I
105TH CONGRESS
2D SESSION
H. R. 3116
To address the Year 2000 computer problems with regard to financial institu-
tions, to extend examination parity to the Director of the Office of
Thrift Supervision and the National Credit Union Administration, and
for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 28, 1998
Mr. LEACH (for himself, Mr. CASTLE, Mr. BACHUS, Mr. BAKER, and Mrs.
ROUKEMA) introduced the following bill; which was referred to the Com-
mittee on Banking and Financial Services
A BILL
To address the Year 2000 computer problems with regard
to financial institutions, to extend examination parity
to the Director of the Office of Thrift Supervision and
the National Credit Union Administration, 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; DEFINITION.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Examination Parity and Year 2000 Readiness for Finan-
cial Institutions Act’’.
(b) YEAR 2000 COMPUTER PROBLEM DEFINED.—
For purposes of this Act, the term ‘‘Year 2000 computer
problem’’ means, with respect to information technology,
any problem which prevents such technology from accu-
rately processing, calculating, comparing, or sequencing
date or time data—
(1) from, into, or between—
(A) the 20th and 21st centuries; or
(B) the years 1999 and 2000; or
(2) with regard to leap year calculations.
SEC. 2. FINDINGS.
The Congress finds as follows:
(1) The Year 2000 computer problem poses a
serious challenge to the American economy, includ-
ing the Nation’s banking and financial services in-
dustries.
(2) Thousands of banks, savings associations,
and credit unions rely heavily on internal informa-
tion technology and computer systems, as well as
outside service providers, for mission-critical func-
tions, such as check clearing, direct deposit, account-
ing, automated teller machine networks, credit card
processing, and data exchanges with domestic and
international borrowers, customers, and other finan-
cial institutions.
(3) Federal financial regulatory agencies must
have sufficient examination authority to ensure that
the safety and soundness of the Nation’s financial
institutions will not be at risk.
SEC. 3. SEMINARS AND MODEL APPROACHES TO YEAR 2000
COMPUTER PROBLEM.
(a) SEMINARS.—
(1) IN GENERAL.—Each Federal banking agen-
cy and the National Credit Union Administration
Board shall offer seminars to all depository institu-
tions and credit unions under the jurisdiction of
such agency on the implication of the Year 2000
computer problem for—
(A) the safe and sound operations of such
depository institutions and credit unions; and
(B) transactions with other financial insti-
tutions, including Federal reserve banks and
Federal home loan banks.
(2) CONTENT
AND
SCHEDULE.—The content
and schedule of seminars offered pursuant to para-
graph (1) shall be determined by each Federal bank-
ing agency and the National Credit Union Adminis-
tration Board taking into account the resources and
examination priorities of such agency.
(b) MODEL APPROACHES.—
(1) IN GENERAL.—Each Federal banking agen-
cy and the National Credit Union Administration
Board shall make available to all depository institu-
tions and credit unions under the jurisdiction of
such agency model approaches to common Year
2000 computer problems, such as model approaches
with regard to project management, vendor con-
tracts, testing regimes, and business continuity plan-
ning.
(2) VARIETY OF APPROACHES.—In developing
model approaches to the Year 2000 computer prob-
lem pursuant to paragraph (1), each Federal bank-
ing agency and the National Credit Union Adminis-
tration Board shall take into account the need to de-
velop a variety of approaches to correspond to the
variety of depository institutions or credit unions
within the jurisdiction of the agency.
(c) COOPERATION.—In carrying out this section, the
Federal banking agencies and the National Credit Union
Administration Board may cooperate and coordinate ac-
tivities with each other, the Financial Institutions Exam-
ination Council, and appropriate organizations represent-
ing depository institutions or credit unions.
(d) FEDERAL BANKING AGENCY DEFINED.—For
purposes of this section, the term ‘‘Federal banking agen-
cy’’ has the meaning given to such term in section 3(z)
of the Federal Deposit Insurance Act.
SEC. 4. REGULATION AND EXAMINATION OF SERVICE COR-
PORATIONS CONTROLLED BY SAVINGS ASSO-
CIATIONS AND SERVICE PROVIDERS.
Section 5(d) of the Home Owners’ Loan Act (12
U.S.C. 1464(d)) is amended by adding at the end the fol-
lowing new paragraph:
‘‘(7) REGULATION AND EXAMINATION OF SERV-
ICE
CORPORATIONS, SUBSIDIARIES, AND
SERVICE
PROVIDERS.—
‘‘(A) GENERAL EXAMINATION AND REGU-
LATORY AUTHORITY.—
‘‘(i) IN GENERAL.—A service corpora-
tion or subsidiary that is owned in whole
or in part by a savings association shall be
subject to examination and regulation by
the Director to the same extent as such
savings association.
‘‘(ii) EXAMINATION BY OTHER BANK-
ING AGENCIES.—The Director may author-
ize any other Federal banking agency that
supervises any other person who maintains
an ownership interest in the service cor-
poration or subsidiary to make an exam-
ination of the corporation or subsidiary for
purposes of clause (i).
‘‘(B) APPLICABILITY
OF
SECTION
OF
THE FEDERAL DEPOSIT INSURANCE ACT.—
‘‘(i) IN GENERAL.—A service corpora-
tion or subsidiary that is owned in whole
or in part by a savings association shall be
subject to the provisions of section 8 of the
Federal Deposit Insurance Act as if the
service corporation or subsidiary were an
insured depository institution.
‘‘(ii) APPROPRIATE
FEDERAL
BANK-
ING AGENCY.—For purposes of clause (i),
the Director shall be the appropriate Fed-
eral banking agency with regard to a serv-
ice corporation or subsidiary described in
such clause.
‘‘(C) SERVICE PERFORMED BY CONTRACT
OR
OTHERWISE.—Notwithstanding 
subpara-
graph (A), if a savings association or subsidi-
ary, or any savings and loan holding company,
affiliate, or entity referred to in section 8(b)(9)
of the Federal Deposit Insurance Act, that is
regularly examined or subject to examination by
the Director, causes to be performed for itself,
paragraph and prevent evasions of this para-
graph.’’.
SEC. 5. REGULATION AND EXAMINATION OF CREDIT UNION
ORGANIZATIONS AND SERVICE PROVIDERS.
Title II of the Federal Credit Union Act (12 U.S.C.
1781 et seq.) is amended by inserting after section 206
the following new section:
‘‘SEC. 206A. REGULATION AND EXAMINATION OF CREDIT
UNION ORGANIZATIONS AND SERVICE PRO-
VIDERS.
‘‘(a) GENERAL EXAMINATION AND REGULATORY AU-
THORITY.—
‘‘(1) IN GENERAL.—A credit union organization
shall be subject to examination and regulation by the
Board to the same extent as an insured credit union.
‘‘(2) EXAMINATION BY OTHER FEDERAL AGEN-
CIES.—The Board may authorize—
‘‘(A) any Federal regulatory agency that
supervises any activity of a credit union organi-
zation; or
‘‘(B) any Federal banking agency (as de-
fined in section 3(z) of the Federal Deposit In-
surance Act) that supervises any other person
who maintains an ownership interest in a credit
union organization,
to make an examination of the credit union organi-
zation for purposes of paragraph (1).
‘‘(3) 
CREDIT
UNION
ORGANIZATION
DE-
FINED.—For purposes of this section, the term
‘credit union organization’ means any entity that—
‘‘(A) is not a credit union;
‘‘(B) is an entity in which an insured cred-
it union may lawfully hold an ownership inter-
est or investment; and
‘‘(C) is owned in whole or in part by an in-
sured credit union.
‘‘(b) APPLICABILITY
OF SECTION 206.—A credit
union organization shall be subject to the provisions of
section 206 as if the credit union organization were an
insured credit union.
‘‘(c) SERVICE PERFORMED BY CONTRACT OR OTHER-
WISE.—Notwithstanding subsection (a), if an insured
credit union or a credit union organization that is regu-
larly examined or subject to examination by the Board,
causes to be performed for itself, by contract or otherwise,
any services authorized under this Act or any applicable
State law, whether on or off its premises—
‘‘(1) the performance of such services shall be
subject to regulation and examination by the Board
to the same extent as if such services were being
performed by the insured credit union itself on its
own premises; and
‘‘(2) the insured credit union or credit union or-
ganization shall notify the Board of the existence of
the service relationship before the end of the 30-day
period beginning on the earlier of—
‘‘(A) the date on which the contract is en-
tered into; or
‘‘(B) the date on which the performance of
the service is initiated.
‘‘(d) ADMINISTRATION BY THE BOARD.—The Board
may prescribe such regulations and issue such orders as
may be necessary to enable the Board to administer and
carry out the purposes of this section and prevent evasions
of this section.’’.
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