has used the negotiated rule-
making procedure established under subchapter III of
chapter 5 of title 5, United States Code, to attempt
to negotiate and develop the rule.
‘‘(2) CONSISTENCY WITH PURPOSE.—Any regula-
tion prescribed in accordance with paragraph (1)
shall be consistent with the purposes of this title as
set forth in section 2.’’.
(e) ADMINISTRATIVE ENFORCEMENT OF PROHIBITION
AGAINST KICKBACKS AND UNEARNED FEES.—Section 8 of
the Real Estate Settlement Procedures Act of 1974 (12
U.S.C. 2607) is amended by adding after subsection (e) (as
added by subsection (d) of this section) the following new
subsection:
‘‘(f) ADMINISTRATIVE ENFORCEMENT.—
‘‘(1) IN GENERAL.—Compliance with the require-
ments of this section and sections 9 and 12 shall be
enforced under this Act—
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‘‘(A) in the case of an insured depository
institution (as defined in section 3 of the Federal
Deposit Insurance Act), by the appropriate Fed-
eral banking agency (as defined in such section);
‘‘(B) in the case of an insured credit union
(as defined in section 101(7) of the Federal Cred-
it Union Act), by the National Credit Union Ad-
ministration;
‘‘(C) in the case of a bank holding company
(as defined in section 2 of the Bank Holding
Company Act of 1956) and any affiliate of any
such holding company (other than an insured
depository institution), by the Board;
‘‘(D) in the case of a savings and loan hold-
ing company (as defined in section 10 of the
Home Owners’ Loan Act) and any affiliate of
any such holding company (other than an in-
sured depository institution), by the Director of
the Office of Thrift Supervision; and
‘‘(E) in the case of any other person, by the
Secretary.
‘‘(2) SPECIAL RULES RELATING TO DETERMINA-
TION OF APPROPRIATE REGULATOR.—
‘‘(A) CASES OF MORE THAN 1 APPROPRIATE
REGULATOR.—If, under paragraph (1), a com-
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pany may be regulated by more than 1 agency,
the Board shall determine which agency shall be
the responsible agency, notwithstanding para-
graph (1).
‘‘(B) CASES
INVOLVING
JOINT
VENTURES,
PARTNERSHIPS, AND OTHER AFFILIATED BUSI-
NESS ARRANGEMENTS.—If any insured deposi-
tory institution is involved in a joint venture,
partnership, or other affiliated business arrange-
ment with any person who is not an insured de-
pository institution, the agency responsible for
enforcing this section and sections 9 and 12 with
respect to such insured depository institution
shall be the agency with such responsibility with
respect to such joint venture, partnership, or
other affiliated business arrangement.
‘‘(3) INTERAGENCY COOPERATION AND ENFORCE-
MENT GUIDELINES.—All the agencies referred to in
any subparagraph of paragraph (1) shall cooperate
with each other to develop enforcement guidelines and
other means for achieving effective compliance with
this section and sections 9 and 12.
‘‘(4) PREFERENCE
FOR
CIVIL
ENFORCEMENT
OVER CRIMINAL ENFORCEMENT.—As part of the coop-
erative efforts required under paragraph (3), the
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agencies referred to in paragraph (1) shall consider
means for achieving compliance with this section and
section 9 through the exercise of administrative en-
forcement authority under this subsection without re-
sorting to criminal enforcement actions under sub-
section (d) except in appropriate cases.
‘‘(5) EFFECTIVE DATE.—Paragraphs (1) and (2)
shall not take effect until joint interagency coopera-
tion and enforcement guidelines are adopted by all
the agencies to which paragraphs (1) and (2) apply
and the enforcement authority of the Secretary with
respect to this section and sections 9 and 12 shall con-
tinue until such paragraphs take effect.’’.
(f) INCREASED SCIENTER REQUIREMENT FOR CRIMI-
NAL PENALTY.—Section 8(d) of the Real Estate Settlement
Procedures Act of 1974 (12 U.S.C. 2607(d)) is amended—
(1) in paragraph (1), by inserting ‘‘willfully’’
after ‘‘persons who’’; and
(2) in paragraph (3), by striking ‘‘was not in-
tentional and’’.
(g) REDESIGNATION OF CONTROLLED BUSINESS AR-
RANGEMENTS
AS
AFFILIATED
BUSINESS
ARRANGE-
MENTS.—The Real Estate Settlement Procedures Act of
1974 (12 U.S.C. 2601 et seq.) is amended—
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(1) in section 3(7), by striking ‘‘controlled busi-
ness arrangement’’ and inserting ‘‘affiliated business
arrangement’’; and
(2) in subsections (c)(4) and (d)(6) of section 8,
by striking ‘‘controlled business arrangements’’ and
inserting ‘‘affiliated business arrangements’’.
(h) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) Section 4(a) of the Real Estate Settlement
Procedures Act of 1974 (12 U.S.C. 2603(a)) is amend-
ed by striking ‘‘Federal Home Loan Bank Board’’
and inserting ‘‘Director of the Office of Thrift Super-
vision’’.
(2) Section 8(d)(4) of the Real Estate Settlement
Procedures Act of 1974 (12 U.S.C. 2607(d)(4)) is
amended by inserting ‘‘any other agency described in
subsection (f)(1),’’ after ‘‘the Secretary,’’.
(3) Section 10(c)(1)(C) of the Real Estate Settle-
ment 
Procedures 
Act 
of 
1974 
(12 
U.S.C.
2609(c)(1)(C)) is amended by striking ‘‘Not later than
the expiration of the 90-day period beginning on the
date of the enactment of the Cranston-Gonzalez Na-
tional Affordable Housing Act, the’’ and inserting
‘‘The’’.
(4) Section 16 of the Real Estate Settlement Pro-
cedures Act of 1974 (12 U.S.C. 2614) is amended by
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striking ‘‘Secretary,’’ and inserting ‘‘Board, an agen-
cy referred to in any subparagraph of section
8(f)(1),’’.
(5) Section 18 of the Real Estate Settlement Pro-
cedures Act of 1974 (12 U.S.C. 2616) is amended—
(A) by striking ‘‘Secretary is authorized to’’
and inserting ‘‘Board and Secretary may joint-
ly’’;
(B) by striking ‘‘Secretary’’ each place such
term appears other than the 1st place and insert-
ing ‘‘Board and Secretary’’; and
(C) by striking ‘‘determines that such laws’’
and inserting ‘‘determine that such laws’’.
(6) Section 19(a) of the Real Estate Settlement
Procedures Act of 1974 (12 U.S.C. 2617(a)) is amend-
ed to read as follows:
‘‘(a) REGULATIONS.—
‘‘(1) IN GENERAL.—Subject to paragraph (2), the
Secretary and the Board may prescribe such regula-
tions, make such interpretations, and grant such rea-
sonable exemptions for classes of transactions, as may
be necessary to achieve the purposes of this Act.
‘‘(2) APPLICATION.—
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‘‘(A) BOARD.—The authority of the Board
under paragraph (1) shall apply with respect
to—
‘‘(i) sections 4, 5, 6, 10, and 12; and
‘‘(ii) sections 3, 7, 17, and 18 to the
extent such sections are applicable with re-
spect to the sections described in clause (i).
‘‘(B) SECRETARY.—The authority of the
Secretary under paragraph (1) shall apply with
respect to—
‘‘(i) sections 8 and 9; and
‘‘(ii) sections 3, 7, 17, and 18 to the
extent such sections are applicable with re-
spect to the sections described in clause
(i).’’.
(7) Section 19(b) of the Real Estate Settlement
Procedures Act of 1974 (12 U.S.C. 2617(b)) is amend-
ed by inserting ‘‘, the Board,’’ after ‘‘the Secretary’’.
(8) Section 19(c) of the Real Estate Settlement
Procedures Act of 1974 (12 U.S.C. 2617(c)) is amend-
ed—
(A) in paragraph (1)—
(i) by striking ‘‘Secretary’’ the 1st
place such term appears and inserting
‘‘Board, with respect to any action to en-
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force section 4, 5, 6, or 10, and each agency
referred to in any subparagraph of section
8(f)(1), with respect to any action to enforce
section 8, 9, or 12,’’; and
(ii) by striking ‘‘Secretary’’ each place
such term appears other than the 1st place
and inserting ‘‘Board or such other agen-
cy’’; and
(B) in paragraph (2), by striking ‘‘Sec-
retary’’ and inserting ‘‘Board or an agency re-
ferred to in any subparagraph of section
8(f)(1)’’.
(9) The heading for section 19 of the Real Estate
Settlement Procedures Act of 1974 (12 U.S.C. 2617)
is amended to read as follows:
‘‘AUTHORITY OF THE SECRETARY AND THE FEDERAL
RESERVE BOARD’’.
(i) REPEAL OF OBSOLETE PROVISIONS.—The Real Es-
tate Settlement Procedures Act of 1974 (12 U.S.C. 2601 et
seq.) is amended by striking sections 13, 14, and 15.
SEC. 102. SIMPLIFICATION AND UNIFICATION OF DISCLO-
SURES REQUIRED UNDER RESPA AND TILA
FOR MORTGAGE TRANSACTIONS.
(a) IN GENERAL.—With respect to credit transactions
which are subject to the Real Estate Settlement Procedures
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Act of 1974 and the Truth in Lending Act, the Board of
Governors of the Federal Reserve System shall take such ac-
tion as may be necessary before the end of the 3-month pe-
riod beginning on the date of the enactment of this Act—
(1) to simplify the disclosures applicable to such
transactions under such Acts, including the timing of
the disclosures; and
(2) to provide a single format for such disclo-
sures which will satisfy the requirements of each such
Act with respect to such transactions.
(b) REGULATIONS.—To the extent that it is necessary
to prescribe any regulation in order to effect any changes
required to be made under subsection (a), the proposed regu-
lation shall be published in the Federal Register before the
end of the 3-month period referred to in subsection (a).
(c) RECOMMENDATIONS
FOR LEGISLATION.—If the
Board of Governors of the Federal Reserve System finds that
legislative action may be necessary or appropriate in order
to simplify and unify the disclosure requirements under the
Real Estate Settlement Procedures Act of 1974 and the
Truth in Lending Act, the Board shall submit a report con-
taining recommendations to the Congress concerning such
action.
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SEC. 103. INCREASED REGULATORY FLEXIBILITY UNDER
THE TRUTH IN LENDING ACT.
(a) REGULATORY FLEXIBILITY.—Section 104 of the
Truth in Lending Act (15 U.S.C. 1603) is amended by add-
ing at the end the following new paragraph:
‘‘(7) Transactions for which the Board, by regu-
lation, determines that coverage under the Act is not
needed to carry out the purposes of the Act.’’.
(b) EXEMPTIVE AUTHORITY.—Section 105 of the
Truth in Lending Act (15 U.S.C. 1604) is amended—
(1) by redesignating subsections (b), (c), and (d)
as subsections (c), (d), and (e), respectively; and
(2) by inserting after subsection (a) the following
new subsection:
‘‘(b) EXEMPTIVE AUTHORITY.—
‘‘(1) IN GENERAL.—The Board shall exempt from
all or parts of this title any class of transactions for
which, in the Board’s judgment, coverage under all or
part of this title does not provide a measurable benefit
to consumers in the form of useful information or
protection.
‘‘(2) FACTORS TO BE CONSIDERED.—In deter-
mining which classes of transactions to exempt in
whole or in part, the Board shall consider, among
other factors, the following:
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‘‘(A) The amount of the loan or closing costs
and whether the disclosures, right of rescission,
and other provisions are necessary, particularly
for small loans.
‘‘(B) Whether the requirements of this title
complicate, hinder, or make more expensive the
credit process for the class of transactions.
‘‘(C) The status of the borrower, including,
the borrowers’ related financial arrangements,
the financial sophistication of the borrower rel-
ative to the type of transaction, and the impor-
tance of the credit and related supporting prop-
erty to the borrower.’’.
SEC. 104. REDUCTIONS IN RESPA REGULATORY BURDENS;
CLARIFYING AMENDMENTS.
(a) UNNECESSARY DISCLOSURE.—Section 6(a) of the
Real Estate Settlement Procedures Act of 1974 (12 U.S.C.
2605) is amended to read as follows:
‘‘(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
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other person at any time while such loan is outstand-
ing.
‘‘(2) SIGNATURE OF APPLICANT.—Any disclosure
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 develop before the ex-
piration of the 180-day period beginning on the date
of the enactment of the Financial Institutions Regu-
latory Relief Act of 1995, 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 application.’’.
(b) EFFECTIVE DATE.—The amendments made by sub-
section (a) shall take effect 180 days after the date of the
enactment of this Act.
(c) SECOND MORTGAGES.—Section 3(1)(A) of the Real
Estate Settlement Procedures Act of 1974 (12 U.S.C.
2602(1)(A)) is amended by striking ‘‘or subordinate’’.
(d) CONSISTENCY OF RESPA AND TRUTH IN LENDING
ACT EXEMPTION OF BUSINESS LOANS.—Section 7 of the
Real Estate Settlement Procedures Act of 1974 (12 U.S.C.
2606) is amended—
(1) by inserting ‘‘(a) IN GENERAL.—’’ before
‘‘This Act’’; and