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‘‘(i) ON THE MACHINE.—The notice 
required under clause (i) of subparagraph 
(A) with respect to any fee described in 
such subparagraph shall be posted in a 
prominent and conspicuous location on or 
at the automated teller machine at which 
the electronic fund transfer is initiated by 
the consumer; and 
‘‘(ii) ON
THE
SCREEN.—The notice 
required under clauses (i) and (ii) of sub-
paragraph (A) with respect to any fee de-
scribed in such subparagraph shall appear 
on the screen of the automated teller ma-
chine, or on a paper notice issued from 
such machine, after the transaction is initi-
ated and before the consumer is irrev-
ocably committed to completing the trans-
action. 
‘‘(C) PROHIBITION
ON
FEES
NOT
PROP-
ERLY DISCLOSED AND EXPLICITLY ASSUMED BY 
CONSUMER.—No fee may be imposed by any 
automated teller machine operator in connec-
tion with any electronic fund transfer initiated 
by a consumer for which a notice is required 
under subparagraph (A), unless— 
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HR 10 PCS 
‘‘(i) the consumer receives such notice 
in accordance with subparagraph (B); and 
‘‘(ii) the consumer elects to continue 
in the manner necessary to effect the 
transaction after receiving such notice. 
‘‘(D) DEFINITIONS.—For purposes of this 
paragraph, the following definitions shall apply: 
‘‘(i) ELECTRONIC FUND TRANSFER.— 
The term ‘electronic fund transfer’ in-
cludes a transaction which involves a bal-
ance inquiry initiated by a consumer in the 
same manner as an electronic fund trans-
fer, whether or not the consumer initiates 
a transfer of funds in the course of the 
transaction. 
‘‘(ii) AUTOMATED
TELLER
MACHINE 
OPERATOR.—The term ‘automated teller 
machine operator’ means any person 
who— 
‘‘(I) operates an automated teller 
machine at which consumers initiate 
electronic fund transfers; and 
‘‘(II) is not the financial institu-
tion which holds the account of such 
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HR 10 PCS 
consumer from which the transfer is 
made. 
‘‘(iii) HOST
TRANSFER
SERVICES.— 
The term ‘host transfer services’ means 
any electronic fund transfer made by an 
automated teller machine operator in con-
nection with a transaction initiated by a 
consumer at an automated teller machine 
operated by such operator.’’. 
SEC. 173. DISCLOSURE OF POSSIBLE FEES TO CONSUMERS 
WHEN ATM CARD IS ISSUED. 
Section 905(a) of the Electronic Fund Transfer Act 
(15 U.S.C. 1693c(a)) is amended— 
(1) by striking ‘‘and’’ at the end of paragraph 
(8); 
(2) by striking the period at the end of para-
graph (9) and inserting ‘‘; and’’; and 
(3) by inserting after paragraph (9) the fol-
lowing new paragraph: 
‘‘(10) a notice to the consumer that a fee may 
be imposed by— 
‘‘(A) an automated teller machine operator 
(as defined in section 904(d)(3)(D)(ii)) if the 
consumer initiates a transfer from an auto-
mated teller machine which is not operated by 
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the person issuing the card or other means of 
access; and 
‘‘(B) any national, regional, or local net-
work utilized to effect the transaction.’’. 
SEC. 174. FEASIBILITY STUDY. 
(a) IN GENERAL.—The Comptroller General of the 
United States shall conduct a study of the feasibility of 
requiring, in connection with any electronic fund transfer 
initiated by a consumer through the use of an automated 
teller machine— 
(1) a notice to be provided to the consumer be-
fore the consumer is irrevocably committed to com-
pleting the transaction, which clearly states the 
amount of any fee which will be imposed upon the 
consummation of the transaction by— 
(A) any automated teller machine operator 
(as defined in section 904(d)(3)(D)(ii) of the 
Electronic Fund Transfer Act) involved in the 
transaction; 
(B) the financial institution holding the ac-
count of the consumer; 
(C) any national, regional, or local network 
utilized to effect the transaction; and 
(D) any other party involved in the trans-
fer; and 
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(2) the consumer to elect to consummate the 
transaction after receiving the notice described in 
paragraph (1). 
(b) FACTORS TO BE CONSIDERED.—In conducting 
the study required under subsection (a) with regard to the 
notice requirement described in such subsection, the 
Comptroller General shall consider the following factors: 
(1) The availability of appropriate technology. 
(2) Implementation and operating costs. 
(3) The competitive impact any such notice re-
quirement would have on various sizes and types of 
institutions, if implemented. 
(4) The period of time which would be reason-
able for implementing any such notice requirement. 
(5) The extent to which consumers would ben-
efit from any such notice requirement. 
(6) Any other factor the Comptroller General 
determines to be appropriate in analyzing the feasi-
bility of imposing any such notice requirement. 
(c) REPORT TO THE CONGRESS.—Before the end of 
the 6-month period beginning on the date of the enact-
ment of this Act, the Comptroller General shall submit 
a report to the Congress containing— 
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(1) the findings and conclusions of the Comp-
troller General in connection with the study required 
under subsection (a); and 
(2) the recommendation of the Comptroller 
General with regard to the question of whether a no-
tice requirement described in subsection (a) should 
be implemented and, if so, how such requirement 
should be implemented. 
SEC. 175. NO LIABILITY IF POSTED NOTICES ARE DAM-
AGED. 
Section 910 of the Electronic Fund Transfer Act (15 
U.S.C 1693h) is amended by adding at the end the fol-
lowing new subsection: 
‘‘(d) EXCEPTION FOR DAMAGED NOTICES.—If the 
notice required to be posted pursuant to section 
904(d)(3)(B)(i) by an automated teller machine operator 
has been posted by such operator in compliance with such 
section and the notice is subsequently removed, damaged, 
or altered by any person other than the operator of the 
automated teller machine, the operator shall have no li-
ability under this section for failure to comply with section 
904(d)(3)(B)(i).’’. 
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Subtitle I—Direct Activities of 
Banks 
SEC. 181. AUTHORITY OF NATIONAL BANKS TO UNDER-
WRITE CERTAIN MUNICIPAL BONDS. 
The paragraph designated the Seventh of section 
5136 of the Revised Statutes of the United States (12 
U.S.C. 24(7)) is amended by adding at the end the fol-
lowing new sentence: ‘‘In addition to the provisions in this 
paragraph for dealing in, underwriting or purchasing secu-
rities, the limitations and restrictions contained in this 
paragraph as to dealing in, underwriting, and purchasing 
investment securities for the national bank’s own account 
shall not apply to obligations (including limited obligation 
bonds, revenue bonds, and obligations that satisfy the re-
quirements of section 142(b)(1) of the Internal Revenue 
Code of 1986) issued by or on behalf of any State or polit-
ical subdivision of a State, including any municipal cor-
porate instrumentality of one or more States, or any pub-
lic agency or authority of any State or political subdivision 
of a State, if the national bank is well capitalized (as de-
fined in section 38 of the Federal Deposit Insurance 
Act).’’. 
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Subtitle J—Deposit Insurance 
Funds 
SEC. 186. STUDY OF SAFETY AND SOUNDNESS OF FUNDS. 
(a) STUDY REQUIRED.—The Board of Directors of 
the Federal Deposit Insurance Corporation shall conduct 
a study of the following issues with regard to the Bank 
Insurance Fund and the Savings Association Insurance 
Fund: 
(1) SAFETY AND SOUNDNESS.—The safety and 
soundness of the funds and the adequacy of the re-
serve requirements applicable to the funds in light 
of— 
(A) the size of the insured depository insti-
tutions which are resulting from mergers and 
consolidations since the effective date of the 
Riegle-Neal Interstate Banking and Branching 
Efficiency Act of 1994; and 
(B) the affiliation of insured depository in-
stitutions with other financial institutions pur-
suant to this Act and the amendments made by 
this Act. 
(2) CONCENTRATION LEVELS.—The concentra-
tion levels of the funds, taking into account the 
number of members of each fund and the geographic 
distribution of such members, and the extent to 
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HR 10 PCS 
which either fund is exposed to higher risks due to 
a regional concentration of members or an insuffi-
cient membership base relative to the size of member 
institutions. 
(3) MERGER
ISSUES.—Issues relating to the 
planned merger of the funds, including the cost of 
merging the funds and the manner in which such 
costs will be distributed among the members of the 
respective funds. 
(b) REPORT REQUIRED.— 
(1) IN GENERAL.—Before the end of the 9- 
month period beginning on the date of the enact-
ment of this Act, the Board of Directors of the Fed-
eral Deposit Insurance Corporation shall submit a 
report to the Congress on the study conducted pur-
suant to subsection (a). 
(2) CONTENTS OF REPORT.—The report shall 
include— 
(A) detailed findings of the Board of Di-
rectors with regard to the issues described in 
subsection (a); 
(B) a description of the plans developed by 
the Board of Directors for merging the Bank 
Insurance Fund and the Savings Association 
Insurance Fund, including an estimate of the 
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HR 10 PCS 
amount of the cost of such merger which would 
be borne by Savings Association Insurance 
Fund members; and 
(C) such recommendations for legislative 
and administrative action as the Board of Di-
rectors determines to be necessary or appro-
priate to preserve the safety and soundness of 
the deposit insurance funds, reduce the risks to 
such funds, provide for an efficient merger of 
such funds, and for other purposes. 
(c) 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(c) of the Federal Deposit 
Insurance Act. 
(2) BIF AND SAIF MEMBERS.—The terms 
‘‘Bank Insurance Fund member’’ and ‘‘Savings As-
sociation Insurance Fund member’’ have the same 
meanings as in section 7(l) of the Federal Deposit 
Insurance Act. 
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SEC. 187. ELIMINATION OF SAIF AND DIF SPECIAL RE-
SERVES. 
(a) SAIF SPECIAL RESERVES.—Section 11(a)(6) of 
the Federal Deposit Insurance Act (12 U.S.C. 1821(a)(6)) 
is amended by striking subparagraph (L). 
(b) DIF SPECIAL RESERVES.—Section 2704 of the 
Deposit Insurance Funds Act of 1996 (12 U.S.C. 1821 
note) is amended— 
(1) by striking subsection (b); and 
(2) in subsection (d)— 
(A) by striking paragraph (4); 
(B) in paragraph (6)(C)(i), by striking 
‘‘(6) and (7)’’ and inserting ‘‘(5), (6), and (7)’’; 
and 
(C) in paragraph (6)(C), by striking clause 
(ii) and inserting the following: 
‘‘(ii) by redesignating paragraph (8) 
as paragraph (5).’’. 
Subtitle K—Miscellaneous 
Provisions 
SEC. 191. TERMINATION OF ‘‘KNOW YOUR CUSTOMER’’ REG-
ULATIONS. 
(a) IN GENERAL.—None of the proposed regulations 
described in subsection (b) may be published in final form 
and, to the extent any such regulation has become effec-
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tive before the date of the enactment of this Act, such 
regulation shall cease to be effective as of such date. 
(b) PROPOSED
REGULATIONS
DESCRIBED.—The 
proposed regulations referred to in subsection (a) are as 
follows: 
(1) The regulation proposed by the Comptroller 
of the Currency to amend part 21 of title 12 of the 
Code of Federal Regulations, as published in the 
Federal Register on December 7, 1998. 
(2) The regulation proposed by the Director of 
the Office of Thrift Supervision to amend part 563 
of title 12 of the Code of Federal Regulations, as 
published in the Federal Register on December 7, 
1998. 
(3) The regulation proposed by the Board of 
Governors of the Federal Reserve System to amend 
parts 208, 211, and 225 of title 12 of the Code of 
Federal Regulations, as published in the Federal 
Register on December 7, 1998. 
(4) The regulation proposed by the Federal De-
posit Insurance Corporation to amend part 326 of 
title 12 of the Code of Federal Regulations, as pub-
lished in the Federal Register on December 7, 1998. 
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SEC. 192. STUDY AND REPORT ON FEDERAL ELECTRONIC 
FUND TRANSFERS. 
(a) STUDY.—The Secretary of the Treasury shall 
conduct a feasibility study to determine— 
(1) whether all electronic payments issued by 
Federal agencies could be routed through the Re-
gional Finance Centers of the Department of the 
Treasury for verification and reconciliation; 
(2) whether all electronic payments made by the 
Federal Government could be subjected to the same 
level of reconciliation as United States Treasury 
checks, including matching each payment issued 
with each corresponding deposit at financial institu-
tions; 
(3) whether the appropriate computer security 
controls are in place in order to ensure the integrity 
of electronic payments; 
(4) the estimated costs of implementing, if so 
recommended, the processes and controls described 
in paragraphs (1), (2), and (3); and 
(5) a possible timetable for implementing those 
processes if so recommended. 
(b) REPORT TO CONGRESS.—Not later than October 
1, 2000, the Secretary of the Treasury shall submit a re-
port to Congress containing the results of the study re-
quired by subsection (a). 
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(c) DEFINITION.—For purposes of this section, the 
term ‘‘electronic payment’’ means any transfer of funds, 
other than a transaction originated by check, draft, or 
similar paper instrument, which is initiated through an 
electronic terminal, telephonic instrument, or computer or 
magnetic tapes so as to order, instruct, or authorize a 
debit or credit to a financial account. 
SEC. 193. GENERAL ACCOUNTING OFFICE STUDY OF CON-
FLICTS OF INTEREST 
(a) STUDY REQUIRED.—The Comptroller General of 
the United States shall conduct a study analyzing the con-
flict of interest faced by the Board of Governors of the 
Federal Reserve System between its role as a primary reg-
ulator of the banking industry and its role as a vendor 
of services to the banking and financial services industry. 
(b) SPECIFIC CONFLICT REQUIRED
TO BE AD-
DRESSED.—In the course of the study required under sub-
section (a), the Comptroller General shall address the con-
flict of interest faced by the Board of Governors of the 
Federal Reserve System between the role of the Board as 
a regulator of the payment system, generally, and its par-
ticipation in the payment system as a competitor with pri-
vate entities who are providing payment services. 
(c) REPORT TO CONGRESS.—Before the end of the 
1-year period beginning on the date of the enactment of 
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HR 10 PCS 
this Act, the Comptroller General shall submit a report 
to the Congress containing the findings and conclusions 
of the Comptroller General in connection with the study 
required under this section, together with such rec-
ommendations for such legislative or administrative ac-
tions as the Comptroller General may determine to be ap-
propriate, including recommendations for resolving any 
such conflict of interest. 
SEC. 194. STUDY OF COST OF ALL FEDERAL BANKING REG-
ULATIONS. 
(a) IN GENERAL.—In accordance with the finding in 
the Board of Governors of the Federal Reserve System 
Staff Study Numbered 171 (April, 1998) that ‘‘Further 
research covering more and different types of regulations 
and regulatory requirements is clearly needed to make in-
formed decisions about regulations’’, the Board of Gov-
ernors of the Federal Reserve System, in consultation with 
the other Federal banking agencies (as defined in section 
3 of the Federal Deposit Insurance Act) shall conduct a 
comprehensive study of the total annual costs and benefits 
of all Federal financial regulations and regulatory require-
ments applicable to banks. 
(b) REPORT REQUIRED.—Before the end of the 2- 
year period beginning on the date of the enactment of this 
Act, the Board of Governors of the Federal Reserve Sys-
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tem shall submit a comprehensive report to the Congress 
containing the findings and conclusions of the Board in 
connection with the study required under subsection (a) 
and such recommendations for legislative and administra-
tive action as the Board may determine to be appropriate. 
SEC. 195. STUDY AND REPORT ON ADAPTING EXISTING 
LEGISLATIVE REQUIREMENTS TO ONLINE 
BANKING AND LENDING. 
(a) STUDY REQUIRED.—The Federal banking agen-
cies shall conduct a study of banking regulations regard-
ing the delivery of financial services, including those regu-
lations that may assume that there will be person-to-per-
son contact during the course of a financial services trans-
action, and report their recommendations on adapting 
those existing requirements to online banking and lending. 
(b) REPORT REQUIRED.—Within 1 year of the date 
of the enactment of this Act, the Federal banking agencies 
shall submit a report to the Congress on the findings and 
conclusions of the agencies with respect to the study re-
quired under subsection (a), together with such rec-
ommendations for legislative or regulatory action as the 
agencies may determine to be appropriate. 
(c) DEFINITION.—For purposes of this section, the 
term ‘‘Federal banking agencies’’ means each Federal 
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HR 10 PCS 
banking agency (as defined in section 3(z) of the Federal 
Deposit Insurance Act). 
SEC. 196. REGULATION OF UNINSURED STATE MEMBER 
BANKS. 
Section 9 of the Federal Reserve Act (12 U.S.C. 321 
et seq.) is amended by adding at the end the following 
new paragraph: 
‘‘(24) ENFORCEMENT AUTHORITY OVER UNIN-
SURED STATE MEMBER BANKS.—Section 3(u) of the 
Federal Deposit Insurance Act, subsections (j) and 
(k) of section 7 of such Act, and subsections (b) 
through (n), (s), (u), and (v) of section 8 of such 
Act shall apply to an uninsured State member bank 
in the same manner and to the same extent such 
provisions apply to an insured State member bank 
and any reference in any such provision to ‘insured 
depository institution’ shall be deemed to be a ref-
erence to ‘uninsured State member bank’ for pur-
poses of this paragraph.’’. 
SEC. 197. CLARIFICATION OF SOURCE OF STRENGTH DOC-
TRINE. 
Section 18 of the Federal Deposit Insurance Act (21 
U.S.C. 1828) is amended by adding at the end the fol-
lowing new subsection: 
‘‘(t) LIMITATION ON CLAIMS.— 
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HR 10 PCS 
‘‘(1) IN GENERAL.—Notwithstanding any other 
provision of law other than paragraph (2), no person 
shall have any claim for monetary damages or re-
turn of assets or other property against any Federal 
banking agency (including in its capacity as conser-
vator or receiver) relating to the transfer of money, 
assets, or other property to increase the capital of 
an insured depository institution by any depository 
institution holding company or controlling share-
holder for such depository institution, or any affil-
iate or subsidiary of such depository institution, if at 
the time of the transfer— 
‘‘(A) the insured depository institution is 
subject to any direction issued in writing by a 
Federal banking agency to increase its capital; 
‘‘(B) the depository institution is under-
capitalized, significantly undercapitalized, or 
critically undercapitalized (as defined in section 
38 of this Act); and 
‘‘(C) for that portion of the transfer that 
is made by an entity covered by section 5(g) of 
the Bank Holding Company Act of 1956 or sec-
tion 45 of this Act, the Federal banking agency 
has followed the procedure set forth in such 
section. 
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‘‘(2) EXCEPTION.—No provision of this sub-
section shall be construed as limiting— 
‘‘(A) the right of an insured depository in-
stitution, a depository institution holding com-
pany, or any other agency or person to seek di-
rect review of an order or directive issued by a 
Federal banking agency under this Act, the 
Bank Holding Company Act of 1956, the Na-
tional Bank Receivership Act, the Bank Con-
servation Act, or the Home Owners’ Loan Act; 
‘‘(B) the rights of any party to a contract 
pursuant to section 11(e) of this Act; or 
‘‘(C) the rights of any party to a contract 
with a depository institution holding company 
or a subsidiary of a depository institution hold-
ing company (other than an insured depository 
institution).’’. 
SEC. 198. INTEREST RATES AND OTHER CHARGES AT 
INTERSTATE BRANCHES. 
Section 44 of the Federal Deposit Insurance Act (12 
U.S.C. 1831u) is amended— 
(1) by redesignating subsection (f) as sub-
section (g); and 
(2) by inserting after subsection (e) the fol-
lowing: 
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‘‘(f) APPLICABLE RATE AND OTHER CHARGE LIMI-
TATIONS.— 
‘‘(1) IN GENERAL.—Except as provided for in 
paragraph (3), upon the establishment of a branch 
of any insured depository institution in a host State 
under this section, the maximum interest rate or 
amount of interest, discount points, finance charges, 
or other similar charges that may be charged, taken, 
received, or reserved from time to time in any loan 
or discount made or upon any note, bill of exchange, 
financing transaction, or other evidence of debt by 
any insured depository institution in such State shall 
be equal to not more than the greater of— 
‘‘(A) the maximum interest rate or amount 
of interest, discount points, finance charges, or 
other similar charges that may be charged, 
taken, received, or reserved in a similar trans-
action under the constitution, statutory, or 
other lows of the home State of the insured de-
pository 
institution 
establishing 
any 
such 
branch, without reference to this section, as 
such maximum interest rate or amount of inter-
est may change from time to time; or 
‘‘(B) the maximum rate or amount of in-
terest, discount points, finance charges, or 
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other similar charges that may be charged, 
taken, received, or reserved in a similar trans-
action by an insured depository institution 
under the constitution, statutory, or other laws 
of the host State, without reference to this sec-
tion. 
‘‘(2) PREEMPTION.—The limitations established 
under paragraph (1) shall apply only in any State 
that has a constitutional provision that sets a max-
imum lawful rate of interest on any contract at not 
more than 5 percent per annum above the Federal 
Reserve Discount Rate or 90-day commercial paper 
in effect in the Federal Reserve Bank in the Federal 
Reserve District in which the State is located. 
‘‘(3) RULE OF CONSTRUCTION.—No provision 
of this subsection shall be construed as superseding 
section 501 of the Depository Institutions Deregula-
tion and Monetary Control Act of 1980. 
SEC. 198A. INTERSTATE BRANCHES AND AGENCIES OF FOR-
EIGN BANKS. 
Section 5(a)(7) of the International Banking Act of 
1978 (12 U.S.C. 3103(a)(7)), is amended to read as fol-
lows: 
‘‘(7) ADDITIONAL AUTHORITY FOR INTERSTATE 
BRANCHES AND AGENCIES OF FOREIGN BANKS, UP-
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GRADES OF CERTAIN FOREIGN BANK AGENCIES AND 
BRANCHES.—Notwithstanding paragraphs (1) and 
(2), a foreign bank may— 
‘‘(A) with the approval of the Board and 
the Comptroller of the Currency, establish and 
operate a Federal branch or Federal agency or, 
with the approval of the Board and the appro-
priate State bank supervisor, a State branch or 
State agency in any State outside the foreign 
bank’s home State if— 
‘‘(i) the establishment and operation 
of such branch or agency is permitted by 
the State in which the branch or agency is 
to be established; and 
‘‘(ii) in the case of a Federal or State 
branch, the branch receives only such de-
posits as would be permitted for a corpora-
tion organized under section 25A of the 
Federal Reserve Act (12 U.S.C. 611 et 
seq.); or 
‘‘(B) with the approval of the Board and 
the relevant licensing authority (the Comp-
troller in the case of a Federal branch or the 
appropriate State supervisor in the case of a 
State branch), upgrade an agency, or a branch 
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of the type referred to in subparagraph (A)(ii), 
located in a State outside the foreign bank’s 
home State, into a Federal or State branch if— 
‘‘(i) the establishment and operation 
of such branch is permitted by such State; 
and 
‘‘(ii) such agency or branch— 
‘‘(I) was in operation in such 
State on the day before September 29, 
1994; or 
‘‘(II) has been in operation in 
such State for a period of time that 
meets the State’s minimum age re-
quirement permitted under section 
44(a)(5) of the Federal Deposit Insur-
ance Act.’’. 
SEC. 198B. FAIR TREATMENT OF WOMEN BY FINANCIAL AD-
VISERS. 
(a) FINDINGS.—The Congress finds as follows: 
(1) Women’s stature in society has risen consid-
erably, as they are now able to vote, own property, 
and pursue independent careers, and are granted 
equal protection under the law. 
(2) Women are at least as fiscally responsible 
as men, and more than half of all women have sole 
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responsibility for balancing the family checkbook and 
paying the bills. 
(3) Estate planners, trust officers, investment 
advisers, and other financial planners and advisers 
still encourage the unjust and outdated practice of 
leaving assets in trust for the category of wives and 
daughters, along with senile parents, minors, and 
mentally incompetent children. 
(4) Estate planners, trust officers, investment 
advisers, and other financial planners and advisers 
still use sales themes and tactics detrimental to 
women by stereotyping women as uncomfortable 
handling money and needing protection from their 
own possible errors of judgment and ‘‘fortune hunt-
ers’’. 
(b) SENSE OF THE CONGRESS.—It is the sense of 
the Congress that estate planners, trust officers, invest-
ment advisers, and other financial planners and advisers 
should— 
(1) eliminate examples in their training mate-
rials which portray women as incapable and foolish; 
and 
(2) develop fairer and more balanced presen-
tations that eliminate outmoded and stereotypical 
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examples which lead clients to take actions that are 
financially detrimental to their wives and daughters. 
Subtitle L—Effective Date of Title 
SEC. 199. EFFECTIVE DATE. 
Except with regard to any subtitle or other provision 
of this title for which a specific effective date is provided, 
this title and the amendments made by this title shall take 
effect at the end of the 180-day period beginning on the 
date of the enactment of this Act. 
TITLE II—FUNCTIONAL 
REGULATION 
Subtitle A—Brokers and Dealers 
SEC. 201. DEFINITION OF BROKER. 
Section 3(a)(4) of the Securities Exchange Act of 
1934 (15 U.S.C. 78c(a)(4)) is amended to read as follows: 
‘‘(4) BROKER.— 
‘‘(A) IN
GENERAL.—The term ‘broker’ 
means any person engaged in the business of 
effecting transactions in securities for the ac-
count of others. 
‘‘(B) EXCEPTION FOR CERTAIN BANK AC-
TIVITIES.—A bank shall not be considered to be 
a broker because the bank engages in any one 
or more of the following activities under the 
conditions described: 
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‘‘(i) THIRD
PARTY
BROKERAGE
AR-
RANGEMENTS.—The bank enters into a 
contractual or other written arrangement 
with a broker or dealer registered under 
this title under which the broker or dealer 
offers brokerage services on or off the 
premises of the bank if— 
‘‘(I) such broker or dealer is 
clearly identified as the person per-
forming the brokerage services; 
‘‘(II) the broker or dealer per-
forms brokerage services in an area 
that is clearly marked and, to the ex-
tent practicable, physically separate 
from the routine deposit-taking activi-
ties of the bank; 
‘‘(III) any materials used by the 
bank to advertise or promote generally 
the availability of brokerage services 
under the arrangement clearly indi-
cate that the brokerage services are 
being provided by the broker or dealer 
and not by the bank; 
‘‘(IV) any materials used by the 
bank to advertise or promote generally 
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HR 10 PCS 
the availability of brokerage services 
under the arrangement are in compli-
ance with the Federal securities laws 
before distribution; 
‘‘(V) bank employees (other than 
associated persons of a broker or deal-
er who are qualified pursuant to the 
rules of a self-regulatory organization) 
perform only clerical or ministerial 
functions in connection with broker-
age transactions including scheduling 
appointments with the associated per-
sons of a broker or dealer, except that 
bank employees may forward cus-
tomer funds or securities and may de-
scribe in general terms the types of 
investment vehicles available from the 
bank and the broker or dealer under 
the arrangement; 
‘‘(VI) bank employees do not re-
ceive incentive compensation for any 
brokerage transaction unless such em-
ployees are associated persons of a 
broker or dealer and are qualified 
pursuant to the rules of a self-regu-
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latory organization, except that the 
bank employees may receive com-
pensation for the referral of any cus-
tomer if the compensation is a nomi-
nal one-time cash fee of a fixed dollar 
amount and the payment of the fee is 
not contingent on whether the referral 
results in a transaction; 
‘‘(VII) such services are provided 
by the broker or dealer on a basis in 
which all customers which receive any 
services are fully disclosed to the 
broker or dealer; 
‘‘(VIII) the bank does not carry 
a securities account of the customer 
except as permitted under clause (ii) 
or (viii) of this subparagraph; and 
‘‘(IX) the bank, broker, or dealer 
informs each customer that the bro-
kerage services are provided by the 
broker or dealer and not by the bank 
and that the securities are not depos-
its or other obligations of the bank, 
are not guaranteed by the bank, and 
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are not insured by the Federal De-
posit Insurance Corporation. 
‘‘(ii) TRUST
ACTIVITIES.—The bank 
effects transactions in a trustee or fidu-
ciary capacity in its trust department, or 
another department where the trust or fi-
duciary activity is regularly examined by 
bank examiners under the same standards 
and in the same way as such activities are 
examined in the trust department, and— 
‘‘(I) is chiefly compensated for 
such transactions, consistent with fi-
duciary principles and standards, on 
the basis of an administration or an-
nual fee (payable on a monthly, quar-
terly, or other basis), a percentage of 
assets under management, or a flat or 
capped per order processing fee equal 
to not more than the cost incurred by 
the bank in connection with executing 
securities transactions for trustee and 
fiduciary customers, or any combina-
tion of such fees; and 
‘‘(II) does not solicit brokerage 
business, other than by advertising 
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that it effects transactions in securi-
ties in conjunction with advertising its 
other trust activities. 
‘‘(iii) 
PERMISSIBLE
SECURITIES 
TRANSACTIONS.—The bank effects trans-
actions in— 
‘‘(I) commercial paper, bankers 
acceptances, or commercial bills; 
‘‘(II) exempted securities; 
‘‘(III) qualified Canadian govern-
ment obligations as defined in section 
5136 of the Revised Statutes, in con-
formity with section 15C of this title 
and the rules and regulations there-
under, or obligations of the North 
American Development Bank; or 
‘‘(IV) any standardized, credit 
enhanced debt security issued by a 
foreign government pursuant to the 
March 1989 plan of then Secretary of 
the Treasury Brady, used by such for-
eign government to retire outstanding 
commercial bank loans. 
‘‘(iv) 
CERTAIN
STOCK
PURCHASE 
PLANS.— 
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