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(1) By striking paragraphs (1) and (2) and in-
serting in lieu thereof the following:
‘‘(1) PRIOR
REVIEW
REQUIRED.—Before any
foreign bank application to establish a branch or an
agency, or acquire ownership or control of a com-
mercial lending company may be approved by any
appropriate State bank supervisor or the Comptrol-
ler of the Currency, the application must first be
submitted for review to the Board for a period of
not more than 180 days. The purpose of the review
is to determine whether approval of any application
would place at risk the safe and sound operation of
the United States banking system.
‘‘(2) AUTHORITY OF THE BOARD.—Based on
the determination described in paragraph (1), the
Board is authorized to—
‘‘(A) deny the application;
‘‘(B) extend for 180 days the period for re-
view of any application, after providing notice
of, and the reasons for, the extension to the ap-
plicant and any appropriate State bank super-
visor or the Comptroller of the Currency; or
‘‘(C) approve the application, either by af-
firmative action or by taking no action during
the 180 day review period.’’.
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(2) In paragraph (3), by redesignating subpara-
graphs (A) through (D) as subparagraphs (C)
through (F); by striking all from ‘‘In’’ through ‘‘ac-
count—’’; and by inserting the following: ‘‘In mak-
ing any determination under paragraph (1), the
Board may consider—
‘‘(A) whether the foreign bank engages di-
rectly in the business of banking outside the
United States and is subject to comprehensive
supervision or regulation on a consolidated
basis by the appropriate authorities in its home
country; and
‘‘(B) whether the foreign bank has fur-
nished to the Board the information it needs to
adequately assess the application.’’.
SEC. 240. DUPLICATE EXAMINATION OF FOREIGN BANKS.
Section 7(c)(1) of the International Banking Act of
1978 (12 U.S.C. 3105(b)(1)) is amended by striking sub-
paragraphs (B), (C), and (D) and inserting in lieu thereof:
‘‘(B) RELIANCE
ON
PRIMARY
SUPER-
VISOR.—In order to avoid unnecessary duplica-
tion and cost, the Board shall, to the extent
practicable, rely upon the reports of examina-
tions made by the Comptroller, the Federal De-
posit Insurance Corporation, or the appropriate
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State bank supervisor in achieving the purposes
of this subsection.
‘‘(C) 
ON-SITE
EXAMINATION.—Each
branch or agency of a foreign bank shall be
subject to on-site examination on the same
schedule that a comparable national or State
non-member bank would be examined by the
Comptroller of the Currency or the Federal De-
posit Insurance Corporation.
‘‘(D) COST OF EXAMINATIONS.—The cost
of any examination undertaken pursuant to
subparagraph (A) shall be assessed against and
collected from the foreign bank or the foreign
company that controls the foreign bank, as the
case may be, but only to the same extent that
fees are collected by the Board for examination
of any State member insured bank.’’.
SEC. 241. SECOND MORTGAGES.
Section 103 of the Truth in Lending Act (15 U.S.C.
1602) is amended—
(1) in paragraph (aa)(1) by inserting ‘‘a subor-
dinate mortgage on’’ after ‘‘secured by’’; and
(2) by deleting ‘‘a residential mortgage trans-
action’’.
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SEC. 242. OCC AUTHORITY.
The Comptroller of the Currency shall not authorize
or allow by rule, regulation, order, action, inaction or oth-
erwise any activity that would have the effect of permitting
a national bank to provide insurance as principal, agent
or broker, and no national bank shall engage in any such
activity, except to the extent that such specific activity was
authorized for national banks on June 12, 1995.
TITLE III—LENDER LIABILITY
SEC. 301. LENDER LIABILITY.
(a) IN GENERAL.—The Federal Deposit Insurance
Act (12 U.S.C. 1811 et seq.) is amended by adding after
section 44, the following new section:
‘‘SEC. 45. LENDER, FIDUCIARY AND GOVERNMENT AGENCY
ENVIRONMENTAL LIABILITIES.
‘‘(a) LENDER ENVIRONMENTAL LIABILITY.—
‘‘(1) Nothwithstanding any other provision or
rule of Federal law, no lender shall be liable pursu-
ant to any Federal environmental law, except as pro-
vided in this section.
‘‘(2) A lender shall only be liable pursuant to
an Federal environmental law when the lender actu-
ally participates in management of another person’s
activities which create liability under the same Fed-
eral environmental law.
‘‘(3) For purposes of this section—
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‘‘(A) the term ‘participate in management’
means actually participating in the management
or operational affairs of other persons’ activi-
ties, and does not include merely having the ca-
pacity to influence, or the unexercised right to
control such activities;
‘‘(B) a person shall be considered to ‘par-
ticipate in management’ while a borrower is still
in possession of property, only if such person—
‘‘(i) exercises decisionmaking control
over the environmental compliance of a
borrower, such that the person has under-
taken responsibility for the hazardous sub-
stance handling or disposal practices of the
borrower; or
‘‘(ii) exercises control at a level com-
parable to that of a manager of the enter-
prise of the borrower, such that the person
has assumed or manifested responsibility
for the overall management of the enter-
prise encompassing day-to-day decision-
making with respect to environmental com-
pliance, or with respect to substantially all
of the operational aspects (as distinguished
from financial or administrative aspects) of
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the enterprise, other than environmental
compliance;
‘‘(C) the term ‘participate in management’
does not include engaging in an act of failing
to act prior to the time that an extension of
credit is made or a security interest is created
in property; and
‘‘(D) the term ‘participate in management’
does not include—
‘‘(i) holding an extension of credit or
a security interest or abandoning or releas-
ing an extension of credit or a security in-
terest;
‘‘(ii) including in the terms of an ex-
tension of credit, or in a contract or secu-
rity agreement relating to such an exten-
sion, convenants, warranties, or other
terms and conditions that relate to envi-
ronmental compliance;
‘‘(iii) monitoring or enforcing the
terms and conditions of an extension of
credit or security interest;
‘‘(iv) monitoring or undertaking one
or more inspections of property;
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‘‘(v) requiring or conducting a re-
sponse action or other lawful means of ad-
dressing the release or threatened release
of a hazardous substance in connection
with property prior to, during, or upon the
expiration of the term of an extension of
credit;
‘‘(vi) providing financial or other ad-
vice or counseling in an effort to mitigate,
prevent, or cure default or dimunition in
the value of the property;
‘‘(vii) restructuring, renegotiating, or
otherwise agreeing to alter the terms and
conditions of an extension of credit or se-
curity interest, or exercising forbearance;
or
‘‘(viii) exercising other remedies that
may be available under applicable law for
the breach of any term or condition of the
extension of credit or security agreement;
if such actions do not rise to the level of partici-
pating in management, as defined in subpara-
graphs (A) and (B).
‘‘(E) When a lender did not participate in
management of property prior to foreclosure,
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then the lender shall not be liable even if such
person forecloses on property, sells, re-leases, or
liquidates property, maintains business activi-
ties, winds up operations, or undertakes any re-
sponse action with respect to property, or takes
other measures to preserve, protect, or prepare
property prior to sale or disposition, if such
person seeks to sell, re-lease, or otherwise divest
the property at the earliest practical, commer-
cially reasonable time, on commercially reason-
able terms, taking into account market condi-
tions and legal and regulatory requirements.
‘‘(4) The liability of any lender that is liable
under any Federal environmental law shall be lim-
ited to the unpaid balance of any outstanding exten-
sion of credit related to the property or activities
forming the basis for the liability.
‘‘(b) FIDUCIARY ENVIRONMENTAL LIABILITY.—
‘‘(1) Notwithstanding any other provision or
rule of Federal law, no fiduciary shall be liable pur-
suant to any Federal environmental law, except as
provided in this section.
‘‘(2)(A) Subject to subparagraphs (B) and (C),
a fiduciary holding title to property or otherwise af-
filiated with property solely in a fiduciary capacity
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shall be personally subject to the obligations and li-
abilities of any person under an Federal environ-
mental law, to the same extent as if the property
were held by the fiduciary free of trust.
‘‘(B) The personal obligations and liabilities of
a fiduciary referred to in subparagraph (A) shall be
limited to the extent to which the assets of the trust
or estate are sufficient to indemnify the fiduciary,
unless—
‘‘(i) the obligations and liabilities would
have arisen even if the person had not served
as a fiduciary;
‘‘(ii) the fiduciary’s own failure to exercise
due care with respect to property caused or
contributed to the release of hazardous sub-
stances following establishment of the trust, es-
tate, or fiduciary relationship;
‘‘(iii) the fiduciary had a role in establish-
ing the trust, estate, or fiduciary relationship,
and such trust, estate, or fiduciary relationship
has no objectively reasonable or substantial pur-
pose apart from the avoidance or limitation of
liability under an environmental law.
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‘‘(C) a fiduciary shall not be personally liable
for undertaking or directing another to undertake a
response action.
‘‘(3) Nothing in this section shall be construed
to effect the liability, if any, of a person who—
‘‘(A)(i) acts in a capacity other than a fi-
duciary capacity; and
‘‘(ii) directly or indirectly benefits from a
trust or fiduciary relationship; or
‘‘(B)(i) is a beneficiary and a fiduciary
with respect to the same fiduciary estate; and
‘‘(ii) as a fiduciary, receives benefits that
exceed customary or reasonable compensation,
and incidental benefits, permitted under other
applicable laws.
‘‘(c) DEFINITIONS.—For purposes of subsections (a)
and (b)—
‘‘(1) The term ‘Federal environmental law’
means any Federal statue or rule of common law
with the purpose of protection of the environment
and any Federal regulation promulgated thereunder
and any State statute or regulation created as a
Federal approved or delegated program implement-
ing these laws, including but not limited to 7 U.S.C.
136–136y, 15 U.S.C. 2601–2692, 15 U.S.C. 2641–
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2654, 33 U.S.C. 1251–1387, 33 U.S.C. 2701–2761,
42 U.S.C. 7401–7642, 42 U.S.C. 6901–6991i, 42
U.S.C. 9601–9675, and 42 U.S.C. 13101–13109.
‘‘(2) The term ‘extension of credit’ means the
making or renewal of any loan, a granting of a line
of credit or extending credit in any manner, such as
an advance by means of an overdraft or the issuance
of a standby letter of credit, and a lease finance
transaction—
‘‘(A) in which the lessor does not initially
select the leased property and does not, during
the lease term, control the daily operation or
maintenance of the property; or
‘‘(B) that conforms with regulations issued
by the appropriate Federal banking agency or
the appropriate state bank supervisor (as these
terms are defined in section 3 of the Federal
Deposit Insurance Act or with regulations is-
sued by the National Credit Union Administra-
tion Board, as appropriate.
‘‘(3) The term ‘fiduciary’ means a person who
acts for the exclusive benefit of another person as a
bona fide fiduciary within the meaning of section
3(31) of the Employee Retirement Income Security
Act of 1974, trustee, executor, administrator, custo-