IB
Union Calendar No. 248
103D CONGRESS
2D SESSION
H. R. 3841
[Report No. 103–448]
To amend the Bank Holding Company Act of 1956, the Revised Statutes
of the United States, and the Federal Deposit Insurance Act to provide
for interstate banking and branching.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 10, 1994
Mr. NEAL of North Carolina (for himself, Mr. MCCOLLUM, Mr. LAFALCE, Mr.
VENTO, Mr. SCHUMER, Mr. FRANK of Massachusetts, Mr. KANJORSKI,
Mr. KENNEDY, Mr. FLAKE, Mr. MFUME, Mr. LAROCCO, Mr. ORTON, Mr.
KLEIN, Mrs. MALONEY, Ms. PRYCE of Ohio, Mr. LINDER, Mr. LAZIO,
Mr. BACHUS of Alabama, Mrs. ROUKEMA, Mr. MCCANDLESS, and Mr.
KING) introduced the following bill; which was referred to the Committee
on Banking, Finance and Urban Affairs
MARCH 22, 1994
Additional sponsor: Mr. HINCHEY
MARCH 22, 1994
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 February 10, 1994]
A BILL
To amend the Bank Holding Company Act of 1956, the
Revised Statutes of the United States, and the Federal
Deposit Insurance Act to provide for interstate banking
and branching.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Interstate Banking Efficiency Act of 1994’’.
(b) TABLE OF CONTENTS.—
Sec. 1. Short title and table of contents.
TITLE I—INTERSTATE BANKING AND BRANCHING
Sec. 101. Interstate banking.
Sec. 102. Interstate branching by national banks.
Sec. 103. Interstate branching by State banks.
Sec. 104. Branching by foreign banks.
Sec. 105. Interstate consolidations.
Sec. 106. Branch closures.
Sec. 107. Prohibition against deposit production offices.
Sec. 108. Federal Reserve Board study on bank fees.
Sec. 109. Restatement of existing law.
TITLE II—CRA EVALUATIONS
Sec. 201. State-by-State CRA evaluations of depository institutions with inter-
state branches.
TITLE I—INTERSTATE BANKING
AND BRANCHING
SEC. 101. INTERSTATE BANKING.
(a) INTERSTATE ACQUISITIONS.—Section 3(d) of the
Bank Holding Company Act of 1956 (12 U.S.C. 1842(d))
is amended to read as follows:
‘‘(d) INTERSTATE ACQUISITIONS.—
‘‘(1) APPROVALS AUTHORIZED.—
‘‘(A) IN GENERAL.—Subject to paragraph
(2), the Board may approve an application
under this section by a bank holding company to
acquire, directly or indirectly, any voting shares
of, interest in, or all or substantially all of the
assets of any additional bank or any bank hold-
ing company located in any State other than the
home State of the applicant bank holding com-
pany.
‘‘(B) CONCENTRATION LIMITS.—
‘‘(i) IN
GENERAL.—The Board may
not approve an application under subpara-
graph (A) if—
‘‘(I) the applicant (including all
insured depository institutions which
are affiliates of the applicant) controls,
or upon completion of the acquisition
would control, more than 10 percent of
the total amount of insured depository
institution deposits in the United
States; or
‘‘(II) the applicant (including all
insured depository institutions which
are affiliates of the applicant) controls,
or upon completion of the acquisition
would control, 30 percent or more of
the total amount of insured depository
institution deposits in the State in
which the bank to be acquired is lo-
cated.
‘‘(ii) WAIVER BY STATE.—A State may
waive the application of clause (i)(II) to an
acquisition in such State.
‘‘(2) APPLICABILITY OF STATE LAW TO ACQUISI-
TIONS.—
‘‘(A) INAPPLICABILITY OF CERTAIN STATE
LAWS TO ACQUISITIONS.—Subject to paragraph
(3), any acquisition described in paragraph
(1)(A) which has been approved under this sec-
tion may be consummated notwithstanding any
law of any State that would prohibit or other-
wise limit such acquisition on the basis of—
‘‘(i) the location or size of the acquir-
ing company or any subsidiary of such
company;
‘‘(ii) the number of bank subsidiaries
of such company; or
‘‘(iii) any other factor that—
‘‘(I) directly or indirectly, has the
effect of prohibiting or limiting the ac-
quisition of shares or control of a bank
or bank holding company located in
such State by an out-of-State bank
holding company; and
‘‘(II) is not applied with similar
effect with respect to acquisitions of
banks or bank holding companies lo-
cated in such State by bank holding
companies located in the State.
‘‘(B) APPLICABILITY OF STATE LAW ON THE
FORM OF ACQUISITION.—
‘‘(i) IN
GENERAL.—Notwithstanding
any other provision of this subsection and
subject to clause (ii), any law of a host
State which—
‘‘(I) is in existence on the date of
the enactment of the Interstate Bank-
ing Efficiency Act of 1994 or is en-
acted after such date; and
‘‘(II) allows an out-of-State bank
or bank holding company to establish a
bank in the host State only by acquir-
ing an existing bank in the host State,
shall apply with respect to the establishment
or acquisition of a bank in the host State
under this subsection.
‘‘(ii) APPLICABILITY
OF
PROVISIONS
RELATING TO MINIMUM PERIOD OF EXIST-
ENCE OF ACQUIRED BANK.—In the case of
any State law referred to in clause (i)
which is enacted after the date of the enact-
ment of the Interstate Banking Efficiency
Act of 1994 and requires the bank to be ac-
quired to have been in existence (as of the
date of the transaction) for a period of time
greater than 5 years, such law shall be ap-
plied under clause (i) by substituting ‘5-
year period’ for such greater period.
‘‘(3) APPLICABILITY OF STATE LAW TO INTER-
STATE BANKING OPERATIONS.—
‘‘(A) STATE TAXATION AUTHORITY NOT AF-
FECTED.—No provision of this subsection shall
be construed as affecting the authority of any
State or political subdivision of any State to
apply and administer any tax or method of tax-
ation to any bank, bank holding company, or
foreign bank, or any affiliate of any bank or
bank holding company, to the extent such tax or
tax method is otherwise permissible by or under
the Constitution of the United States of America
or other Federal law.
‘‘(B) APPLICABILITY OF DEPOSIT CAPS AND
ANTITRUST
LAWS.—No provision of this sub-
section shall be construed as affecting—
‘‘(i) the authority of any State to limit
the percentage of the total amount of in-
sured depository institution deposits in the
State which may be held or controlled by
any bank to the extent the application of
such limitation does not discriminate
against out-of-State banks or bank holding
companies; or
‘‘(ii) the applicability of the antitrust
laws or any State law which is similar to
the antitrust laws.
‘‘(4) DEFINITIONS.—For purposes of this sub-
section, the following definitions shall apply:
‘‘(A) ANTITRUST
LAWS.—The term ‘anti-
trust laws’—
‘‘(i) has the same meaning as in sub-
section (a) of the 1st section of the Clayton
Act; and
‘‘(ii) includes section 5 of the Federal
Trade Commission Act to the extent such
section 5 relates to unfair methods of com-
petition.
‘‘(B) DEPOSITS.—The term ‘deposits’ has
the same meaning as in section 3(l) of the Fed-
eral Deposit Insurance Act.
‘‘(C) HOME STATE.—The term ‘home State’
means, with respect to a bank holding company,
the State in which the total deposits of all bank-
ing subsidiaries of such company were the larg-
est on the later of July 1, 1966, or the date on
which the company becomes a bank holding com-
pany.
‘‘(D) HOST STATE.—The term ‘host State’
means, with respect to a bank holding company
acquiring or establishing a bank in a State other
than such company’s home State, the State in
which the bank being acquired or established is
located.
‘‘(E) INSURED DEPOSITORY INSTITUTION.—
The term ‘insured depository institution’ has the
same meaning as in section 3 of the Federal De-
posit Insurance Act.
‘‘(F) OUT-OF-STATE
BANK
HOLDING
COM-
PANY.—The term ‘out-of State bank holding com-
pany’ means, with respect to any State, a bank
holding company the home State of which is an-
other State.’’.
(b) 
SUBSIDIARY
DEPOSITORY
INSTITUTIONS
AS
AGENTS.—Section 18 of the Federal Deposit Insurance Act
(12 U.S.C. 1828) by adding at the end the following new
subsection:
‘‘(q) SUBSIDIARY
DEPOSITORY
INSTITUTIONS
AS
AGENTS FOR CERTAIN AFFILIATES.—
‘‘(1) IN GENERAL.—Any depository institution
subsidiary of a depository institution holding com-
pany may receive deposits, renew time deposits, close
loans, disburse proceeds of loans, and receive pay-
ments on loans and other obligations as agent for a
depository institution affiliate located in another
State.
‘‘(2) DEPOSITORY INSTITUTION ACTING AS AGENT
IS NOT A BRANCH.—Notwithstanding any other provi-
sion of law, a depository institution acting as agent
in accordance with paragraph (1) for a depository in-
stitution affiliate shall not be considered to be a
branch of the affiliate.
‘‘(3) ACTIVITIES
AS
AGENT.—Paragraph (1)
shall not be construed as authorizing a State deposi-
tory institution to engage in activities as an agent in
which such institution is not authorized to engage as
principal under the laws of the State in which such
institution acts as agent.
‘‘(4) PLAN ON MEETING LOCAL CREDIT NEEDS.—
‘‘(A) IN GENERAL.—If a depository institu-
tion holding company controls any depository
institution which acts as agent for another de-
pository institution subsidiary of such company
pursuant to paragraph (1), the depository insti-
tution holding company shall file a local credit
needs plan with the appropriate Federal banking
agency for the subsidiary which acts as agent be-
fore the date on which the subsidiary begins act-
ing as agent.
‘‘(B) LOCAL
CREDIT
NEEDS
PLAN
DE-
FINED.—The term ‘local credit needs plan’
means a plan for meeting local credit needs in
the communities served by any depository insti-
tution subsidiary (of a bank holding company)
which acts as agent pursuant to paragraph (1),
which includes an estimate of the extent to which
the amount of the anticipated savings attrib-
utable to the use of depository institution sub-
sidiaries as agents under this subsection will be
available to meet such local credit needs.’’.
(c) EFFECTIVE DATE.—The amendment made by this
section shall apply after the end of the 12-month period be-
ginning on the date of the enactment of this Act.
SEC. 102. INTERSTATE BRANCHING BY NATIONAL BANKS.
Section 5155 of the Revised Statutes (12 U.S.C. 36)
is amended—
(1) by redesignating subsections (d) through (h)
as subsections (g) through (k), respectively;
(2) by inserting after subsection (c) the following
new subsections:
‘‘(d) INTERSTATE BRANCHING BY NATIONAL BANKS.—
‘‘(1) APPROVALS OF ACQUISITION OF EXISTING
BRANCHES AUTHORIZED.—Subject to paragraphs (3)
and (4) and subsections (e) and (f), after the end of
the 3-year period beginning on the date of the enact-
ment of the Interstate Banking Efficiency Act of
1994, the Comptroller of the Currency may approve
an application to allow a national bank to—
‘‘(A) acquire a bank or branch located out-
side the home State of such bank in a State in
which the bank does not maintain a branch; and
‘‘(B) operate such bank or branch (includ-
ing any branch of such bank) as a branch,
if the conditions established in paragraph (6) are
met.
‘‘(2) STATE
‘OPT-IN’ 
ELECTION
TO
PERMIT
INTERSTATE
BRANCHING
THROUGH
DE
NOVO
BRANCHES.—Subject to subsections (e) and (f), the
Comptroller of the Currency may approve an applica-
tion by a national bank to establish and operate a de
novo branch outside the home State of such bank in
a State in which the bank does not maintain a
branch if—
‘‘(A) there is in effect in the host State a
law that—
‘‘(i) expressly permits all out-of-State
banks to establish de novo branches in such
State; and
‘‘(ii) applies equally to national and
State banks; and
‘‘(B) the conditions established in para-
graph (6) are met.
‘‘(3) STATE ‘OPT-OUT’ ELECTION TO PROHIBIT
INTERSTATE BRANCHING BY ACQUISITION OF EXIST-
ING BANKS.—
‘‘(A) IN GENERAL.—An application by a
national bank to establish a branch in a State
other than the home State of such bank through
the acquisition of an existing bank or branch in
the host State may not be approved by the
Comptroller of the Currency if there is in effect
in the host State a law which—
‘‘(i) expressly prohibits all out-of-State
banks from acquiring a branch located in
such State through the acquisition of an ex-
isting bank or branch in the host State;
‘‘(ii) was enacted during the period be-
ginning on January 1, 1990, and ending 3
years after the date of the enactment of the
Interstate Banking Efficiency Act of 1994;
and
‘‘(iii) applies equally to national and
State banks.
‘‘(B) EFFECT OF PROHIBITION.—A national
bank whose home State has in effect a prohibi-
tion described in subparagraph (A) may not ac-
quire or establish, under this subsection, a
branch located in any other State.
‘‘(4) STATE LAWS REQUIRING MINIMUM PERIOD
OF EXISTENCE FOR ACQUISITIONS BY OUT-OF-STATE
BANKS.—
‘‘(A) LAWS ENACTED BEFORE INTERSTATE
BANKING ACT.—In the case of a State in which
a law is in effect which—
‘‘(i) allows an out-of-State bank or
bank holding company to establish a bank
in the host State only by acquiring a bank
or branch (in the host State) which has been
in existence for not less than the minimum
time period specified in such law; and
‘‘(ii) took effect on or before the date of
the enactment of the Interstate Banking Ef-
ficiency Act of 1994,
an out-of-State national bank which has no
branch in such State may establish a branch in
the State under this subsection only by acquiring
a bank or branch which has been in existence for
not less than the minimum time period specified
in such law.
‘‘(B) SUBSEQUENT
ENACTMENTS.—In the
case of a State in which a law is in effect
which—
‘‘(i) allows an out-of-State bank or
bank holding company to establish a branch
in the host State only by acquiring a bank
or branch (in the host State) which has been
in existence for not less than the minimum
time period specified in such law; and
‘‘(ii) took effect after the date of the en-
actment of the Interstate Banking Effi-
ciency Act of 1994,
an out-of-State national bank which has no
branch in such State may establish a branch in
the State under this subsection only by acquiring
a bank or branch which has been in existence for
not less than the lesser of the minimum time pe-
riod specified in such law or 5 years.
‘‘(5) EARLY APPROVAL AUTHORIZED IF STATE
LAW PERMITS.—The Comptroller of the Currency may
approve an application under paragraph (1) before
the expiration of the 3-year period described in such
paragraph if the State in which the branch is or will
be located has in effect a law which expressly permits
interstate branching by all national and State banks.
‘‘(6) CONDITIONS APPLICABLE TO THE ESTAB-
LISHMENT
OR
ACQUISITION
OF
INTERSTATE
BRANCHES.—The Comptroller of the Currency may
‘‘(F) HOST STATE.—The term ‘host State’
means any State in which a national bank es-
tablishes or maintains a branch other than the
home State of such bank.
‘‘(G) INSURED DEPOSITORY INSTITUTION.—
The term ‘insured depository institution’ has the
same meaning as in section 3(c)(2) of the Fed-
eral Deposit Insurance Act.
‘‘(H) OUT-OF-STATE BANK.—The term ‘out-
of-State bank’ means, with respect to any State,
a bank whose home State is another State.
‘‘(I) OUT-OF-STATE
BANK
HOLDING
COM-
PANY.—The term ‘out-of-State bank holding com-
pany’ means, with respect to any State, a bank
holding company whose home State (as defined
in section 3(d)(4)(D) of the Bank Holding Com-
pany Act of 1956) is another State.
‘‘(J) STATE BANK.—The term ‘State bank’
has the same meaning as in section 3(a)(2) of
the Federal Deposit Insurance Act.
‘‘(K) STATE BANK SUPERVISOR.—The term
‘State bank supervisor’ has the same meaning as
in section 3(r) of the Federal Deposit Insurance
Act.
‘‘(f) APPLICABILITY OF STATE AND FEDERAL LAW TO
INTERSTATE BRANCHING OPERATIONS.—
‘‘(1) CERTAIN STATE LAWS APPLICABLE TO NA-
TIONAL BANK BRANCHES.—
‘‘(A) IN GENERAL.—Any branch of an out-
of-State national bank shall be subject to the
laws of the host State with respect to intrastate
branching, consumer protection, fair lending,
and community reinvestment as if the branch
were a branch of a bank chartered by that State,
except to the extent any such State law is pre-
empted by Federal law regarding the same sub-
ject.
‘‘(B) PROHIBITION ON DISCRIMINATORY EF-
FECT.—Notwithstanding subparagraph (A), a
branch of an out-of-State national bank shall not
be subject to a State law described in such sub-
paragraph to the extent the Comptroller of the
Currency determines that the application of the
law has, or would have, a discriminatory effect
on the branch in comparison with the effect the
application of such law has with respect to
branches of a bank chartered by the State.
‘‘(C) ENFORCEMENT OF APPLICABLE STATE
LAWS.—The provisions of any State law to
in existence for not less than the minimum
time period specified in such law; and
‘‘(ii) took effect after the date of the en-
actment of the Interstate Banking Effi-
ciency Act of 1994,
an out-of-State insured State bank which has no
branch in such State may establish a branch in
the State under this subsection only by acquiring
a bank or branch which has been in existence for
not less than the lesser of the minimum time pe-
riod specified in such law or 5 years.
‘‘(5) EARLY APPROVAL AUTHORIZED IF STATE
LAW
PERMITS.—The appropriate Federal banking
agency may approve an application under paragraph
(1) before the expiration of the 3-year period described
in such paragraph if the State in which the branch
is or will be located has in effect a law which ex-
pressly permits interstate branching by all national
and State banks.
‘‘(6) CONDITIONS APPLICABLE TO THE ESTAB-
LISHMENT
OR
ACQUISITION
OF
INTERSTATE
BRANCHES.—The appropriate Federal banking agen-
cy may approve an application under paragraph (1)
or (2) by an insured State bank to acquire or estab-
lish a branch only if—