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(1) SECTION 8 DESIGNATIONS.—Section 8(a) of
the Federal Deposit Insurance Act (12 U.S.C.
1818(a)) is amended—
(A) by striking paragraph (1); and
(B) 
by 
redesignating 
paragraphs 
(2)
through (9) as paragraphs (1) through (8), re-
spectively.
(2) VOLUNTARY TERMINATION OF INSURED STA-
TUS.—The Federal Deposit Insurance Act (12 U.S.C.
1811 et seq.) is amended by inserting after section 8
the following new section:
‘‘SEC. 8A. VOLUNTARY TERMINATION OF STATUS AS IN-
SURED DEPOSITORY INSTITUTION.
‘‘(a) IN GENERAL.—Except as provided in subsection
(b), an insured State bank or a national bank may volun-
tarily terminate such bank’s status as an insured depository
institution in accordance with regulations of the Corpora-
tion if—
‘‘(1) the bank provides written notice of the
bank’s intent to terminate such insured status—
‘‘(A) to the Corporation and the Board of
Governors of the Federal Reserve System not less
than 6 months before the effective date of such
termination; and
121
‘‘(B) to all depositors at such bank, not less
than 6 months before the effective date of the ter-
mination of such status; and
‘‘(2) either—
‘‘(A) the deposit insurance fund of which
such bank is a member equals or exceeds the
fund’s designated reserve ratio as of the date the
bank provides a written notice under paragraph
(1) and the Corporation determines that the fund
will equal or exceed the applicable designated re-
serve ratio for the 2 semiannual assessment peri-
ods immediately following such date; or
‘‘(B) the Corporation and the Board of Gov-
ernors of the Federal Reserve System approve the
termination of the bank’s insured status and the
bank pays an exit fee in accordance with sub-
section (e).
‘‘(b) EXCEPTION.—Subsection (a) shall not apply with
respect to—
‘‘(1) an insured savings association;
‘‘(2) an insured branch that is required to be in-
sured under subsection (a) or (b) of section 6 of the
International Banking Act of 1978; or
‘‘(3) any institution described in section 2(c)(2)
of the Bank Holding Company Act of 1956.
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‘‘(c) ELIGIBILITY
FOR INSURANCE TERMINATED.—
Any bank that voluntarily elects to terminate the bank’s
insured status under subsection (a) shall not be eligible for
insurance on any deposits or any assistance authorized
under this Act after the period specified in subsection (f)(1).
‘‘(d) INSTITUTION MUST BECOME WHOLESALE FINAN-
CIAL INSTITUTION OR TERMINATE DEPOSIT-TAKING AC-
TIVITIES.—Any depository institution which voluntarily
terminates such institution’s status as an insured deposi-
tory institution under this section may not, upon termi-
nation of insurance, accept any deposits unless the institu-
tion is a wholesale financial institution under section 9B
of the Federal Reserve Act.
‘‘(e) EXIT FEES.—
‘‘(1) IN GENERAL.—Any bank that voluntarily
terminates such bank’s status as an insured deposi-
tory institution under this section shall pay an exit
fee in an amount that the Corporation determines is
sufficient to account for the institution’s pro rata
share of the amount (if any) which would be required
to restore the relevant deposit insurance fund to the
fund’s designated reserve ratio as of the date the bank
provides a written notice under subsection (a)(1).
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‘‘(2) PROCEDURES.—The Corporation shall pre-
scribe, by regulation, procedures for assessing any exit
fee under this subsection.
‘‘(f) TEMPORARY INSURANCE OF DEPOSITS INSURED
AS OF TERMINATION.—
‘‘(1) TRANSITION PERIOD.—The insured deposits
of each depositor in a State bank or a national bank
on the effective date of the voluntary termination of
the bank’s insured status, less all subsequent with-
drawals from any deposits of such depositor, shall
continue to be insured for a period of not less than
6 months and not more than 2 years, as determined
by the Corporation. During such period, no additions
to any such deposits, and no new deposits in the de-
pository institution made after the effective date of
such termination shall be insured by the Corporation.
‘‘(2) TEMPORARY
ASSESSMENTS; OBLIGATIONS
AND DUTIES.—During the period specified in para-
graph (1) with respect to any bank, the bank shall
continue to pay assessments under section 7 as if the
bank were an insured depository institution. The
bank shall, in all other respects, be subject to the au-
thority of the Corporation and the duties and obliga-
tions of an insured depository institution under this
Act during such period, and in the event that the
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bank is closed due to an inability to meet the de-
mands of the bank’s depositors during such period,
the Corporation shall have the same powers and
rights with respect to such bank as in the case of an
insured depository institution.
‘‘(g) ADVERTISEMENTS.—
‘‘(1) IN GENERAL.—A bank that voluntarily ter-
minates the bank’s insured status under this section
shall not advertise or hold itself out as having insured
deposits, except that the bank may advertise the tem-
porary insurance of deposits under subsection (f) if,
in connection with any such advertisement, the adver-
tisement also states with equal prominence that addi-
tions to deposits and new deposits made after the ef-
fective date of the termination are not insured.
‘‘(2) CERTIFICATES OF DEPOSIT, OBLIGATIONS,
AND SECURITIES.—Any certificate of deposit or other
obligation or security issued by a State bank or a na-
tional bank after the effective date of the voluntary
termination of the bank’s insured status under this
section shall be accompanied by a conspicuous,
prominently displayed notice that such certificate of
deposit or other obligation or security is not insured
under this Act.
‘‘(h) NOTICE REQUIREMENTS.—
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‘‘(1) NOTICE TO THE CORPORATION.—The notice
required under subsection (a)(1)(A) shall be in such
form as the Corporation may require.
‘‘(2) NOTICE
TO
DEPOSITORS.—The notice re-
quired under subsection (a)(1)(B) shall be—
‘‘(A) sent to each depositor’s last address of
record with the bank; and
‘‘(B) in such manner and form as the Cor-
poration finds to be necessary and appropriate
for the protection of depositors.’’.
(3) DEFINITION.—Section 19(b)(1)(A)(i) of the
Federal Reserve Act (12 U.S.C. 461(b)(1)(A)(i)) is
amended after ‘‘such Act’’ by inserting ‘‘, or any
wholesale financial institution as defined in section
9B of this Act’’.
(c) REPORTS
ON DISCOUNTS
AND ADVANCES
TO
WHOLESALE FINANCIAL INSTITUTIONS.—Section 10B of
the Federal Reserve Act (12 U.S.C. 347(b)) is amended by
adding at the end the following new subsection:
‘‘(c) REPORTS
ON DISCOUNTS
AND ADVANCES
TO
WHOLESALE FINANCIAL INSTITUTIONS.—
‘‘(1) IN GENERAL.—The Board shall submit a re-
port to the Congress at the end of any year in which
any wholesale financial institution has obtained a
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discount, advance, or other extension of credit from a
Federal reserve bank.
‘‘(2) CONTENTS.—Any report submitted under
paragraph (1) shall explain the circumstances and
need for any discount, advance, or other extension of
credit to a wholesale financial institution during the
period covered by the report, including the type and
amount of credit extended and the amount of credit
remaining outstanding as of the date of the report.’’.
Subtitle C—Financial Activities
SEC. 121. FINANCIAL ACTIVITIES.
Section 4(c)(8) of the Bank Holding Company Act of
1956 (12 U.S.C. 1843(c)(8)) is amended—
(1) by striking ‘‘shares of any company’’ and all
that follows through ‘‘for a bank holding company to
provide’’ and inserting ‘‘shares of any company the
activities of which the Board after due notice has de-
termined (by order, regulation, or advisory opinion)
to be financial in nature or incidental to such finan-
cial activities. In determining whether an activity is
financial in nature or incidental to financial activi-
ties, the Board shall take into account changes or rea-
sonably expected changes in the marketplace in which
financial services holding companies compete as well
as changes or reasonably expected changes in the tech-
127
nology by which these services are delivered. In addi-
tion, the Board shall take into account activities con-
sidered financial activities or banking or financial
operations for purposes of the regulation of the Board
designated as ‘Regulation K’ (12 C.F.R. 211.23
(f)(5)(iii)(B)) as in effect on the date of the enactment
of the Financial Services Competitiveness Act of 1995.
Any activity that the Board has determined, by order
or regulation that is in effect on such date to be so
closely related to banking or managing or controlling
banks as to be a proper incident thereto shall be
deemed to be of a financial nature for purposes of this
paragraph without further action by the Board (sub-
ject to the same terms and conditions contained in
such order or regulation, unless modified by the
Board), but for purposes of this subsection it shall not
be closely related to banking or managing or control-
ling banks or financial in nature or incidental to a
financial activity for a financial services holding
company to provide’’;
(2) in the 3d sentence, by inserting ‘‘and between
activities commenced by affiliates of different classes
of banks’’ before the period at the end; and
(3) by striking the 2d sentence.
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SEC. 122. NO PRIOR APPROVAL REQUIRED FOR WELL CAP-
ITALIZED AND WELL MANAGED FINANCIAL
SERVICES HOLDING COMPANIES.
Section 4(j) of the Bank Holding Company Act of 1956
(12 U.S.C. 1843(j)) is amended—
(1) in paragraph (1), by striking ‘‘No’’ and in-
serting ‘‘Except as provided in paragraph (3) or sec-
tion 10(b)(3), no’’; and
(2) by adding at the end the following new para-
graphs:
‘‘(3) NO NOTICE REQUIRED FOR CERTAIN TRANS-
ACTIONS.—Notwithstanding paragraph (1), no notice
under subsection (c)(8) or (a)(2)(B) is required for a
proposal by a financial services holding company to
engage in any activity (other than an activity de-
scribed in subparagraph (A) or (B) of section
10(a)(1)) or acquire or retain the shares or assets of
any company (other than a securities affiliate) 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—
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‘‘(i) the acquiring financial services
holding company is well capitalized;
‘‘(ii) the lead depository institution of
such holding company is well capitalized;
‘‘(iii) well capitalized depository insti-
tutions control at least 80 percent of the ag-
gregate total risk-weighted assets of deposi-
tory institutions controlled by such holding
company; and
‘‘(iv) no depository institution con-
trolled 
by 
such 
holding 
company 
is
undercapitalized.
‘‘(B) MANAGERIAL CRITERIA.—
‘‘(i) WELL MANAGED.—At the time of
the transaction, the acquiring financial
services holding company, the lead deposi-
tory institution of such holding company,
and depository institutions that control at
least 80 percent of the aggregate total risk-
weighted assets of depository institutions
controlled by such holding company are well
managed.
‘‘(ii) LIMITATION ON POORLY MANAGED
INSTITUTIONS.—No depository institution
which is controlled by the acquiring finan-
130
cial services holding company has received
any of the lowest 2 composite ratings at the
later of the institution’s most recent exam-
ination or subsequent review.
‘‘(iii) RECENTLY
ACQUIRED
INSTITU-
TIONS.—Depository institutions acquired by
the financial services holding company dur-
ing the 12-month period ending on the date
of the proposed transaction may be excluded
for purposes of clause (ii) if—
‘‘(I) the financial services holding
company has developed a plan accept-
able to the appropriate Federal bank-
ing agency for the institution to restore
the capital and management of the in-
stitution; and
‘‘(II) all such depository institu-
tions represent, in the aggregate, less
than 25 percent of the total risk-
weighted assets of all depository insti-
tutions controlled by the financial serv-
ices holding company.
‘‘(C) ACTIVITIES PERMISSIBLE.—Following
consummation of the proposed transaction, the
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financial services holding company engages di-
rectly or through a subsidiary solely in—
‘‘(i) activities that are permissible
under subsection (c)(8), as determined by
the Board by any regulation, order, or advi-
sory opinion under such subsection that is
in effect at the time of the proposed trans-
action, subject to all of the restrictions,
terms, and conditions of such subsection
and such regulation, order, or advisory
opinion; and
‘‘(ii) such other activities as are other-
wise permissible under this Act, subject to
the restrictions, terms and conditions, in-
cluding any prior notice or approval re-
quirements, provided in this Act.
‘‘(D) SIZE OF ACQUISITION.—
‘‘(i) ASSET SIZE.—The book value of
the total risk-weighted assets acquired does
not exceed 10 percent of the consolidated
total risk-weighted assets of the acquiring fi-
nancial services holding company.
‘‘(ii) CONSIDERATION.—The gross con-
sideration to be paid for the securities or
assets does not exceed 15 percent of the con-
132
solidated tier 1 capital of the acquiring fi-
nancial services holding company.
‘‘(E) 
NOTICE
NOT
OTHERWISE
WAR-
RANTED.—For proposals described in paragraph
(5)(B), the Board has not, before the conclusion
of the period described in such paragraph, ad-
vised the financial services holding company that
a notice under paragraph (1) is required.
‘‘(5) NOTIFICATION.—
‘‘(A) COMMENCEMENT
OF
ACTIVITIES
AP-
PROVED BY RULE.—A financial services holding
company that qualifies under paragraph (4) and
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.
‘‘(B) SUBSEQUENT
NOTICE.—A financial
services holding company that commences an ac-
tivity under subsection (c)(8) without prior no-
tice to the Board shall provide written notice to
the Board no later than 10 business days after
commencing the activity.
‘‘(C) ACTIVITIES PERMITTED BY ORDER AND
ACQUISITIONS.—