266 
HR 4173 RFS
‘‘(B) USE OF EXISTING REPORTS.— 
‘‘(i) IN GENERAL.—The Board shall, 
to the fullest extent possible, use— 
‘‘(I) reports that a bank holding 
company or any subsidiary of such 
company has been required to provide 
to other Federal or State regulatory 
agencies; 
‘‘(II) information that is other-
wise required to be reported publicly; 
and 
‘‘(III) externally audited financial 
statements. 
‘‘(ii) AVAILABILITY.—A bank holding 
company or a subsidiary of such company 
shall promptly provide to the Board, at the 
request of the Board, a report referred to 
in clause (i)(I).’’. 
(b) FUNCTIONALLY REGULATED SUBSIDIARY.—Sec-
tion 5(c)(1) of the Bank Holding Company Act of 1956 
(12 U.S.C. 1844(c)(1)) is amended by inserting at the end 
the following new subparagraph: 
‘‘(C) DEFINITION.—For purposes of this 
subsection and section 6, the term ‘functionally 
regulated subsidiary’ means any subsidiary 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00266
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
267 
HR 4173 RFS
(other than a depository institution) of a bank 
holding company that is— 
‘‘(i) a broker or dealer registered with 
the Securities and Exchange Commission 
under the Securities Exchange Act of 
1934, for which the Securities and Ex-
change Commission is the Federal regu-
latory agency; 
‘‘(ii) an investment company reg-
istered with the Securities and Exchange 
Commission under the Investment Com-
pany Act of 1940, for which the Securities 
and Exchange Commission is the Federal 
regulatory agency; 
‘‘(iii) an investment adviser registered 
with the Securities and Exchange Commis-
sion under the Investment Advisers Act of 
1940, for which the Securities and Ex-
change Commission is the Federal regu-
latory agency, with respect to the invest-
ment advisory activities of such investment 
adviser and activities incidental to such in-
vestment advisory activities; and 
‘‘(iv) a futures commission merchant, 
commodity trading advisor, and commodity 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00267
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
268 
HR 4173 RFS
pool operator registered with the Com-
modity 
Futures 
Trading 
Commission 
under the Commodity Exchange Act, for 
which the Commodity Futures Trading 
Commission is the Federal regulatory 
agency, with respect to the commodities 
activities of such entity and activities inci-
dental to such commodities activities.’’. 
(c) EXAMINATIONS
OF BANK HOLDING COMPA-
NIES.—Sections 5(c)(2)(A) and (B) of the Bank Holding 
Company Act of 1956 (12 U.S.C. 1844(c)(2)(A) and (B)) 
are amended to read as follows: 
‘‘(A) IN GENERAL.—The Board may make 
examinations of a bank holding company and 
any subsidiary of such a company to carry out 
the purposes of this chapter, prevent evasions 
thereof, and monitor compliance by the com-
pany or subsidiary with applicable provisions of 
law. 
‘‘(B) FUNCTIONALLY REGULATED AND DE-
POSITORY
INSTITUTION
SUBSIDIARIES.—The 
Board shall, to the fullest extent possible, use 
reports of examination of functionally regulated 
subsidiaries and subsidiary depository institu-
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00268
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
269 
HR 4173 RFS
tions made by other Federal or State regulatory 
authorities.’’. 
(d) REGULATION OF FINANCIAL HOLDING COMPA-
NIES.—Section 5(c)(2) of the Bank Holding Company Act 
of 1956 (12 U.S.C. 1844(c)) is amended by striking sub-
paragraphs (C), (D), and (E). 
(e) AUTHORITY TO REGULATE FUNCTIONALLY REG-
ULATED
SUBSIDIARIES
OF
BANK
HOLDING
COMPA-
NIES.—The Bank Holding Company Act of 1956 (12 
U.S.C. 1841 et seq.) is amended by striking section 10A 
(12 U.S.C. 1848a). 
SEC. 1304. REQUIREMENTS FOR FINANCIAL HOLDING COM-
PANIES TO REMAIN WELL CAPITALIZED AND 
WELL MANAGED. 
Section 4(l)(1) of the Bank Holding Company Act of 
1956 (12 U.S.C. 1843(l)(1)) is amended— 
(1) in subparagraph (B), by striking ‘‘and’’; 
(2) by redesignating subparagraph (C) as sub-
paragraph (D); 
(3) by inserting after subparagraph (B) the fol-
lowing new subparagraph: 
‘‘(C) the bank holding company is well 
capitalized and well managed; and’’; and 
(4) in subparagraph (D) (as so redesignated) 
by amending clause (ii) to read as follows: 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00269
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
270 
HR 4173 RFS
‘‘(ii) a certification that the company 
meets the requirements of subparagraphs 
(A) through (C).’’. 
SEC. 1305. STANDARDS FOR INTERSTATE ACQUISITIONS. 
(a) BANK HOLDING COMPANY ACT OF 1956 AMEND-
MENT.—Section 3(d)(1)(A) of the Bank Holding Company 
Act of 1956 (12 U.S.C. 1842(d)(1)(A)) is amended— 
(1) by striking ‘‘adequately capitalized’’ and in-
serting ‘‘well capitalized’’; and 
(2) by striking ‘‘adequately managed’’ and in-
serting ‘‘well managed’’. 
(b) FEDERAL DEPOSIT INSURANCE ACT AMEND-
MENT.—Section 44(b)(4)(B) of the Federal Deposit In-
surance Act (12 U.S.C. 1831u(b)(4)(B)) is amended to 
read as follows: 
‘‘(B) the responsible agency determines 
that the resulting bank will be well capitalized 
and well managed upon the consummation of 
the transaction.’’. 
SEC. 1306. ENHANCING EXISTING RESTRICTIONS ON BANK 
TRANSACTIONS WITH AFFILIATES. 
(a) Section 23A of the Federal Reserve Act (12 
U.S.C. 371c) is amended— 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00270
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
271 
HR 4173 RFS
(1) in subsection (b)(1), by striking subpara-
graph (D) and inserting the following new subpara-
graph: 
‘‘(D) any investment fund with respect to 
which a member bank or affiliate thereof is an 
investment adviser; and’’; 
(2) in subsection (b)(7)(A), by inserting ‘‘(in-
cluding a purchase of assets subject to an agreement 
to repurchase)’’ after ‘‘affiliate’’; 
(3) in subsection (b)(7)(C), by striking ‘‘, in-
cluding assets subject to an agreement to repur-
chase,’’; 
(4) in subsection (b)(7)(D)— 
(A) by inserting ‘‘or other debt obliga-
tions’’ after ‘‘acceptance of securities’’; and 
(B) by striking ‘‘or’’ after the semicolon; 
(5) in subsection (b)(7), by inserting at the end 
the following new subparagraphs: 
‘‘(F) any securities borrowing and lending 
transactions with an affiliate to the extent that 
the transactions create credit exposure of the 
member bank to the affiliate; or 
‘‘(G) current and potential future credit 
exposure to the affiliate on derivative trans-
actions with the affiliate;’’; 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00271
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
272 
HR 4173 RFS
(6) in subsection (c)(1), by striking ‘‘at the 
time of the transaction,’’ and inserting ‘‘at all 
times’’; 
(7) in subsection (c)— 
(A) by striking paragraph (2); 
(B) by redesignating paragraphs (3), (4), 
and (5) as paragraphs (2), (3), and (4), respec-
tively; 
(8) in subsection (c)(3) (as so redesignated by 
paragraph (7)), by inserting ‘‘or other debt obliga-
tions’’ after ‘‘securities’’; 
(9) in subsection (f)(2), by inserting at the end 
the following: ‘‘The Board may not, by regulation or 
order, grant an exemption under this section unless 
the Board obtains the concurrence of the Chairman 
of the Federal Deposit Insurance Corporation.’’; and 
(10) in subsection (f)— 
(A) by redesignating paragraph (3) as 
paragraph (4); and 
(B) and inserting after paragraph (2) the 
following new paragraph: 
‘‘(3) CONCURRENCE OF THE COMPTROLLER OF 
THE CURRENCY.—With respect to a transaction or 
relationship involving a national bank or Federal 
savings association, the Board may not grant an ex-
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00272
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
273 
HR 4173 RFS
emption under this section unless the Board obtains 
the concurrence of the Comptroller of the Currency 
(in addition to obtaining the concurrence of the 
Chairman of the Federal Deposit Insurance Cor-
poration under paragraph (2)).’’. 
(b) TECHNICAL AND CONFORMING AMENDMENT.— 
Section 23B(e) of the Federal Reserve Act (12 U.S.C. 
371–1(e)), is amended by inserting at the end the fol-
lowing new paragraph: 
‘‘(3) The Board may not grant an exemption or 
exclusion under this section unless the Board ob-
tains the concurrence of the Chairman of the Fed-
eral Deposit Insurance Corporation.’’. 
SEC. 1307. ELIMINATING EXCEPTIONS FOR TRANSACTIONS 
WITH FINANCIAL SUBSIDIARIES. 
Section 23A(e) of the Federal Reserve Act (12 U.S.C. 
371c(e)) is amended— 
(1) by striking paragraph (3); and 
(2) by redesignating paragraph (4) as para-
graph (3). 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00273
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
274 
HR 4173 RFS
SEC. 1308. LENDING LIMITS APPLICABLE TO CREDIT EXPO-
SURE ON DERIVATIVE TRANSACTIONS, RE-
PURCHASE AGREEMENTS, REVERSE REPUR-
CHASE 
AGREEMENTS, 
AND 
SECURITIES 
LENDING AND BORROWING TRANSACTIONS. 
Section 5200 of the Revised Statutes of the United 
States (12 U.S.C. 84) is amended— 
(1) in subsection (b)(1), by striking ‘‘shall in-
clude all direct or indirect’’ and all that follows 
through ‘‘commitment;’’ and inserting: ‘‘shall in-
clude— 
‘‘(A) all direct or indirect advances of 
funds to a person made on the basis of any ob-
ligation of that person to repay the funds or re-
payable from specific property pledged by or on 
behalf of the person; 
‘‘(B) to the extent specified by the Comp-
troller of the Currency, such term shall also in-
clude any liability of a national banking associa-
tion to advance funds to or on behalf of a per-
son pursuant to a contractual commitment; and 
‘‘(C) credit exposure to a person arising 
from a derivative transaction, repurchase agree-
ment, reverse repurchase agreement, securities 
lending transaction, or securities borrowing 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00274
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
275 
HR 4173 RFS
transaction between the national banking asso-
ciation and the person;’’; 
(2) in subsection (b)(2) by striking the period 
at the end and inserting ‘‘; and’’; 
(3) in subsection (b), by inserting after para-
graph (2) the following new paragraph: 
‘‘(3) the term ‘derivative transaction’ means 
any transaction that is a contract, agreement, swap, 
warrant, note, or option that is based, in whole or 
in part, on the value of, any interest in, or any 
quantitative measure or the occurrence of any event 
relating to, one or more commodities, securities, cur-
rencies, interest or other rates, indices, or other as-
sets.’’; and 
(4) in subsection (d), by inserting after para-
graph (2) the following new paragraph: 
‘‘(3) The Comptroller of the Currency shall pre-
scribe rules to administer and carry out the pur-
poses of this section with respect to credit exposures 
arising from any derivative transaction, repurchase 
agreement, reverse repurchase agreement, securities 
lending transaction, or securities borrowing trans-
action. Rules required to be prescribed under this 
paragraph (3) shall take effect, in final form, not 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00275
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
276 
HR 4173 RFS
later than 180 days after the date of enactment of 
the Financial Stability Improvement Act of 2009.’’. 
SEC. 1309. RESTRICTION ON CONVERSIONS OF TROUBLED 
BANKS AND THRIFTS. 
(a) CONVERSION OF A NATIONAL BANKING ASSOCIA-
TION TO A STATE BANK.—The National Bank Consolida-
tion and Merger Act (12 U.S.C. 215 et seq.) is amended 
by redesignating section 7 as section 8 and by inserting 
after section 6 the following: 
‘‘SEC. 7. PROHIBITION ON CERTAIN CONVERSIONS. 
‘‘A national bank may not convert to a State bank 
during any period of time in which it is subject to a cease 
and desist order, memorandum of understanding, or other 
enforcement action entered into with or issued by the 
Comptroller of the Currency.’’. 
(b) CONVERSION OF A STATE BANK TO A NATIONAL 
BANK.—Section 5154 of the Revised Statutes (12 U.S.C. 
35) is amended by adding at the end the following new 
sentence: ‘‘The Comptroller of the Currency shall not ap-
prove the conversion of a State bank to a national bank 
during any period of time in which the State bank is sub-
ject to a cease and desist order, memorandum of under-
standing, or other enforcement action entered into or 
issued by a State bank supervisor, the Federal Deposit 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00276
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
277 
HR 4173 RFS
Insurance Corporation, the Board of Governors of the 
Federal Reserve System or a Federal Reserve Bank.’’. 
(c) CONVERSION BETWEEN A FEDERAL SAVINGS AS-
SOCIATION AND A STATE SAVINGS ASSOCIATION.—Section 
5(i) of the Home Owners’ Loan Act (12 U.S.C. 1464(i)) 
is amended by adding at the end the following new para-
graph: 
‘‘(6) 
PROHIBITION
ON
CERTAIN
CONVER-
SIONS.—A Federal savings association may not con-
vert to a State savings association, and a State sav-
ings association may not convert to a Federal sav-
ings association, during any period of time in which 
such savings association is subject to a cease and de-
sist order, memorandum of understanding, or other 
enforcement action entered into with or issued by 
the Director of the Office of Thrift Supervision or 
a State savings association supervisor.’’. 
SEC. 1310. LENDING LIMITS TO INSIDERS. 
Section 22(h)(9)(D)(ii) of the Federal Reserve Act 
(12 U.S.C. 375b(h)(9)(D)(ii)) is amended by inserting ‘‘, 
except that a member bank shall be deemed to have ex-
tended credit to a person if the member bank has credit 
exposure to the person arising from a derivative trans-
action, repurchase agreement, reverse repurchase agree-
ment, securities lending transaction, or securities bor-
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00277
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
278 
HR 4173 RFS
rowing transaction between the member bank and the per-
son’’ before the period at the end. 
SEC. 1311. LIMITATIONS ON PURCHASES OF ASSETS FROM 
INSIDERS. 
(a) Section 18 of the Federal Deposit Insurance Act 
(12 U.S.C. 1828) is amended by inserting at the end the 
following new subsection: 
‘‘(y) GENERAL PROHIBITION.—An insured deposi-
tory institution shall not purchase an asset from, or sell 
an asset to, one of its executive officers, directors, or prin-
cipal shareholders or any related interest of such person 
(as such terms are defined in section 22(h) of Federal Re-
serve Act) unless the transaction is on market terms and, 
if the transaction represents more than 10 percent of the 
institution’s capital stock and surplus, the transaction has 
been approved in advance by a majority of the institution’s 
board of directors (with interested directors of the insured 
depository institution not participating in the approval of 
the transaction).’’. 
(b) FDIC RULEMAKING AUTHORITY.—The Federal 
Deposit Insurance Corporation may prescribe rules to im-
plement the requirements of subsection (a) and the 
amendments made by subsection (a). 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00278
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
279 
HR 4173 RFS
(c) AMENDMENTS
TO
THE
FEDERAL
RESERVE 
ACT.—Section 22 of the Federal Reserve Act (12 U.S.C. 
375) is amended by striking subsection (d). 
SEC. 1312. RULES REGARDING CAPITAL LEVELS OF BANK 
HOLDING COMPANIES. 
Section 5(b) of the Bank Holding Company Act of 
1956 (12 U.S.C. 1844(b)) is amended by inserting ‘‘, in-
cluding regulations relating to the capital levels of bank 
holding companies’’ before the period at the end. 
SEC. 1313. ENHANCEMENTS TO FACTORS TO BE CONSID-
ERED IN CERTAIN ACQUISITIONS. 
(a) BANK ACQUISITIONS.—Section 3(c) of the Bank 
Holding Company Act of 1956 (12 U.S.C. 1842(c)) is 
amended by inserting at the end the following new para-
graph: 
‘‘(7) FINANCIAL STABILITY.— 
‘‘(A) IN
GENERAL.—In every case, the 
Board shall take into consideration the extent 
to which the proposed acquisition, merger, or 
consolidation may pose risk to the stability of 
the United States financial system or the econ-
omy of the United States, including the result-
ing scope, nature, size, scale, concentration, or 
interconnectedness of activities that are finan-
cial in nature. 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00279
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
280 
HR 4173 RFS
‘‘(B) STANDARDS
FOR
APPROVAL.—The 
Board may in its sole discretion disapprove any 
acquisition, merger, or consolidation of, or by, 
a financial holding company subject to stricter 
standards if the Board determines that the re-
sulting concentration of liabilities on a consoli-
dated basis is likely to pose a great threat to 
financial stability during times of severe eco-
nomic distress.’’. 
(b) NONBANK ACQUISITIONS.— 
(1) Section 4(j)(2)(A) of the Bank Holding 
Company is amended by— 
(A) striking ‘‘or’’ before ‘‘unsound banking 
practices’’; and 
(B) inserting before the period at the end 
the following: ‘‘, or risk to the stability of the 
United States financial system or the economy 
of the United States’’. 
(2) Section 4(k)(6) of the Bank Holding Com-
pany Act of 1956 is amended by striking subpara-
graph (B) and inserting the following new subpara-
graph: 
‘‘(B) A financial holding company may 
commence any activity or acquire any company, 
pursuant to paragraph (4) or any regulation 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00280
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
281 
HR 4173 RFS
prescribed or order issued under paragraph (5), 
without prior approval of the Board, except— 
‘‘(i) for a transaction in which the 
total assets to be acquired by the financial 
holding company exceed $25 billion; and 
‘‘(ii) as provided in subsection (j) with 
regard to the acquisition of a savings asso-
ciation.’’. 
(3) Section 4(j) of the Bank Holding Company 
Act of 1956 is amended by inserting after paragraph 
(4) the following new paragraph (and redesignating 
succeeding paragraphs accordingly): 
‘‘(5) FINANCIAL STABILITY.— 
‘‘(A) IN
GENERAL.—In every case, the 
Board shall take into consideration the extent 
to which the proposed acquisition, merger, or 
consolidation may pose risk to the stability of 
the United States financial system or the econ-
omy of the United States, including the result-
ing scope, nature, size, scale, concentration, or 
interconnectedness of activities that are finan-
cial in nature. 
‘‘(B) STANDARDS
FOR
APPROVAL.—The 
Board may, in the sole discretion of the Board, 
disapprove any acquisition, merger, or consoli-
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00281
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
282 
HR 4173 RFS
dation of, or by, a financial holding company 
subject to stricter standards if the Board deter-
mines that the resulting concentration of liabil-
ities on a consolidated basis is likely to pose a 
great threat to financial stability during times 
of severe economic distress.’’. 
(c) BANK MERGER ACT TRANSACTIONS.—Section 
18(c)(5) of the Federal Deposit Insurance Act (12 U.S.C. 
1828(c)) is amended by— 
(1) in paragraph (5), by striking ‘‘and’’ before 
‘‘the convenience and needs of the community to be 
served’’; 
(2) in paragraph (5), by inserting before the pe-
riod at the end the following: ‘‘, and the risk to the 
stability of the United States financial system and 
the economy of the United States based on, among 
other things, the scope, nature, size, scale, con-
centration, or interconnectedness of activities that 
are financial in nature’’; and 
(3) in paragraph (7)(B), by inserting ‘‘subpara-
graphs (A) and (B) of’’ before ‘‘paragraph’’. 
SEC. 1314. ELIMINATION OF ELECTIVE INVESTMENT BANK 
HOLDING COMPANY FRAMEWORK. 
Section 17 of the Securities Exchange Act of 1934 
(15 U.S.C. 78q) is amended— 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00282
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
283 
HR 4173 RFS
(1) by striking subsection (i); and 
(2) by redesignating subsections (j) and (k) as 
subsections (i) and (j), respectively. 
SEC. 1315. EXAMINATION FEES FOR LARGE BANK HOLDING 
COMPANIES. 
The Bank Holding Company Act of 1956 is amended 
by inserting after section 5 the following new section: 
‘‘SEC. 5A. EXAMINATION FEES. 
‘‘The Board of Governors of the Federal Reserve Sys-
tem or the Federal Reserve Banks shall assess fees on 
bank holding companies with total consolidated assets of 
$10 billion or more. Such fees shall be sufficient to defray 
the cost of the examination of such bank holding compa-
nies.’’. 
SEC. 1316. MUTUAL NATIONAL BANKS AND FEDERAL MU-
TUAL BANK HOLDING COMPANIES AUTHOR-
IZED. 
(a) IN GENERAL.—Chapter one of title LXII of the 
Revised Statutes of the United States (12 U.S.C. 21 et 
seq.) is amended by inserting after section 5133 the fol-
lowing new sections: 
‘‘SEC. 5133A. MUTUAL NATIONAL BANKS. 
‘‘(a) IN GENERAL.—Notwithstanding the section des-
ignated the ‘Third’ of section 5134, in order to provide 
mutual institutions for the deposit of funds, the extension 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00283
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
284 
HR 4173 RFS
of credit, and provision of other services, the Comptroller 
of the Currency may charter mutual national banks either 
de novo or through a conversion of any insured depository 
institution or any State mutual bank or credit union, sub-
ject to regulations prescribed by the Comptroller of the 
Currency in accordance with this section. The powers con-
ferred by this section are intended to provide for the cre-
ation and maintenance of mutual national banks as bodies 
corporate existing in perpetuity for the benefit of their de-
positors and the communities in which they operate. 
‘‘(b) REGULATIONS.— 
‘‘(1) REGULATIONS OF THE COMPTROLLER.— 
The Comptroller of the Currency is authorized to 
prescribe appropriate regulations for the organiza-
tion, incorporation, examination, operation, and reg-
ulation of mutual national banks. Except to the ex-
tent that such existing regulations conflict with sec-
tions 5133A and 5133B, mutual national banks 
shall be subject to the regulations of the Director of 
the Office of Thrift Supervision governing corporate 
organization, governance, and conversion of mutual 
institutions, as in effect on the date of the enact-
ment of the Wall Street Reform and Consumer Pro-
tection Act of 2009, including parts 543, 544, 546, 
563b, and 563c of chapter V of title 12, Code of 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00284
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
285 
HR 4173 RFS
Federal Regulations (as in effect on that date), for 
up to 3 years beginning on the date of the enact-
ment of the Wall Street Reform and Consumer Pro-
tection Act of 2009. 
‘‘(2) APPLICABILITY
OF
CAPITAL
STOCK
RE-
QUIREMENTS.—The Comptroller of the Currency 
shall prescribe regulations regarding the manner in 
which requirements of this title with respect to cap-
ital stock, and limitations imposed on national banks 
under this title based on capital stock, shall apply to 
mutual national banks. 
‘‘(c) CONVERSIONS.— 
‘‘(1) CONVERSION OF A MUTUAL DEPOSITORY 
TO A MUTUAL NATIONAL BANK.—Subject to such 
regulations as the Comptroller of the Currency may 
prescribe for the protection of depositors’ rights and 
for any other purpose the Comptroller of the Cur-
rency may consider appropriate, any mutual deposi-
tory may convert to a mutual 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 no-
tice is filed, and the mutual depository shall be con-
verted to a mutual national bank charter on the date 
specified in the notice. 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00285
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
286 
HR 4173 RFS
‘‘(2) 
CONVERSION
TO
STOCK
NATIONAL 
BANK.—Subject to such regulations as the Comp-
troller of the Currency may prescribe for the protec-
tion of depositors’ rights and for any other purpose 
the Comptroller of the Currency may consider ap-
propriate, any national bank that is organized in the 
mutual form under subsection (a) may reorganize as 
a stock national bank. 
‘‘(3) CONVERSION TO STATE BANKS.—Any na-
tional mutual bank may convert to a State bank 
charter in accordance with regulations prescribed by 
the Comptroller of the Currency and applicable 
State law. 
‘‘(d) TERMINATING MUTUALITY.—If a mutual na-
tional bank elects to terminate mutuality, it must do so 
by— 
‘‘(1) liquidating; or 
‘‘(2) converting to a national banking associa-
tion operating in stock form. 
‘‘(e) STATUS AND RIGHTS OF MEMBERS.— 
‘‘(1) In general, the status of a member is pri-
marily that of a depositor and secondarily that of a 
holder of a contingent right to participate in the eq-
uity of a mutual national bank upon a liquidation or 
conversion. 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00286
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
287 
HR 4173 RFS
‘‘(2) Each member of a mutual national bank 
shall have the following rights: 
‘‘(A) Such rights as may be agreed upon, 
by contract, between the member and the mu-
tual national bank. 
‘‘(B) The right to vote for members of the 
board of directors of the mutual national bank. 
‘‘(C) The right to attend any meeting of 
members properly called by the board of direc-
tors of a mutual national bank. 
‘‘(D) In the event the board of directors, 
in its sole discretion, determines a conversion of 
a mutual national bank to a national banking 
association operating in stock form is in the 
best interests of the community in which the 
bank operates and the members approve the 
conversion through a special proxy, then the 
members as of a record date set by the board 
of directors shall have the first right to sub-
scribe for and purchase stock in the converted 
bank. 
‘‘(E) In the event the board of directors, in 
its sole discretion, determines a liquidation of 
the mutual national bank is in the best inter-
ests of the community in which the bank oper-
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00287
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
288 
HR 4173 RFS
ates and the members approve the liquidation, 
or if for any other reason the bank is liquidated 
by operation of law, then the members as of the 
date of liquidation shall have the right to have 
credited to their accounts, on a pro rata basis, 
any residual assets left after the liquidation of 
the mutual national bank. 
‘‘(3) In the consideration of all questions re-
quiring action by the members of a national mutual 
bank, the bank may provide in its charter that each 
member shall be permitted (i) one vote per member, 
or (ii) to cast one vote for each $100, or fraction 
thereof, of the withdrawal value of the member’s ac-
count, but not more than 1,000 votes per member. 
‘‘(f) PROXIES.— 
‘‘(1) A member may give, in writing or elec-
tronically, a perpetual proxy to a committee of the 
board of directors of a mutual depository, provided 
that the member may revoke such a proxy in writing 
or electronically, with such revocation to take effect 
after 6 business days. 
‘‘(2) Such proxies may be used to vote on any 
issue requiring approval of the members, including 
the conversion of a mutual depository into a mutual 
national bank and the reorganization of a mutual 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00288
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
289 
HR 4173 RFS
national bank into a Federal mutual bank holding 
company, except that, without a prior finding by the 
regulator of the mutual national bank that such ac-
tion is needed to avoid loss to the Federal Deposit 
Insurance Corporation’s deposit insurance fund or to 
protect the stability of the United States financial 
system, such proxies may not be used to vote in 
favor of— 
‘‘(A) terminating mutuality for a mutual 
national bank or a Federal mutual bank holding 
company; 
‘‘(B) permitting the modification of a Fed-
eral mutual bank holding company; or 
‘‘(C) issuing mutual capital certificates 
(except when used to found a mutual national 
bank or a Federal mutual bank holding com-
pany de novo). 
‘‘(3) Proxies given by a member, in writing or 
electronically, to management of, or to a committee 
of the board of directors of, a mutual depository 
shall not be deemed to have been revoked solely be-
cause of, and shall continue to exist following, a con-
version to a mutual national bank and any concur-
rent or subsequent reorganization to a Federal mu-
tual bank holding company. 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00289
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
290 
HR 4173 RFS
‘‘(g) 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 In-
surance Act. 
‘‘(2) MUTUAL
NATIONAL
BANK.—The term 
‘mutual national bank’ means a national banking as-
sociation that operates in mutual form and is char-
tered by the Comptroller of the Currency under this 
section. 
‘‘(3) MUTUAL DEPOSITORY.—The term ‘mutual 
depository’ means a depository institution that is or-
ganized in non-stock form, including a Federal non- 
stock depository and any form of non-stock deposi-
tory provided for under State law, the deposits of 
which are insured by an instrumentality of the Fed-
eral Government. 
‘‘(4) MUTUALITY.—The term ‘mutuality’ means 
the quality of being an insured depository institution 
organized under a Federal or State law providing for 
the organization of non-stock depository institutions, 
or a holding company organized under a Federal or 
State law providing for the organization of non-stock 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00290
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
291 
HR 4173 RFS
entities that control one or more depository institu-
tions. 
‘‘(5) MEMBER.—The term ‘member’ means 
each tax-liable depositor in a mutual depository’s 
savings, demand, or other authorized depository ac-
counts and each tax-liable depositor in such an ac-
count in a depository subsidiary of a Federal mutual 
bank holding company. 
‘‘(6) TAX LIABLE DEPOSITOR.—The term ‘tax 
liable depositor’ means the single person responsible 
for paying any Federal taxes due on any interest 
paid on any deposits held within any savings, de-
mand, or other authorized depository account or ac-
counts with any mutual depository. 
‘‘(7) MEMBERSHIP RIGHTS.—The term ‘mem-
bership rights’ means the rights of each member 
under this section. 
‘‘(h) CONFORMING REFERENCES.—Unless otherwise 
provided by the Comptroller of the Currency— 
‘‘(1) any reference in any Federal law to a na-
tional bank operating in stock form, including a ref-
erence to the term ‘national banking association’, 
‘member bank’, ‘national bank’, ‘national associa-
tion’, ‘bank’, ‘insured bank’, ‘insured depository in-
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00291
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
292 
HR 4173 RFS
stitution’, or ‘depository institution’, shall be deemed 
to refer also to a mutual national bank; 
‘‘(2) any reference in any Federal law to the 
term ‘board of directors’, ‘director’, or ‘directors’ of 
a national bank operating in stock form shall be 
deemed to refer also to the board of a mutual na-
tional bank; and 
‘‘(3) 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’, 
‘stock certificates’, ‘certificates representing shares 
of stock’, ‘stock dividend’, ‘transferable stock’, ‘each 
class of stock’, ‘cumulate such shares’, ‘par value’, 
‘preferred stock’ shall not apply to a mutual national 
bank, unless the Comptroller of the Currency deter-
mines 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 
Federal mutual bank holding company by submitting 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00292
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
293 
HR 4173 RFS
a reorganization plan to the appropriate bank hold-
ing company regulator. 
‘‘(2) PLAN APPROVAL.—Upon the approval of 
the reorganization plan by the appropriate bank 
holding company regulator 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, a ma-
jority of the shares of voting stock of which is 
owned, directly or indirectly, by the mutual na-
tional bank that is to become a Federal mutual 
bank holding company; and 
‘‘(B) the mutual national bank shall be-
come 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) a majority of members has approved the 
plan at a meeting held at the call of the directors 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00293
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
294 
HR 4173 RFS
under the procedures prescribed by the bank’s char-
ter and bylaws. 
‘‘(c) OWNERSHIP OF DEPOSITORY SUBSIDIARIES.— 
To avoid terminating mutuality, a Federal mutual bank 
holding company must own, directly or indirectly, a major-
ity of the shares of voting stock of each of its depository 
subsidiaries. 
‘‘(d) NO TERMINATION OF MUTUALITY.—Neither a 
reorganization of a mutual depository nor a modification 
of a Federal mutual bank holding company shall cause a 
termination of mutuality. 
‘‘(e) RETENTION OF CAPITAL.—In connection with a 
transaction described in subsection (a), a mutual national 
bank may, subject to the approval of the appropriate bank 
holding company regulator, 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 association chartered as 
a part of a transaction described in subsection (a) to meet 
all relevant capital standards established by the Comp-
troller of the Currency for national banking associations. 
‘‘(f) TERMINATING MUTUALITY.—If a Federal mu-
tual bank holding company elects to terminate mutuality, 
it must do so by either liquidating or converting to a bank 
holding company operating in stock form. 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00294
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
295 
HR 4173 RFS
‘‘(g) MEMBERSHIP RIGHTS.—Holders of savings, de-
mand, or other authorized depository accounts in a deposi-
tory subsidiary of a Federal mutual bank holding company 
shall have the same membership rights with respect to the 
Federal mutual bank holding company as those holders 
would have had if the depository subsidiary of the Federal 
mutual bank holding company had been a mutual national 
bank. 
‘‘(h) REGULATION.—A Federal mutual bank holding 
company shall be— 
‘‘(1) chartered by the appropriate bank holding 
company regulator and shall be subject to such regu-
lations as the appropriate bank holding company 
regulator shall prescribe; and 
‘‘(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. 
‘‘(i) CAPITAL IMPROVEMENT.— 
‘‘(1) PLEDGE OF STOCK OF NATIONAL BANK 
SUBSIDIARY.—This section shall not prohibit a Fed-
eral mutual bank holding company from pledging all 
or a portion of the stock of the national banking as-
sociation chartered as part of a transaction de-
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00295
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
296 
HR 4173 RFS
scribed in subsection (a) to raise capital for such na-
tional banking association. 
‘‘(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. 
‘‘(j) INSOLVENCY AND LIQUIDATION.— 
‘‘(1) IN GENERAL.—Notwithstanding any other 
provision of law, the appropriate bank holding com-
pany regulator 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— 
‘‘(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 (i)(1). 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00296
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
297 
HR 4173 RFS
‘‘(2) DISTRIBUTION OF NET PROCEEDS.—Ex-
cept as provided in paragraph (3), the net proceeds 
of any liquidation of any Federal mutual bank hold-
ing company under paragraph (1) shall be trans-
ferred to persons who hold membership interests in 
such Federal mutual bank holding company. 
‘‘(3) RECOVERY BY FDIC.—If the Federal De-
posit 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 liq-
uidated under paragraph (1), the Federal Deposit 
Insurance Corporation shall succeed to the interests 
of the depositors of the bank as members in the 
Federal mutual bank holding company, to the extent 
of the Federal Deposit Insurance Corporation’s loss. 
‘‘(k) DEFINITIONS.— 
‘‘(1) FEDERAL MUTUAL BANK HOLDING COM-
PANY.—The term ‘Federal mutual bank holding 
company’ means a holding company that is orga-
nized in mutual form and owns, directly or indi-
rectly, a majority of the shares of voting stock of 
one or more depository subsidiaries of a Federal mu-
tual bank holding company. 
‘‘(2) DEPOSITORY SUBSIDIARY OF A FEDERAL 
MUTUAL BANK HOLDING COMPANY.—The term ‘de-
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00297
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
298 
HR 4173 RFS
pository subsidiary of a Federal mutual bank hold-
ing company’ means a depository institution orga-
nized in stock form that is insured by the Federal 
Deposit Insurance Corporation, the majority of the 
shares of voting stock of which are owned by the 
Federal mutual bank holding company or its wholly 
owned subsidiaries and none of the shares of stock 
of which are pledged or otherwise subjected to lien 
except as permitted in subsection (i). 
‘‘(3) REORGANIZATION OF A MUTUAL DEPOSI-
TORY.—The term ‘reorganization of a mutual depos-
itory’ means the conversion of a mutual depository 
into a depository subsidiary of a Federal mutual 
bank holding company. 
‘‘(4) MODIFICATION
OF
A
FEDERAL
MUTUAL 
BANK HOLDING COMPANY.—The term ‘modification 
of a Federal mutual bank holding company’ means 
either: (A) the sale of shares of common or preferred 
stock in a depository subsidiary of a Federal mutual 
bank holding company to any party other than the 
subsidiary’s parent Federal mutual bank holding 
company or a wholly owned subsidiary of that par-
ent; or (B) the voluntary grant of a lien on shares 
of common or preferred stock in a depository sub-
sidiary of a Federal mutual bank holding company. 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00298
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
299 
HR 4173 RFS
‘‘(5) DEFAULT.—With respect to a national 
bank, the term ‘default’ means an adjudication or 
other official determination by any court of com-
petent jurisdiction, the Comptroller of the Currency, 
or other public authority pursuant to which a con-
servator, receiver, or other legal custodian is ap-
pointed for the national bank. 
‘‘(l) CONFORMING REFERENCES.—Unless otherwise 
provided by the appropriate bank holding company regu-
lator— 
‘‘(1) any reference in any Federal law to a bank 
holding company operating in stock form shall be 
deemed to refer also to a Federal mutual bank hold-
ing company; 
‘‘(2) any reference in any Federal law to the 
term ‘board of directors’, ‘director’, or ‘directors’ of 
a national bank operating in stock form shall be 
deemed to refer also to the board of a Federal mu-
tual bank holding company; and 
‘‘(3) 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’, 
‘stock certificates’, ‘certificates representing shares 
of stock’, ‘stock dividend’, ‘transferable stock’, ‘each 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00299
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
300 
HR 4173 RFS
class of stock’, ‘cumulate such shares’, ‘par value’, 
‘preferred stock’ shall not apply to a Federal mutual 
bank holding company, unless the appropriate bank 
holding company regulator determines that the con-
text requires otherwise.’’. 
(b) LIMITATION
ON
FEDERAL
REGULATION
OF 
STATE BANKS.—Except as otherwise provided in Federal 
law, the Comptroller of the Currency, the Board of Gov-
ernors of the Federal Reserve System, and the Federal 
Deposit Insurance Corporation may not adopt or enforce 
any regulation that contravenes the corporate governance 
rules prescribed by State law or regulation for State banks 
unless the Director, Board, or Corporation finds that the 
Federal regulation is necessary to assure the safety and 
soundness of the State banks. 
(c) TECHNICAL AMENDMENT.—The table of sections 
for chapter one of title LXII of the Revised Statutes of 
the United States (12 U.S.C. 21 et seq.) is amended by 
inserting after the item relating to section 5133 the fol-
lowing new items: 
‘‘5133A. Mutual national banks. 
‘‘5133B. Federal mutual bank holding companies.’’. 
(d) APPROPRIATE FEDERAL BANKING AGENCY FOR 
FEDERAL MUTUAL BANK HOLDING COMPANIES.—Sec-
tion 3(q)(1) of the Federal Deposit Insurance Act (12 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00300
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
301 
HR 4173 RFS
U.S.C. 1813(q)(2)) is amended by inserting after subpara-
graph (F) the following new subparagraph: 
‘‘(G) supervisory or regulatory proceedings 
arising from the authority given to the appro-
priate bank holding company regulator under 
section 5133B of the Revised Statutes of the 
United States.’’. 
(e) MUTUAL HOLDING COMPANY CONVERSION.— 
(1) IN
GENERAL.—Any mutual holding com-
pany, including any form of mutual depository hold-
ing company provided for under State law, may con-
vert to a Federal mutual bank holding company by 
filing with the appropriate bank holding company 
regulator 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 company shall be converted to a Federal mu-
tual holding company charter on the date specified 
in the notice. 
(2) DEFINITIONS.—For purposes of this sub-
section, the following definitions shall apply: 
(A) FEDERAL
MUTUAL
BANK
HOLDING 
COMPANY.—The term ‘‘Federal mutual bank 
holding company’’ has the same meaning as in 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00301
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
302 
HR 4173 RFS
section 5133B of the Revised Statutes of the 
United States (as added by this section); and 
(B) MUTUAL
HOLDING
COMPANY.—The 
term ‘‘mutual holding company’’ has the same 
meaning as in section 10(o)(10)(A) of the 
Home Owners Loan Act as in effect on the day 
before the date of enactment of this Act. 
(f) EFFECTIVE DATE.—This section shall take effect 
on the date of enactment of this Act. 
SEC. 1317. NATIONWIDE DEPOSIT CAP FOR INTERSTATE AC-
QUISITIONS. 
(a) AMENDMENTS TO THE BANK HOLDING COMPANY 
ACT OF 1956.— 
(1) CONCENTRATION LIMIT FOR BANK HOLDING 
COMPANIES.—Section 3(d)(2)(A) of the Bank Hold-
ing Company Act (12 U.S.C. 1842(d)(2)(A)) is 
amended by striking ‘‘paragraph (1)(A)’’ and insert-
ing ‘‘subsection (a) of this section’’. 
(2) REMOVAL OF NONBANK SAVINGS ASSOCIA-
TION PROVISION IN LIGHT OF BEING DEFINED AS A 
BANK.—Section 4 of the Bank Holding Company 
Act is amended by striking subsection (i) and insert 
the following new subsection: 
‘‘(i) [Repealed.]’’. 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00302
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
303 
HR 4173 RFS
(b) AMENDMENTS TO THE FEDERAL DEPOSIT IN-
SURANCE ACT.— 
(1) IN GENERAL.—Section 18(e) of the Federal 
Deposit Insurance Act (12 U.S.C. 1828(c)) is 
amended— 
(A) by redesignating paragraph (12) as 
paragraph (13); and 
(B) by inserting after paragraph (11), the 
following new paragraph: 
‘‘(12) NATIONWIDE DEPOSIT CAP.—The respon-
sible agency may not approve an application for an 
interstate merger transaction if the resulting insured 
depository institution (including all insured deposi-
tory institutions which are affiliates of the resulting 
insured depository institution), upon consummation 
of the transaction, would control more than 10 per-
cent of, the total amount of deposits of insured de-
pository institutions in the United States.’’. 
(2) 
PARALLEL
REQUIREMENT.—Section 
44(b)(2) of the Federal Deposit Insurance Act (12 
U.S.C. 1831u(b)(2)(A) is amended to read as fol-
lows: 
‘‘(A) NATIONWIDE
CONCENTRATION
LIM-
ITS.—The responsible agency may not approve 
an application for an interstate merger trans-
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00303
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
305 
HR 4173 RFS
SEC. 1318. DE NOVO BRANCHING INTO STATES. 
(a) NATIONAL BANKS.—Section 5155(g)(1)(A) of the 
Revised Statutes (12 U.S.C. 36(g)(1)(A)) is amended to 
read as follows: 
‘‘(A) the law of the State where the branch 
is located, or is to be located, would permit es-
tablishment of the branch if the national bank 
were a state bank chartered by such State;’’. 
(b) STATE INSURED BANKS.—Section 18(d)(4)(A)(i) 
of the Federal Deposit Insurance Act (12 U.S.C. 
1828(d)(4)(A)(i)) is amended to read as follows: 
‘‘(i) the law of the State where the 
branch is located, or is to be located, would 
permit establishment of the branch if the 
bank were a State bank chartered by such 
State;’’. 
Subtitle E—Improvements to the 
Federal Deposit Insurance Fund 
SEC. 1401. ACCOUNTING FOR ACTUAL RISK TO THE DE-
POSIT INSURANCE FUND. 
(a) Section 7(b)(1)(C) of the Federal Deposit Insur-
ance Act is amended to read as follows: 
‘‘(C) ‘RISK-BASED
ASSESSMENT
SYSTEM’ 
DEFINED.—For purposes of this paragraph, the 
term ‘risk-based assessment system’ means a 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00305
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
306 
HR 4173 RFS
system for calculating a depository institution’s 
assessment based on— 
‘‘(i) the probability that the Deposit 
Insurance Fund will incur a loss with re-
spect to the institution; 
‘‘(ii) the likely amount of any such 
loss; 
‘‘(iii) the risks to the Deposit Insur-
ance Fund attributable to such depository 
institution, including risks posed by its af-
filiates to the extent the Corporation deter-
mines appropriate, taking into account— 
‘‘(I) the amount, different cat-
egories, and concentrations of assets 
of the insured depository institution 
and its affiliates, including both on- 
balance sheet and off-balance sheet 
assets; 
‘‘(II) the amount, different cat-
egories, and concentrations of liabil-
ities, both insured and uninsured, con-
tingent and noncontingent, including 
both on-balance sheet and off-balance 
sheet liabilities, of the insured deposi-
tory institution and its affiliates; and 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00306
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
307 
HR 4173 RFS
‘‘(III) any other factors the Cor-
poration determines are relevant to 
assessing the risks; and 
‘‘(iv) the revenue needs of the Deposit 
Insurance Fund.’’. 
(b) Section 7(b)(2) of the Federal Deposit Insurance 
Act is amended by striking subparagraph (D) and by re-
designating subparagraph (E) as subparagraph (D). 
SEC. 1402. CREATING A RISK-FOCUSED ASSESSMENT BASE. 
Section 7(b)(2) of such Act, as amended, is further 
amended by amending subparagraph (C) to read as fol-
lows: 
‘‘(C) ASSESSMENT.—The assessment of 
any insured depository institution imposed 
under this subsection shall be an amount equal 
to the product of— 
‘‘(i) an assessment rate established by 
the Corporation; and 
‘‘(ii) the amount of the insured depos-
itory institution’s average total assets dur-
ing the assessment period minus the 
amount of the insured depository institu-
tion’s average tangible equity during the 
assessment period, minus additional deduc-
tions or adjustments necessary to establish 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00307
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
308 
HR 4173 RFS
assessments consistent with the definition 
under section 7(b)(1)(C) of the Federal 
Deposit Insurance Act for custodial banks 
(as defined by the Corporation based on 
factors including percentage of total reve-
nues generated by custodial businesses and 
the level of assets under custody) or a 
bankers’ bank (as referred to in section 
5136 of the Revised Statutes of the United 
States).’’. 
SEC. 1403. ELIMINATION OF PROCYCLICAL ASSESSMENTS. 
Section 7(e) of the Federal Deposit Insurance Act is 
amended— 
(1) in paragraph (2)— 
(A) by amending subparagraph (B) to read 
as follows: 
‘‘(B) LIMITATION.—The Board of Direc-
tors may, in its sole discretion, suspend or limit 
the declaration of payment of dividends under 
subparagraph (A).’’; 
(B) by amending subparagraph (C) to read 
as follows: 
‘‘(C) NOTICE AND OPPORTUNITY FOR COM-
MENT.—The Corporation shall prescribe, by 
regulation, after notice and opportunity for 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00308
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
309 
HR 4173 RFS
comment, the method for the declaration, cal-
culation, distribution, and payment of dividends 
under this paragraph’’; and 
(C) by striking subparagraphs (D) through 
(G); and 
(2) in paragraph (4)(A) by striking ‘‘para-
graphs (2)(D) and’’ and inserting ‘‘paragraphs (2) 
and’’. 
SEC. 1404. ENHANCED ACCESS TO INFORMATION FOR DE-
POSIT INSURANCE PURPOSES. 
(a) Section 7(a)(2)(B) of the Federal Deposit Insur-
ance Act is amended by striking ‘‘, after agreement with 
the Comptroller of the Currency, the Board of Governors 
of the Federal Reserve System, and the Director of the 
Office of Thrift Supervision, as appropriate,’’. 
(b) Section 7(b)(1)(E) of the Federal Deposit Insur-
ance Act is amended— 
(1) in clause (i), by striking ‘‘such as’’ and in-
serting ‘‘including’’; and 
(2) by striking clause (iii). 
SEC. 1405. TRANSITION RESERVE RATIO REQUIREMENTS 
TO REFLECT NEW ASSESSMENT BASE. 
(a) Section 7(b)(3)(B) of the Federal Deposit Insur-
ance Act is amended to read as follows: 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00309
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
310 
HR 4173 RFS
‘‘(B) MINIMUM RESERVE RATIO.—The re-
serve ratio designated by the Board of Direc-
tors for any year may not be less than 1.15 per-
cent of estimated insured deposits, or the com-
parable percentage of the assessment base set 
forth in paragraph (2)(C).’’. 
(b) Section 3(y)(3) of the Federal Deposit Insurance 
Act is amended by inserting ‘‘, or such comparable per-
centage of the assessment base set forth in section 
7(b)(2)(C)’’ before the period. 
(c) For a period of not less than 5 years after the 
date of the enactment of this title, the Federal Deposit 
Insurance Corporation shall make available to the public 
the reserve ratio and the designated reserve ratio using 
both estimated insured deposits and the assessment base 
under section 7(b)(2)(C) of the Federal Deposit Insurance 
Act. 
Subtitle F—Improvements to the 
Asset-backed 
Securitization 
Process 
SEC. 1501. SHORT TITLE. 
This subtitle may be cited as the ‘‘Credit Risk Reten-
tion Act of 2009’’. 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00310
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS
347 
HR 4173 RFS
(A) SUCCESSOR TO COVERED FINANCIAL 
COMPANY.—The Corporation shall, upon ap-
pointment as receiver for a covered financial 
company under section 1604, and by operation 
of law, succeed to— 
(i) all rights, titles, powers, and privi-
leges of the covered financial company, and 
of any stockholder, member, officer, or di-
rector of such institution with respect to 
the covered financial company and the as-
sets of the covered financial company; and 
(ii) title to the books, records, and as-
sets of any previous receiver or other legal 
custodian of such covered financial com-
pany. 
(B) OPERATE
THE
COVERED
FINANCIAL 
COMPANY.—The Corporation as receiver for a 
covered financial company may— 
(i) take over the assets of and operate 
the covered financial company with all the 
powers of the members or shareholders, 
the directors, and the officers of the cov-
ered financial company and conduct all 
business of the covered financial company; 
VerDate Nov 24 2008 
04:13 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00347
Fmt 6652
Sfmt 6201
E:\BILLS\H4173.RFS
H4173
SMARTINEZ on DSKH9S0YB1PROD with BILLS