‘‘(D) SOLICITATION OF VIEWS OF OTHER
SUPERVISORY AGENCIES.—
‘‘(i) IN GENERAL.—Upon receiving a
prior notice under this paragraph, in order
to provide for the submission of their views
and recommendations, the Board shall give
notice of the proposal to—
‘‘(I) 
the 
appropriate 
Federal
banking agency of any bank involved;
‘‘(II) the appropriate functional
regulator of any functionally regulated
nondepository institution (as defined
in section 5(c)(1)(C)) involved; and
‘‘(III) the Secretary of the Treas-
ury, the Attorney General, and the
Federal Trade Commission.
‘‘(ii) TIMING.—The views and rec-
ommendations of any agency provided no-
tice under this paragraph shall be sub-
mitted to the Board not later than 30 cal-
endar days after the date on which notice
to the agency was given, unless the Board
determines that another shorter time pe-
riod is appropriate.
‘‘(d) PROVISIONS APPLICABLE TO FINANCIAL HOLD-
ING COMPANIES THAT FAIL TO MEET REQUIREMENTS.—
‘‘(1) IN GENERAL.—If the Board finds, after
notice from or consultation with the appropriate
Federal banking agency, that a financial holding
company is not in compliance with the requirements
of subparagraph (A), (B), or (C) of subsection
(b)(1), the Board shall give notice of such finding to
the company.
‘‘(2) AGREEMENT TO CORRECT CONDITIONS RE-
QUIRED.—Within 45 days of receipt by a financial
holding company of a notice given under paragraph
(1) (or such additional period as the Board may per-
mit), the company shall execute an agreement ac-
ceptable to the Board to comply with the require-
ments applicable to a financial holding company.
‘‘(3) AUTHORITY
TO
IMPOSE
LIMITATIONS.—
Until the conditions described in a notice to a finan-
cial holding company under paragraph (1) are
corrected—
‘‘(A) the Board may impose such limita-
tions on the conduct or activities of the com-
pany or any affiliate of the company as the
Board determines to be appropriate under the
circumstances; and
‘‘(B) the appropriate Federal banking
agency may impose such limitations on the con-
duct or activities of an affiliated depository in-
stitution or subsidiary of a depository institu-
tion as the appropriate Federal banking agency
determines to be appropriate under the cir-
cumstances.
‘‘(4) FAILURE TO CORRECT.—If, after receiving
a notice under paragraph (1), a financial holding
company does not—
‘‘(A) execute and implement an agreement
in accordance with paragraph (2);
‘‘(B) comply with any limitations imposed
under paragraph (3);
‘‘(C) in the case of a notice of failure to
comply with subsection (b)(1)(A), restore each
depository institution subsidiary to well capital-
ized status before the end of the 180-day period
beginning on the date such notice is received by
the company (or such other period permitted by
the Board); or
‘‘(D) in the case of a notice of failure to
comply with subparagraph (B) or (C) of sub-
section (b)(1), restore compliance with any such
subparagraph by the date the next examination
of the depository institution subsidiary is com-
pleted or by the end of such other period as the
Board determines to be appropriate,
the Board may require such company, under such
terms and conditions as may be imposed by the
Board and subject to such extension of time as may
be granted in the Board’s discretion, to divest con-
trol of any depository institution subsidiary or, at
the election of the financial holding company, in-
stead to cease to engage in any activity conducted by
such company or its subsidiaries pursuant to this
section.
‘‘(5) CONSULTATION.—In taking any action
under this subsection, the Board shall consult with
all relevant Federal and State regulatory agencies.
‘‘(e) SAFEGUARDS FOR BANK SUBSIDIARIES.—A fi-
nancial holding company shall assure that—
‘‘(1) the procedures of the holding company for
identifying and managing financial and operational
risks within the company, and the subsidiaries of
such company, adequately protect the subsidiaries of
such company which are insured depository institu-
tions or wholesale financial institution from such
risks;
‘‘(2) the holding company has reasonable poli-
cies and procedures to preserve the separate cor-
porate identity and limited liability of such company
and the subsidiaries of such company, for the pro-
tection of the company’s subsidiary insured deposi-
tory institutions and wholesale financial institutions;
and
‘‘(3) the holding company complies with this
section.
‘‘(f) 
AUTHORITY
TO
RETAIN
LIMITED
NON-
FINANCIAL ACTIVITIES AND AFFILIATIONS.—
‘‘(1) IN
GENERAL.—Notwithstanding section
4(a), a company that is not a bank holding company
or a foreign bank (as defined in section 1(b)(7) of
the International Banking Act of 1978) and becomes
a financial holding company after the date of the en-
actment of the Financial Services Act of 1999 may
continue to engage in any activity and retain direct
or indirect ownership or control of shares of a com-
pany engaged in any activity if—
‘‘(A) the holding company lawfully was en-
gaged in the activity or held the shares of such
company on September 30, 1997;
‘‘(B) the holding company is predomi-
nantly engaged in financial activities as defined
in paragraph (2); and
‘‘(C) the company engaged in such activity
continues to engage only in the same activities
that such company conducted on September 30,
1997, and other activities permissible under
this Act.
‘‘(2) PREDOMINANTLY
FINANCIAL.—For pur-
poses of this subsection, a company is predominantly
engaged in financial activities if the annual gross
revenues derived by the holding company and all
subsidiaries of the holding company (excluding reve-
nues derived from subsidiary depository institu-
tions), on a consolidated basis, from engaging in ac-
tivities that are financial in nature or are incidental
to activities that are financial in nature under sub-
section (c) represent at least 85 percent of the con-
solidated annual gross revenues of the company.
‘‘(3) NO EXPANSION OF GRANDFATHERED COM-
MERCIAL
ACTIVITIES
THROUGH
MERGER
OR
CON-
SOLIDATION.—A financial holding company that en-
gages in activities or holds shares pursuant to this
subsection, or a subsidiary of such financial holding
company, may not acquire, in any merger, consolida-
tion, or other type of business combination, assets of
any other company which is engaged in any activity
which the Board has not determined to be financial
in nature or incidental to activities that are financial
in nature under subsection (c), except this para-
graph shall not apply with respect to a company that
owns a broadcasting station licensed under title III
of the Communications Act of 1934 and the shares
of which have been controlled by an insurance com-
pany since January 1, 1998.
‘‘(4) CONTINUING
REVENUE
LIMITATION
ON
GRANDFATHERED
COMMERCIAL
ACTIVITIES.—Not-
withstanding any other provision of this subsection,
a financial holding company may continue to engage
in activities or hold shares in companies pursuant to
this subsection only to the extent that the aggregate
annual gross revenues derived from all such activi-
ties and all such companies does not exceed 15 per-
cent of the consolidated annual gross revenues of the
financial holding company (excluding revenues de-
rived from subsidiary depository institutions).
‘‘(5) CROSS MARKETING RESTRICTIONS APPLI-
CABLE TO COMMERCIAL ACTIVITIES.—A depository
institution controlled by a financial holding company
shall not—
percent of the consolidated total capital of the hold-
ing company;
‘‘(5) neither the Board nor the Secretary of the
Treasury has determined that the activity is not fi-
nancial in nature or incidental to financial activities
under subsection (c);
‘‘(6) the holding company is not required to
provide prior written notice of the transaction to the
Board under subsection (c)(6); and
‘‘(7) the holding company provides written noti-
fication to the Board describing the activity com-
menced or conducted by the company acquired no
later than 10 business days after commencing the
activity or consummating the acquisition.’’.
(b) FACTORS FOR CONSIDERATION IN REVIEWING
APPLICATION BY FINANCIAL HOLDING COMPANY TO AC-
QUIRE BANK.—Section 3(c) of the Bank Holding Com-
pany Act of 1956 (12 U.S.C. 1842(c)) is amended by add-
ing at the end the following new paragraph:
‘‘(6) ‘TOO BIG TO FAIL’ FACTOR.—In consid-
ering an acquisition, merger, or consolidation under
this section involving a financial holding company or
a company that would be any such holding company
upon the consummation of the transaction, the
Board shall consider whether, and the extent to
which, the proposed acquisition, merger, or consoli-
dation poses an undue risk to the stability of the fi-
nancial system of the United States.’’.
(c) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) Section 2 of the Bank Holding Company
Act of 1956 (12 U.S.C. 1841) is amended by adding
at the end the following new subsection:
‘‘(p) INSURANCE COMPANY.—For purposes of sec-
tions 5, 6, and 10, the term ‘insurance company’ includes
any person engaged in the business of insurance to the
extent of such activities.’’.
(2) Section 4(j) of the Bank Holding Company
Act of 1956 (12 U.S.C. 1843(j)) is amended—
(A) in paragraph (1)(A), by inserting ‘‘or
in any complementary activity under section
6(c)(1)(B)’’ after ‘‘subsection (c)(8) or (a)(2)’’;
and
(B) in paragraph (3)—
(i) by inserting ‘‘, other than any
complementary 
activity 
under 
section
6(c)(1)(B),’’ after ‘‘to engage in any activ-
ity’’; and
(ii) by inserting ‘‘or a company en-
gaged in any complementary activity under
section 6(c)(1)(B)’’ after ‘‘insured deposi-
tory institution’’.
(d) REPORT.—
(1) IN GENERAL.—By the end of the 4-year pe-
riod beginning on the date of the enactment of this
Act and every 4 years thereafter, the Board of Gov-
ernors of the Federal Reserve System and the Sec-
retary of the Treasury shall submit a joint report to
the Congress containing a summary of new activities
which are financial in nature, including grand-
fathered commercial activities, in which any financial
holding company is engaged pursuant to subsection
(c)(1) or (f) of section 6 of the Bank Holding Com-
pany Act of 1956 (as added by subsection (a)).
(2) OTHER CONTENTS.—Each report submitted
to the Congress pursuant to paragraph (1) shall also
contain the following:
(A) A discussion of actions by the Board
of Governors of the Federal Reserve System
and the Secretary of the Treasury, whether by
regulation, order, interpretation, or guideline or
by approval or disapproval of an application,
with regard to activities of financial holding
companies which are incidental to activities fi-
nancial in nature or complementary to such fi-
nancial activities.
(B) An analysis and discussion of the risks
posed by commercial activities of financial hold-
ing companies to the safety and soundness of
affiliate depository institutions.
(C) An analysis and discussion of the ef-
fect of mergers and acquisitions under section
6 of the Bank Holding Company Act of 1956
on market concentration in the financial serv-
ices industry.
(D) An analysis and discussion, by the
Board and the Secretary in consultation with
the other Federal banking agencies (as defined
in section 3(z) of the Federal Deposit Insurance
Act), of the impact of the implementation of
this Act, and the amendments made by this
Act, on the extent of meeting community credit
needs and capital availability under the Com-
munity Reinvestment Act of 1977.
SEC. 104. OPERATION OF STATE LAW.
(a) AFFILIATIONS.—
(1) IN GENERAL.—Except as provided in para-
graph (2), no State may, by statute, regulation,
order, interpretation, or other action, prevent or re-
strict an insured depository institution or wholesale
financial institution, or a subsidiary or affiliate
thereof, from being affiliated directly or indirectly or
associated with any person or entity, as authorized
or permitted by this Act or any other provision of
Federal law.
(2) INSURANCE.—With respect to affiliations
between insured depository institutions or wholesale
financial institutions, or any subsidiary or affiliate
thereof, and persons or entities engaged in the busi-
ness of insurance, paragraph (1) does not prohibit—
(A) any State from requiring any person
or entity that proposes to acquire control of an
entity that is engaged in the business of insur-
ance and domiciled in that State (hereafter in
this subparagraph referred to as the ‘‘insurer’’)
to furnish to the insurance regulatory authority
of that State, not later than 60 days before the
effective date of the proposed acquisition—
(i) the name and address of each per-
son by whom, or on whose behalf, the af-
filiation referred to in this subparagraph is
to be effected (hereafter in this subpara-
graph referred to as the ‘‘acquiring
party’’);
(ii) if the acquiring party is an indi-
vidual, his or her principal occupation and
all offices and positions held during the 5
years preceding the date of notification,
and any conviction of crimes other than
minor traffic violations during the 10 years
preceding the date of notification;
(iii) if the acquiring party is not an
individual—
(I) a report of the nature of its
business operations during the 5 years
preceding the date of notification, or
for such shorter period as such person
and any predecessors thereof shall
have been in existence;
(II) an informative description of
the business intended to be done by
the acquiring party and any sub-
sidiary thereof; and
(III) a list of all individuals who
are, or who have been selected to be-
come, directors or executive officers of
the acquiring party or who perform,
or will perform, functions appropriate
to such positions, including, for each
such individual, the information re-
quired by clause (ii);
(iv) the source, nature, and amount of
the consideration used, or to be used, in ef-
fecting the merger or other acquisition of
control, a description of any transaction
wherein funds were, or are to be, obtained
for any such purpose, and the identity of
persons furnishing such consideration, ex-
cept that, if a source of such consideration
is a loan made in the lender’s ordinary
course of business, the identity of the lend-
er shall remain confidential if the person
filing such statement so requests;
(v) fully audited financial information
as to the earnings and financial condition
of each acquiring party for the 5 fiscal
years preceding the date of notification of
each such acquiring party, or for such less-
er period as such acquiring party and any
predecessors thereof shall have been in ex-
istence, and similar unaudited information
as of a date not earlier than 90 days be-
fore the date of notification, except that, in
the case of an acquiring party that is an
insurer actively engaged in the business of
insurance, the financial statements of such
insurer need not be audited, but such audit
may be required if the need therefor is de-
termined by the insurance regulatory au-
thority of the State;
(vi) any plans or proposals that each
acquiring party may have to liquidate such
insurer, to sell its assets, or to merge or
consolidate it with any person or to make
any other material change in its business
or corporate structure or management;
(vii) the number of shares of any se-
curity of the insurer that each acquiring
party proposes to acquire, the terms of any
offer, request, invitation, agreement, or ac-
quisition, and a statement as to the meth-
od by which the fairness of the proposal
was arrived at;
(viii) the amount of each class of any
security of the insurer that is beneficially
owned or concerning which there is a right
to acquire beneficial ownership by each ac-
quiring party;
(ix) a full description of any contracts,
arrangements, or understandings with re-
spect to any security of the insurer in
which any acquiring party is involved, in-
cluding transfer of any of the securities,
joint ventures, loan or option arrange-
ments, puts or calls, guarantees of loans,
guarantees against loss or guarantees of
profits, division of losses or profits, or the
giving or withholding of proxies, and iden-
tification of the persons with whom such
contracts, 
arrangements, 
or 
under-
standings have been entered into;
(x) a description of the purchase of
any security of the insurer during the 12-
month period preceding the date of notifi-
cation by any acquiring party, including
the dates of purchase, names of the pur-
chasers, and consideration paid, or agreed
to be paid, therefor;
(xi) a description of any recommenda-
tions to purchase any security of the in-
surer made during the 12-month period
preceding the date of notification by any
acquiring party or by any person based
upon interviews or at the suggestion of
such acquiring party;
(xii) copies of all tender offers for, re-
quests or invitations for tenders of, ex-
change offers for and agreements to ac-
quire or exchange any securities of the in-
surer and, if distributed, of additional so-
liciting material relating thereto; and
(xiii) the terms of any agreement,
contract, or understanding made with any
broker-dealer as to solicitation of securities
of the insurer for tender and the amount
of any fees, commissions, or other com-
pensation to be paid to broker-dealers with
regard thereto;
(B) in the case of a person engaged in the
business of insurance which is the subject of an
acquisition or change or continuation in control,
the State of domicile of such person from re-
viewing or taking action (including approval or
disapproval) with regard to the acquisition or
change or continuation in control, as long as
the State reviews and actions—
(i) are completed by the end of the
60-day period beginning on the later of the
date the State received notice of the pro-
posed action or the date the State received
the information required under State law
regarding such acquisition or change or
continuation in control;
(ii) do not have the effect of discrimi-
nating, intentionally or unintentionally,
against an insured depository institution or
affiliate thereof or against any other per-
son based upon affiliation with an insured
depository institution; and
(iii) are based on standards or re-
quirements relating to solvency or manage-
rial fitness;
(C) any State from requiring an entity
that is acquiring control of an entity that is en-
gaged in the business of insurance and domi-
ciled in that State to maintain or restore the
capital requirements of that insurance entity to
the level required under the capital regulations
of general applicability in that State to avoid
the requirement of preparing and filing with the
insurance regulatory authority of that State a
plan to increase the capital of the entity, except
that any determination by the State insurance
regulatory authority with respect to such re-
quirement shall be made not later than 60 days
after the date of notification under subpara-
graph (A);
(D) any State from taking actions with re-
spect to the receivership or conservatorship of
any insurance company;
(E) any State from restricting a change in
the ownership of stock in an insurance com-
pany, or a company formed for the purpose of
controlling such insurance company, for a pe-
riod of not more than 3 years beginning on the
date of the conversion of such company from
mutual to stock form; or
(F) any State from requiring an organiza-
tion which has been eligible at any time since
January 1, 1987, to claim the special deduction
provided by section 833 of the Internal Revenue
Code of 1986 to meet certain conditions in
order to undergo, as determined by the State,
a reorganization, recapitalization, conversion,
merger, consolidation, sale or other disposition
of substantial operating assets, demutualization,
dissolution, or to undertake other similar ac-
tions and which is governed under a State stat-
ute enacted on May 22, 1998, relating to hos-
pital, medical, and dental service corporation
conversions.
(3) PRESERVATION OF STATE ANTITRUST AND
GENERAL CORPORATE LAWS.—
(A) IN GENERAL.—Subject to subsection
(c) and the nondiscrimination provisions con-
tained in such subsection, no provision in para-
graph (1) shall be construed as affecting State
laws, regulations, orders, interpretations, or
other actions of general applicability relating to
the governance of corporations, partnerships,
limited liability companies or other business as-
sociations incorporated or formed under the
laws of that State or domiciled in that State, or
the applicability of the antitrust laws of any
State or any State law that is similar to the
antitrust laws.
(B) DEFINITION.—The term ‘‘antitrust
laws’’ has the same meaning as in subsection
(a) of the first section of the Clayton Act, and
includes section 5 of the Federal Trade Com-
mission Act to the extent that such section 5
relates to unfair methods of competition.
(b) ACTIVITIES.—
(1) IN GENERAL.—Except as provided in para-
graph (3), and except with respect to insurance
sales, solicitation, and cross marketing activities,
which shall be governed by paragraph (2), no State
may, by statute, regulation, order, interpretation, or
other action, prevent or restrict an insured deposi-
tory institution, wholesale financial institution, or
subsidiary or affiliate thereof from engaging directly
or indirectly, either by itself or in conjunction with
a subsidiary, affiliate, or any other entity or person,
in any activity authorized or permitted under this
Act.
(2) INSURANCE SALES.—
(A) IN GENERAL.—In accordance with the
legal standards for preemption set forth in the
decision of the Supreme Court of the United
States in Barnett Bank of Marion County N.A.
v. Nelson, 517 U.S. 25 (1996), no State may,
by statute, regulation, order, interpretation, or
other action, prevent or significantly interfere
with the ability of an insured depository institu-
tion or wholesale financial institution, or a sub-
sidiary or affiliate thereof, to engage, directly or
indirectly, either by itself or in conjunction with
a subsidiary, affiliate, or any other party, in
any insurance sales, solicitation, or cross-mar-
keting activity.
(B) CERTAIN STATE LAWS PRESERVED.—
Notwithstanding subparagraph (A), a State
may impose any of the following restrictions, or
restrictions which are substantially the same as
but no more burdensome or restrictive than
those in each of the following clauses:
(i) Restrictions prohibiting the rejec-
tion of an insurance policy by an insured
depository institution, wholesale financial
institution, or any subsidiary or affiliate
thereof, solely because the policy has been
issued or underwritten by any person who
is not associated with such insured deposi-
tory institution or wholesale financial insti-
tution, or any subsidiary or affiliate there-
of, when such insurance is required in con-
nection with a loan or extension of credit.
(ii) Restrictions prohibiting a require-
ment for any debtor, insurer, or insurance
agent or broker to pay a separate charge
in connection with the handling of insur-
ance that is required in connection with a
loan or other extension of credit or the
provision of another traditional banking
product by an insured depository institu-
tion, wholesale financial institution, or any
subsidiary or affiliate thereof, unless such
charge would be required when the insured
depository institution or wholesale financial
institution, or any subsidiary or affiliate
thereof, is the licensed insurance agent or
broker providing the insurance.
(iii) Restrictions prohibiting the use of
any advertisement or other insurance pro-
motional material by an insured depository
institution or wholesale financial institu-
tion, or any subsidiary or affiliate thereof,
that would cause a reasonable person to
believe mistakenly that—
(I) a State or the Federal Gov-
ernment is responsible for the insur-
ance sales activities of, or stands be-
hind the credit of, the institution, af-
filiate, or subsidiary; or
(II) a State, or the Federal Gov-
ernment guarantees any returns on
insurance products, or is a source of
payment on any insurance obligation
of or sold by the institution, affiliate,
or subsidiary;
(iv) Restrictions prohibiting the pay-
ment or receipt of any commission or bro-
kerage fee or other valuable consideration
for services as an insurance agent or
broker to or by any person, unless such
person holds a valid State license regard-
ing the applicable class of insurance at the
time at which the services are performed,
except that, in this clause, the term ‘‘serv-
ices as an insurance agent or broker’’ does
not include a referral by an unlicensed per-
son of a customer or potential customer to
a licensed insurance agent or broker that
does not include a discussion of specific in-
surance policy terms and conditions.
(v) Restrictions prohibiting any com-
pensation paid to or received by any indi-
vidual who is not licensed to sell insurance,
for the referral of a customer that seeks to
purchase, or seeks an opinion or advice on,
any insurance product to a person that
sells or provides opinions or advice on such
product, based on the purchase of insur-
ance by the customer.
(vi) Restrictions prohibiting the re-
lease of the insurance information of a cus-
tomer (defined as information concerning
the premiums, terms, and conditions of in-
surance 
coverage, 
including 
expiration
dates and rates, and insurance claims of a
customer contained in the records of the
insured depository institution or wholesale
financial institution, or a subsidiary or af-
filiate thereof) to any person or entity
other than an officer, director, employee,
agent, subsidiary, or affiliate of an insured
depository institution or a wholesale finan-
cial institution, for the purpose of soliciting
or selling insurance, without the express
consent of the customer, other than a pro-
vision that prohibits—
(I) a transfer of insurance infor-
mation to an unaffiliated insurance
company, agent, or broker in connec-
tion with transferring insurance in
force on existing insureds of the in-
sured depository institution or whole-
sale financial institution, or subsidiary
or affiliate thereof, or in connection
with a merger with or acquisition of
an unaffiliated insurance company,
agent, or broker; or
(II) the release of information as
otherwise authorized by State or Fed-
eral law.
(vii) Restrictions prohibiting the use
of health information obtained from the in-
surance records of a customer for any pur-
pose, other than for its activities as a li-
censed agent or broker, without the ex-
press consent of the customer.
(viii) Restrictions prohibiting the ex-
tension of credit or any product or service
that is equivalent to an extension of credit,
lease or sale of property of any kind, or
furnishing of any services or fixing or vary-
ing the consideration for any of the fore-
going, on the condition or requirement that
the customer obtain insurance from an in-
sured depository institution, wholesale fi-
nancial institution, a subsidiary or affiliate
thereof, or a particular insurer, agent, or
broker, other than a prohibition that would
prevent any insured depository institution
or wholesale financial institution, or any
subsidiary or affiliate thereof—
(I) from engaging in any activity
described in this clause that would not
violate section 106 of the Bank Hold-
ing Company Act Amendments of
1970, as interpreted by the Board of
Governors of the Federal Reserve Sys-
tem; or
(II) from informing a customer
or prospective customer that insur-
ance is required in order to obtain a
loan or credit, that loan or credit ap-
proval is contingent upon the procure-
ment by the customer of acceptable
insurance, or that insurance is avail-
able from the insured depository insti-
tution or wholesale financial institu-
tion, or any subsidiary or affiliate
thereof.
(ix) Restrictions requiring, when an
application by a consumer for a loan or
other extension of credit from an insured
depository institution or wholesale financial
institution is pending, and insurance is of-
fered or sold to the consumer or is re-
quired in connection with the loan or ex-
tension of credit by the insured depository
institution or wholesale financial institu-
tion or any affiliate or subsidiary thereof,
that a written disclosure be provided to the
consumer or prospective customer indi-
cating that his or her choice of an insur-
ance provider will not affect the credit de-
cision or credit terms in any way, except
that the insured depository institution or
wholesale financial institution may impose
reasonable requirements concerning the
creditworthiness of the insurance provider
and scope of coverage chosen.
(x) Restrictions requiring clear and
conspicuous disclosure, in writing, where
practicable, to the customer prior to the
sale of any insurance policy that such
policy—
(I) is not a deposit;
(II) is not insured by the Federal
Deposit Insurance Corporation;
(III) is not guaranteed by the in-
sured depository institution or whole-
sale financial institution or, if appro-
priate, its subsidiaries or affiliates or
any person soliciting the purchase of
or selling insurance on the premises
thereof; and
(IV) where appropriate, involves
investment risk, including potential
loss of principal.
(xi) Restrictions requiring that, when
a customer obtains insurance (other than
credit insurance or flood insurance) and
credit from an insured depository institu-
tion or wholesale financial institution, or
its subsidiaries or affiliates, or any person
soliciting the purchase of or selling insur-
ance on the premises thereof, the credit
and insurance transactions be completed
through separate documents.
(xii) Restrictions prohibiting, when a
customer obtains insurance (other than
credit insurance or flood insurance) and
credit from an insured depository institu-
tion or wholesale financial institution or its
subsidiaries or affiliates, or any person so-
liciting the purchase of or selling insurance
on the premises thereof, inclusion of the
expense of insurance premiums in the pri-
mary credit transaction without the ex-
press written consent of the customer.
(xiii) Restrictions requiring mainte-
nance of separate and distinct books and
records relating to insurance transactions,
including all files relating to and reflecting
consumer complaints, and requiring that
such insurance books and records be made
available to the appropriate State insur-
ance regulator for inspection upon reason-
able notice.
(C) LIMITATIONS.—
(i) OCC DEFERENCE.—Section 306(e)
does not apply with respect to any State
statute, regulation, order, interpretation,
or other action regarding insurance sales,
solicitation, or cross marketing activities
described in subparagraph (A) that was
issued, adopted, or enacted before Sep-
tember 3, 1998, and that is not described
in subparagraph (B).
(ii) NONDISCRIMINATION.—Subsection
(c) does not apply with respect to any
State statute, regulation, order, interpreta-
tion, or other action regarding insurance
sales, solicitation, or cross marketing ac-
tivities described in subparagraph (A) that
was issued, adopted, or enacted before
September 3, 1998, and that is not de-
scribed in subparagraph (B).
(iii) CONSTRUCTION.—Nothing in this
paragraph shall be construed to limit the
applicability of the decision of the Supreme
Court in Barnett Bank of Marion County
N.A. v. Nelson, 116 S. Ct. 1103 (1996)
with respect to a State statute, regulation,
order, interpretation, or other action that
is not described in subparagraph (B).
(iv) LIMITATION
ON
INFERENCES.—
Nothing in this paragraph shall be con-
strued to create any inference with respect
to any State statute, regulation, order, in-
terpretation, or other action that is not re-
ferred to or described in this paragraph.
(3) 
INSURANCE
ACTIVITIES
OTHER
THAN
SALES.—State statutes, regulations, interpretations,
orders, and other actions shall not be preempted
under subsection (b)(1) to the extent that they—
(A) relate to, or are issued, adopted, or en-
acted for the purpose of regulating the business
of insurance in accordance with the Act of
March 9, 1945 (commonly known as the
‘‘McCarran-Ferguson Act’’);
(B) apply only to persons or entities that
are not insured depository institutions or whole-
sale financial institutions, but that are directly
engaged in the business of insurance (except
that they may apply to depository institutions
engaged in providing savings bank life insur-
ance as principal to the extent of regulating
such insurance);
(C) do not relate to or directly or indirectly
regulate insurance sales, solicitations, or cross-
marketing activities; and
(D) are not prohibited under subsection
(c).
(4) FINANCIAL ACTIVITIES OTHER THAN INSUR-
ANCE.—No State statute, regulation, interpretation,
order, or other action shall be preempted under sub-
section (b)(1) to the extent that—
(A) it does not relate to, and is not issued
and adopted, or enacted for the purpose of reg-
ulating, directly or indirectly, insurance sales,
solicitations, or cross marketing activities cov-
ered under paragraph (2);
(B) it does not relate to, and is not issued
and adopted, or enacted for the purpose of reg-
ulating, directly or indirectly, the business of in-
surance activities other than sales, solicitations,
or cross marketing activities, covered under
paragraph (3);
(C) it does not relate to securities inves-
tigations or enforcement actions referred to in
subsection (d); and
(D) it—
(i) does not distinguish by its terms
between insured depository institutions,
wholesale financial institutions, and sub-
sidiaries and affiliates thereof engaged in
the activity at issue and other persons or
entities engaged in the same activity in a
manner that is in any way adverse with re-
spect to the conduct of the activity by any
such insured depository institution, whole-
sale financial institution, or subsidiary or
affiliate thereof engaged in the activity at
issue;
(ii) as interpreted or applied, does not
have, and will not have, an impact on de-
pository institutions, wholesale financial in-
stitutions, or subsidiaries or affiliates
thereof engaged in the activity at issue, or
any person or entity affiliated therewith,
that is substantially more adverse than its
impact on other persons or entities en-
gaged in the same activity that are not in-
sured depository institutions, wholesale fi-
nancial institutions, or subsidiaries or af-
filiates thereof, or persons or entities affili-
ated therewith;
(iii) does not effectively prevent a de-
pository institution, wholesale financial in-
stitution, or subsidiary or affiliate thereof
from engaging in activities authorized or
permitted by this Act or any other provi-
sion of Federal law; and
(iv) does not conflict with the intent
of this Act generally to permit affiliations
that are authorized or permitted by Fed-
eral law.
(c) NONDISCRIMINATION.—Except as provided in any
restrictions described in subsection (b)(2)(B), no State
may, by statute, regulation, order, interpretation, or other
action, regulate the insurance activities authorized or per-
mitted under this Act or any other provision of Federal
law of an insured depository institution or wholesale finan-
cial institution, or subsidiary or affiliate thereof, to the
extent that such statute, regulation, order, interpretation,
or other action—
(1) distinguishes by its terms between insured
depository institutions or wholesale financial institu-
tions, or subsidiaries or affiliates thereof, and other
persons or entities engaged in such activities, in a
manner that is in any way adverse to any such in-
sured depository institution or wholesale financial in-
stitution, or subsidiary or affiliate thereof;
(2) as interpreted or applied, has or will have
an impact on depository institutions or wholesale fi-
nancial institutions, or subsidiaries or affiliates
thereof, that is substantially more adverse than its
impact on other persons or entities providing the
same products or services or engaged in the same
activities that are not insured depository institu-
tions, wholesale financial institutions, or subsidiaries
or affiliates thereof, or persons or entities affiliated
therewith;
(3) effectively prevents a depository institution
or wholesale financial institution, or subsidiary or af-
filiate thereof, from engaging in insurance activities
authorized or permitted by this Act or any other
provision of Federal law; or
(4) conflicts with the intent of this Act gen-
erally to permit affiliations that are authorized or
permitted by Federal law between insured depository
institutions or wholesale financial institutions, or
subsidiaries or affiliates thereof, and persons and en-
tities engaged in the business of insurance.
(d) LIMITATION.—Subsections (a) and (b) shall not
be construed to affect the jurisdiction of the securities
commission (or any agency or office performing like func-
tions) of any State, under the laws of such State—
(1) to investigate and bring enforcement ac-
tions, consistent with section 18(c) of the Securities
Act of 1933, with respect to fraud or deceit or un-
lawful conduct by any person, in connection with se-
curities or securities transactions; or
(2) to require the registration of securities or
the licensure or registration of brokers, dealers, or
investment advisers (consistent with section 203A of
the Investment Advisers Act of 1940), or the associ-
ated persons of a broker, dealer, or investment ad-
viser (consistent with such section 203A).
(e) DEFINITIONS.—For purposes of this section, the
following definitions shall apply:
(1) INSURED DEPOSITORY INSTITUTION.—The
term ‘‘insured depository institution’’ includes any
foreign bank that maintains a branch, agency, or
commercial lending company in the United States.
(2) STATE.—The term ‘‘State’’ means any
State of the United States, the District of Columbia,
any territory of the United States, Puerto Rico,
Guam, American Samoa, the Trust Territory of the
Pacific Islands, the Virgin Islands, and the Northern
Mariana Islands.
SEC. 105. MUTUAL BANK HOLDING COMPANIES AUTHOR-
IZED.
Section 3(g)(2) of the Bank Holding Company Act
of 1956 (12 U.S.C. 1842(g)(2)) is amended to read as
follows:
‘‘(2) REGULATIONS.—A bank holding company
organized as a mutual holding company shall be reg-
ulated on terms, and shall be subject to limitations,
comparable to those applicable to any other bank
holding company.’’.
SEC. 105A. PUBLIC MEETINGS FOR LARGE BANK ACQUISI-
TIONS AND MERGERS.
(a) BANK HOLDING COMPANY ACT OF 1956.—Sec-
tion 3(c)(2) of the Bank Holding Company Act of 1956
(12 U.S.C. 1842(c)(2)) is amended—
(1) by striking ‘‘FACTORS.—In every case’’ and
inserting ‘‘FACTORS.—
‘‘(A) IN GENERAL.—In every case’’; and
(2) by adding at the end the following new sub-
paragraph:
‘‘(B) PUBLIC MEETINGS.—In each case in-
volving one or more insured depository institu-
tions each of which has total assets of
$1,000,000,000 or more, the Board shall, as
necessary and on a timely basis, conduct public
meetings in one or more areas where the Board
believes, in the sole discretion of the Board,
there will be a substantial public impact.’’.
(b) FEDERAL DEPOSIT INSURANCE ACT.—Section
18(c) of the Federal Deposit Insurance Act (12 U.S.C.
1828(c)) is amended by adding at the end the following
new paragraph:
‘‘(12) PUBLIC MEETINGS.—In each merger trans-
action involving one or more insured depository institu-
tions each of which has total assets of $1,000,000,000 or
more, the responsible agency shall, as necessary and on
a timely basis, conduct public meetings in one or more
areas where the agency believes, in the sole discretion of
the agency, there will be a substantial public impact.’’.
(c) NATIONAL BANK CONSOLIDATION AND MERGER
ACT.—The National Bank Consolidation and Merger Act
(12 U.S.C. 215 et seq.) is amended by adding at the end
the following new section:
‘‘SEC. 6. PUBLIC MEETINGS FOR LARGE BANK CONSOLIDA-
TIONS AND MERGERS.
‘‘In each case of a consolidation or merger under this
Act involving one or more banks each of which has total
assets of $1,000,000,000 or more, the Comptroller shall,
as necessary and on a timely basis, conduct public meet-
ings in one or more areas where the Comptroller believes,
in the sole discretion of the Comptroller, there will be a
substantial public impact.’’.
(d) HOME OWNERS’ LOAN ACT.—Section 10(e) of
the Home Owners’ Loan Act (12 U.S.C. 1463) is amended
by adding at the end the following new paragraph:
‘‘(7) PUBLIC
MEETINGS
FOR
LARGE
DEPOSI-
TORY INSTITUTION ACQUISITIONS AND MERGERS.—
In each case involving one or more insured deposi-
tory institutions each of which has total assets of
$1,000,000,000 or more, the Director shall, as nec-
essary and on a timely basis, conduct public meet-
ings in one or more areas where the Director be-
lieves, in the sole discretion of the Director, there
will be a substantial public impact.’’.
SEC. 106. PROHIBITION ON DEPOSIT PRODUCTION OF-
FICES.
(a) IN GENERAL.—Section 109(d) of the Riegle-Neal
Interstate Banking and Branching Efficiency Act of 1994
(12 U.S.C. 1835a(d)) is amended—
(1) by inserting ‘‘, the Financial Services Act of
1999,’’ after ‘‘pursuant to this title’’; and
(2) by inserting ‘‘or such Act’’ after ‘‘made by
this title’’.
(b) TECHNICAL AND CONFORMING AMENDMENT.—
Section 109(e)(4) of the Riegle-Neal Interstate Banking
and Branching Efficiency Act of 1994 (12 U.S.C.
1835a(e)(4)) is amended by inserting ‘‘and any branch of
a bank controlled by an out-of-State bank holding com-
pany (as defined in section 2(o)(7) of the Bank Holding
Company Act of 1956)’’ before the period.
SEC. 107. CLARIFICATION OF BRANCH CLOSURE REQUIRE-
MENTS.
Section 42(d)(4)(A) of the Federal Deposit Insurance
Act (12 U.S.C. 1831r–1(d)(4)(A)) is amended by inserting
‘‘and any bank controlled by an out-of-State bank holding
company (as defined in section 2(o)(7) of the Bank Hold-
ing Company Act of 1956)’’ before the period.
SEC. 108. AMENDMENTS RELATING TO LIMITED PURPOSE
BANKS.
(a) IN GENERAL.—Section 4(f) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1843(f)) is amended—
(1) in paragraph (2)(A)(ii)—
(A) by striking ‘‘and’’ at the end of sub-
clause (IX);
(B) by inserting ‘‘and’’ after the semicolon
at the end of subclause (X); and
(C) by inserting after subclause (X) the
following new subclause:
‘‘(XI) assets that are derived
from, or are incidental to, consumer
lending activities in which institutions
described in subparagraph (F) or (H)
of section 2(c)(2) are permitted to en-
gage,’’;
(2) in paragraph (2), by striking subparagraph
(B) and inserting the following new subparagraphs:
‘‘(B) any bank subsidiary of such company
engages in any activity in which the bank was
not lawfully engaged as of March 5, 1987, un-
less the bank is well managed and well capital-
ized;
‘‘(C) any bank subsidiary of such company
both—
‘‘(i) accepts demand deposits or de-
posits that the depositor may withdraw by
check or similar means for payment to
third parties; and
‘‘(ii) engages in the business of mak-
ing commercial loans (and, for purposes of
this clause, loans made in the ordinary
course of a credit card operation shall not
be treated as commercial loans); or
‘‘(D) after the date of the enactment of the
Competitive Equality Amendments of 1987, any
bank subsidiary of such company permits any
overdraft (including any intraday overdraft), or
incurs any such overdraft in such bank’s ac-
count at a Federal Reserve bank, on behalf of
an affiliate, other than an overdraft described
in paragraph (3).’’; and
(3) by striking paragraphs (3) and (4) and in-
serting the following new paragraphs:
‘‘(3) PERMISSIBLE OVERDRAFTS DESCRIBED.—
For purposes of paragraph (2)(D), an overdraft is
described in this paragraph if—
‘‘(A) such overdraft results from an inad-
vertent computer or accounting error that is be-
yond the control of both the bank and the affil-
iate;
‘‘(B) such overdraft—
‘‘(i) is permitted or incurred on behalf
of an affiliate which is monitored by, re-
ports to, and is recognized as a primary
dealer by the Federal Reserve Bank of
New York; and
‘‘(ii) is fully secured, as required by
the Board, by bonds, notes, or other obli-
gations which are direct obligations of the
United States or on which the principal
and interest are fully guaranteed by the
United States or by securities and obliga-
tions eligible for settlement on the Federal
Reserve book entry system; or
‘‘(C) such overdraft—
‘‘(i) is incurred on behalf of an affil-
iate solely in connection with an activity
that is so closely related to banking, or
managing or controlling banks, as to be a
proper incident thereto, to the extent the
bank incurring the overdraft and the affil-
iate on whose behalf the overdraft is in-
curred each document that the overdraft is
incurred for such purpose; and
‘‘(ii) does not cause the bank to vio-
late any provision of section 23A or 23B of
the Federal Reserve Act, either directly, in
the case of a member bank, or by virtue of
section 18(j) of the Federal Deposit Insur-
ance Act, in the case of a nonmember
bank.
‘‘(4) DIVESTITURE IN CASE OF LOSS OF EX-
EMPTION.—If any company described in paragraph
(1) fails to qualify for the exemption provided under
such paragraph by operation of paragraph (2), such
exemption shall cease to apply to such company and
such company shall divest control of each bank it
controls before the end of the 180-day period begin-
ning on the date that the company receives notice
from the Board that the company has failed to con-
tinue to qualify for such exemption, unless before
the end of such 180-day period, the company has—