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(2) by striking subsections (c) and (e) and redes-
ignating subsections (d) and (f) as subsections (c) and
(d), respectively.
SEC. 182. AMENDMENTS TO THE FEDERAL DEPOSIT INSUR-
ANCE ACT TO VEST IN THE ATTORNEY GEN-
ERAL SOLE RESPONSIBILITY FOR ANTITRUST
REVIEW OF DEPOSITORY INSTITUTION MERG-
ERS.
Section 18(c) of the Federal Deposit Insurance Act (12
U.S.C. 1828) is amended—
(1) in paragraph (3)(C) by striking ‘‘during a
period at least as long as the period allowed for fur-
nishing reports under paragraph (4) of this sub-
section’’;
(2) by striking paragraph (4) and inserting the
following new paragraph:
‘‘(4) FACTORS TO BE CONSIDERED.—In deter-
mining whether to approve a transaction, the respon-
sible agency shall in every case take into consider-
ation the financial and managerial resources and fu-
ture prospects of the existing and proposed institu-
tions, and the convenience and needs of the commu-
nity to be served.’’;
(3) by striking paragraph (5) and inserting the
following new paragraph:
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‘‘(5) NOTICE TO ATTORNEY GENERAL.—The re-
sponsible agency shall immediately notify the Attor-
ney General of any approval by it pursuant to this
subsection of a proposed merger transaction. If the re-
sponsible agency has found that it must act imme-
diately in order to prevent the probable failure of one
of the banks involved, the transaction may be con-
summated immediately upon approval by the agency.
If the responsible agency has notified the other Fed-
eral banking agencies referred to in this section of the
existence of an emergency requiring expeditious ac-
tion and has required the submission of views and
recommendations within 10 days, the transaction
may not be consummated before the 5th calendar day
after the date of approval of the responsible agency.
In all other cases, the transaction may not be con-
summated before the 30th calendar day after the date
of approval by the agency, or such shorter period of
time as may be prescribed by the Attorney General.’’;
(4) by striking paragraph (6) and redesignating
paragraphs (7) through (11) as paragraphs (6)
through (10), respectively;
(5) in subparagraph (A) of paragraph (6) (as so
redesignated by paragraph (4) of this section))—
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(A) by striking ‘‘(5)’’ and inserting ‘‘(4)’’;
and
(B) by striking ‘‘(6)’’ and inserting ‘‘(5)’’;
(C) by striking ‘‘In any such action, the
court shall review de novo the issues presented.’’;
(6) in paragraph (6) (as so redesignated by
paragraph (4) of this section)—
(A) by striking subparagraphs (B) and (D);
and
(B) by redesignating subparagraph (C) as
subparagraph (B);
(7) in paragraph (8) (as so redesignated by
paragraph (4) of this section)—
(A) by inserting ‘‘and’’ after the semicolon
at the end of subparagraph (A):
(B) by striking subparagraph (B); and
(C) by redesignating subparagraph (C) as
subparagraph (B); and
(8) by inserting after paragraph (10) (as so re-
designated by paragraph (4) of this section) the fol-
lowing new paragraph:
‘‘(11) REQUIREMENT
TO
FILE
INFORMATION
WITH ATTORNEY GENERAL.—Any applicant seeking
prior written approval of the responsible Federal
banking agency to engage in a merger transaction
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under this subsection shall file simultaneously with
the Attorney General copies of any documents regard-
ing the proposed transaction required by the Federal
banking agency.’’.
SEC. 183. INFORMATION FILED BY DEPOSITORY INSTITU-
TIONS; INTERAGENCY DATA SHARING.
(a) FORMAT OF NOTICE.—
(1) IN GENERAL.—Notice of any proposed trans-
action for which approval is required under section 3
of the Bank Holding Company Act of 1956 or section
18(c) of the Federal Deposit Insurance Act shall be in
a format designated and required by the appropriate
Federal banking agency (as defined in section 3 of the
Federal Deposit Insurance Act) and shall contain a
section on the likely competitive effects of the proposed
transaction.
(2) DESIGNATION BY AGENCY.—The appropriate
Federal banking agency, with the concurrence of the
Attorney General, shall designate and require the
form and content of the competitive effects section.
(3) NOTICE OF SUSPENSION.—Upon notification
by the Attorney General that the competitive effects
section of an application is incomplete, the appro-
priate Federal banking agency shall notify the appli-
cant that the agency will suspend processing of the
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application until the Attorney General notifies the
agency that the application is complete.
(4) EMERGENCY ACTION.—This provision shall
not affect the appropriate Federal banking agency’s
authority to act immediately—
(A) to prevent the probable failure of 1 of
the banks involved; or
(B) to reduce or eliminate a post approval
waiting period in case of an emergency requir-
ing expeditious action.
(5) EXEMPTION
FOR
CERTAIN
FILINGS.—With
the concurrence of the Attorney General, the appro-
priate Federal banking agency may exempt classes of
persons, acquisitions, or transactions that are not
likely to violate the antitrust laws from the require-
ment that applicants file a competitive effects section.
(b) INTERAGENCY DATA SHARING REQUIREMENT.—
(1) IN GENERAL.—To the extent not prohibited
by other law, the Federal banking agencies shall make
available to the Attorney General any data in their
possession that the Attorney General deems necessary
for antitrust reviews of transactions requiring ap-
proval under section 3 of the Bank Holding Company
Act of 1956 or section 18(c) of the Federal Deposit In-
surance Act.
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(2) CONTINUATION
OF
DATA
COLLECTION
AND
ANALYSIS.—The Federal banking agencies shall con-
tinue to provide market analysis, deposit share infor-
mation, and other relevant information for determin-
ing market competition as needed by the Attorney
General in the same manner such agencies provided
analysis and information under section 18(c) of the
Federal Deposit Insurance Act and 3(c) of the Bank
Holding Company Act of 1956 (as such sections were
in effect on the day before the date of the enactment
of this Act) and shall continue to collect information
necessary or useful for such analysis.
SEC. 184. ANNUAL GAO REPORT.
(a) IN GENERAL.—By the end of the 1-year period be-
ginning on the date of the enactment of this Act and annu-
ally thereafter the Comptroller General of the United States
shall submit a report to the Congress on market concentra-
tion in the financial services industry.
(b) ANALYSIS.—Each report submitted under sub-
section (a) shall contain an analysis of—
(1) the positive and negative effects of affiliations
between various types of financial companies, and of
acquisitions pursuant to this Act and the amend-
ments made by this Act to other provisions of law, in-
cluding any positive or negative effects on registered
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securities brokers and dealers which have been pur-
chased by depository institutions or depository insti-
tution holding companies;
(2) the changes in business practices and the ef-
fects of any such changes on the availability of ven-
ture capital and the availability of capital and credit
for small businesses; and
(3) the acquisition patterns among depository
institutions, depository institution holding compa-
nies, securities firms, and insurance companies in-
cluding acquisitions among the largest 20 percent of
firms and acquisitions within a limited geographical
area.
SEC. 185. APPLICABILITY OF ANTITRUST LAWS.
No provision of this subtitle shall be construed as af-
fecting—
(1) the applicability of antitrust laws (as defined
in section 11(d) of the Bank Holding Company Act
of 1956; as so redesignated pursuant to this subtitle);
or
(2) the applicability, if any, of any State law
which is similar to the antitrust laws.
SEC. 186. EFFECTIVE DATE.
This subtitle shall become effective 6 months after the
date of enactment of this Act.
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Subtitle J—Redomestication of
Mutual Insurers
SEC. 191. REDOMESTICATION OF MUTUAL INSURERS.
(a) REDOMESTICATION.—A mutual insurer organized
under the laws of any State may transfer its domicile to
a transferee domicile as a step in a reorganization in
which, pursuant to the laws of the transferee domicile, the
mutual insurer becomes a stock insurer (whether as a direct
or indirect subsidiary of a mutual holding company or oth-
erwise).
(b) RESULTING DOMICILE.—Upon complying with the
applicable law of the transferee domicile governing transfers
of domicile and completion of a transfer pursuant to this
section, the mutual insurer shall cease to be a domestic in-
surer in the transferor domicile and, as a continuation of
its corporate existence, shall be a domestic insurer of the
transferee domicile.
(c) LICENSES PRESERVED.—The certificate of author-
ity, agents’ appointments and licenses, rates, approvals and
other items that a licensed State allows and that are in
existence immediately prior to the date that a redomesticat-
ing insurer transfers its domicile pursuant to this subtitle
shall continue in full force and effect upon transfer, if the
insurer remains duly qualified to transact the business of
insurance in such licensed State.
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(d) EFFECTIVENESS OF OUTSTANDING POLICIES AND
CONTRACTS.—
(1) IN
GENERAL.—All outstanding insurance
policies and annuities contracts of a redomesticating
insurer shall remain in full force and effect and need
not be endorsed as to the new domicile of the insurer,
unless so ordered by the State insurance regulator of
a licensed State, and then only in the case of out-
standing policies and contracts whose owners reside
in such licensed State.
(2) FORMS.—
(A) Applicable State law may require a re-
domesticating insurer to file new policy forms
with the State insurance regulator of a licensed
State on or before the effective date of the trans-
fer.
(B) Notwithstanding subparagraph (A), a
redomesticating insurer may use existing policy
forms with appropriate endorsements to reflect
the new domicile of the redomesticating insurer
until the new policy forms are approved for use
by the State insurance regulator of such licensed
State.
(e) NOTICE.—A redomesticating insurer shall give no-
tice of the proposed transfer to the State insurance regulator
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of each licensed State and shall file promptly any resulting
amendments to corporate documents required to be filed by
a foreign licensed mutual insurer with the insurance regu-
lator of each such licensed State.
(f) RULE OF CONSTRUCTION.—No provision of this
subtitle shall be construed so as to preempt any provision
of a State law relating to the establishment of a mutual
insurance holding company which protects the rights of pol-
icy holders.
SEC. 192. EFFECT ON STATE LAWS RESTRICTING REDOMES-
TICATION.
(a) IN GENERAL.—Unless otherwise permitted by this
subtitle, State laws that conflict with the purposes and in-
tent of this subtitle are preempted, including but not limited
to—
(1) any law that has the purpose or effect of im-
peding the activities of, taking any action against, or
applying any provision of law or regulation to, any
insurer or an affiliate of such insurer because that in-
surer or any affiliate plans to redomesticate or has
redomesticated pursuant to this subtitle;
(2) any law that has the purpose or effect of im-
peding the activities of, taking action against, or ap-
plying any provision of law or regulation to, any in-
sured or any insurance licensee or other intermediary
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because such person or entity has procured insurance
from or placed insurance with any insurer or affiliate
of such insurer that plans to redomesticate or has re-
domesticated pursuant to this subtitle;
(3) any law that has the purpose or effect of ter-
minating, because of the redomestication of a mutual
insurer pursuant to this subtitle, any certificate of
authority, agent appointment or license, rate ap-
proval or other approval, of any State insurance reg-
ulator or other State authority in existence imme-
diately prior to the redomestication in any State
other than the transferee domicile.
(b) DIFFERENTIAL
TREATMENT
PROHIBITED.—No
State law, regulation, interpretation, or functional equiva-
lent thereof, may treat a redomesticating or redomesticated
insurer or any affiliate thereof any differently than an in-
surer operating in that State that is not a redomesticating
or redomesticated insurer.
(c) LAWS PROHIBITING OPERATIONS.—If any licensed
State fails to issue, delays the issuance of, or seeks to revoke
an original or renewal certificate of authority of a redomes-
ticated insurer immediately following redomestication, ex-
cept on grounds and in a manner consistent with its past
practices regarding the issuance of certificates of authority
to foreign insurers that are not redomesticating, then the
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redomesticating insurer shall be exempt from any State law
of the licensed State to the extent that such State law or
the operation of such State law would make unlawful, or
regulate, directly or indirectly, the operation of the redomes-
ticated insurer, except that such licensed State may require
the redomesticated insurer to—
(1) comply with the unfair claim settlement
practices law of the licensed State;
(2) pay, on a nondiscriminatory basis, applica-
ble premium and other taxes which are levied on li-
censed insurers or policyholders under the laws of the
licensed State;
(3) register with and designate the State insur-
ance regulator as its agent solely for the purpose of
receiving service of legal documents or process;
(4) submit to an examination by the State insur-
ance regulator in any licensed state in which the re-
domesticated insurer is doing business to determine
the insurer’s financial condition, if—
(A) the State insurance regulator of the
transferee domicile has not begun and has re-
fused to initiate an examination of the redomes-
ticated insurer; and
(B) any such examination is coordinated to
avoid unjustified duplication and repetition;
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tion or requirement that discriminates against a non-
resident insurance licensee.
(d) JUDICIAL
REVIEW.—The appropriate United
States district court shall have exclusive jurisdiction over
litigation arising under this section involving any redomes-
ticating or redomesticated insurer.
(e) SEVERABILITY.—If any provision of this section,
or the application thereof to any person or circumstances,
is held invalid, the remainder of the section, and the appli-
cation of such provision to other persons or circumstances,
shall not be affected thereby.
SEC. 193. DEFINITIONS.
For purposes of this subtitle, the following definitions
shall apply:
(1) COURT OF COMPETENT JURISDICTION.—The
term ‘‘court of competent jurisdiction’’ means a court
authorized pursuant to section 192(d) to adjudicate
litigation arising under this subtitle.
(2) DOMICILE.—The term ‘‘domicile’’ means the
State in which an insurer is incorporated, chartered,
or organized.
(3) INSURANCE LICENSEE.—The term ‘‘insurance
licensee’’ means any person holding a license under
State law to act as insurance agent, subagent, broker,
or consultant.
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(4) INSTITUTION.—The term ‘‘institution’’ means
a corporation, joint stock company, limited liability
company, limited liability partnership, association,
trust, partnership, or any similar entity.
(5) LICENSED
STATE.—The term ‘‘licensed
State’’ means any State, Puerto Rico, or the U.S.
Virgin Islands in which the redomesticating insurer
has a certificate of authority in effect immediately
prior to the redomestication.
(6) MUTUAL INSURER.—The term ‘‘mutual in-
surer’’ means a mutual insurer organized under the
laws of any State.
(7) PERSON.—The term ‘‘person’’ means an in-
dividual, institution, government or governmental
agency, State or political subdivision of a State, pub-
lic corporation, board, association, estate, trustee, or
fiduciary, or other similar entity.
(8) REDOMESTICATED INSURER.—The term ‘‘re-
domesticated insurer’’ means a mutual insurer that
has redomesticated pursuant to this subtitle.
(9) REDOMESTICATING INSURER.—The term ‘‘re-
domesticating insurer’’ means a mutual insurer that
is redomesticating pursuant to this subtitle.
(10) REDOMESTICATION
OR
TRANSFER.—The
terms ‘‘redomestication’’ and ‘‘transfer’’ mean the
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transfer of the domicile of a mutual insurer from one
State to another State pursuant to this subtitle.
(11) STATE INSURANCE REGULATOR.—The term
‘‘State insurance regulator’’ means the principal in-
surance regulatory authority of a State or of Puerto
Rico, or the United States Virgin Islands.
(12) STATE LAW.—The term ‘‘State law’’ means
the statutes of any State or of Puerto Rico, or the
U.S. Virgin Islands and any regulation, order, or re-
quirement prescribed pursuant to any such statute.
(13) TRANSFEREE DOMICILE.—The term ‘‘trans-
feree domicile’’ means the State to which a mutual
insurer is redomesticating pursuant to this subtitle.
(14) TRANSFEROR DOMICILE.—The term ‘‘trans-
feror domicile’’ means the State from which a mutual
insurer is redomesticating pursuant to this subtitle.
SEC. 194. EFFECTIVE DATE.
This subtitle shall become effective on the date of enact-
ment of this Act.
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Subtitle K—Applying the Principles
of 
National 
Treatment 
and
Equality of Competitive Oppor-
tunity to Foreign Banks and For-
eign Financial Institutions
SEC. 195. APPLYING THE PRINCIPLES OF NATIONAL TREAT-
MENT AND EQUALITY OF COMPETITIVE OP-
PORTUNITY TO FOREIGN BANKS AND FOR-
EIGN FINANCIAL INSTITUTIONS.
The purpose of this subtitle is to apply the reforms of
this Act to foreign banks and other foreign financial institu-
tions in a manner consistent with the principles of national
treatment and equality of competitive opportunity, without
disadvantaging either foreign or domestic banks or other fi-
nancial institutions in relation to each other.
SEC. 196. APPLYING THE PRINCIPLES OF NATIONAL TREAT-
MENT AND EQUALITY OF COMPETITIVE OP-
PORTUNITY TO FOREIGN BANKS THAT ARE
QUALIFYING BANK HOLDING COMPANIES.
Section 8(c) of the International Banking Act of 1978
(12 U.S.C. 3106(c)) is amended by adding at the end the
following new paragraph:
‘‘(3) 
TERMINATION
OF
GRANDFATHERED
RIGHTS.—
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‘‘(A) IN GENERAL.—If any foreign bank or
foreign company files a declaration under section
6(a)(1)(F) of the Bank Holding Company Act of
1956 or receives a determination from the Board
under section 6(l)(6) of such Act, any authority
conferred by this subsection on any foreign bank
or company to engage in any financial activity
(as defined in section 6(a)(3) of such Act) shall
terminate immediately.
‘‘(B) RESTRICTIONS
AND
REQUIREMENTS
AUTHORIZED.—If a foreign bank or company
that engages, directly or through an affiliate
pursuant to paragraph (1), in a financial activ-
ity (as defined in section 6(a)(3) of the Bank
Holding Company Act of 1956) has not filed a
declaration with the the Board of its status as a
qualifying bank holding company under section
6(a) of the Bank Holding Company Act of 1956
by the end of the second year after the date of
enactment of the Financial Services Competition
Act of 1997, the Board, giving due regard to the
principle of national treatment and equality of
competitive opportunity, may impose such re-
strictions and requirements on the conduct of
such activities by such foreign bank or company
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as are comparable to those imposed on a qualify-
ing bank holding company organized under the
laws of the United States, including a require-
ment to conduct such activities in compliance
with the safeguards of section 6 of the Bank
Holding Company Act of 1956 and any addi-
tional safeguards imposed by the National Coun-
cil on Financial Services.’’.
SEC. 197. APPLYING THE PRINCIPLES OF NATIONAL TREAT-
MENT AND EQUALITY OF COMPETITIVE OP-
PORTUNITY TO FOREIGN BANKS AND FOR-
EIGN FINANCIAL INSTITUTIONS THAT ARE
WHOLESALE FINANCIAL INSTITUTIONS.
Section 8A of the Federal Deposit Insurance Act (as
added by section 161 of this Act) is amended by adding
at the end the following new subsection:
‘‘(i) VOLUNTARY TERMINATION OF DEPOSIT INSUR-
ANCE.—The provisions on voluntary termination of insur-
ance in this section apply to an insured branch of a foreign
bank (including a Federal branch) in the same manner and
to the same extent as they apply to an insured State bank
or a national bank.’’.
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Subtitle L—Effective Date of Title
SEC. 199. EFFECTIVE DATE.
Except with regard to any subtitle or other provision
of this title for which a specific effective date is provided,
this title and the amendments made by this title shall take
effect at the end of the 270-day period beginning on the
date of the enactment of this Act.
TITLE II—FUNCTIONAL
REGULATION
Subtitle A—Brokers and Dealers
SEC. 201. DEFINITION OF BROKER.
Section 3(a)(4) of the Securities Exchange Act of 1934
(15 U.S.C. 78c(a)(4)) is amended to read as follows:
‘‘(4) BROKER.—
‘‘(A) IN
GENERAL.—The term ‘broker’
means any person engaged in the business of
effecting transactions in securities for the ac-
count of others.
‘‘(B) EXCLUSION
OF
BANKS.—The term
‘broker’ does not include a bank unless such
bank—
‘‘(i) publicly solicits the business of
effecting securities transactions for the ac-
count of others; or
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‘‘(ii) is compensated for such business
by the payment of commissions or similar
remuneration based on effecting trans-
actions in securities (other than fees cal-
culated as a percentage of assets under
management) in excess of the bank’s incre-
mental 
costs 
directly 
attributable 
to
effecting such transactions (hereafter re-
ferred to as ‘incentive compensation’).
‘‘(C) EXEMPTION FOR CERTAIN BANK AC-
TIVITIES.—A bank shall not be considered to be
a broker because the bank engages in any of the
following activities under the conditions de-
scribed:
‘‘(i) THIRD
PARTY
BROKERAGE
AR-
RANGEMENTS.—The bank enters into a con-
tractual or other arrangement with a broker
or dealer registered under this title under
which the broker or dealer offers brokerage
services on or off the premises of the bank
if—
‘‘(I) such broker or dealer is clear-
ly identified as the person performing
the brokerage services;
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‘‘(II) the broker or dealer performs
brokerage services in an area that is
clearly marked and, unless made im-
possible by space or personnel consider-
ations, physically separate from the
routine deposit-taking activities of the
bank;
‘‘(III) any materials used by the
bank to advertise or promote generally
the availability of brokerage services
under the contractual or other arrange-
ment clearly indicate that the broker-
age services are being provided by the
broker or dealer and not by the bank;
‘‘(IV) any materials used by the
bank to advertise or promote generally
the availability of brokerage services
under the contractual or other arrange-
ment are in compliance with the Fed-
eral securities laws before distribution;
‘‘(V) bank employees perform only
clerical or ministerial functions in
connection with brokerage transactions,
including 
scheduling 
appointments
with the associated persons of a broker
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or dealer and, on behalf of a broker or
dealer, transmitting orders or handling
customers funds or securities, except
that bank employees who are not so
qualified may describe in general terms
investment vehicles under the contrac-
tual or other arrangement and accept
customer orders on behalf of the broker
or dealer if such employees have re-
ceived training that is substantially
equivalent to the training required for
personnel qualified to sell securities
pursuant to the requirements of a self-
regulatory organization;
‘‘(VI) bank employees do not di-
rectly receive incentive compensation
for any brokerage transaction unless
such employees are associated persons
of a broker or dealer and are qualified
pursuant to the requirements of a self-
regulatory organization (as so defined)
except that the bank employees may re-
ceive nominal cash and noncash com-
pensation for customer referrals if the
cash compensation is a one-time fee of
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a fixed dollar amount and the pay-
ment of the fee is not contingent on
whether the referral results in a trans-
action;
‘‘(VII) such services are provided
by the broker or dealer on a basis in
which all customers which receive any
services are fully disclosed to the broker
or dealer; and
‘‘(VIII) the broker or dealer in-
forms each customer that the brokerage
services are provided by the broker or
dealer and not by the bank and that
the securities are not deposits or other
obligations of the bank, are not guar-
anteed by the bank, and are not in-
sured by the Federal Deposit Insurance
Corporation.
‘‘(ii) TRUST
ACTIVITIES.—The bank
engages 
in 
trust 
activities 
(including
effecting transactions in the course of such
trust activities) permissible for national
banks under the first section of the Act of
September 28, 1962, or for State banks
under relevant State trust statutes or law
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(including securities safekeeping, self-di-
rected individual retirement accounts, or
managed agency accounts or other function-
ally equivalent accounts of a bank) unless
the bank—
‘‘(I) publicly solicits brokerage
business, other than by advertising that
it effects transactions in securities in
conjunction with advertising its other
trust activities; or
‘‘(II) receives incentive compensa-
tion for such brokerage activities.
‘‘(iii) 
PERMISSIBLE
SECURITIES
TRANSACTIONS.—The bank effects trans-
actions in exempted securities, commercial
paper, bankers acceptances, commercial
bills, qualified Canadian government obli-
gations as defined in section 5136 of the Re-
vised Statutes, obligations of the Washing-
ton Metropolitan Area Transit Authority
which are guaranteed by the Secretary of
Transportation under section 9 of the Na-
tional Capital Transportation Act of 1969,
obligations of the North American Develop-
ment Bank, and obligations of any local
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public agency (as defined in section 110(h)
of the Housing Act of 1949) or any public
housing agency (as defined in the United
States Housing Act of 1937) that are ex-
pressly authorized by section 5136 of the
Revised Statutes of the United States as
permissible for a national bank to under-
write or deal in.
‘‘(iv) EMPLOYEE
AND
SHAREHOLDER
BENEFIT
PLANS.—The bank effects trans-
actions as part of any bonus, profit-sharing,
pension, retirement, thrift, savings, incen-
tive, stock purchase, stock ownership, stock
appreciation, stock option, dividend rein-
vestment, or similar plan for employees or
shareholders of an issuer or its subsidiaries.
‘‘(v) SWEEP ACCOUNTS.—The bank ef-
fects transactions as part of a program for
the investment or reinvestment of bank de-
posit funds into any no-load, open-end
management investment company registered
under the Investment Company Act of 1940
that holds itself out as a money market
fund.
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‘‘(vi) AFFILIATE TRANSACTIONS.—The
bank effects transactions for the account of
any affiliate of the bank (as defined in sec-
tion 2 of the Bank Holding Company Act
of 1956).
‘‘(vii) PRIVATE
SECURITIES
OFFER-
INGS.—The bank—
‘‘(I) effects sales as part of a pri-
mary offering of securities by an is-
suer, not involving a public offering,
pursuant to section 3(b), 4(2), or 4(6)
of the Securities Act of 1933 and the
rules and regulations issued there-
under; and
‘‘(II) effects such sales exclusively
to an accredited investor, as defined in
section 2 of the Securities Act of 1933.
‘‘(viii) DE
MINIMUS
EXEMPTION.—If
the bank does not have a subsidiary or affil-
iate registered as a broker or dealer under
section 15, the bank effects, other than in
transactions referred to in clauses (i)
through (vii), not more than—
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‘‘(I) 800 transactions in any cal-
endar year in securities for which a
ready market exists, and
‘‘(II) 200 other transactions in se-
curities in any calendar year.
‘‘(ix) 
SAFEKEEPING
AND
CUSTODY
SERVICES.—The bank, as part of customary
banking activities—
‘‘(I) provides safekeeping or cus-
tody services with respect to securities,
including the exercise of warrants or
other rights on behalf of customers;
‘‘(II) clears or settles transactions
in securities;
‘‘(III) effects securities lending or
borrowing transactions with or on be-
half of customers as part of services
provided to customers pursuant to sub-
clauses (I) and (II) or invests cash col-
lateral pledged in connection with such
transactions; or
‘‘(IV) holds securities pledged by
one customer to another customer or se-
curities subject to resale agreements be-
tween customers or facilitates the
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pledging or transfer of such securities
by book entry.
‘‘(x) CONTRACTS OF INSURANCE.—The
bank effects transactions in contracts of in-
surance.
‘‘(xi) BANKING PRODUCTS.—The bank
effects transactions in banking products, as
defined in section 18 of the Federal Deposit
Insurance Act.
‘‘(D) EXEMPTION
FOR
ENTITIES
SUBJECT
TO SECTION 15(e).—The term ‘broker’ does not
include a bank that—
‘‘(i) was, immediately prior to the en-
actment of the Financial Services Competi-
tion Act of 1997, subject to section 15(e);
and
‘‘(ii) is subject to such restrictions and
requirements as the Commission considers
appropriate.’’.
SEC. 202. DEFINITION OF DEALER.
Section 3(a)(5) of the Securities Exchange Act of 1934
(15 U.S.C. 78c(a)(5)) is amended to read as follows:
‘‘(5) DEALER.—
‘‘(A) IN
GENERAL.—The term ‘dealer’
means any person engaged in the business of
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buying and selling securities for such person’s
own account through a broker or otherwise.
‘‘(B) EXCEPTION
FOR
PERSON
NOT
EN-
GAGED
IN
THE
BUSINESS
OF
DEALING.—The
term ‘dealer’ does not include a person that buys
or sells securities for such person’s own account,
either individually or in a fiduciary capacity,
but not as a part of a regular business.
‘‘(C) EXEMPTION FOR CERTAIN BANK AC-
TIVITIES.—A bank shall not be considered to be
a dealer because the bank engages in any of the
following activities under the conditions de-
scribed:
‘‘(i) The bank buys and sells commer-
cial paper, bankers acceptances, exempted
securities, qualified Canadian Government
obligations as defined in section 5136 of the
Revised Statutes, obligations of the Wash-
ington Metropolitan Area Transit Authority
which are guaranteed by the Secretary of
Transportation under section 9 of the Na-
tional Capital Transportation Act of 1969,
obligations of the North American Develop-
ment Bank, and obligations of any local
public agency (as defined in section 110(h)
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of the Housing Act of 1949) or any public
housing agency (as defined in the United
States Housing Act of 1937) that are ex-
pressly authorized by section 5136 of the
Revised Statutes of the United States as
permissible for a national bank to under-
write or deal in.
‘‘(ii) The bank buys and sells securities
for investment purposes for the bank or for
accounts for which the bank acts as a trust-
ee or fiduciary.
‘‘(iii) The bank effects transactions in
contracts of insurance.
‘‘(iv) The bank offers or sells, solely to
any accredited investor (as defined in sec-
tion 2 of the Securities Act of 1933) securi-
ties backed by or representing an interest in
notes, drafts, acceptances, loans, leases, re-
ceivables, other obligations, or pools of any
such obligations originated or purchased by
the bank or any affiliate of the bank.
‘‘(v) The bank buys and sells banking
products, as defined in section 18 of the
Federal Deposit Insurance Act.’’.
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SEC. 203. BANK BROKER AND DEALER ACTIVITIES.
Section 3 of the Securities Exchange Act of 1934 (15
U.S.C. 78c) is amended by adding at the end the following:
‘‘(h) EXEMPTION FROM DEFINITION OF BROKER OR
DEALER.—With respect to the employees of a bank that en-
gages in the offer and sale of securities to the retail public,
such employees shall be subject to the same rules and regula-
tions of a self-regulatory organization applicable under au-
thority of section 15A to employees of securities and other
nonbank firms.’’.
SEC. 204. APPLICATION OF THIS TITLE TO BANKS REG-
ISTERED AS BROKERS OR DEALERS.
Section 15 of the Securities Exchange Act of 1934 (15
U.S.C. 78o) is amended by adding at the end the following
new subsection:
‘‘(i) APPLICATION OF THIS TITLE TO BANKS REG-
ISTERED AS BROKERS OR DEALERS.—
‘‘(1) 
NONDISCRIMINATION.—In 
administering
and enforcing this title with respect to banks that are
registered brokers or dealers, the Commission shall not
treat banks more restrictively than any other entities
that are registered as brokers or dealers pursuant to
this section.
‘‘(2) CAPITAL REQUIREMENTS.—
‘‘(A) WELL-CAPITALIZED
BANKS.—Capital
requirements for brokers or dealers shall not
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apply to a bank that is well-capitalized (as de-
fined in section 38 of the Federal Deposit Insur-
ance Act) and determined by the appropriate
Federal banking agency (as defined in section 3
of such Act), if the bank’s brokerage and dealer
activities requiring registration do not represent
the predominant portion of the gross revenues of
the bank.
‘‘(B) OTHER BANKS.—The Commission, in
consultation with the appropriate Federal regu-
latory agencies for banks, shall provide appro-
priate transitional relief to banks that are reg-
istered brokers or dealers, and that cease to be
well-capitalized but are adequately capitalized
(as defined in section 38 of the Federal Deposit
Insurance Act). Such rules shall take account of
the purposes of this section and the extent to
which bank capital requirements further those
purposes.
‘‘(3) SCOPE OF APPLICATION.—The regulation,
under this Act, of any bank registered under this Act
as a broker or dealer shall apply only with respect to
activities of the bank for which the bank is required
under this Act to be registered as a broker or dealer.’’.
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SEC. 205. EXCLUSION FROM SIPC MEMBERSHIP OF BANKS
REGISTERED AS BROKERS OR DEALERS.
Section 3(a)(2)(A) of the Securities Investor Protection
Act of 1970 (15 U.S.C. 78ccc(a)(2)(A)) is amended—
(1) in clause (i), by striking ‘‘and’’ after the
semicolon;
(2) in clause (ii), by striking the period at the
end and inserting ‘‘; and’’; and
(3) by adding at the end the following new
clause:
‘‘(iii) banks.’’.
SEC. 206. EFFECTIVE DATE.
This subtitle shall take effect at the end of the 270-
day period beginning on the date of the enactment of this
Act.
Subtitle B—Bank Investment
Company Activities
SEC. 211. CUSTODY OF INVESTMENT COMPANY ASSETS BY
AFFILIATED BANK.
(a) MANAGEMENT COMPANIES.—Section 17(f) of the
Investment Company Act of 1940 (15 U.S.C. 80a–17(f)) is
amended—
(1) by redesignating paragraphs (1), (2), and (3)
as subparagraphs (A), (B), and (C), respectively;
(2) by striking ‘‘(f) Every registered’’ and insert-
ing the following:
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•HR 10 RH2
‘‘(f) CUSTODY OF SECURITIES.—
‘‘(1) Every registered’’;
(3) by redesignating the 2d, 3d, 4th, and 5th sen-
tences of such subsection as paragraphs (2) through
(5), respectively, and indenting the left margin of
such paragraphs appropriately; and
(4) by adding at the end the following new para-
graph:
‘‘(6) Notwithstanding any provision of this sub-
section, if a bank described in paragraph (1) or an
affiliated person of such bank is an affiliated person,
promoter, organizer, or sponsor of, or principal un-
derwriter for the registered company, such bank may
serve as custodian under this subsection in accordance
with such rules, regulations, or orders as the Commis-
sion may prescribe, consistent with the protection of
investors, after consulting in writing with the appro-
priate Federal banking agency, as defined in section
3 of the Federal Deposit Insurance Act.’’.
(b) UNIT INVESTMENT TRUSTS.—Section 26(a)(1) of
the Investment Company Act of 1940 (15 U.S.C. 80a–
6(a)(1)) is amended by inserting before the semicolon at the
end the following: ‘‘, except that, if the trustee or custodian
described in this subsection is an affiliated person of such
underwriter or depositor, the Commission may adopt rules
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•HR 10 RH2
and regulations or issue orders, consistent with the protec-
tion of investors, prescribing the conditions under which
such trustee or custodian may serve, after consulting in
writing with the appropriate Federal banking agency (as
defined in section 3 of the Federal Deposit Insurance Act)’’.
(c) FIDUCIARY DUTY OF CUSTODIAN.—Section 36(a)
of the Investment Company Act of 1940 (15 U.S.C. 80a–
35(a)) is amended—
(1) in paragraph (1), by striking ‘‘or’’ at the
end;
(2) in paragraph (2), by striking the period at
the end and inserting ‘‘; or’’; and
(3) by inserting after paragraph (2) the follow-
ing:
‘‘(3) as custodian.’’.
SEC. 212. LENDING TO AN AFFILIATED INVESTMENT COM-
PANY.
Section 18 of the Investment Company Act of 1940 (15
U.S.C. 80a–18) is amended by adding at the end the follow-
ing:
‘‘Notwithstanding any provision of this section, it shall be
unlawful for any affiliated person of a registered investment
company or any affiliated person of such a person to loan
money to such investment company in contravention of
such rules, regulations, or orders as the Commission may
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•HR 10 RH2
prescribe in the public interest and consistent with the pro-
tection of investors.’’.
SEC. 213. INDEPENDENT DIRECTORS.
(a) IN GENERAL.—Section 2(a)(19)(A) of the Invest-
ment Company Act of 1940 (15 U.S.C. 80a–2(a)(19)(A))
is amended—
(1) by striking clause (v) and inserting the fol-
lowing new clause:
‘‘(v) any person (other than a reg-
istered investment company) that, at any
time during the preceding 6 months, has ex-
ecuted any portfolio transactions for, en-
gaged in any principal transactions with,
or distributed shares for—
‘‘(I) the investment company,
‘‘(II) any other investment com-
pany having the same investment ad-
viser as such investment company or
holding itself out to investors as a re-
lated company for purposes of invest-
ment or investor services, or
‘‘(III) any account over which the
investment company’s investment ad-
viser has brokerage placement discre-
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tion, or any affiliated person of such a
person,’’;
(2) by redesignating clause (vi) as clause (vii);
and
(3) by inserting after clause (v) the following
new clause:
‘‘(vi) any person (other than a reg-
istered investment company) that, at any
time during the preceding 6 months, has
loaned money to—
‘‘(I) the investment company,
‘‘(II) any other investment com-
pany having the same investment ad-
viser as such investment company or
holding itself out to investors as a re-
lated company for purposes of invest-
ment or investor services, or
‘‘(III) any account for which the
investment company’s investment ad-
viser has borrowing authority,
or any affiliated person of such a person,
or’’.
(b) CONFORMING AMENDMENT.—Section 2(a)(19)(B)
of the Investment Company Act of 1940 (15 U.S.C. 80a–
2(a)(19)(B)) is amended—
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•HR 10 RH2
(1) by striking clause (v) and inserting the fol-
lowing new clause:
‘‘(v) any person (other than a reg-
istered investment company) that, at any
time during the preceding 6 months, has ex-
ecuted any portfolio transactions for, en-
gaged in any principal transactions with,
or distributed shares for—
‘‘(I) any investment company for
which the investment adviser or prin-
cipal underwriter serves as such,
‘‘(II) any investment company
holding itself out to investors, for pur-
poses of investment or investor services,
as a company related to any invest-
ment company for which the invest-
ment adviser or principal underwriter
serves as such, or
‘‘(III) any account over which the
investment adviser has brokerage place-
ment discretion, or any affiliated per-
son of such a person,’’;
(2) by redesignating clause (vi) as clause (vii);
and
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(3) by inserting after clause (v) the following
new clause:
‘‘(vi) any person (other than a reg-
istered investment company) that, at any
time during the preceding 6 months, has
loaned money to—
‘‘(I) any investment company for
which the investment adviser or prin-
cipal underwriter serves as such,
‘‘(II) any investment company
holding itself out to investors, for pur-
poses of investment or investor services,
as a company related to any invest-
ment company for which the invest-
ment adviser or principal underwriter
serves as such, or
‘‘(III) any account for which the
investment adviser has borrowing au-
thority,
or any affiliated person of such a person,
or’’.
(c) AFFILIATION OF DIRECTORS.—Section 10(c) of the
Investment Company Act of 1940 (15 U.S.C. 80a–10(c)) is
amended by striking ‘‘bank, except’’ and inserting ‘‘bank
(and its subsidiaries) or any single bank holding company
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•HR 10 RH2
(and the affiliates and subsidiaries of such holding com-
pany) (as such terms are defined in the Bank Holding Com-
pany Act of 1956), except’’.
(d) EFFECTIVE DATE.—The provisions of subsection
(a) of this section shall take effect at the end of the 1-year
period beginning on the date of enactment of this subtitle.
SEC. 214. ADDITIONAL SEC DISCLOSURE AUTHORITY.
(a) MISREPRESENTATION.—Section 35(a) of the In-
vestment Company Act of 1940 (15 U.S.C. 80a–34(a)) is
amended to read as follows:
‘‘(a) MISREPRESENTATION OF GUARANTEES.—
‘‘(1) IN GENERAL.—It shall be unlawful for any
person, issuing or selling any security of which a reg-
istered investment company is the issuer, to represent
or imply in any manner whatsoever that such secu-
rity or company—
‘‘(A) has been guaranteed, sponsored, rec-
ommended, or approved by the United States, or
any agency, instrumentality or officer of the
United States;
‘‘(B) has been insured by the Federal De-
posit Insurance Corporation; or
‘‘(C) is guaranteed by or is otherwise an ob-
ligation of any bank or insured depository insti-
tution.
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‘‘(2) DISCLOSURES.—Any person issuing or sell-
ing the securities of a registered investment company
shall prominently disclose that the investment com-
pany or any security issued by the investment com-
pany—
‘‘(A) is not insured by the Federal Deposit
Insurance Corporation;
‘‘(B) is not guaranteed by an affiliated in-
sured depository institution; and
‘‘(C) is not otherwise an obligation of any
bank or insured depository institution,
in accordance with such rules, regulations, or orders
as the Commission may prescribe as reasonably nec-
essary or appropriate in the public interest for the
protection of investors, after consulting in writing
with the appropriate Federal banking agencies.
‘‘(3) DEFINITIONS.—The terms ‘insured deposi-
tory institution’ and ‘appropriate Federal banking
agency’ have the meaning given to such terms in sec-
tion 3 of the Federal Deposit Insurance Act.’’.
(b) DECEPTIVE USE OF NAMES.—Section 35(d) of the
Investment Company Act of 1940 (15 U.S.C. 80a–34(d))
is amended to read as follows:
‘‘(d) It shall be unlawful for any registered investment
company to adopt as part of the name or title of such com-
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•HR 10 RH2
pany, or of any securities of which it is the issuer, any
word or words that the Commission finds are materially
deceptive or misleading. The Commission may adopt such
rules or regulations or issue such orders as are necessary
or appropriate to prevent the use of deceptive or misleading
names or titles by investment companies.’’.
SEC. 215. DEFINITION OF BROKER UNDER THE INVEST-
MENT COMPANY ACT OF 1940.
Section 2(a)(6) of the Investment Company Act of
1940 (15 U.S.C. 80a–2(a)(6)) is amended to read as follows:
‘‘(6) The term ‘broker’ has the same meaning as
in the Securities Exchange Act of 1934, except that
such term does not include any person solely by rea-
son of the fact that such person is an underwriter for
one or more investment companies.’’.
SEC. 216. DEFINITION OF DEALER UNDER THE INVESTMENT
COMPANY ACT OF 1940.
Section 2(a)(11) of the Investment Company Act of
1940 (15 U.S.C. 80a–2(a)(11)) is amended to read as fol-
lows:
‘‘(11) The term ‘dealer’ has the same meaning as
in the Securities Exchange Act of 1934, but does not
include an insurance company or investment com-
pany.’’.
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SEC. 217. REMOVAL OF THE EXCLUSION FROM THE DEFINI-
TION OF INVESTMENT ADVISER FOR BANKS
THAT ADVISE INVESTMENT COMPANIES.
(a) INVESTMENT ADVISER.—Section 202(a)(11) of the
Investment Advisers Act of 1940 (15 U.S.C. 80b–2(a)(11))
is amended in subparagraph (A), by striking ‘‘investment
company’’ and inserting ‘‘investment company, except that
the term ‘investment adviser’ includes any bank or bank
holding company to the extent that such bank or bank hold-
ing company acts as an investment adviser to a registered
investment company, or if, in the case of a bank, such serv-
ices are performed through a separately identifiable depart-
ment or division, the department or division, and not the
bank itself, shall be deemed to be the investment adviser’’.
(b) SEPARATELY IDENTIFIABLE DEPARTMENT OR DI-
VISION.—Section 202(a) of the Investment Advisers Act of
1940 (15 U.S.C. 80b–2(a)) is amended by adding at the
end the following:
‘‘(26) The term ‘separately identifiable depart-
ment or division’ of a bank means a unit—
‘‘(A) that is under the direct supervision of
an officer or officers designated by the board of
directors of the bank as responsible for the day-
to-day conduct of the bank’s investment adviser
activities for one or more investment companies,
including the supervision of all bank employees
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•HR 10 RH2
engaged in the performance of such activities;
and
‘‘(B) for which all of the records relating to
its investment adviser activities are separately
maintained in or extractable from such unit’s
own facilities or the facilities of the bank, and
such records are so maintained or otherwise ac-
cessible as to permit independent examination
and enforcement of this Act or the Investment
Company Act of 1940 and rules and regulations
promulgated under this Act or the Investment
Company Act of 1940.’’.
SEC. 218. DEFINITION OF BROKER UNDER THE INVEST-
MENT ADVISERS ACT OF 1940.
Section 202(a)(3) of the Investment Advisers Act of
1940 (15 U.S.C. 80b–2(a)(3)) is amended to read as follows:
‘‘(3) The term ‘broker’ has the same meaning as
in the Securities Exchange Act of 1934.’’.
SEC. 219. DEFINITION OF DEALER UNDER THE INVESTMENT
ADVISERS ACT OF 1940.
Section 202(a)(7) of the Investment Advisers Act of
1940 (15 U.S.C. 80b–2(a)(7)) is amended to read as follows:
‘‘(7) The term ‘dealer’ has the same meaning as
in the Securities Exchange Act of 1934, but does not
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•HR 10 RH2
include an insurance company or investment com-
pany.’’.
SEC. 220. INTERAGENCY CONSULTATION.
The Investment Advisers Act of 1940 (15 U.S.C. 80b–
1 et seq.) is amended by inserting after section 210 the fol-
lowing new section:
‘‘SEC. 210A. CONSULTATION.
‘‘(a) EXAMINATION RESULTS AND OTHER INFORMA-
TION.—
‘‘(1) The appropriate Federal banking agency
shall provide the Commission upon request the results
of any examination, reports, records, or other infor-
mation as each may have access to with respect to the
investment advisory activities of any bank holding
company, bank, or separately identifiable department
or division of a bank, that is registered under section
203 of this title, or, in the case of a bank holding
company or bank, that has a subsidiary or a sepa-
rately identifiable department or division registered
under that section, to the extent necessary for the
Commission to carry out its statutory responsibilities.
‘‘(2) The Commission shall provide to the appro-
priate Federal banking agency upon request the re-
sults of any examination, reports, records, or other
information with respect to the investment advisory
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activities of any bank holding company, bank, or sep-
arately identifiable department or division of a bank,
any of which is registered under section 203 of this
title, to the extent necessary for the agency to carry
out its statutory responsibilities.
‘‘(b) EFFECT ON OTHER AUTHORITY.—Nothing herein
shall limit in any respect the authority of the appropriate
Federal banking agency with respect to such bank holding
company, bank, or department or division under any provi-
sion of law.
‘‘(c) DEFINITION.—For purposes of this section, the
term ‘appropriate Federal banking agency’ shall have the
same meaning as in section 3 of the Federal Deposit Insur-
ance Act.’’.
SEC. 221. TREATMENT OF BANK COMMON TRUST FUNDS.
(a) SECURITIES ACT OF 1933.—Section 3(a)(2) of the
Securities Act of 1933 (15 U.S.C. 77c(a)(2)) is amended
by striking ‘‘or any interest or participation in any com-
mon trust fund or similar fund maintained by a bank ex-
clusively for the collective investment and reinvestment of
assets contributed thereto by such bank in its capacity as
trustee, executor, administrator, or guardian’’ and insert-
ing ‘‘or any interest or participation in any common trust
fund or similar fund that is excluded from the definition
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of the term ‘investment company’ under section 3(c)(3) of
the Investment Company Act of 1940’’.
(b) SECURITIES EXCHANGE ACT OF 1934.—Section
3(a)(12)(A)(iii) of the Securities Exchange Act of 1934 (15
U.S.C. 78c(a)(12)(A)(iii)) is amended to read as follows:
‘‘(iii) any interest or participation in
any common trust fund or similar fund
that is excluded from the definition of the
term ‘investment company’ under section
3(c)(3) of the Investment Company Act of
1940;’’.
(c) INVESTMENT COMPANY ACT
OF 1940.—Section
3(c)(3) of the Investment Company Act of 1940 (15 U.S.C.
80a–3(c)(3)) is amended by inserting before the period the
following: ‘‘, if—
‘‘(A) such fund is employed by the bank
solely as an aid to the administration of trusts,
estates, or other accounts created and main-
tained for a fiduciary purpose;
‘‘(B) except in connection with the ordinary
advertising of the bank’s fiduciary services, in-
terests in such fund are not—
‘‘(i) advertised; or
‘‘(ii) offered for sale to the general pub-
lic; and
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‘‘(C) fees and expenses charged by such fund
are not in contravention of fiduciary principles
established under applicable Federal or State
law’’.
SEC. 222. INVESTMENT ADVISERS PROHIBITED FROM HAV-
ING 
CONTROLLING 
INTEREST 
IN 
REG-
ISTERED INVESTMENT COMPANY.
Section 15 of the Investment Company Act of 1940 (15
U.S.C. 80a–15) is amended by adding at the end the follow-
ing new subsection:
‘‘(g) CONTROLLING INTEREST IN INVESTMENT COM-
PANY PROHIBITED.—
‘‘(1) IN GENERAL.—If any investment adviser to
a registered investment company, or an affiliated per-
son of that investment adviser, holds a controlling in-
terest in that registered investment company in a
trustee or fiduciary capacity, such person shall—
‘‘(A) if it holds the shares in a trustee or fi-
duciary capacity with respect to any employee
benefit plan subject to the Employee Retirement
Income Security Act of 1974, transfer the power
to vote the shares of the investment company
through to another person acting in a fiduciary
capacity with respect to the plan who is not an
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affiliated person of that investment adviser or
any affiliated person thereof; or
‘‘(B) if it holds the shares in a trustee or fi-
duciary capacity with respect to any other per-
son or entity other than an employee benefit
plan subject to the Employee Retirement Income
Security Act of 1974—
‘‘(i) transfer the power to vote the
shares of the investment company through
to—
‘‘(I) the beneficial owners of the
shares;
‘‘(II) another person acting in a
fiduciary capacity who is not an affili-
ated person of that investment adviser
or any affiliated person thereof; or
‘‘(III) any person authorized to
receive statements and information
with respect to the trust who is not an
affiliated person of that investment ad-
viser or any affiliated person thereof;
‘‘(ii) vote the shares of the investment
company held by it in the same proportion
as shares held by all other shareholders of
the investment company; or
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‘‘(iii) vote the shares of the investment
company as otherwise permitted under such
rules, regulations, or orders as the Commis-
sion may prescribe for the protection of in-
vestors.
‘‘(2) EXEMPTION.—Paragraph (1) shall not
apply to any investment adviser to a registered in-
vestment company, or an affiliated person of that in-
vestment adviser, holding shares of the investment
company in a trustee or fiduciary capacity if that
registered investment company consists solely of assets
held in such capacities.
‘‘(3) SAFE HARBOR.—No investment adviser to a
registered investment company or any affiliated per-
son of such investment adviser shall be deemed to have
acted unlawfully or to have breached a fiduciary duty
under State or Federal law solely by reason of acting
in accordance with clause (i), (ii), or (iii) of para-
graph (1)(B).
‘‘(4) CHURCH PLAN EXEMPTION.—Paragraph (1)
shall not apply to any investment adviser to a reg-
istered investment company, or an affiliated person of
that investment adviser, holding shares in such a ca-
pacity, if such investment adviser or such affiliated
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person is an organization described in section
414(e)(3)(A) of the Internal Revenue Code of 1986.’’.
SEC. 223. CONFORMING CHANGE IN DEFINITION.
Section 2(a)(5) of the Investment Company Act of
1940 (15 U.S.C. 80a–2(a)(5)) is amended by striking ‘‘(A)
a banking institution organized under the laws of the Unit-
ed States’’ and inserting ‘‘(A) a depository institution (as
defined in section 3 of the Federal Deposit Insurance Act)
or a branch or agency of a foreign bank (as such terms
are defined in section 1(b) of the International Banking Act
of 1978)’’.
SEC. 224. EFFECTIVE DATE.
This subtitle shall take effect 90 days after the date
of the enactment of this Act.
TITLE 
III—MERGER 
OF 
BANK
AND THRIFT CHARTERS, REG-
ULATORS, 
AND 
INSURANCE
FUNDS
SEC. 301. SHORT TITLE; DEFINITIONS.
(a) SHORT TITLE.—This title may be cited as the
‘‘Thrift Charter Transition Act of 1997’’.
(b) DEFINITIONS.—Unless otherwise defined in this
Act, the terms ‘‘bank holding company’’, ‘‘depository insti-
tution’’, ‘‘Federal savings association’’, ‘‘insured depository
institution’’, ‘‘savings association’’, ‘‘State bank’’, and
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‘‘State savings association’’ (as used in the uncodified pro-
visions of this Act) have the same meanings as in section
3 of the Federal Deposit Insurance Act, as in effect on the
day before the date of enactment of this Act.
Subtitle A—Facilitating Conversion
of Savings Associations to Banks
SEC. 311. CONVERSION TO STATE OR NATIONAL BANKS.
(a) AUTOMATIC CONVERSION OF FEDERAL SAVINGS
ASSOCIATIONS TO NATIONAL BANKS.—
(1) IN
GENERAL.—Effective 2 years after the
date of enactment of this Act, each Federal savings
association then in existence shall be converted to a
national bank by operation of law.
(2) PRESERVATION
OF
RIGHTS, POWERS, AND
PRIVILEGES.—Unless otherwise provided in this Act,
a Federal savings association that is converted to a
State bank or a national bank under this section shall
continue to have all of the rights, powers, privileges,
and immunities that such bank had as a Federal sav-
ings association on the day before the date of the con-
version to a bank.
(3) RETENTION OF ‘‘FEDERAL’’ IN NAME OF CON-
VERTED FEDERAL SAVINGS ASSOCIATION.—Section 2
of the Act entitled ‘‘An Act to enable national banking
associations to increase their capital stock and to
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change their names or locations.’’ and approved May
1, 1886 (12 U.S.C. 30) is amended by adding at the
end the following new subsection:
‘‘(d) RETENTION OF ‘FEDERAL’ IN NAME OF CON-
VERTED FEDERAL SAVINGS ASSOCIATION.—
‘‘(1) IN GENERAL.—Notwithstanding subsection
(a) or any other provision of law, any depository in-
stitution the charter of which is converted from that
of a Federal savings association to a national bank
or a State bank after the date of the enactment of the
Financial Services Competition Act of 1997 may re-
tain the term ‘Federal’ in the name of such institu-
tion so long as such depository institution remains an
insured depository institution.
‘‘(2) DEFINITIONS.—For purposes of this sub-
section, the terms ‘depository institution’, ‘insured de-
pository institution’, ‘national bank’, and ‘State
bank’ have the same meanings given to such terms in
section 3 of the Federal Deposit Insurance Act.’’.
(b) EARLIER CONVERSIONS TO NATIONAL BANK .—
The following paragraphs shall apply during the 22-month
period beginning 60 days after the date of enactment of this
Act:
(1) ACCELERATED
CONVERSION
OF
FEDERAL
SAVINGS ASSOCIATIONS.—Any Federal savings asso-
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ciation may file with the Comptroller of the Currency
a notice of its election to accelerate its conversion to
a national bank to a specified date that is not earlier
than 30 days after the date on which the notice is
filed, and the association shall be converted to a na-
tional bank on the date specified in the notice.
(2) STREAMLINED CONVERSION OF STATE SAV-
INGS ASSOCIATIONS.—Any State savings association
may (to the extent consistent with State law) convert
to a national bank by filing with the Comptroller of
the Currency a notice of its election to convert on a
specified date that is not earlier than 30 days after
the date on which the notice is filed, and the associa-
tion shall be converted to a national bank on the date
specified in the notice.
(c) CONVERSION
TO MUTUAL NATIONAL BANK.—A
savings association that is operating in mutual form on
the date it is converted to a national bank under this section
shall be converted to a mutual national bank as defined
in section 5133A of the Revised Statutes of the United
States.
(d) OTHER AUTHORITY NOT AFFECTED.—The author-
ity to convert to a national bank under this section shall
be in addition to any other authority of a savings associa-
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tion to convert to a national bank, State bank, or State
savings association.
(e) EFFECTIVE DATE.—This section shall take effect 60
days after the date of enactment of this Act.
SEC. 312. MUTUAL NATIONAL BANKS AND FEDERAL MU-
TUAL BANK HOLDING COMPANIES AUTHOR-
IZED.
(a) IN GENERAL.—Chapter one of title LXII of the Re-
vised Statutes of the United States (12 U.S.C. 21 et seq.)
is amended by inserting after section 5133 the following
new sections:
‘‘SEC. 5133A. MUTUAL NATIONAL BANKS.
‘‘(a) IN GENERAL.—The Comptroller of the Currency
may charter national banking associations as mutual na-
tional banks, either de novo or through the conversion of
an insured depository institution, in accordance with this
section and such regulations as the Comptroller may pre-
scribe.
‘‘(b) APPLICABLE LAW.—Unless otherwise provided by
this section or by the Comptroller of the Currency because
of the mutual form of the institution, a mutual national
bank—
‘‘(1) shall be subject to the same laws, require-
ments, duties, and obligations that apply to a na-
tional banking association operating in stock form;
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‘‘(2) shall have the same powers and privileges
as, and may engage in the same activities subject to
the same restrictions and limitations that apply to, a
national banking association operating in stock form;
and
‘‘(3) shall be supervised and examined by the
Comptroller in the same manner and to the same ex-
tent as a national banking association operating in
stock form.
‘‘(c) CONVERSIONS.—Subject to any requirements im-
posed by the Comptroller—
‘‘(1) a mutual national bank may convert to, or
acquire and retain all or substantially all of the as-
sets and liabilities of, a national banking association
operating in stock form; and
‘‘(2) a national banking association operating in
stock form may convert to a mutual national bank.
‘‘(d) DEFINITIONS.—For purposes of this section, the
following definitions shall apply:
‘‘(1) INSURED
DEPOSITORY
INSTITUTION.—The
term ‘insured depository institution’ has the same
meaning as in section 3 of the Federal Deposit Insur-
ance Act.
‘‘(2) MUTUAL NATIONAL BANK.—The term ‘mu-
tual national bank’ means a national banking asso-
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ciation that operates in mutual form and is chartered
by the Comptroller under this section.
‘‘(e) CONFORMING REFERENCES.—Unless otherwise
provided by the Comptroller—
‘‘(1) any reference in any Federal law to a na-
tional bank, including a reference to the term ‘na-
tional banking association’, ‘member bank’, ‘national
bank’, ‘national association’, ‘bank’, ‘insured bank’,
‘insured depository institution’, or ‘depository institu-
tion’, shall be deemed to refer also to a ‘mutual na-
tional bank’;
‘‘(2) any reference in any Federal law to the
term ‘shareholder’, ‘shareholders’, ‘stockholder’, or
‘stockholders’ of a national bank shall be deemed to
refer also to any member or members of a mutual na-
tional bank;
‘‘(3) any reference in any Federal law to the
term ‘board of directors’, ‘director’, or ‘directors’ of a
national bank shall be deemed to refer also to the
board of trustees, trustee, or trustees, respectively, of
a mutual national bank; and
‘‘(4) any terms in Federal law that may apply
only to a national bank operating in stock form, in-
cluding the terms ‘stock’, ‘shares’, ‘shares of stock’,
‘capital stock’, ‘common stock’, ‘stock certificate’,
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‘stock certificates’, ‘certificate representing shares of
stock’, ‘stock dividend’, ‘transferable stock’, ‘each class
of stock’, ‘cumulate such shares’, ‘par value’, ‘pre-
ferred stock’, ‘body corporate’, ‘corporation’, ‘cor-
porate powers’, ‘incorporated’, ‘articles of association’,
and ‘corporate existence’, shall not apply to a mutual
national bank, unless the Comptroller determines that
the context requires otherwise.
‘‘SEC. 5133B. FEDERAL MUTUAL BANK HOLDING COMPA-
NIES.
‘‘(a) REORGANIZATION OF MUTUAL NATIONAL BANK
AS A HOLDING COMPANY.—
‘‘(1) IN GENERAL.—Subject to approval under
the Bank Holding Company Act of 1956, a mutual
national bank may reorganize so as to become a Fed-
eral mutual bank holding company by submitting a
reorganization plan to the Comptroller of the Cur-
rency for the Comptroller’s approval.
‘‘(2) PLAN APPROVAL.—Upon the approval of the
reorganization plan by the Comptroller of the Cur-
rency and the issuance of the appropriate charters—
‘‘(A) the substantial part of the mutual na-
tional bank’s assets and liabilities, including all
of the bank’s insured liabilities, shall be trans-
ferred to a national banking association, the
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stock of which is owned (except as otherwise pro-
vided by this section) by the mutual national
bank; and
‘‘(B) the mutual national bank shall become
a Federal mutual bank holding company.
‘‘(b) DIRECTORS AND CERTAIN ACCOUNT HOLDERS’
APPROVAL OF PLAN REQUIRED.—This subsection does not
authorize a reorganization unless—
‘‘(1) a majority of the mutual national bank’s
board of directors has approved the plan providing
for such reorganization; and
‘‘(2) in the case of a mutual national bank in
which holders of accounts and obligors exercise voting
rights, a majority of such individuals has approved
the plan at a meeting held at the call of the directors
under the procedures prescribed by the bank’s charter
and bylaws.
‘‘(c) RETENTION OF CAPITAL.—In connection with a
transaction described in subsection (a), a mutual national
bank may, subject to the Comptroller’s approval, retain
capital at the holding company level to the extent that the
capital retained at the holding company level exceeds the
amount of capital required for the national banking asso-
ciation chartered as a part of a transaction described in
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subsection (a) to meet all relevant capital standards estab-
lished by the Comptroller for national banking associations.
‘‘(d) OWNERSHIP.—
‘‘(1) IN
GENERAL.—Persons having ownership
rights in the mutual national bank under Federal or
State law shall have the same ownership rights with
respect to the Federal mutual bank holding company.
‘‘(2) HOLDERS OF CERTAIN ACCOUNTS.—Holders
of savings, demand, or other accounts in the following
institutions shall have the same ownership rights with
respect to the Federal mutual bank holding company
as persons described in paragraph (1):
‘‘(A) A national bank chartered as part of
a transaction described in subsection (a).
‘‘(B) A mutual bank acquired through the
merger of the mutual bank into a national bank
subsidiary of the holding company or an interim
national bank subsidiary of the holding com-
pany.
‘‘(e) REGULATION.—A Federal mutual bank holding
company shall be—
‘‘(1) chartered by the Comptroller of the Cur-
rency and shall be subject to such regulations as the
Comptroller shall prescribe; and
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‘‘(2) regulated under the Bank Holding Com-
pany Act of 1956 on the same terms and subject to
the same limitations as any other company that con-
trols a bank.
‘‘(f) CAPITAL IMPROVEMENT.—
‘‘(1) PLEDGE OF STOCK OF NATIONAL BANK SUB-
SIDIARY.—This section shall not prohibit a Federal
mutual bank holding company from pledging all or
a portion of the stock of a national banking associa-
tion chartered as part of a transaction described in
subsection (a) to raise capital for such bank.
‘‘(2) ISSUANCE
OF
NONVOTING
SHARES.—This
section shall not prohibit a national banking associa-
tion chartered as part of a transaction described in
subsection (a) from issuing any nonvoting shares, or
less than 50 percent of the voting shares of such bank,
to any person other than the Federal mutual bank
holding company.
‘‘(g) INSOLVENCY AND LIQUIDATION.—
‘‘(1) IN GENERAL.—Notwithstanding any other
provision of law, the Comptroller of the Currency
may file a petition under chapter 7 of title 11, United
States Code, with respect to a Federal mutual bank
holding company upon—
‘‘(A) the default of any national bank—
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‘‘(i) the stock of which is owned by the
Federal mutual bank holding company; and
‘‘(ii) that was chartered in a trans-
action described in subsection (a); or
‘‘(B) a foreclosure on a pledge by the Fed-
eral mutual bank holding company described in
subsection (f)(1).
‘‘(2) DISTRIBUTION OF NET PROCEEDS.—Except
as provided in paragraph (3), the net proceeds of any
liquidation of any Federal mutual bank holding com-
pany under paragraph (1) shall be transferred to per-
sons who hold ownership interests in such Federal
mutual bank holding company.
‘‘(3) RECOVERY BY FDIC.—If the Federal Deposit
Insurance Corporation incurs a loss as a result of the
default of any insured bank subsidiary of a Federal
mutual bank holding company that is liquidated
under paragraph (1), the Federal Deposit Insurance
Corporation shall succeed to the ownership interests of
the depositors of the bank in the Federal mutual bank
holding company, to the extent of the Federal Deposit
Insurance Corporation’s loss.
‘‘(h) DEFINITIONS.—
‘‘(1) FEDERAL
MUTUAL
BANK
HOLDING
COM-
PANY.—The term ‘Federal mutual bank holding com-
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pany’ means a corporation chartered under this sec-
tion.
‘‘(2) DEFAULT.—With respect to a national
bank, the term ‘default’ means an adjudication or
other official determination by any court of competent
jurisdiction, the Comptroller, or other public author-
ity pursuant to which a conservator, receiver, or other
legal custodian is appointed for the national bank.’’.
(b) TECHNICAL AMENDMENT.—The table of sections for
chapter one of title LXII of the Revised Statutes of the Unit-
ed States (12 U.S.C. 21 et seq) is amended by inserting
after the item relating to section 5133 the following new
items:
‘‘5133A. Mutual national banks.
‘‘5133B. Federal mutual bank holding companies.’’.
(c) APPROPRIATE FEDERAL BANKING AGENCY FOR
FEDERAL MUTUAL BANK HOLDING COMPANIES.—Section
3(q)(1) of the Federal Deposit Insurance Act (12 U.S.C.
1813(q)(1)) is amended to read as follows:
‘‘(1) The Comptroller of the Currency in the case
of—
‘‘(A) any national banking association, any
District bank, or any Federal branch or agency
of a foreign bank; and
‘‘(B) supervisory or regulatory proceedings
arising from the authority given to the Comp-
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troller under section 5133B of the Revised Stat-
utes of the United States.’’.
(d) MUTUAL HOLDING COMPANY CONVERSION.—
(1) IN GENERAL.—Any mutual holding company
may convert to a Federal mutual bank holding com-
pany by filing with the Comptroller of the Currency
a notice of its election to convert on a specified date
that is not earlier than 30 days after the date on
which the notice is filed, and the mutual holding com-
pany shall be converted to a Federal mutual holding
company charter on the date specified in the notice.
(2) AUTOMATIC
CONVERSION.—On the date 2
years after the date of enactment of this Act, each mu-
tual holding company shall become a Federal mutual
bank holding company by operation of law.
(3) DEFINITIONS.—For purposes of this sub-
section, the following definitions shall apply:
(A) FEDERAL MUTUAL BANK HOLDING COM-
PANY.—The term ‘‘Federal mutual bank holding
company’’ has the same meaning as in section
5133B of the Revised Statutes of the United
States (as added by this section).
(B) MUTUAL HOLDING COMPANY.—The term
‘‘mutual holding company’’ has the same mean-
ing as in section 10(o)(10)(A) of the Home Own-
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ers’ Loan Act as in effect on the day before the
date of enactment of this Act.
(e) LIMITATION ON FEDERAL REGULATION OF MU-
TUAL STATE BANKS.—Except as otherwise provided in Fed-
eral law, the Comptroller of the Currency, Board of Gov-
ernors of the Federal Reserve System, and Federal Deposit
Insurance Corporation may not adopt or enforce any regu-
lation which contravenes the corporation governance rules
prescribed by State law or regulation for mutual State
banks unless the Comptroller, Board, or Corporation finds
that such Federal regulation is necessary to assure the safe-
ty and soundness of such State banks.
(f) EFFECTIVE DATE.—This section shall take effect 60
days after the date of enactment of this Act.
SEC. 313. GRANDFATHERED ACTIVITIES OF SAVINGS ASSO-
CIATIONS.
(a) SAVINGS ASSOCIATIONS THAT CONVERT TO NA-
TIONAL BANKS.—Except as provided in subsection (b), any
Federal savings association that converted to a national
bank under section 311 may continue to engage in any ac-
tivity, including the holding of any asset, in which it was
lawfully engaged prior to conversion pursuant to section
311.
(b) INVESTMENTS NOT AUTHORIZED FOR NATIONAL
BANKS TO HOLD DIRECTLY.—
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(1) IN GENERAL.—Notwithstanding section 5136
of the Revised Statutes of the United States or any
other provision of law, a national bank resulting from
the conversion of a savings association to a national
bank under section 311 may retain an equity invest-
ment that is not permissible for a national bank to
hold directly only if the bank complies with section
5(t)(5) of the Home Owners’ Loan Act (as in effect
on the day before the date of the enactment of the
Thrift Charter Transition Act of 1997) to the same
extent as if the institution were a savings association
subject to the Home Owners’ Loan Act.
(2) REGULATIONS OF EXISTING ACTIVITIES.—In-
vestments held by a national bank resulting from the
conversion of a savings association referred to in
paragraph (1) held on the date of the enactment of the
Thrift Charter Transition Act of 1997 shall be subject
to the same regulations and supervision as if the in-
stitution were a savings association subject to the
Home Owners’ Loan Act as in effect on the day before
the date of the enactment of the Thrift Charter Tran-
sition Act of 1997.
(3) INVESTMENTS
ACQUIRED
AFTER
ENACT-
MENT.—For investments acquired after the date of en-
actment of the Thrift Charter Transition Act of 1997
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but before the conversion of a savings association to
a national bank under section 311, such national
bank—
(A) may, if a subsidiary of the bank is en-
gaged in an activity that is not permissible for
a national bank to engage in directly, retain an
equity investment in the subsidiary only if the
bank and the subsidiary comply with section
5136A of the Revised Statutes of the United
States; and
(B) shall, in determining compliance with
applicable capital standards, deduct from the
bank’s assets and tangible equity capital the
amount of any equity investment (other than in-
vestment subject to subparagraph (A)) that is not
a permissible investment for a national bank to
hold directly.
(c) PERMISSIBLE ACTIVITIES OF STATE SAVINGS AS-
SOCIATIONS THAT CONVERT TO STATE BANKS.—For pur-
poses of section 24 of the Federal Deposit Insurance Act,
a State savings association that converts to a State bank
may, to the extent permitted by applicable State law, con-
tinue to engage (in the same manner) in any activity, in-
cluding the holding of any asset, permitted under section
28 of the Federal Deposit Insurance Act (as in effect on
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the day before the date of enactment of this Act) in which
the savings association was lawfully engaged on the day
before the date of enactment of this Act.
(d) TRANSITION PROVISION.—Notwithstanding any
other provision of this Act, in the case of any insured sav-
ings association described in this section securities offerings
and other financing transactions completed by such an in-
stitution on or before the date of its conversion pursuant
to section 311 shall continue to be governed by the capital
and accounting rules of the Office of Thrift Supervision as
in effect on the date that such institution converts to a bank
or becomes treated as a State bank.
SEC. 314. BRANCHES OF FORMER SAVINGS ASSOCIATIONS.
(a) BRANCHES.—
(1) EXISTING
BRANCHES
RETAINED.—Notwith-
standing any other provision of law, any depository
institution that qualifies under paragraph (2), and
any successor to such an institution, may continue,
after the depository institution becomes a bank, to op-
erate any branch or agency that the institution oper-
ated as a branch or agency, or was in the process of
establishing as a branch or agency, respectively, as of
the date of enactment of the Thrift Charter Transition
Act of 1997.
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(c) BRANCHING RIGHTS OF STATE CHARTERED INSTI-
TUTIONS NOT AFFECTED.—Except as provided in sub-
section (b), applicable State law and Federal law shall gov-
ern the authority of a savings association that converts to
a State savings association charter or a State bank charter
to continue to operate any branch or agency that the insti-
tution operated prior to conversion and the future branch-
ing rights of the converted institution.
(d) INTRASTATE BRANCHES.—Any branch operated
under subsection (a)(1) in a State other than the depository
institution’s home State may acquire, establish or operate
additional branches in the host State to the same extent
as permitted for a national bank with its main office lo-
cated in the host State.
SEC. 315. PROGRAMS FOR PROMOTING HOUSING FINANCE.
Section 22 of the Federal Deposit Insurance Act (12
U.S.C. 1830) is amended by—
(1) striking ‘‘It is not’’ and inserting ‘‘(a) IN
GENERAL.—It is not’’; and
(2) adding at the end the following new sub-
section:
‘‘(b) PROGRAMS
FOR
PROMOTING
HOUSING
FI-
NANCE.—
‘‘(1) FINDINGS.—The Congress finds that it is in
the national interest to protect and promote housing
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finance in the process of converting savings associa-
tions to banks and eliminating the separate Federal
regulation of savings associations.
‘‘(2) PROGRAMS REQUIRED.—In furtherance of
paragraph (1), each appropriate Federal banking
agency shall—
‘‘(A) develop and implement a program de-
signed to—
‘‘(i) facilitate the conversion of savings
associations to banks and the treatment of
State savings associations as State banks;
and
‘‘(ii) promote housing finance by as-
suring that insured depository institutions
may, at their own election, specialize in ac-
quisition, development, residential mortgage
finance, and residential mortgage and hous-
ing production lending; and
‘‘(B) develop guidelines and procedures for
assuring that insured depository institutions are
not subject to supervisory criticism or sanction
for prudently concentrating in acquisition, devel-
opment, residential mortgage finance, and resi-
dential mortgage and housing production lend-
ing.’’.
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SEC. 316. SAVINGS AND LOAN HOLDING COMPANIES.
Section 3 of the Bank Holding Company Act of 1956
(12 U.S.C. 1842) is amended by inserting after subsection
(f) (as so redesignated by section 102(b)(2) of this Act) the
following new subsection:
‘‘(g) SAVINGS AND LOAN HOLDING COMPANY POWERS
GRANDFATHERED.—
‘‘(1) IN
GENERAL.—A company that qualifies
under paragraph (2) may—
‘‘(A) maintain or enter into any nonbank
affiliation that the company was permitted pur-
suant to section 10 of the Home Owners’ Loan
Act to maintain or enter into prior to becoming
a bank holding company pursuant to paragraph
(2)(C); and
‘‘(B) engage in any activity, including
holding any asset, in which the company or any
affiliate described in subparagraph (A) was per-
mitted pursuant to section 10 of the Home Own-
ers’ Loan Act to engage prior to becoming a
bank holding company pursuant to paragraph
(2)(C).
‘‘(2) QUALIFIED GRANDFATHERED COMPANIES.—
‘‘(A) GRANDFATHERED
COMPANIES
DE-
FINED.—A company qualifies under this para-
graph for purposes of paragraph (1) if—
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‘‘(i) as of the date of enactment of the
Thrift Charter Transition Act of 1997, the
company—
‘‘(I) was a savings and loan hold-
ing company (as defined in section 10
of the Home Owners’ Loan Act, as in
effect on that date); or
‘‘(II) had filed an application to
become a savings and loan holding
company; and
‘‘(ii) the company—
‘‘(I) becomes a bank holding com-
pany by operation of law; or
‘‘(II) was exempt from section 4
(as in effect on the date of enactment
of the Thrift Charter Transition Act of
1997) under an order issued by the
Board under section 4(d) (as in effect
on the date of enactment of the Thrift
Charter Transition Act of 1997).
‘‘(B) HOLDING COMPANIES WITH IDENTICAL
SHAREHOLDERS.—A company also qualifies
under this paragraph for purposes of paragraph
(1) if the company—
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‘‘(i) is formed by a company qualified
under subparagraph (A); and
‘‘(ii) the shareholders of such company
are identical to the shareholders of the com-
pany referred to in (i).
‘‘(C) OPERATION
OF
LAW
DEFINED.—For
purposes of this subsection, a savings and loan
holding company becomes a bank holding com-
pany by operation of law if a savings associa-
tion controlled by the company is converted to a
bank or is treated as a bank under an amend-
ment made by the Thrift Charter Transition Act
of 1997.
‘‘(3) 
REQUIREMENTS
TO
RETAIN
GRAND-
FATHERED POWERS.—
‘‘(A) IN
GENERAL.—Paragraph (1) shall
cease to apply to a company if the company does
not comply with this paragraph.
‘‘(B) ACQUISITION OF BANKS .—
‘‘(i) IN GENERAL.—The company may
not acquire (by any form of business com-
bination) control of a bank after the date of
enactment of the Thrift Charter Transition
Act of 1997.
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‘‘(ii) EXCEPTIONS TO PROHIBITION.—
Clause (i) shall not apply to the acquisition
of—
‘‘(I) a bank, during the period
ending on the date 2 years after the
date of enactment of the Thrift Charter
Transition Act of 1997, if the acquisi-
tion results from the conversion of a
savings association or the treatment of
a savings association as a bank under
amendments made by the Thrift Char-
ter Transition Act of 1997;
‘‘(II) a bank, if the assets of such
bank are merged with an insured de-
pository institution which was con-
trolled by such company before the date
of enactment of the Thrift Charter
Transition Act of 1997, and if the re-
sulting institution continues to comply
with the requirements of Section 10(m)
of the Home Owners’ Loan Act as in
effect on the day prior to enactment of
the Thrift Charter Transition Act of
1997;
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‘‘(III) shares held as a bona fide
fiduciary (whether with or without the
sole discretion to vote such shares);
‘‘(IV) shares held by any person
as a bona fide fiduciary solely for the
benefit of employees of either the com-
pany or any subsidiary of the com-
pany and the beneficiaries of those em-
ployees;
‘‘(V) an entity described in section
2(c)(2);
‘‘(VI) shares held temporarily
pursuant to an underwriting commit-
ment in the normal course of an un-
derwriting business;
‘‘(VII) shares held in an account
solely for trading purposes;
‘‘(VIII) shares over which no con-
trol is held other than control of voting
rights acquired in the normal course of
a proxy solicitation;
‘‘(IX) shares or assets acquired in
securing or collecting a debt previously
contracted in good faith, during the 2-
year period beginning on the date of
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such acquisition or for such additional
time (not exceeding 3 years) as the
Board may permit if the Board deter-
mines that such an extension will not
be detrimental to the public interest;
‘‘(X) a bank from the Federal De-
posit Insurance Corporation, in any
capacity; and
‘‘(XI) a bank in an acquisition in
which the bank has been found to be in
danger of default by the appropriate
Federal or State authority.
‘‘(C) The company may not control a sav-
ings association or a national bank resulting
from the conversion of a savings association to a
national bank pursuant to section 311 if such
savings association or national bank fails to
comply with the requirements of section 5(c)(2)
and section 10(m) of the Home Owners’ Loan
Act as in effect on the day before the date of the
enactment of the Thrift Charter Transition Act
of 1997.
‘‘(4) GRANDFATHERED POWERS NONTRANSFER-
ABLE.—
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‘‘(A) IN
GENERAL.—Paragraph (1) shall
not apply with respect to any company if after
the date of the enactment of the Thrift Charter
Transition Act of 1997—
‘‘(i) any company (other than a com-
pany qualified under paragraph (2)) not
under common control with such company
as of that date acquires, directly, or indi-
rectly, control of the company; or
‘‘(ii) the company is the subject of any
merger, consolidation, or other type of busi-
ness combination as a result of which a
company (other than a company qualified
under paragraph (2)) not under common
control with such company acquires, di-
rectly or indirectly, control of such com-
pany.
‘‘(B) ANTI-EVASION.—The appropriate Fed-
eral banking agency may issue interpretations,
regulations, or orders that it deems necessary to
administer and carry out the purpose, and pre-
vent evasions, of this paragraph, including deter-
mining that (notwithstanding the form of a
transaction) the transaction would in substance
effect a change in control.
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‘‘(5) SAVINGS AND LOAN HOLDING COMPANIES
THAT BECOME BANK HOLDING COMPANIES.—
‘‘(A) EXCLUSION
FROM
APPLICATION
RE-
QUIREMENT.—A company that qualifies under
subparagraph (B) shall not be required to obtain
the approval of the Board under subsection (a)
to become a bank holding company if such com-
pany becomes a bank holding company after the
date of enactment of the Thrift Charter Transi-
tion Act of 1997 as a result of the conversion of
a savings association subsidiary to a bank or by
virtue of the treatment of a savings association
subsidiary as a bank under an amendment made
by this Act.
‘‘(B) COMPANIES EXCLUDED FROM APPLICA-
TION REQUIREMENT.—A company qualifies for
purposes of subparagraph (A) if the company, as
of the date of the enactment of the Thrift Charter
Transition Act of 1997, was a savings and loan
holding company (as defined in section 10(a) of
the Home Owners’ Loan Act as in effect on that
date) or has filed an application to become a
savings and loan holding company.
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‘‘(C) SUPERVISION
AND
REGULATION
OF
COMPANIES
THAT
WERE
PREVIOUSLY
SAVINGS
AND LOAN HOLDING COMPANIES.—
‘‘(i) IN GENERAL.—Any company that
qualifies under paragraph (2) and complies
with paragraph (3) and was registered and
regulated under section 10 of the Home
Owners’ Loan Act on the day before becom-
ing a bank holding company described in
paragraphs (2) and (3) shall continue to be
regulated, for a period of 3 years after be-
coming such holding company, under the
terms of section 10 of the Home Owners’
Loan Act in the same manner and to the
same extent and subject to the same require-
ments as by the Office of Thrift Supervision
before the date of the enactment of the Thrift
Charter Transition Act of 1997.
‘‘(ii) HOLDING COMPANY CAPITAL EX-
CEPTION.—With regard to holding company
capital, any company that qualifies under
paragraph (2) and complies with para-
graph (3) and was registered and regulated
under section 10 of the Home Owners’ Loan
Act before June 19, 1997, or had an appli-
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cation pending to do so on such date, shall
continue to be regulated under the terms of
section 10 of the Home Owners’ Loan Act
in the same manner and to the same extent
and subject to the same requirements as by
the Office of Thrift Supervision before the
date of the enactment of the Thrift Charter
Transition Act of 1997.
‘‘(iii) 
SUBMISSIONS
TO
REGU-
LATORS.—A company shall provide for a
period of 3 years after becoming a bank
holding company described in paragraphs
(2) and (3) the appropriate Federal bank-
ing agency with—
‘‘(I) notice of acquisition of any
company not controlled or affiliated on
the date of enactment of the Thrift
Charter Transition Act of 1997 that is
engaged in nonbanking activities with-
in 15 days after completion of any
such transaction; and
‘‘(II) copies of such quarterly and
annual reports as it is otherwise re-
quired to file with any other govern-
mental agency.
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‘‘(iv) REPORTING
REQUIREMENTS.—
The appropriate Federal banking agency
may adopt, for a period of 3 years after a
company becomes a bank holding company
described in paragraphs (2) and (3), report-
ing requirements substantially similar to
and no more burdensome than required by
the Office of Thrift Supervision as of Janu-
ary 1, 1997.
‘‘(v) REGULATORY
AUTHORITY.—The
appropriate Federal banking agency shall,
for a period of 3 years after a company be-
comes a bank holding company described in
paragraphs (2) and (3)—
‘‘(I) have the same authority to
examine a company or any subsidiary
or affiliate thereof only to the same ex-
tent as the Office of Thrift Supervision
had as of January 1, 1997; and
‘‘(II) conduct only the same type
of examination and with the same fre-
quency as the Office of Thrift Super-
vision prior to January 1, 1997, unless
required to prevent an unsafe or un-
sound activity or course of conduct of
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the savings institution converted to a
bank pursuant to the Thrift Charter
Transition Act of 1997.’’.
SEC. 317. TREATMENT OF REFERENCES IN ADJUSTABLE
RATE MORTGAGES.
(a) TREATMENT
OF REFERENCES
IN ADJUSTABLE
RATE MORTGAGES ISSUED BEFORE FIRREA.—For pur-
poses of section 402(e) of Financial Institutions Reform,
Recovery, and Enactment Act of 1989 (12 U.S.C. 1437
note), any reference in such section to—
(1) the Director of the Office of Thrift Super-
vision shall be deemed to be a reference to the Sec-
retary of the Treasury; and
(2) a Savings Association Insurance Fund mem-
ber shall be deemed to be a reference to an insured de-
pository institution (as defined in section 3 of the
Federal Deposit Insurance Act).
(b) TREATMENT
OF REFERENCES
IN ADJUSTABLE
RATE
MORTGAGES
INSTRUMENTS
ISSUED
AFTER
FIRREA.—
(1) IN
GENERAL.—For purposes of adjustable
rate mortgage instruments that are in effect as of the
date of enactment of this Act, any reference in the in-
strument to the Director of the Office of Thrift Super-
vision or Savings Association Insurance Fund mem-
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bers shall be treated as a reference to the Secretary of
the Treasury or insured depository institutions (as
defined in section 3 of the Federal Deposit Insurance
Act), as appropriate.
(2) SUBSTITUTION FOR INDEXES.—If any index
used to calculate the applicable interest rate on any
adjustable rate mortgage instrument is no longer cal-
culated and made available as a direct or indirect re-
sult of the enactment of this title, any index—
(A) made available by the Secretary of the
Treasury; or
(B) determined by the Secretary of the
Treasury, pursuant to paragraph (4), to be sub-
stantially similar to the index which is no longer
calculated or made available,
may be substituted by the holder of any such adjust-
able rate mortgage instrument upon notice to the bor-
rower.
(3) AGENCY ACTION REQUIRED TO PROVIDE CON-
TINUED AVAILABILITY OF INDEXES.—Promptly after
the enactment of this subsection, the Secretary of the
Treasury, the Chairperson of the Federal Deposit In-
surance Corporation, and the Comptroller of the Cur-
rency shall take such action as may be necessary to
assure that the indexes prepared by the Director of the
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Office of Thrift Supervision immediately before the
enactment of this subsection and used to calculate the
interest rate on adjustable rate mortgage instruments
continue to be available.
(4) REQUIREMENTS RELATING TO SUBSTITUTE
INDEXES.—If any agency can no longer make avail-
able an index pursuant to paragraph (3), an index
that is substantially similar to such index may be
substituted for such index for purposes of paragraph
(2) if the Secretary of the Treasury determines, after
notice and opportunity for comment, that—
(A) the new index is based upon data sub-
stantially similar to that of the original index;
and
(B) the substitution of the new index will
result in an interest rate substantially similar to
the rate in effect at the time the original index
became unavailable.
SEC. 318. COST OF FUNDS INDEXES.
(a) COST OF FUNDS INDEX DEFINED.—The term ‘‘cost
of funds indexed’’ means any index that is published by
a Federal home loan bank and is based, in whole or in part,
upon the cost of funds of such bank’s members.
(b) CALCULATIONS BASED ON TYPE OF CHARTER AND
INSURANCE FUND MEMBERSHIP OF MEMBERS.— If any
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cost of funds index includes data based on charter type, in-
surance fund membership, or other similar characteristics
of members of a Federal home loan ban, such index shall
be calculated after the date of the enactment of this Act
using data only from insured depository institutions which
were bank members and whose data was included in such
index on or before such date of enactment.
(c) ACQUISITION OF DATA.—
(1) IN GENERAL.—Each insured depository in-
stitution the data from which is required to compile
a cost of funds index in accordance with subsection
(b) shall provide to the Federal home loan bank which
maintains the index such information as may be nec-
essary, and in such form as may be appropriate, for
the bank to calculate and publish the index.
(2) ENFORCEMENT
BY
BANKING
AGENCIES.—
Each appropriate Federal banking agency shall take
such action as may be necessary to ensure that in-
sured depository institutions which are required to
provide information to any Federal home loan bank
under paragraph (1) furnish such information on a
timely basis and in the form required by the bank.
(3) TREATMENT
OF
INSTITUTIONS.—Notwith-
standing any other provision of law, an insured de-
pository institution which furnishes information to a
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Federal home loan bank pursuant to this section for
use in compiling a cost of funds index shall not be
deemed to control, directly, or indirectly, such index.
(d) CERTAIN
DATA
EXCLUDED.—Notwithstanding
subsections (b) and (c), no cost of funds index shall include
any data from any insured depository institution which re-
sults from the merger, consolidation, or other combination
of a member of a Federal home loan bank with a nonmem-
ber of any such bank if—
(1) the total assets of the nonmember exceed the
total assets of the bank member at the time of such
merger, consolidation, or other combination; or
(2) in the case of a merger, consolidation, or
other merger in which a member of a Federal home
loan bank is the resulting insured depository institu-
tion, combined ration of the average amount of single-
family loan balances to average total assets of all in-
sured depository institutions involved in such merger,
consolidation, or other combination for the 12-months
period ending on the date of such transaction is less
than 70 percent.
(e) OTHER DEFINITIONS.—For purposes of this sec-
tion, the terms ‘‘appropriate Federal banking agency’’ and
‘‘insured depository institution’’ shall have the same mean-
ings as in section 3 of the Federal Deposit Insurance Act.
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Subtitle B—Ending Separate Fed-
eral Regulation of Savings Asso-
ciations and Savings and Loan
Holding Companies
SEC. 321. STATE SAVINGS ASSOCIATIONS TREATED AS
STATE BANKS UNDER FEDERAL BANKING
LAW.
(a) AMENDMENTS TO THE FEDERAL DEPOSIT INSUR-
ANCE ACT.—Section 3 of the Federal Deposit Insurance Act
(12 U.S.C. 1813) is amended—
(1) by striking paragraph (2) of subsection (a)
and inserting the following new paragraph:
‘‘(2) STATE BANK.—
‘‘(A) IN GENERAL.—The term ‘State bank’
means any bank, banking association, trust com-
pany, savings bank, industrial bank (or similar
depository institution which the Board of Direc-
tors finds to be operating in substantially the
same manner as an industrial bank), building
and loan association, savings and loan associa-
tion, homestead association, cooperative bank, or
other banking institution—
‘‘(i) which is engaged in the business of
receiving deposits, other than trust funds
(as defined in this section); and
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‘‘(ii) which—
‘‘(I) is incorporated under the
laws of any State;
‘‘(II) is organized and operating
according to the laws of the State in
which such institution is chartered or
organized; or
‘‘(III) is operating under the Code
of Law for the District of Columbia
(except a national bank).
‘‘(B) 
CERTAIN
INSURED
BANKS
IN-
CLUDED.—The term ‘State bank’ includes any
cooperative bank or other unincorporated bank
the deposits of which were insured by the Cor-
poration on the day before the date of enactment
of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989.
‘‘(C) CERTAIN
UNINSURED
BANKS
EX-
CLUDED.—The term ‘State bank’ shall not in-
clude any cooperative bank or other unincor-
porated bank the deposits of which were not in-
sured by the Corporation on the day before the
date of enactment of the Financial Institutions
Reform, Recovery, and Enforcement Act of
1989.’’; and
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(2) in subsection (q), by—
(A) inserting ‘‘and’’ after the semicolon at
the end of paragraph (2);
(B) striking ‘‘; and’’ at the end of para-
graph (3) and inserting a period; and
(C) striking paragraph (4).
(b) AMENDMENT TO THE BANK HOLDING COMPANY
ACT OF 1956.—Section 2(a)(5) of the Bank Holding Com-
pany Act of 1956 (12 U.S.C. 1841(a)(5)) is amended by
striking subparagraph (E).
(c) AMENDMENTS TO THE FEDERAL RESERVE ACT.—
Section 1 of the Federal Reserve Act (12 U.S.C. 221) is
amended by inserting ‘‘(as defined in section 3 of the Fed-
eral Deposit Insurance Act)’’ after ‘‘State bank’’ each place
such term appears.
(d) EFFECTIVE DATE.—This section shall take effect
2 years after the date of the enactment of this Act.
SEC. 322. POWERS OF FEDERAL SAVINGS ASSOCIATIONS AC-
CORDED TO NATIONAL BANKS.
(a) ADDITIONAL POWERS FOR NATIONAL BANKS TO
ACCOMMODATE FEDERAL SAVINGS ASSOCIATION CONVER-
SIONS.—Subsection (a) of section 5136 of the Revised Stat-
utes of the United States (12 U.S.C. 24) (as so designated
by section 151(a) of this Act) is amended by adding at the
end the following new paragraph:
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‘‘(12) To exercise all the powers and privileges
authorized by the Director of the Office of Thrift Su-
pervision for a Federal savings association on the day
before the date of enactment of the Financial Services
Competition Act of 1997, subject to the requirements
otherwise applicable to national banks, including sec-
tions 5136A and 5155, except this paragraph shall
not confer on a national bank the power granted to
a Federal savings association under section 5(c)(4)(B)
of the Home Owners’ Loan Act to invest in a corpora-
tion engaged in real estate development and the power
granted to a Federal savings association under section
5(c)(4)(B) of the Home Owners’ Loan Act to invest in
a corporation may be exercised by a national bank
only if the investment is made in a corporation that
is a subsidiary of the bank.’’.
(b) EFFECTIVE DATE.—This section shall take effect
2 years after the date of the enactment of this Act.
SEC. 323. HOME OWNERS’ LOAN ACT REPEALED.
Effective 2 years after the date of enactment of this
Act, the Home Owners’ Loan Act (12 U.S.C. 1461–1468c)
is repealed.
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SEC. 324. CONFORMING AMENDMENT REFLECTING ELIMI-
NATION OF THE FEDERAL THRIFT CHARTER
AND THE SEPARATE SYSTEM OF THRIFT REG-
ULATION.
Section 2704(c) of the Economic Growth and Regu-
latory Paperwork Reduction Act of 1996 is amended to read
as follows:
‘‘(c) EFFECTIVE DATE.—This section and the amend-
ments made by this section shall take effect on the earlier
of—
‘‘(1) January 1, 2000; or
‘‘(2) the end of the 2-year period beginning on
the date of the enactment of the Thrift Charter Tran-
sition Act of 1997.’’.
SEC. 325. CONFORMING AMENDMENTS TO THE FEDERAL
HOME LOAN BANK ACT.
(a) AMENDMENT TO SECTION 2.—Section 2 of the Fed-
eral Home Loan Bank Act (12 U.S.C. 1422) is amended
by striking paragraph (9) and redesignating paragraphs
(10) through (12) as paragraphs (9) through (11), respec-
tively.
(b) AMENDMENTS TO SECTION 10.—Subsection (h) of
section 10 of the Federal Home Loan Bank Act (12 U.S.C.
1430) is amended to read as follows:
‘‘(h) [Repealed]’’.
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(c) 
AMENDMENTS
TO
SECTION
11.—Section
11(d)(2)(C) of the Federal Home Loan Bank Act (12 U.S.C.
1431(e)(2)(C)) (as so redesignated by section 174(e) of this
Act) is amended by—
(1) striking ‘‘, and with respect to the collection
and settlement (including payment by the payor in-
stitution) of items payable by Federal savings and
loan associations and Federal mutual savings
banks,’’; and
(2) striking ‘‘, associations, or banks’’.
(d) AMENDMENT TO SECTION 18.—Section 18(c) of the
Federal Home Loan Bank Act (12 U.S.C. 1438(c)) is re-
pealed.
(e) AMENDMENT TO SECTION 22.—Section 22(a) of the
Federal Home Loan Bank Act (12 U.S.C. 1442(a)) is
amended by striking ‘‘, and the Director of the Office of
Thrift Supervision’’ each place such appears and inserting
‘‘and’’ before ‘‘the Chairperson of the National Credit Union
Administration’’.
(f) AMENDMENT TO SECTION 24.—Section 24 of the
Federal Home Loan Bank Act (12 U.S.C. 1444) is repealed.
(g) EFFECTIVE DATE.—This section shall become effec-
tive 2 years after the date of enactment of this Act.
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SEC. 326. AMENDMENTS TO TITLE 11, UNITED STATES
CODE.
(a) DEFINITION OF FEDERAL MUTUAL BANK HOLDING
COMPANY.—Section 101 of title 11, United States Code, is
amended by inserting after paragraph (21B) the following
new paragraph:
‘‘(21C) ‘Federal mutual bank holding company’
has the same meaning as in section 5133B(h)(1) of
the Revised Statutes of the United States.’’.
(b) CONSERVATOR OR RECEIVER MAY PETITION.—
Section 303(b) of title 11, United States Code, is amend-
ed—
(1) in paragraph (3)(B) by striking ‘‘or’’ at the
end;
(2) in paragraph (4) by striking the period at
the end and inserting ‘‘; or’’; and
(3) by adding at the end the following:
‘‘(5) in a proceeding concerning a Federal mu-
tual bank holding company, the Comptroller of the
Currency.’’
(c) EFFECT OF INVOLUNTARY PETITION BY COMP-
TROLLER.—
(1) EXEMPTION FROM INDEMNIFICATION.—Sec-
tion 303(e) of title 11, United States Code, is amend-
ed by inserting ‘‘, other than a petitioner specified in
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subsection (b)(5),’’ after ‘‘petitioners under this sec-
tion’’.
(2) 
RESTRICTION
ON
OPERATION
PENDING
COURT ORDER OF RELIEF.—Section 303(f) of title 11,
United States Code, is amended by inserting ‘‘or a
petition was filed by a petitioner specified in sub-
section (b)(5)’’ after ‘‘otherwise’’.
(3) INTERIM TRUSTEE TO BE APPOINTED.—Sec-
tion 303(g) of title 11, United States Code, is amend-
ed by inserting after the 1st sentence the following
new sentence: ‘‘Upon the filing of a petition by a peti-
tioner specified in subsection (b)(5), and without re-
quiring notice or hearing, the United States Trustee
shall appoint an interim trustee from a list submitted
by the Comptroller of the Currency of 5 disinterested
persons that are qualified and willing to serve.’’
Subtitle C—Combining OTS and
OCC
SEC. 331. PROHIBITION OF MERGER OR CONSOLIDATION
REPEALED.
Section 321 of title 31, United States Code, is amended
by striking subsection (e).
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SEC. 332. SECRETARY OF THE TREASURY REQUIRED TO
FORMULATE PLANS FOR COMBINING OFFICE
OF THRIFT SUPERVISION WITH OFFICE OF
THE COMPTROLLER OF THE CURRENCY.
Not later than 9 months after the date of the enactment
of this Act, the Secretary of the Treasury, in consultation
with the Director of the Office of Thrift Supervision and
the Comptroller of the Currency, shall formulate a plan for
consolidating the Office of Thrift Supervision with the Of-
fice of the Comptroller of the Currency by the end of the
2-year period beginning on the date of enactment of this
Act. The Director of the Office of Thrift Supervision and
the Comptroller of the Currency shall implement that plan,
notwithstanding any other provision of Federal banking
laws.
SEC. 333. OFFICE OF THRIFT SUPERVISION AND POSITION
OF DIRECTOR OF THE OFFICE OF THRIFT SU-
PERVISION ABOLISHED.
Effective 2 years after the date of enactment of this
Act, the Office of Thrift Supervision and the position of
Director of the Office of Thrift Supervision are abolished.
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SEC. 334. RECONFIGURATION OF BOARD OF DIRECTORS OF
FDIC AS A RESULT OF REMOVAL OF DIREC-
TOR OF THE OFFICE OF THRIFT SUPER-
VISION.
(a) IN GENERAL.—Section 2(a)(1) of the Federal De-
posit Insurance Act (12 U.S.C. 1812(a)(1)) is amended to
read as follows:
‘‘(1) IN GENERAL.—The management of the Cor-
poration shall be vested in a Board of Directors con-
sisting of 5 members—
‘‘(A) 1 of whom shall be the Comptroller of
the Currency; and
‘‘(B) 4 of whom shall be appointed by the
President, and with the advice and consent of the
Senate, from among individuals who are citizens
of the United States, 1 of whom shall have State
bank supervisory experience.’’.
(b) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) Section 2(d)(2) of the Federal Deposit Insur-
ance Act (12 U.S.C. 1812(d)(2)) is amended—
(A) by striking ‘‘or the office of Director of
the Office of Thrift Supervision’’;
(B) by striking ‘‘or such Director’’;
(C) by striking ‘‘or the acting Director of
the Office of Thrift Supervision, as the case may
be’’; and
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(D) by striking ‘‘or Director’’.
(2) Section 2(f)(2) of the Federal Deposit Insur-
ance Act (12 U.S.C. 1812(f)(2)) is amended by strik-
ing ‘‘or of the Office of Thrift Supervision’’.
(c) EFFECTIVE DATE.—The amendments made by sub-
sections (a) and (b) shall take effect at the end of the 2-
year period beginning on the date of the enactment of this
Act.
SEC. 335. CONTINUATION PROVISIONS.
(a) CONTINUATION OF ORDERS, RESOLUTIONS, DE-
TERMINATIONS AND REGULATIONS.—All orders, resolutions,
determinations and regulations of the Office of Thrift Su-
pervision that have been issued, made, prescribed or allowed
to become effective by the Office of Thrift Supervision (in-
cluding orders, resolutions, determinations and regulations
that relate to the conduct of conservatorship and receiver-
ships), or by a court of competent jurisdiction, and are in
effect on the day before the date of enactment, shall continue
in effect according to the terms of such orders, resolutions,
determinations, and regulations and shall be enforceable by
or against the appropriate successor agency until modified,
terminated, set aside or superseded in accordance with ap-
plicable law by the appropriate successor agency or by a
court of competent jurisdiction or by operation of law.
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(b) CONTINUATION OF SUITS.—No action or other pro-
ceeding commenced by or against the Office of Thrift Super-
vision shall abate because of the enactment of this Act, ex-
cept that the appropriate successor agency to the Office of
Thrift Supervision shall be substituted for the Office of
Thrift Supervision as a party to any such action or pro-
ceeding.
(c) CONTINUATION OF AGENCY SERVICES.—Any agen-
cy, department, or other instrumentality of the United
States, and any successor to such agency, department, or
instrumentality, that was providing supporting services to
the Office of Thrift Supervision shall—
(1) continue to provide such services, on a reim-
bursable basis or as otherwise agreed before the date
of enactment, to the Office of Thrift Supervision; and
(2) consult with the Office of Thrift Supervision
to coordinate and facilitate a prompt and reasonable
completion or termination of such services.
(d) TRANSFER OF PROPERTY.—Not later than two
years of the date of enactment, all property of the Office
of Thrift Supervision shall be transferred to the Office of
the Comptroller of the Currency, or another appropriate
successor agency, in accordance with the division of respon-
sibilities and activities effected by this Act. For purposes
of this subsection, the term ‘‘property’’ includes, but is not