annual period may not exceed the total amount
of assessments paid by such member to the in-
surance fund with respect to such period.’’.
SEC. 105. ASSESSMENTS AUTHORIZED ONLY IF NEEDED TO
MAINTAIN THE RESERVE RATIO OF A DE-
POSIT INSURANCE FUND.
(a) IN GENERAL.—Section 7(b)(2)(A)(i) of the Fed-
eral Deposit Insurance Act (12 U.S.C. 1817(b)(2)(A)(i))
is amended in the portion of such section preceding
subclause (I) by inserting ‘‘when necessary, and only to
the extent necessary’’ after ‘‘insured depository institu-
tions’’.
(b) 
LIMITATION
ON
ASSESSMENT.—Section
7(b)(2)(A)(iii) of the Federal Deposit Insurance Act (12
U.S.C. 1817(b)(2)(A)(iii)) is amended to read as follows:
‘‘(iii) LIMITATION ON ASSESSMENT.—
The Board of Directors shall not set semi-
annual assessments with respect to a de-
posit insurance fund in excess of the
amount needed—
‘‘(I) to maintain the reserve ratio
of the fund at the designated reserve
ratio; or
‘‘(II) if the reserve ratio is less
than the designated reserve ratio, to
increase the reserve ratio to the des-
ignated reserve ratio.’’.
TITLE II—STATUS OF BANKS
AND SAVINGS ASSOCIATIONS
SEC. 201. TERMINATION OF FEDERAL SAVINGS ASSOCIA-
TIONS; TREATMENT OF STATE SAVINGS ASSO-
CIATIONS AS BANKS FOR PURPOSES OF FED-
ERAL BANKING LAW.
(a) TERMINATION OF FEDERAL SAVINGS ASSOCIA-
TION CHARTERS.—
(1) IN GENERAL.—Each Federal savings asso-
ciation shall—
(A) convert to a national bank charter;
(B) convert to a State depository institu-
tion charter; or
(C) surrender the charter of such savings
association and liquidate the institution.
(2) CONVERSION TO NATIONAL BANK BY OPER-
ATION OF LAW.—If any Federal savings association
has not taken any action required under paragraph
(1) as of January 1, 1998, the savings association
shall—
(A) become a national bank on such date
by operation of law;
(B) immediately file articles of association
and an organizational certificate with the
Comptroller of the Currency in accordance with
sections 5133, 5134, 5135 of the Revised Stat-
utes of the United States; and
(C) cease to exist as a Federal savings as-
sociation as of such date.
(3) PROHIBITION ON NEW CHARTERS OF FED-
ERAL SAVINGS ASSOCIATIONS.—The Director of the
Office of Thrift Supervision may not grant any char-
ter for a Federal savings association after the date
of the enactment of this Act.
(b) TREATMENT OF STATE SAVINGS ASSOCIATIONS
AS
BANKS
FOR
PURPOSES
OF
FEDERAL
BANKING
LAW.—
(1) AMENDMENTS
TO
FEDERAL
DEPOSIT
IN-
SURANCE ACT.—Section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813) is amended—
(A) by striking paragraph (2) of subsection
(a) and inserting the following new paragraph:
‘‘(2) STATE
BANK.—The term ‘State bank’
means any bank, banking association, trust com-
pany, savings bank, industrial bank (or similar de-
pository institution which the Board of Directors
finds to be operating substantially in the same man-
ner as an industrial bank), building and loan asso-
ciation, savings and loan association, homestead as-
sociation, cooperative bank, or other banking institu-
tion—
‘‘(A) which is engaged in the business of
receiving deposits, other than trust funds (as
defined in this section); and
‘‘(B) which—
‘‘(i) is incorporated under the laws of
any State;
‘‘(ii) is organized and operating ac-
cording to the laws of the State in which
such institution is chartered or organized;
or
‘‘(iii) is operating under the Code of
Law for the District of Columbia (except a
national bank).’’; and
(B) in subsection (q)—
(i) by inserting ‘‘and’’ after the semi-
colon at the end of paragraph (2);
(ii) by striking ‘‘; and’’ at the end of
paragraph (3) and inserting a period; and
(iii) by striking paragraph (4).
(2) AMENDMENTS
TO
THE
BANK
HOLDING
COMPANY
ACT
OF
1956.—Section 2 of the Bank
Holding Company Act of 1956 (12 U.S.C. 1841) is
amended—
(A) by striking subparagraph (E) of sub-
section (a)(5); and
(B) by striking subparagraphs (B) and (J)
of subsection (c)(2).
(3) AMENDMENTS TO THE FEDERAL RESERVE
ACT.—The 2d and 3d paragraphs of the 1st section
of the Federal Reserve Act (12 U.S.C. 221) are each
amended by inserting ‘‘(as defined in section 3(a)(2)
of the Federal Deposit Insurance Act)’’ after ‘‘State
bank’’.
SEC. 202. TREATMENT OF CERTAIN ACTIVITIES AND AFFILI-
ATIONS OF BANK HOLDING COMPANIES RE-
SULTING FROM THIS ACT.
Section 4 of the Bank Holding Company Act of 1956
(12 U.S.C. 1843) is amended by adding at the end the
following new subsection:
‘‘(k) TREATMENT OF COMPANIES RESULTING FROM
SAVINGS AND LOAN HOLDING COMPANIES.—
‘‘(1) IN GENERAL.—Notwithstanding any other
provision of this section or any other provision of
Federal law including sections 20 and 32 of the
Banking Act of 1933, a qualified bank holding com-
pany may continue, after such company becomes a
bank holding company—
‘‘(A) to maintain or enter into any non-
banking affiliation which such company was au-
thorized to maintain or enter into as of Septem-
ber 13, 1995; and
‘‘(B) to engage, directly or through any af-
filiate described in subparagraph (A) which is
not a bank, in any activity in which such com-
pany or any affiliate described in subparagraph
(A) was authorized to engage as of September
13, 1995,
if the requirements of paragraph (3) are met.
‘‘(2) QUALIFIED BANK HOLDING COMPANY DE-
FINED.—For purposes of this subsection, the term
‘qualified bank holding company’ means—
‘‘(A) any company which—
‘‘(i) as of September 13, 1995, is a
savings and loan holding company and is
not a bank holding company; and
‘‘(ii) becomes a bank holding company
after such date; and
‘‘(B) any bank holding company which—
‘‘(i) as of September 13, 1995—
‘‘(I) is a savings and loan holding
company; and
‘‘(II) is exempt from this Act
pursuant to an order issued by the
Board under subsection (d); and
‘‘(ii) after such date, loses the exemp-
tion under subsection (d).
‘‘(3) PREREQUISITES
FOR
CONTINUATION
OF
GRANDFATHERED ACTIVITIES AND AFFILIATIONS.—
This subsection shall cease to apply with respect to
a qualified bank holding company if, at any time
after such company becomes a bank holding com-
pany company or, in the case of a qualified bank
holding company described in paragraph (2)(B),
loses such company’s exemption under subsection
(d)—
‘‘(A) any insured depository institution
controlled by such company which, as of the
day before the company becomes a bank holding
company, was subject to the requirements con-
tained in section 10(m) of the Home Owners’
Loan Act, as in effect on such date, (and regu-
lations in effect on such date under such sec-
tion) for treatment as a qualified thrift lender
under such section fails to meet such require-
ments;
‘‘(B) any insured depository institution
controlled by such company fails to comply with
any limitation or restriction on the type or
amounts of loans or investments of the institu-
tion to which such institution was subject as of
the date of the enactment of the Thrift Charter
Conversion Act of 1995; or
‘‘(C) the company or any subsidiary of the
company acquires more than 5 percent of the
shares or assets of any insured depository insti-
tution after September 13, 1995.
‘‘(4) 
NONTRANSFERABLE.—This 
subsection
shall not apply with respect to any qualified bank
holding company if, after September 13, 1995, any
person acquires, directly or indirectly, control of the
company or the company is the subject of any merg-
er, consolidation, or other similar transaction.
‘‘(5) PROHIBITION ON CERTAIN INSURED DE-
POSITORY INSTITUTIONS IDENTIFYING THEMSELVES
AS NATIONAL BANKS.—
‘‘(A) IN
GENERAL.—Notwithstanding the
requirement of section 5134 of the Revised
Statutes of the United States—
‘‘(i) the name of an insured depository
institution subsidiary of a qualified bank
holding company which—
‘‘(I) as of the date of the enact-
ment of the Thrift Charter Conversion
Act of 1995, is a savings and loan
holding company described in section
10(c)(3) of the Home Owners’ Loan
Act (as in effect on such date); and
‘‘(II) is subject to the restrictions
contained in paragraph (3),
may not include the term ‘national’; and
‘‘(ii) such insured depository institu-
tion may not be identified as a national
bank on any sign displayed by the institu-
tion or in any advertisement or other pub-
lication of the institution.
‘‘(B) DEPOSITORY INSTITUTION NOT LIA-
BLE
FOR
FRAUDULENT
MISREPRESENTATION
FOR
NOT
REPRESENTING
ITSELF
AS
A
NA-
TIONAL BANK.—An insured depository institu-
tion which is subject to subparagraph (A) shall
not be liable for any civil or criminal penalty
under any Federal or State consumer protection
law, or in any criminal or civil action, for fraud-
ulently misrepresenting the nature of the char-
ter of the institution, for falsely advertising the
status of the institution, for making a false
statement with respect to the status of the in-
stitution, or for any similar offense by reason of
the institution’s compliance with such subpara-
graph.
‘‘(6) ENFORCEMENT.—In addition to any other
power of the Board, the Board may enforce compli-
ance with the provisions of this subsection with re-
spect to any qualified bank holding company and
any bank controlled by such company under section
8 of the Federal Deposit Insurance Act.’’.
SEC. 203. TRANSITION PROVISIONS FOR ACTIVITIES OF
SAVINGS ASSOCIATIONS WHICH CONVERT
INTO OR BECOME TREATED AS BANKS.
(a) IN GENERAL.—Notwithstanding any other provi-
sion of Federal law, any insured depository institution
which, as of September 13, 1995, is a savings association
(as defined in section 3(b) of the Federal Deposit Insur-
ance Act (as in effect on such date)) and after such date
converts to a national or State bank charter or becomes
treated as a State bank pursuant to the amendment made
by section 201(b) may continue to engage, directly or indi-
rectly, in any activity in which such institution was law-
fully engaged as of such date during the 2-year period be-
ginning on the effective date of such conversion or the ef-
fective date of such amendments, as the case may be.
(b) TWO 1-YEAR EXTENSIONS AUTHORIZED.—The
2-year period described in subsection (a) with respect to
any insured depository institution may be extended for
such institution not to exceed 2 additional times for not
more than 1 year each time if the appropriate Federal
banking agency determines that such extension is nec-
essary to avert substantial loss to the institution and is
otherwise consistent with the safety and soundness of the
institution.
SEC. 204. REGISTRATION OF BANK HOLDING COMPANIES
RESULTING FROM CONVERSIONS OF SAV-
INGS ASSOCIATIONS TO BANKS OR TREAT-
MENT OF SAVINGS ASSOCIATIONS AS BANKS.
Section 3 of the Bank Holding Company Act of 1956
(12 U.S.C. 1842) is amended by adding at the end the
following new subsection:
‘‘(h) REGISTRATION OF CERTAIN BANK HOLDING
COMPANIES.—A company which, as of September 13,
1995, is a savings and loan holding company (as defined
in section 10(a)(1)(D) of Home Owners’ Loan Act (as in
effect on such date) and is not a bank holding company
shall not be required to obtain the approval of the Board
under subsection (a) to become a bank holding company
after September 13, 1995, as a result of the conversion
of any insured depository institution subsidiary of such
company into a bank or by virtue of the treatment of any
insured depository institution subsidiary of such company
as a bank pursuant to the amendments made by the Thrift
Charter Conversion Act of 1995, if such company—
‘‘(1) registers as a bank holding company with
the Board in accordance with section 5(a); and
‘‘(2) does not acquire, directly or indirectly,
ownership or control of any additional insured de-
pository institution or other company in connection
with such conversion or treatment.’’.
SEC. 205. ADDITIONAL TRANSITION PROVISIONS AND SPE-
CIAL RULES.
(a) CONVERSION
OF MUTUAL SAVINGS ASSOCIA-
TIONS INTO NATIONAL BANKS.—
(1) IN GENERAL.—Notwithstanding the para-
graph designated the ‘‘Third’’ of section 5134 of the
Revised Statutes of the United States and subject to
regulations prescribed by the Comptroller of the
Currency under subparagraph (B), any savings asso-
ciation which is organized in mutual form as of the
date of the enactment of this Act and at all times
thereafter may organize as a national bank in mu-
tual form.
(2) APPLICABILITY
OF
CAPITAL
STOCK
RE-
QUIREMENTS.—The Comptroller of the Currency
shall prescribe regulations regarding the manner in
which requirements of title LXII of the Revised
Statutes of the United States with respect to capital
stock, and limitations imposed on national banks
under such title based on capital stock, shall apply
to national banks organized in mutual form pursu-
ant to subparagraph (A).
(3) RULE OF CONSTRUCTION.—No provision of
this subsection shall be construed as authorizing any
national bank to be organized in mutual form, or to
convert to a mutual form, other than a mutual na-
tional bank resulting from the conversion of a sav-
ings association described in subparagraph (A).
(4) CONVERSION TO STOCK NATIONAL BANK.—
Subject to such regulations as the Comptroller of the
Currency may prescribe for the protection of deposi-
tors’ rights and for any other purpose the Comptrol-
ler of the Currency may consider appropriate, any
national bank which is organized in mutual form
pursuant to paragraph (1) may reorganize as a
stock national bank.
(b) 
MEMBERSHIP
IN
FEDERAL
HOME
LOAN
BANKS.—Any insured depository institution which—
(1) as of the date of the enactment of this Act,
is a Federal savings association which, pursuant to
section 6(e) of the Federal Home Loan Bank Act,
may not voluntarily withdraw from membership in a
Federal home loan bank; and
(2) after such date ceases to be a Federal sav-
ings association,
shall continue to be subject to the prohibition under such
section on voluntary withdrawal from such membership
after such institution ceases to be a Federal savings asso-
ciation.
(c) BRANCHES.—
(1) IN GENERAL.—Notwithstanding any provi-
sion of the Federal Deposit Insurance Act, the Bank
Holding Company Act of 1956, or any other Federal
or State law, any depository institution which—
(A) as of the date of the enactment of this
Act, is a savings association; and
(B) becomes a bank before January 1,
1998, or, pursuant to the amendments made by
this subsection, is treated as a bank as of such
date under the Federal Deposit Insurance Act,
and any depository institution or bank holding com-
pany which acquires such depository institution, may
continue, after the depository institution becomes or
commences to be treated as a bank, to operate any
branch which the savings association operated as a
branch on September 13, 1995.
(2) NO
ADDITIONAL
BRANCHES.—Paragraph
(1) shall not be construed as authorizing the estab-
lishment, acquisition, or operation of any additional
branch of a depository institution in any State by
virtue of the operation by such institution of a
branch in such State pursuant to such paragraph
except to the extent such establishment, acquisition,
or operation is permitted under the Federal Deposit
Insurance Act, Bank Holding Company Act of 1956,
and any other applicable Federal or State law with-
out regard to such branch.
(d) TRANSITION PROVISION RELATING TO LIMITA-
TIONS ON LOANS TO 1 BORROWER.—Section 5200 of the
Revised Statutes of the United States (12 U.S.C. 84) is
amended by adding at the end the following new sub-
section:
‘‘(e) TRANSITION PROVISION FOR SAVINGS ASSOCIA-
TIONS CONVERTING TO NATIONAL BANKS.—In the case
of any depository institution which, as of September 13,
1995, is a savings association (as defined in section 3(b)
of the Federal Deposit Insurance Act (as in effect on such
date)) and becomes a national bank on or before January
1, 1998, any loan, or legally binding commitment to make
a loan, made or entered into by such institution which is
outstanding on the date the institution becomes a national
bank may continue to be held without regard to any limi-
tation contained in this section during the 3-year period
beginning on such date.’’.
SEC. 206. TECHNICAL AND CONFORMING AMENDMENTS.
(a) AMENDMENTS TO THE FEDERAL DEPOSIT IN-
SURANCE ACT.—
(1) Section 3(z) of the Federal Deposit Insur-
ance Act (12 U.S.C. 1813(z)) is amended by strik-
ing ‘‘, the Director of the Office of Thrift Super-
vision,’’.
(2) Section 8(b) of the Federal Deposit Insur-
ance Act (12 U.S.C. 1818(b)) is amended by strik-
ing paragraph (9).
(3) Section 13 of the Federal Deposit Insurance
Act (12 U.S.C. 1823) is amended by striking sub-
section (k).
(4) Subsections (c)(2) and (i)(2) of section 18
of the Federal Deposit Insurance Act (12 U.S.C.
1828) are each amended—
(A) in subparagraph (B), by inserting
‘‘and’’ after the semicolon;
(B) in subparagraph (C), by striking
‘‘; and’’ and inserting a period; and
(C) by striking subparagraph (D).
(5) Section 18 of the Federal Deposit Insurance
Act (12 U.S.C. 1828) is amended by striking sub-
section (m).
(6) The Federal Deposit Insurance Act (12
U.S.C. 1811 et seq.) is amended by striking section
28.
(b) AMENDMENTS TO THE BANK HOLDING COMPANY
ACT OF 1956.—
(1) Section 2 of the Bank Holding Company
Act of 1956 (12 U.S.C. 1841) is amended by strik-
ing subsections (i) and (j).
(2) Section 4(c)(8) of the Bank Holding Com-
pany Act of 1956 (12 U.S.C. 1843(c)(8)) is amend-
ed by striking the sentence preceding the penul-
timate sentence.
(3) Section 4(f) of the Bank Holding Company
Act of 1956 (12 U.S.C. 1843(f)) is amended—
(A) in paragraph (2)(A)(i), by striking ‘‘or
an insured institution’’ and all that follows
through ‘‘of this subsection)’’;
(B) in paragraph (2)(A)(ii)—
(i) by striking ‘‘or a savings associa-
tion’’ where such term appears in the por-
tion of such paragraph which precedes
subclause (I));
(ii) by inserting ‘‘and’’ at the end of
subclause (VI);
(iii) by striking subclauses (VIII),
(IX), and (X); and
(iv) by striking ‘‘(V), and (VIII)’’,
where such term appears in the portion of
such paragraph which appears after the
end of subclause (VII), and inserting ‘‘and
(V)’’; and
(C) by striking paragraphs (10), (11),
(12), and (13).
(4) Section 4(i) of the Bank Holding Company
Act of 1956 (12 U.S.C. 1843(i)) is amended—
(A) by striking paragraphs (1) and (2);
and
(B) in paragraph (3)(A), by striking ‘‘any
Federal savings association’’ and all that fol-
lows through the period at the end of such
paragraph and inserting ‘‘such association was
authorized to engage under this section as of
September 15, 1995.’’.
(c) OTHER TECHNICAL AND CONFORMING AMEND-
MENTS.—
(1) Section 804(a) of the Alternative Mortgage
Transaction Parity Act of 1982 (12 U.S.C. 3803) is
amended—
(A) in paragraph (1), by inserting ‘‘(as
such term is defined in section 3(a) of the Fed-
eral Deposit Insurance Act)’’ after ‘‘with re-
spect to banks’’;
(B) by inserting ‘‘and’’ after the semicolon
at the end of paragraph (1);
(C) by striking ‘‘; and’’ at the end of para-
graph (2) and inserting a period; and
(D) by striking paragraph (3).
(2) Section 205 of the Depository Institution
Management Interlocks Act (12 U.S.C. 3204) is
amended—
(A) in the portion of paragraph (8)(A)
which precedes clause (i), by striking ‘‘diversi-
fied savings’’ and all that follows through ‘‘with
respect to’’ and inserting ‘‘A depository institu-
tion holding company which, as of September
13, 1995, and at all times thereafter, is a diver-
sified savings and loan holding company (as de-
fined in section 10(1)(F) of Home Owners’
Loan Act, as such section is in effect on such
date) with respect to’’; and
(B) by striking paragraph (9).
(3) Section 19(b)(1)(A) of the Federal Reserve
Act (12 U.S.C. 461(b)(1)(A)) is amended—
(A) by inserting ‘‘and’’ after the semicolon
at the end of clause (v); and
(B) by striking clause (vi).
SEC. 207. REFERENCES TO SAVINGS ASSOCIATIONS AND
STATE BANKS IN FEDERAL LAW.
Effective January 1, 1998, any reference in any Fed-
eral banking law to—
(1) the term ‘‘savings association’’ shall be
deemed to be a reference to a bank as defined in
section 3(a) of the Federal Deposit Insurance Act;
and
(2) the term ‘‘State bank’’ shall be deemed to
include any depository institution included in the
definition of such term in section 3(a)(2) of such
Act.
SEC. 208. REPEAL OF HOME OWNERS’ LOAN ACT.
Effective January 1, 1998, the Home Owners’ Loan
Act (12 U.S.C. 1461 et seq.) is hereby repealed.
SEC. 209. EFFECTIVE DATE; DEFINITIONS.
(a) EFFECTIVE DATE.—The amendments made by
this title shall take effect on January 1, 1998.
(b) DEFINITIONS.—For purposes of this title, the
terms ‘‘appropriate Federal banking agency’’, ‘‘bank hold-
ing company’’, ‘‘depository institution’’, ‘‘Federal savings
association’’, ‘‘insured depository institution’’, ‘‘savings
association’’, and ‘‘State bank’’ have the same meanings
as in section 3 of the Federal Deposit Insurance Act (as
in effect on the date of the enactment of this Act).
TITLE III—TRANSFER OF FUNC-
TIONS, 
PERSONNEL, 
AND
PROPERTY
SEC. 301. OFFICE OF THRIFT SUPERVISION ABOLISHED.
Effective January 1, 1998, the Office of Thrift Su-
pervision and the position of Director of the Office of
Thrift Supervision are hereby abolished.
SEC. 302. DETERMINATION OF TRANSFERRED FUNCTIONS
AND EMPLOYEES.
(a) ALL OFFICE OF THRIFT SUPERVISION EMPLOY-
EES SHALL BE TRANSFERRED.—All employees of the Of-
fice of Thrift Supervision shall be identified for transfer
under subsection (b) to the Office of the Comptroller of
the Currency, the Federal Deposit Insurance Corporation,
or the Board of Governors of the Federal Reserve System.
(b) FUNCTIONS AND EMPLOYEES TRANSFERRED.—
(1) IN GENERAL.—The Director of the Office of
Thrift Supervision, the Comptroller of the Currency,
the Chairperson of the Federal Deposit Insurance
Corporation, and the Chairman of the Board of Gov-
ernors of the Federal Reserve System shall jointly
determine the functions or activities of the Office of
Thrift Supervision, and the number of employees of
such Office necessary to perform or support such
functions or activities, which are transferred from
the Office to the Office of the Comptroller of the
Currency, the Federal Deposit Insurance Corpora-
tion, or the Board of Governors of the Federal Re-
serve System, as the case may be.
(2) ALLOCATION OF EMPLOYEES.—The Comp-
troller of the Currency, the Chairperson of the Fed-
eral Deposit Insurance Corporation, and the Chair-
man of the Board of Governors of the Federal Re-
serve System shall allocate the employees of the Of-
fice of Thrift Supervision consistent with the num-
ber determined pursuant to paragraph (1) in a man-
ner which such Comptroller, Chairperson, and Chair-
man, in their sole discretion, deem equitable, except
that, within work units, the agency preferences of
individual employees shall be accommodated as far
as possible.
SEC. 303. SAVINGS PROVISIONS.
(a) EXISTING RIGHTS, DUTIES, AND OBLIGATIONS
NOT AFFECTED.—No provision of this title shall be con-
strued as affecting the validity of any right, duty, or obli-
gation of the United States, the Director of the Office of
Thrift Supervision, or any person, which existed on the
day before the date upon which the position of Director
of the Office of Thrift Supervision and the Office of Thrift
Supervision are abolished.
(b) CONTINUATION OF SUITS.—No action or other
proceeding commenced by or against the Director of the
Office of Thrift Supervision shall abate by reason of enact-
ment of this Act, except that, effective January 1, 1998,
the Comptroller of the Currency, the Federal Deposit In-
surance Corporation, or the Board of Governors of the
Federal Reserve System, as the case may be, shall be sub-
stituted as a party to any such action or proceeding.
(c) CONTINUATION OF ADMINISTRATIVE RULES.—
All orders, resolutions, determinations, regulations, inter-
pretative rules, other interpretations, guidelines, proce-
dures, supervisory and enforcement actions, and other ad-
visory material (other than any regulation to which section
3(f) of the Home Owners’ Loan Act (as in effect on Sep-
tember 13, 1995) applies) which—
(1) have been issued, made, prescribed, or per-
mitted to become effective by the Office of Thrift
Supervision, and
(2) are in effect on December 31, 1996, (or be-
come effective after such date pursuant to the terms
of the order, resolution, determination, rule, other
interpretation, guideline, procedure, supervisory or
enforcement action, and other advisory material, as
in effect on such date), shall—
(A) continue in effect according to the
terms of such orders, resolutions, determina-
tions, regulations, interpretative rules, other in-
terpretations, guidelines, procedures, super-
visory or enforcement actions, or other advisory
material;
(B) be administered by the Comptroller of
the Currency, the Federal Deposit Insurance
Corporation, or the Board of Governors of the
Federal Reserve System; and
(C) be enforceable by or against the Comp-
troller of the Currency, the Federal Deposit In-
surance Corporation, or the Board of Governors
of the Federal Reserve System until modified,
terminated, set aside, or superseded in accord-
ance with applicable law by the Comptroller,
Corporation, or Board, by any court of com-
petent jurisdiction, or by operation of law.
(d) TREATMENT OF REFERENCES IN ADJUSTABLE
RATE MORTGAGES ISSUED BEFORE FIRREA.—
(1) REFERENCES IN PRIOR LAW.—For purposes
of section 402(e) of Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 (12 U.S.C.
1437 note), any reference in such section to—
(A) the Director of the Office of Thrift Su-
pervision shall be deemed to be a reference to
the Secretary of the Treasury; and
(B) a Savings Association Insurance Fund
member shall be deemed to be a reference to an
insured depository institution (as defined in sec-
tion 3 of the Federal Deposit Insurance Act).
(e) TREATMENT OF REFERENCES IN ADJUSTABLE
RATE
MORTGAGE
INSTRUMENTS
ISSUED
AFTER
FIRREA.—
(1) IN GENERAL.—For purposes of adjustable
rate mortgage instruments that are in effect as of
the date of enactment of this Act, any reference in
the instrument to the Director of the Office of
Thrift Supervision or Savings Association Insurance
Fund members shall be treated as a reference to the
Secretary of the Treasury or insured depository in-
stitutions (as defined in section 3 of the Federal De-
posit Insurance Act), as appropriate.
(2) SUBSTITUTION FOR INDEXES.—If any index
used to calculate the applicable interest rate on any
adjustable rate mortgage instrument is no longer
calculated and made available as a direct or indirect
result of the enactment of this Act, any index—
(A) made available by the Secretary of the
Treasury; or
(B) determined by the Secretary of the
Treasury, pursuant to paragraph (4), to be sub-
stantially similar to the index which is no
longer calculated or made available,
may be substituted by the holder of any such adjust-
able rate mortgage instrument upon notice to the
borrower.
(3) AGENCY
ACTION
REQUIRED
TO
PROVIDE
CONTINUED AVAILABILITY OF INDEXES.—Promptly
after the enactment of this subsection, the Secretary
of the Treasury, the Chairperson of the Federal De-
posit Insurance Corporation, and the Comptroller of
the Currency shall take such action as may be nec-
essary to assure that the indexes prepared by the
Director of the Office of Thrift Supervision imme-
diately prior to the enactment of this subsection and
used to calculate the interest rate on adjustable rate
mortgage instruments continue to be available.
(4) REQUIREMENTS RELATING TO SUBSTITUTE
INDEXES.—If any agency can no longer make avail-
able an index pursuant to paragraph (3), an index
that is substantially similar to such index may be
substituted for such index for purposes of paragraph
(2) if the Secretary of the Treasury determines,
after notice and opportunity for comment, that—
(A) the new index is based upon data sub-
stantially similar to that of the original index;
and
(B) the substitution of the new index will
result in an interest rate substantially similar to
the rate in effect at the time the original index
became unavailable.
SEC. 304. REFERENCES IN FEDERAL LAW TO DIRECTOR OF
THE OFFICE OF THRIFT SUPERVISION.
Any reference in any Federal law to the Director of
the Office of Thrift Supervision or the Office of Thrift
Supervision shall be deemed to be a reference to the appro-
priate Federal banking agency (as defined in section 3(q)
of the Federal Deposit Insurance Act).
SEC. 305. RECONFIGURATION OF BOARD OF DIRECTORS OF
FDIC AS A RESULT OF REMOVAL OF DIREC-
TOR OF THE OFFICE OF THRIFT SUPER-
VISION.
(a) IN GENERAL.—Section 2(a)(1) of the Federal
Deposit Insurance Act (12 U.S.C. 1812(a)(1)) is amended
to read as follows:
‘‘(1) IN
GENERAL.—The management of the
Corporation shall be vested in a Board of Directors
consisting of 3 members—
‘‘(A) 1 of whom shall be the Comptroller of
the Currency; and
‘‘(B) 2 of whom shall be appointed by the
President, by and with the advice and consent
of the Senate, from among individuals who are
citizens of the United States.’’.
(b) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) Section 2(a)(2) of the Federal Deposit In-
surance Act (12 U.S.C. 1812(a)(2)) is amended—
(A) by striking ‘‘February 28, 1993’’ and
inserting ‘‘January 1, 1998’’; and
(B) by striking ‘‘3’’ and inserting ‘‘2’’.
(2) Section 2(d)(2) of the Federal Deposit In-
surance Act (12 U.S.C. 1812(d)(2)) is amended—
(A) by striking ‘‘or the office of Director
of the Office of Thrift Supervision’’;
(B) by striking ‘‘or such Director’’;
(C) by striking ‘‘or the Acting Director of
the Office of Thrift Supervision, as the case
may be’’; and
(D) by striking ‘‘or Director’’.
(c) EFFECTIVE DATE.—The amendments made by
subsections (a) and (b) shall take effect on January 1,
1998.
(d) DESIGNATION OF ABOLISHED POSITION.—Unless
there is a vacancy in the position of an appointed member
of the Board of Directors as of January 1, 1998, the
President, consistent with the requirements of section
2(a)(2) of the Federal Deposit Insurance Act, shall des-
ignate which of the 3 positions of appointed member of
such Board of Directors shall be abolished pursuant to
the amendment made by subsection (a).
TITLE IV—LOAN LOSS RESERVE
TREATMENT
SEC. 401. REPEAL OF SPECIAL THRIFT BAD DEBT RESERVE
METHOD.
(a) GENERAL RULE.—Section 593 of the Internal
Revenue Code of 1986 (relating to reserves for losses on
loans) is hereby repealed.
(b) EFFECTIVE DATE.—
(1) IN
GENERAL.—The amendment made by
this section shall apply to taxable years beginning
after December 31, 1995.
(2) AMENDMENT
TREATED
AS
CHANGE
IN
METHOD OF ACCOUNTING.—In the case of any tax-
payer who is required by reason of the amendment
made by this section to change his method of com-
puting reserves for bad debts—
(A) such change shall be treated as a
change in a method of accounting,
(B) such change shall be treated as initi-
ated by the taxpayer,
(C) such change shall be treated as having
been made with the consent of the Secretary,
and
(D) the net adjustments which are re-
quired by section 481 of the Internal Revenue
Code of 1986 as a result of the initial change
in method of accounting for bad debts required
by this section shall be treated as zero.
(3) TRANSITIONAL RULE FOR SMALL THRIFTS
TAKING
DEDUCTION
ALLOWABLE
UNDER
SECTION
585.—
(A) IN GENERAL.—In the case of an orga-
nization that—
(i) on the effective date of the amend-
ment made by this section is an association
or bank referred to by section 593(a)(1) of
the Internal Revenue Code of 1986 (as in
effect prior to the amendment made by
this section),
(ii) is a bank to which section 585 ap-
plies, and
(iii) elects to compute a reasonable
addition to a reserve for bad debts under
section 585 in lieu of any deduction under
section 168(a),
then the reserve at the beginning of the first
taxable year beginning after December 31,
1995, and the base year amount for purposes of
section 585(b)(2)(B) shall be equal to the
amount computed under section 585(b)(2)(A)
as of the end of the last taxable year beginning
before January 1, 1996.
(B) TREATMENT OF BEGINNING RESERVE
AMOUNT.—Such beginning reserve amount—
(i) shall not be deductible in the year
of the initial change of method, and
(ii) shall not be included in gross in-
come if the bank no longer computes a rea-
sonable addition to a reserve for bad debts
under section 585 for any reason.
The Secretary shall prescribe such regulations
as may be necessary or appropriate to carry out
the purposes of this subsection.
(c) CLERICAL AMENDMENT.—The table of sections
for part 1 of subchapter H of chapter 1 of the Internal
Revenue Code of 1986 is amended by striking the item
relating to section 593.
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