SEC. 104. BRANCHING BY FOREIGN BANKS.
(a) IN GENERAL.—Section 5(a) of the International
Banking Act of 1978 (12 U.S.C. 3103(a)) is amended to
read as follows:
‘‘(a) INTERSTATE BANKING OPERATIONS.—
‘‘(1) IN GENERAL.—A foreign bank may estab-
lish and operate—
‘‘(A) a Federal branch or agency, with the
approval of the Board and the Comptroller of
the Currency, in any State outside the branch’s
or agency’s home State to the extent that such
establishment and operation would be permitted
under section 5155 of the Revised Statutes for
a national bank; or
‘‘(B) a State branch or agency, with the
approval of the Board and the appropriate reg-
ulatory authority of the State, in any State out-
side the branch’s or agency’s home State to the
extent that such establishment and operation
would be permitted under section 18(d) of the
Federal Deposit Insurance Act for a State
bank,
as if the foreign bank were a national bank the main
office of which is in the home State of the foreign
bank or a State bank chartered in such home State,
as the case may be.
‘‘(2) CRITERIA FOR DETERMINATION.—In ap-
proving an application under paragraph (1), the
Board and the Comptroller of the Currency—
‘‘(A) shall apply the standards for estab-
lishment of a foreign bank office in the United
States under section 7(e); and
‘‘(B) may not approve an application un-
less the Board or the Comptroller of the Cur-
rency—
‘‘(i) determines that the foreign
bank’s financial resources, including the
capital level, are equivalent to those re-
quired for a domestic bank to be approved
for branching under section 5155 of the
Revised Statutes and section 18(d) of the
Federal Deposit Insurance Act; and
‘‘(ii) in the case of the 1st application
by such foreign bank under paragraph (1),
consults with the Secretary of the Treas-
ury regarding capital equivalency.
‘‘(3) REQUIREMENT FOR A SEPARATE SUBSIDI-
ARY.—If the Comptroller of the Currency or the
Board, taking into account differing regulatory or
accounting standards, finds that adherence to cap-
ital requirements equivalent to those imposed under
section 5155 of the Revised Statutes and by section
18(d) of the Federal Deposit Insurance Act can be
verified only if banking activities are carried out in
a domestic banking subsidiary within the United
States, the Board or the Comptroller of the Cur-
rency may approve an application under paragraph
(1) subject to a requirement that the foreign bank
or company controlling the foreign bank establish a
domestic banking subsidiary in the United States.
‘‘(4) ADDITIONAL AUTHORITY FOR INTERSTATE
BRANCHES AND AGENCIES OF FOREIGN BANKS.—
Notwithstanding paragraph (1) and section 4(h), a
foreign bank may, with the approval of the Comp-
troller of the Currency, establish and operate a Fed-
eral branch or Federal agency or, with the approval
of the Board and the appropriate State bank super-
visor, a State branch or State agency in any State
outside the foreign bank’s home State if—
‘‘(A) the establishment and operation of a
branch or agency is expressly permitted by the
State in which the branch or agency is to be es-
tablished; and
‘‘(B) in the case of a Federal or State
branch, the branch receives only such deposits
as would be permissible for a corporation orga-
nized under section 25A of the Federal Reserve
Act.’’.
(b) TREATMENT OF UNITED STATES BANKING SUB-
SIDIARIES.—Section 5 of the International Banking Act
of 1978 (12 U.S.C. 3103) is amended by adding at the
end the following:
‘‘(d) TREATMENT OF UNITED STATES SUBSIDIARY
OF A FOREIGN BANK.—A foreign bank that has a domes-
tic subsidiary within the United States may establish Fed-
eral and State branches and agencies outside the bank’s
home State to the extent permitted under section 5155(d)
of the Revised Statutes and section 18(d) of the Federal
Deposit Insurance Act.’’.
(c) HOME STATE DETERMINATIONS.—
(1) METHOD OF DETERMINING.—Section 4(h)
of the International Banking Act of 1978 (12 U.S.C.
3102(h)) is amended—
(A) by striking the phrase ‘‘in the State in
which such branch or agency is located’’; and
(B) by adding at the end the following sen-
tence: ‘‘For the purposes of section 5155(c) of
the Revised Statutes, the home State of a for-
eign bank shall be the bank’s home State as de-
termined under section 5(c).’’.
(2) SINGLE STATE DETERMINATIONS.—Section
5(c) of the Bank Holding Company Act of 1956 (12
U.S.C. 3103(c)) is amended to read as follows:
‘‘(c) DETERMINATION OF HOME STATE OF FOREIGN
BANK.—For the purposes of this section—
‘‘(1) the home State of a foreign bank that has
branches, agencies, subsidiary commercial lending
companies, or subsidiary banks, or any combination
thereof, in more than 1 State, is the 1 State of such
States which is selected by the foreign bank or, in
default of any such selection, by the Board; and
‘‘(2) the home State of a foreign bank that has
branches, agencies, subsidiary commercial lending
companies, or subsidiary banks, or any combination
thereof, in only 1 State, is that State.’’.
SEC. 105. PERMISSIBLE CONSOLIDATION.
Section 3 of the Bank Holding Company Act of 1956
(12 U.S.C. 1842) is amended by adding at the end the
following subsection:
‘‘(h) PERMISSIBLE CONSOLIDATION.—
‘‘(1) IN GENERAL.—Except as provided in sub-
section (d)(1) and with the approval of the Board,
a bank holding company having subsidiary banks lo-
cated in more than 1 State may combine 2 or more
of such banks into a single bank by means of merg-
er, consolidation, or other transaction. Notwith-
standing any other provision of Federal law or any
provision of State law, any consolidation effected in
accordance with this subsection shall be permissible
within a State, unless such State has enacted a law
in accordance with section 5155(d)(2)(A) of the Re-
vised Statutes or section 18(d)(5)(A) of the Federal
Deposit Insurance Act that applies equally to na-
tional and State banks and that expressly prohibits
all out-of-State banks from establishing or acquiring
branches located in that State.
‘‘(2) ADDITIONAL
BRANCHES.—The consoli-
dated bank may, subject to compliance with all ap-
plicable Federal or State laws relating to the estab-
lishment, acquisition or operation of a branch, estab-
lish, acquire, and operate additional branches at any
location where the consolidated bank or a preexisting
bank could, if the consolidated or preexisting bank
had not been a party to such consolidation, have es-
tablished or acquired and operated a branch, unless
precluded by any provision of State law in existence
on the date of the enactment of the Interstate Bank-
ing Efficiency Act of 1993.
‘‘(3) EFFECT
OF
STATE
PROHIBITION
OF
BRANCHING.—If, during the period beginning on the
itory institution (as defined in section 3(c) of the Federal
Deposit Insurance Act) which is not an adequately capital-
ized institution (as defined under section 38 of the Federal
Deposit Insurance Act).
(b) REGULATOR DISCRETION.—
(1) IN
GENERAL.—Subject to paragraph (2)
and with the approval of the Federal Deposit Insur-
ance Corporation and the appropriate Federal bank-
ing agency, any financial services holding company
which controlled any full-service bank subsidiary on
May 15, 1992, may convert such bank into a branch
of any out-of-State bank pursuant to the amend-
ments made by this title without regard to the mini-
mum capital requirements of this section.
(2) RESTRICTIONS.—No branch of a bank
which results from a conversion described in para-
graph (1) may have total assets in excess of the av-
erage amount held by such branch during May
1992, so long as such bank fails to meet the mini-
mum capital requirement established by this section.
SEC. 107. PROHIBITION AGAINST DEPOSIT PRODUCTION
OFFICES.
(a) REGULATIONS.—Before the end of the 120-day
period beginning on the date of the enactment of the
Interstate Banking Efficiency Act of 1993, the appro-
priate Federal banking agency shall prescribe regulations
which prohibit any person from using any authority to en-
gage in interstate branching pursuant to this title or any
amendment made by this title to any other provision of
law primarily for the purpose of deposit production.
(b) GUIDELINES FOR MEETING CREDIT NEEDS.—
Regulations issued under subsection (a) shall include
guidelines to ensure that each interstate branch meets the
credit needs of the community and market area in which
the branch operates.
(c) LIMITATION ON OUT-OF-STATE LOANS.—
(1) LIMITATION.—Regulations issued under
subsection (a) shall require that if the percentage of
outstanding loans made by an interstate branch to
borrowers located in the host State of, or market
area served by, the branch is less than half the aver-
age of such percentage for all Federal depository in-
stitutions and State depository institutions having
their principal place of operations in the host State
or that market area—
(A) the appropriate Federal banking agen-
cy for the branch shall review the loan portfolio
of the branch and determine whether the
branch is reasonably meeting the credit needs
of the community and market area in which the
branch operates; and
(B) if the agency determines that the
branch is not reasonably meeting those needs—
(i) the branch shall be closed, and
(ii) the person which established the
branch may not open a new branch in that
State unless the person provides reasonable
assurances to the satisfaction of the appro-
priate Federal banking agency that the
new branch will reasonably meet the credit
needs of the community and market area
in which the new branch will operate.
(2) CONSIDERATIONS.—In making a determina-
tion under paragraph (1)(A) regarding an interstate
branch, the appropriate Federal banking agency
shall consider—
(A) whether the branch was acquired as
part of the purchase of a failed or failing depos-
itory institution;
(B) whether the branch has a higher con-
centration of commercial and credit card lend-
ing; and
(C) the ratings received by the branch in
evaluations under the Community Reinvestment
Act of 1977.
(d) APPLICATION.—This section shall not apply to
any interstate branch acquired before January 1, 1992,
as part of any consolidation or merger of depository insti-
tutions.
(e) DEFINITIONS.—For the purposes of this sec-
tion—
(1) APPROPRIATE
FEDERAL
BANKING
AGEN-
CY.—The term ‘‘appropriate Federal banking agen-
cy’’ has the meaning that term has in section 3 of
the Federal Deposit Insurance Act.
(2) BRANCH.—The term ‘‘branch’’ means any
office, agency, or other place of business located in
any State at which deposits are received, checks
paid, or money lent.
(3) FEDERAL DEPOSITORY INSTITUTIONS AND
STATE
DEPOSITORY
INSTITUTION.—Each of the
terms ‘‘Federal depository institution’’ and ‘‘State
depository institution’’ has the meaning given that
term in section 3 of the Federal Deposit Insurance
Act.
(4) HOST STATE DEFINED.—The term ‘‘host
State’’ means the State in which a bank establishes
or maintains a branch, other than—
(A) the State in which the bank is char-
tered and engaging in banking business, or
(B) in the case of—
(i) a national bank, the State in which
the principal place of business of such as-
sociation is located, and
(ii) a bank holding company, the
State in which the total deposits of all
bank subsidiaries of such company is the
largest,
as applicable under the amendments made by this
title.
(5) INTERSTATE
BRANCH.—The term ‘‘inter-
state branch’’ means a branch established pursuant
to the authority referred to in subsection (a).
(6) PRINCIPAL
PLACE
OF
OPERATIONS.—The
term ‘‘principal place of operations’’ means the State
in which the total deposits of all bank subsidiaries
of a person are largest.
(7) STATE DEFINED.—The term ‘‘State’’ has
the meaning given to such term in section 3 of the
Federal Deposit Insurance Act.
SEC. 108. RESTATEMENT OF EXISTING LAW.
No provision of this title and no amendment made
by this title to any other provision of law shall be con-
strued as affecting in any way the right of any State, or
any political subdivision of any State, to impose or main-
tain a nondiscriminatory franchise tax or other non-
property tax instead of a franchise tax in accordance with
section 3124 of title 31, United States Code.
SEC. 109. VISITORIAL POWERS.
Section 5240 of the Revised Statutes (12 U.S.C. 481
et seq.) is amended—
(1) by inserting before the 6th undesignated
paragraph (12 U.S.C. 484) the following new para-
graph heading:
‘‘(6) VISITORIAL POWERS.—’’;
(2) by moving the left margins of subpara-
graphs (A) and (B) of paragraph (6) (as so des-
ignated by the amendment made by paragraph (1)
of this section) 4 ems to the right; and
(3) by inserting after subparagraph (B) of such
paragraph the following new subparagraph:
‘‘(C) STATE
VISITATIONS
AUTHOR-
IZED FOR TAX COMPLIANCE PURPOSES.—
Notwithstanding subparagraph (A), any
lawfully authorized auditor, examiner, or
other representative acting on behalf of
any State agency charged with the admin-
istration and collection of taxes imposed by
a State or any political subdivision of a
State may review at reasonable times those
books and records of any Federal deposi-
tory institution (as defined in section
3(c)(4) of the Federal Deposit Insurance
Act) or any Federal credit union (as de-
fined in section 101(1) of the Federal
Credit Union Act) located in that State
which are reasonably necessary to ensure
compliance with the tax laws of the State
or political subdivision.’’.
TITLE II—CRA EVALUATIONS
SEC. 201. STATE-BY-STATE CRA EVALUATIONS OF DEPOSI-
TORY 
INSTITUTIONS 
WITH 
INTERSTATE
BRANCHES.
Section 807 of the Community Reinvestment Act of
1977 (12 U.S.C. 2906) is amended by adding at the end
the following new subsection:
‘‘(d) 
INSTITUTIONS
WITH
INTERSTATE
BRANCHES.—
‘‘(1) STATE-BY-STATE
EVALUATION.—In the
case of a regulated financial institution which main-
tains 1 or more domestic branches located outside
the State in which the institution’s principal place of
business is located (hereafter in this subsection re-
ferred to as the ‘home State’), the appropriate Fed-
eral financial supervisory agency shall prepare—
‘‘(A) a written evaluation of the entire in-
stitution’s record of performance under this
Act, as required by subsections (a), (b), and (c)
of this section; and
‘‘(B) for each State in which the institu-
tion maintains 1 or more domestic branches
(including the institution’s home State), a sepa-
rate written evaluation of the institution’s
record of performance within such State under
this Act, as required by subparagraphs (A) and
(B) of subsection (b)(1) of this section.
‘‘(2) CONTENT
OF
STATE
LEVEL
EVALUA-
TION.—A written evaluation prepared pursuant to
paragraph (1)(B) of this subsection shall report the
information required by such paragraph separately
for each metropolitan area (as defined by the appro-
priate Federal financial supervisory agency) in which
the regulated financial institution maintains 1 or
more domestic branch offices and separately for the
nonmetropolitan portion of the State if the institu-
tion maintains 1 or more domestic branch offices in
such nonmetropolitan area.’’.
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