I
104TH CONGRESS
1ST SESSION
H. R. 814
To enhance competition in the financial services sector, and for other
purposes.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 3, 1995
Mr. BAKER of Louisiana (for himself, Mr. MCCOLLUM, Mr. DREIER, Mr. CAS-
TLE, Mr. KING, Mr. LAFALCE, Mr. FRANK of Massachusetts, and Mr.
FLAKE) introduced the following bill; which was referred to the Commit-
tee on Banking and Financial Services and, in addition, to the Committee
on Commerce, for a period to be subsequently determined by the Speaker,
in each case for consideration of such provisions as fall within the juris-
diction of the committee concerned
A BILL
To enhance competition in the financial services sector, and
for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Depository Institution Affiliation Act’’.
(b) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
TITLE I—CREATION AND CONTROL OF FINANCIAL SERVICES
HOLDING COMPANIES
Sec. 101. Definitions.
Sec. 102. Amendments to the Bank Holding Company Act of 1956.
Sec. 103. Amendments to the Federal Reserve Act.
Sec. 104. Amendments to the Banking Act of 1933.
Sec. 105. Amendments to the Federal Deposit Insurance Act.
Sec. 106. Amendments to the Securities Exchange Act of 1934.
Sec. 107. Amendment to the Home Owners’ Loan Act.
Sec. 108. Amendments to the Community Reinvestment Act.
TITLE II—SUPERVISORY IMPROVEMENTS
Sec. 201. National Financial Services Committee.
SEC. 2. FINDINGS AND PURPOSES.
(a) FINDINGS.—The Congress finds that—
(1) current laws and regulations restrain effi-
ciency, competition, and innovation in the design
and delivery of financial services to the disadvantage
of consumers;
(2) restrictions on ownership of depository insti-
tutions and affiliations with other business organiza-
tions interfere with their ability to attract and retain
capital and managerial resources;
(3) the vulnerability of the financial system and
its discrete components is increased and effective
monitoring, supervision, and coordination of actions
during periods of stress is impeded by fragmented
and disparate regulation; and
(4) current laws inhibit the ability of domestic
financial markets and intermediaries to respond to
the serious competitive challenges presented by for-
eign intermediaries and the globalization of markets.
(b) PURPOSES.—The purposes of this Act are to pro-
mote the safety and soundness of the Nation’s financial
system, enhance the quality of regulation and supervision
of financial intermediaries, and achieve a more efficient
market and effective regulatory structure by—
(1) establishing an alternative and comprehen-
sive legislative framework for the creation and regu-
lation of financial services holding companies;
(2) increasing the capital adequacy of commer-
cial banks, brokers and dealers, and savings and
loan associations and other financial companies by
eliminating restrictions on common ownership and
affiliation within a financial services holding com-
pany;
(3) permitting affiliates to engage in any activ-
ity subject to functional and equal regulation by the
appropriate Federal or State regulator;
(4) insulating and protecting insured depository
institutions through higher capital requirements, ex-
panded restrictions on relationships with affiliates,
broader examination and enforcement authority and
increased civil and criminal penalties;
(5) permitting the efficient marketing and dis-
tribution of financial services to consumers subject
to safeguards against coercive tie-ins and other un-
fair and abusive practices; and
(6) establishing the National Financial Services
Committee to oversee the evolution and supervision
of the financial services industry and to report to the
Congress.
TITLE I—CREATION AND CON-
TROL OF FINANCIAL SERV-
ICES HOLDING COMPANIES
SEC. 101. DEFINITIONS.
(a) DEFINITIONS.—For purposes of this Act—
(1) the term ‘‘financial services holding com-
pany’’ means a company that—
(A) has filed with the National Financial
Services Committee, established under section
201 a notice stating such company’s intent to
comply with the requirements of this Act and
has not withdrawn such notice; and
(B) controls an insured depository institu-
tion, or either—
(i) has, within the preceding 12
months, filed a notice under subsection (b)
to acquire control of an insured depository
institution, a bank holding company, a sav-
ings and loan holding company, or a finan-
cial services holding company, which notice
has not been disapproved; or
(ii) controls a depository institution
which has, within the preceding 12
months, filed an application for deposit in-
surance under section 5 of the Federal De-
posit Insurance Act which has not been
disapproved,
except that the filing of the notice described in
subparagraph (A) by a bank holding company
that does not control any bank, as defined in
section 2(c) of the Bank Holding Company Act
of 1956, that is not an insured depository insti-
tution, other than a bank that has filed an ap-
plication for deposit insurance under section 5
of the Federal Deposit Insurance Act, that has
not been disapproved, shall result in immediate
termination of the status of such company as a
bank holding company, and the filing of the no-
tice described in subparagraph (A) by a savings
and loan holding company shall result in the
immediate termination of the status of such
company as a savings and loan holding com-
pany, except that, upon denial of any such ap-
plication for deposit insurance filed by a bank