I 
115TH CONGRESS 
1ST SESSION H. R. 4439 
To amend the Revised Statutes, the Bank Service Company Act, the Federal 
Deposit Insurance Act, and the Home Owners’ Loan Act to clarify 
that the role of the insured depository institution as lender and the 
location of an insured depository institution under applicable law are 
not affected by any contract between the institution and a third-party 
service provider, and to clarify that Federal preemption of State usury 
laws applies to any loan to which an insured depository institution 
is the party to which the debt is initially owed according to its terms, 
and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 16, 2017 
Mr. HOLLINGSWORTH (for himself, Mr. HASTINGS, Mr. MCHENRY, Mr. 
LUETKEMEYER, and Mr. CUELLAR) introduced the following bill; which 
was referred to the Committee on Financial Services 
A BILL 
To amend the Revised Statutes, the Bank Service Company 
Act, the Federal Deposit Insurance Act, and the Home 
Owners’ Loan Act to clarify that the role of the insured 
depository institution as lender and the location of an 
insured depository institution under applicable law are 
not affected by any contract between the institution and 
a third-party service provider, and to clarify that Federal 
preemption of State usury laws applies to any loan to 
which an insured depository institution is the party to 
which the debt is initially owed according to its terms, 
and for other purposes. 
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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 ‘‘Modernizing Credit 
Opportunities Act’’. 
SEC. 2. FINDINGS. 
Congress finds the following: 
(1) Insured depository institutions have found 
efficiencies in their lending operations through a va-
riety of different relationships with nondepository in-
stitutions that perform different lending-related 
functions. 
(2) The Federal banking regulators have recog-
nized that insured depository institutions may enter 
into relationships with third parties to originate 
loans, have recognized the benefits of these arrange-
ments for institutions and borrowers alike, and have 
issued guidance to ensure the safety and soundness 
of such relationships and to protect borrowers. 
(3) Insured depository institutions routinely en-
gage in third-party lending arrangements and regu-
lators have long recognized that third-party lending 
arrangements provide institutions with the ability to 
supplement, enhance or expedite lending services for 
their customers, and that engaging in third-party 
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lending arrangements also enables institutions to re-
duce the cost of delivering credit products, to expand 
access to credit, and to achieve strategic goals. 
(4) Litigation concerning loans made by an in-
sured depository institution that involve arrange-
ments with third parties that perform lending-re-
lated functions have required the courts to deter-
mine the identity and location of the lender but have 
reached inconsistent results. 
(5) Inconsistencies in the determinations of the 
identity and location of the lender under judicially 
crafted multi-factor balancing tests lessen the effi-
ciency of the lending process, reduce the trans-
parency of the lending process for both lenders and 
borrowers, and jeopardize the substantial benefits of 
third-party lending arrangements for borrowers and 
the economy. 
(6) In order to maximize efficiency and trans-
parency, it is necessary to clarify and reinforce exist-
ing law by codifying clear and straightforward 
standards that establish that an insured depository 
institution is the lender on any loan or discount 
made, or upon any note, bill of exchange or other 
evidence of debt where it is the party to which the 
debt is initially owed according to its terms and that 
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any relationship with a third party that performs 
lending-related functions does not affect the deter-
mination of such institution’s role as the lender or 
its location. 
SEC. 3. LOCATION OF INSURED DEPOSITORY INSTITUTION. 
(a) AMENDMENT TO THE BANK SERVICE COMPANY 
ACT.—Section 7 of the Bank Service Company Act (12 
U.S.C. 1867) is amended— 
(1) by redesignating subsection (d) as sub-
section (e); and 
(2) by inserting after subsection (c) the fol-
lowing: 
‘‘(d) LOCATION OF INSURED DEPOSITORY INSTITU-
TION.—The geographic location within the United States 
of a person performing services for an insured depository 
institution under subsection (c) or the existence of an eco-
nomic relationship between an insured depository institu-
tion and another person shall not affect the determination 
of the location of such institution under other applicable 
law.’’. 
(b) AMENDMENT
TO
THE HOME OWNERS’ LOAN 
ACT.—Section 5(d)(7) of the Home Owners’ Loan Act (12 
U.S.C. 1464(d)(7)) is amended— 
(1) by redesignating subparagraph (E) as sub-
paragraph (F); and 
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(2) by inserting after subparagraph (D) the fol-
lowing: 
‘‘(E) LOCATION
OF
SAVINGS
ASSOCIA-
TION.—The geographic location within the 
United States of a person performing services 
for a savings association under subparagraph 
(D) or the existence of an economic relationship 
between a savings association and another per-
son shall not affect the determination of the lo-
cation of the savings association under other 
applicable law.’’. 
SEC. 4. TERMS AND CONDITIONS. 
(a) AMENDMENT TO THE REVISED STATUTES.—Sec-
tion 5197 of the Revised Statutes (12 U.S.C. 85) is 
amended by inserting the following after the first sen-
tence: ‘‘A loan, discount, note, bill of exchange, or other 
debt is made by an association, and subject to the pre-
ceding sentence, where the association is the party to 
which the debt is owed according to the terms of the loan, 
discount, note, bill of exchange, or other debt, regardless 
of any later assignment. The existence of a service or eco-
nomic relationship between an association and another 
person shall not affect the application of this section to 
the rate of interest upon the loan or discount made, or 
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the note, bill, or other evidence of debt or the identity of 
the association as the lender under the agreement.’’. 
(b) AMENDMENT TO THE FEDERAL DEPOSIT INSUR-
ANCE ACT.—Subsection (a) of section 27 of the Federal 
Deposit Insurance Act (12 U.S.C. 1831d(a)) is amended 
by adding at the end the following: ‘‘A loan, discount, 
note, bill of exchange, or other debt is made by a State 
bank or an insured branch of a foreign bank, and subject 
to the preceding sentence, where a State bank or an in-
sured branch of a foreign bank is the party to which the 
debt is owed according to the terms of the loan, discount, 
note, bill of exchange or other debt, regardless of any later 
assignment. The existence of a service or economic rela-
tionship between a State bank or insured branch of a for-
eign bank and another person shall not affect the applica-
tion of this subsection to the interest rate upon the loan 
or discount made, or upon the note, bill of exchange, or 
other evidence of debt or the identity of the State bank 
or insured branch of a foreign bank as the lender under 
the agreement.’’. 
(c) AMENDMENT
TO
THE HOME OWNERS’ LOAN 
ACT.—Section 4(g)(1) of the Home Owners’ Loan Act (12 
U.S.C. 1463(g)(1)) is amended by adding at the end the 
following: ‘‘An extension of credit is made by a savings 
association, and subject to the preceding sentence, where 
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a savings association is the party to which the debt is owed 
according to the terms of the debt, regardless of any later 
assignment. The existence of a service or economic rela-
tionship between a savings association and another person 
shall not affect the application of this subsection to the 
interest rate upon the extension of credit or the identity 
of the savings association as the lender under the agree-
ment.’’. 
Æ 
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