I
103D CONGRESS
1ST SESSION
H. R. 3248
To provide for fair trade in financial services.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 7, 1993
Mr. SCHUMER (for himself, Mr. LEACH, and Mr. STARK) introduced the fol-
lowing bill; which was referred jointly to the Committees on Banking, Fi-
nance and Urban Affairs, Energy and Commerce, and Ways and Means
A BILL
To provide for fair trade in financial services.
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
‘‘Fair Trade in Financial Services Act of 1993’’.
(b) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Effectuating the principle of national treatment for banking organiza-
tions.
Sec. 3. Effectuating the principle of national treatment for securities organiza-
tions.
Sec. 4. Financial interdependence study.
Sec. 5. Conforming amendments.
SEC. 2. EFFECTUATING THE PRINCIPLE OF NATIONAL
TREATMENT FOR BANKING ORGANIZATIONS.
The International Banking Act of 1978 (12 U.S.C.
3101 et seq.) is amended by adding at the end the follow-
ing new section:
‘‘SEC. 18. NATIONAL TREATMENT.
‘‘(a) PURPOSE.—The purpose of this section is to en-
courage foreign countries to accord national treatment to
United States banking organizations that operate or seek
to operate in those countries.
‘‘(b) IDENTIFYING COUNTRIES THAT DENY NA-
TIONAL TREATMENT
TO UNITED STATES BANKS
OR
BANK HOLDING COMPANIES.—The Secretary shall iden-
tify the extent to which foreign countries deny national
treatment to United States banking organizations—
‘‘(1) according to the most recent report under
section 3602 of the Omnibus Trade and Competi-
tiveness Act of 1988 (or update thereof); or
‘‘(2) based on more recent information that the
Secretary deems appropriate.
‘‘(c) DETERMINING
WHETHER
DENIAL
OF
NA-
TIONAL TREATMENT HAS SIGNIFICANT ADVERSE EF-
FECT.—
‘‘(1) IN GENERAL.—The Secretary shall deter-
mine whether the denial of national treatment to
United States banking organizations by a foreign
the notice, based on the determination under
subsection (d)(1).
‘‘(2) PREVENTING
EXISTING
ENTITIES
FROM
BEING USED TO EVADE THIS SECTION.—
‘‘(A) IN GENERAL.—If a determination has
been published in accordance with subsection
(d)(1)(A) with respect to a foreign country, a
bank, foreign bank described in section 8(a),
branch, agency, commercial lending company,
or other affiliated entity that is a person of that
country shall not, without prior approval of the
appropriate Federal banking agency, after con-
sultation with the State bank supervisor, di-
rectly or indirectly, in the United States—
‘‘(i) commence any line of business in
which the person was not engaged as of
the date the determination was published
in the Federal Register; or
‘‘(ii) conduct business from any loca-
tion at which the person did not conduct
business as of that date.
‘‘(B) 
EXCEPTION.—Subparagraph 
(A)
shall not apply with respect to companies de-
scribed in section 2(h)(2) of the Bank Holding
Company Act of 1956.
‘‘(f) EXEMPTIONS FROM SANCTIONS.—
‘‘(1) IN
GENERAL.—Subsection (e) does not
apply to the subsidiaries in the United States of a
person of a foreign country if the Secretary deter-
mines that the banking laws and regulations of the
foreign country, as actually applied, meet or ex-
ceed—
‘‘(A) the standards for treatment of sub-
sidiaries of United States banking organizations
contained in the Second Banking Directive, and
in any amendment to the Second Banking Di-
rective, if the Secretary determines that such
amendment—
‘‘(i) does not restrict any operation,
activity, or authority to expand any oper-
ation or activity, permitted under those
standards, of any subsidiary in the foreign
country of any such bank or bank holding
company; or
‘‘(ii) is in accordance with national
treatment of subsidiaries of such banking
organizations; or
‘‘(B) any set of standards that, taken as a
whole, is no less favorable to United States
banking organizations than the standards re-
ferred to in subparagraph (A).
‘‘(2) STANDARDS
FOR
EXERCISE
OF
DISCRE-
TION.—In exercising any discretion under this sub-
section, the Federal banking agencies, after con-
sultation with the Secretary, shall consider, with re-
spect to a bank, foreign bank, branch, agency, com-
mercial lending company, or other affiliated entity
that is a person of a foreign country and is operat-
ing in the United States—
‘‘(A) the extent to which the foreign coun-
try is progressing toward according national
treatment to United States banking organiza-
tions; and
‘‘(B) whether the foreign country permits
United States banking organizations to expand
their activities in that country, even if that
country determined that the United States did
not accord national treatment to the banking
organizations of that country.
‘‘(g) NEGOTIATIONS.—
‘‘(1) IN GENERAL.—The Secretary—
‘‘(A) shall initiate negotiations with any
foreign country with respect to which a deter-
mination made under subsection (d)(1) is in ef-
fect; and
‘‘(B) may initiate negotiations with any
foreign country which denies national treatment
to United States banking organizations to en-
sure that the foreign country accords national
treatment to such organizations.
‘‘(2) EXCEPTIONS.—Paragraph (1) does not re-
quire the Secretary to initiate negotiations with a
foreign country if the Secretary—
‘‘(A) determines that the negotiations—
‘‘(i) would be so unlikely to result in
progress toward according national treat-
ment to United States banking organiza-
tions as to be a waste of effort; or
‘‘(ii) would impair the economic inter-
ests of the United States; and
‘‘(B) gives written notice of that deter-
mination to the chairperson and the ranking
minority member of the Committee on Banking,
Housing, and Urban Affairs of the Senate and
of the Committee on Banking, Finance and
Urban Affairs of the House of Representatives.
‘‘(h) REPORT.—