IB 
Union Calendar No. 113
108TH CONGRESS 
1ST SESSION H. R. 1375
[Report No. 108–152, Parts I and II] 
To provide regulatory relief and improve productivity for insured depository 
institutions, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 20, 2003
Mrs. CAPITO (for herself, Mr. OXLEY, Mr. BACHUS, and Mr. ROSS) introduced 
the following bill; which was referred to the Committee on Financial Services 
JUNE 12, 2003
Reported with an amendment and referred to the Committee on the Judiciary 
for a period ending not later than July 14, 2003, for consideration of 
such provisions of the bill and amendment as fall within the jurisdiction 
of that committee pursuant to clause 1(k), rule X 
[Strike out all after the enacting clause and insert the part printed in italic] 
JULY 14, 2003
Additional sponsors: Mr. ROYCE, Mr. NEY, Mr. LATOURETTE, Ms. HART, Mr. 
TIBERI, Mr. SANDLIN, Mr. HENSARLING, and Mr. CANTOR 
JULY 14, 2003
Reported from the Committee on the Judiciary with an amendment, com-
mitted to the Committee of the Whole House on the State of the Union, 
and ordered to be printed
Sec. 203. Mergers and consolidations of Federal savings associations with non-
depository institution affiliates. 
Sec. 204. Repeal of statutory dividend notice requirement for savings association 
subsidiaries of savings and loan holding companies. 
Sec. 205. Modernizing statutory authority for trust ownership of savings associa-
tions. 
Sec. 206. Repeal of overlapping rules governing purchased mortgage servicing 
rights. 
Sec. 207. Restatement of authority for Federal savings associations to invest in 
small business investment companies. 
Sec. 208. Removal of limitation on investments in auto loans. 
Sec. 209. Selling and offering of deposit products. 
Sec. 210. Funeral- and cemetery-related fiduciary services. 
Sec. 211. Repeal of qualified thrift lender requirement with respect to out-of-state 
branches. 
Sec. 212. Small business and other commercial loans. 
Sec. 213. Clarifying citizenship of Federal savings associations for Federal court 
jurisdiction. 
Sec. 214. Clarification of applicability of certain procedural doctrines. 
TITLE III—CREDIT UNION PROVISIONS 
Sec. 301. Privately insured credit unions authorized to become members of a Fed-
eral home loan bank. 
Sec. 302. Leases of land on Federal facilities for credit unions. 
Sec. 303. Investments in securities by Federal credit unions. 
Sec. 304. Increase in general 12-year limitation of term of Federal credit union 
loans to 15 years. 
Sec. 305. Increase in 1 percent investment limit in credit union service organiza-
tions. 
Sec. 306. Member business loan exclusion for loans to nonprofit religious organi-
zations. 
Sec. 307. Check cashing and money transfer services offered within the field of 
membership. 
Sec. 308. Voluntary mergers involving multiple common-bond credit unions. 
Sec. 309. Conversions involving common-bond credit unions. 
Sec. 310. Credit union governance. 
Sec. 311. Providing the National Credit Union Administration with greater flexi-
bility in responding to market conditions. 
Sec. 312. Exemption from pre-merger notification requirement of the Clayton Act. 
Sec. 313. Treatment of credit unions as depository institutions under securities 
laws. 
TITLE IV—DEPOSITORY INSTITUTION PROVISIONS 
Sec. 401. Easing restrictions on interstate branching and mergers. 
Sec. 402. Statute of limitations for judicial review of appointment of a receiver 
for depository institutions. 
Sec. 403. Reporting requirements relating to insider lending. 
Sec. 404. Amendment to provide an inflation adjustment for the small depository 
institution exception under the Depository Institution Manage-
ment Interlocks Act. 
Sec. 405. Enhancing the safety and soundness of insured depository institutions. 
Sec. 406. Investments by insured savings associations in bank service companies 
authorized. 
Sec. 407. Cross guarantee authority.
Sec. 408. Golden parachute authority and nonbank holding companies. 
Sec. 409. Amendments relating to change in bank control. 
TITLE V—DEPOSITORY INSTITUTION AFFILIATES PROVISIONS 
Sec. 501. Clarification of cross marketing provision. 
Sec. 502. Amendment to provide the Federal Reserve Board with discretion con-
cerning the imputation of control of shares of a company by 
trustees. 
Sec. 503. Eliminating geographic limits on thrift service companies. 
Sec. 504. Clarification of scope of applicable rate provision. 
TITLE VI—BANKING AGENCY PROVISIONS 
Sec. 601. Waiver of examination schedule in order to allocate examiner resources. 
Sec. 602. Interagency data sharing. 
Sec. 603. Penalty for unauthorized participation by convicted individual. 
Sec. 604. Amendment permitting the destruction of old records of a depository in-
stitution by the FDIC after the appointment of the FDIC as re-
ceiver. 
Sec. 605. Modernization of recordkeeping requirement. 
Sec. 606. Clarification of extent of suspension, removal, and prohibition authority 
of Federal banking agencies in cases of certain crimes by institu-
tion-affiliated parties. 
Sec. 607. Streamlining depository institution merger application requirements. 
Sec. 608. Inclusion of Director of the Office of Thrift Supervision in list of bank-
ing agencies regarding insurance customer protection regula-
tions. 
Sec. 609. Shortening of post-approval antitrust review period with the agreement 
of the Attorney General. 
Sec. 610. Protection of confidential information received by Federal banking reg-
ulators from foreign banking supervisors. 
Sec. 611. Prohibition on the participation in the affairs of bank holding company 
or Edge Act or agreement corporations by convicted individual. 
Sec. 612. Clarification that notice after separation from service may be made by 
an order. 
Sec. 613. Examiners of financial institutions. 
Sec. 614. Parity in standards for institution-affiliated parties. 
Sec. 615. Enforcement against misrepresentations regarding FDIC deposit insur-
ance coverage. 
Sec. 616. Compensation of Federal home loan bank directors. 
Sec. 617. Extension of terms of Federal home loan bank directors. 
Sec. 618. Biennial reports on the status of agency employment of minorities and 
women. 
Sec. 619. Coordination of State examination authority. 
TITLE VII—CLERICAL AND TECHNICAL AMENDMENTS 
Sec. 701. Clerical amendments to the Home Owners’ Loan Act. 
Sec. 702. Technical corrections to the Federal Credit Union Act. 
Sec. 703. Other technical corrections. 
Sec. 704. Repeal of obsolete provisions of the Bank Holding Company Act of 
1956.
TITLE I—NATIONAL BANK 
PROVISIONS 
SEC. 101. NATIONAL BANK DIRECTORS. 
Section 5146 of the Revised Statutes of the United 
States (12 U.S.C. 72) is amended—
(1) by striking ‘‘SEC. 5146. Every director must 
during’’ and inserting the following: 
‘‘SEC. 5146. REQUIREMENTS FOR BANK DIRECTORS. 
‘‘(a) RESIDENCY REQUIREMENTS.—Every director of 
a national bank shall, during’’; 
(2) by striking ‘‘total number of directors. Every 
director must own in his or her own right’’ and in-
serting ‘‘total number of directors. 
‘‘(b) INVESTMENT REQUIREMENT.—
‘‘(1) IN GENERAL.—Every director of a national 
bank shall own, in his or her own right,’’; and 
(3) by adding at the end the following new para-
graph: 
‘‘(2) EXCEPTION FOR SUBORDINATED DEBT IN 
CERTAIN CASES.—In lieu of the requirements of para-
graph (1) relating to the ownership of capital stock 
in the national bank, the Comptroller of the Currency 
may, by regulation or order, permit an individual to 
serve as a director of a national bank that has elected, 
or notifies the Comptroller of the bank’s intention to
elect, to operate as a S corporation pursuant to sec-
tion 1362(a) of the Internal Revenue Code of 1986, if 
that individual holds debt of at least $1,000 issued by 
the national bank that is subordinated to the interests 
of depositors and other general creditors of the na-
tional bank.’’. 
SEC. 102. VOTING IN SHAREHOLDER ELECTIONS. 
Section 5144 of the Revised Statutes of the United 
States (12 U.S.C. 61) is amended—
(1) by striking ‘‘or to cumulate’’ and inserting 
‘‘or, if so provided by the articles of association of the 
national bank, to cumulate’’; 
(2) by striking the comma after ‘‘his shares shall 
equal’’; and 
(3) by adding at the end the following new sen-
tence: ‘‘The Comptroller of the Currency may pre-
scribe such regulations to carry out the purposes of 
this section as the Comptroller determines to be ap-
propriate.’’. 
SEC. 103. SIMPLIFYING DIVIDEND CALCULATIONS FOR NA-
TIONAL BANKS. 
(a) IN GENERAL.—Section 5199 of the Revised Stat-
utes of the United States (12 U.S.C. 60) is amended to read 
as follows:
‘‘SEC. 5199. NATIONAL BANK DIVIDENDS. 
‘‘(a) IN GENERAL.—Subject to subsection (b), the di-
rectors of any national bank may declare a dividend of so 
much of the undivided profits of the bank as the directors 
judge to be expedient. 
‘‘(b) APPROVAL REQUIRED UNDER CERTAIN CIR-
CUMSTANCES.—A national bank may not declare and pay 
dividends in any year in excess of an amount equal to the 
sum of the total of the net income of the bank for that year 
and the retained net income of the bank in the preceding 
two years, minus any transfers required by the Comptroller 
of the Currency (including any transfers required to be 
made to a fund for the retirement of any preferred stock), 
unless the Comptroller of the Currency approves the dec-
laration and payment of dividends in excess of such 
amount.’’. 
(b) CLERICAL AMENDMENT.—The table of sections for 
chapter three of title LXII of the Revised Statutes of the 
United States is amended by striking the item relating to 
section 5199 and inserting the following new item:
‘‘5199.
National bank dividends.’’.
SEC. 104. REPEAL OF OBSOLETE LIMITATION ON REMOVAL 
AUTHORITY OF THE COMPTROLLER OF THE 
CURRENCY. 
Section 8(e)(4) of the Federal Deposit Insurance Act 
(12 U.S.C. 1818(e)(4)) is amended by striking the 5th sen-
tence. 
SEC. 105. REPEAL OF INTRASTATE BRANCH CAPITAL RE-
QUIREMENTS. 
Section 5155(c) of the Revised Statutes of the United 
States (12 U.S.C. 36(c)) is amended—
(1) in the 2nd sentence, by striking ‘‘, without 
regard to the capital requirements of this section,’’; 
and 
(2) by striking the last sentence. 
SEC. 106. CLARIFICATION OF WAIVER OF PUBLICATION RE-
QUIREMENTS FOR BANK MERGER NOTICES. 
The last sentence of sections 2(a) and 3(a)(2) of the 
National Bank Consolidation and Merger Act (12 U.S.C. 
215(a) and 215a(a)(2), respectively) are each amended by 
striking ‘‘Publication of notice may be waived, in cases 
where the Comptroller determines that an emergency exists 
justifying such waiver, by unanimous action of the share-
holders of the association or State bank’’ and inserting 
‘‘Publication of notice may be waived if the Comptroller 
determines that an emergency exists justifying such waiver 
or if the shareholders of the association or State bank agree
by unanimous action to waive the publication requirement 
for their respective institutions’’. 
SEC. 107. CAPITAL EQUIVALENCY DEPOSITS FOR FEDERAL 
BRANCHES 
AND 
AGENCIES 
OF 
FOREIGN 
BANKS. 
Section 4(g) of the International Banking Act of 1978 
(12 U.S.C. 3102(g)) is amended to read as follows: 
‘‘(g) CAPITAL EQUIVALENCY DEPOSIT.—
‘‘(1) IN GENERAL.—Upon the opening of a Fed-
eral branch or agency of a foreign bank in any State 
and thereafter, the foreign bank, in addition to any 
deposit requirements imposed under section 6, shall 
keep on deposit, in accordance with such regulations 
as the Comptroller of the Currency may prescribe in 
accordance with paragraph (2), dollar deposits, in-
vestment securities, or other assets in such amounts as 
the Comptroller of the Currency determines to be nec-
essary for the protection of depositors and other inves-
tors and to be consistent with the principles of safety 
and soundness. 
‘‘(2) LIMITATION.—Notwithstanding paragraph 
(1), regulations prescribed under such paragraph 
shall not permit a foreign bank to keep assets on de-
posit in an amount that is less than the amount re-
quired for a State licensed branch or agency of a for-
eign bank under the laws and regulations of the State 
in which the Federal agency or branch is located.’’. 
SEC. 108. EQUAL TREATMENT FOR FEDERAL AGENCIES OF 
FOREIGN BANKS. 
The 1st sentence of section 4(d) of the International 
Banking Act of 1978 (12 U.S.C. 3102(d)) is amended by 
inserting ‘‘from citizens or residents of the United States’’ 
after ‘‘deposits’’. 
SEC. 109. MAINTENANCE OF A FEDERAL BRANCH AND A 
FEDERAL AGENCY IN THE SAME STATE. 
Section 4(e) of the International Banking Act of 1978 
(12 U.S.C. 3102(e)) is amended by inserting ‘‘if the mainte-
nance of both an agency and a branch in the State is pro-
hibited under the law of such State’’ before the period at 
the end. 
SEC. 110. BUSINESS ORGANIZATION FLEXIBILITY FOR NA-
TIONAL BANKS. 
(a) IN GENERAL.—Chapter one of title LXII of the Re-
vised Statutes of the United States (12 U.S.C. 21 et seq.) 
is amended by inserting after section 5136B the following 
new section: 
‘‘SEC. 5136C. ALTERNATIVE BUSINESS ORGANIZATION. 
‘‘(a) IN GENERAL.—The Comptroller of the Currency 
may prescribe regulations—
‘‘(1) to permit a national bank to be organized 
other than as a body corporate; and 
‘‘(2) to provide requirements for the organiza-
tional characteristics of a national bank organized 
and operating other than as a body corporate, con-
sistent with the safety and soundness of the national 
bank. 
‘‘(b) EQUAL TREATMENT.—Except as provided in reg-
ulations prescribed under subsection (a), a national bank 
that is operating other than as a body corporate shall have 
the same rights and privileges and shall be subject to the 
same duties, restrictions, penalties, liabilities, conditions, 
and limitations as a national bank that is organized as 
a body corporate.’’. 
(b) TECHNICAL AND CONFORMING AMENDMENT.—Sec-
tion 5136 of the Revised Statutes of the United States (12 
U.S.C. 24) is amended, in the matter preceding the para-
graph designated as the ‘‘First’’, by inserting ‘‘or other form 
of business organization provided under regulations pre-
scribed by the Comptroller of the Currency under section 
5136C’’ after ‘‘a body corporate’’. 
(c) CLERICAL AMENDMENT.—The table of sections for 
chapter one of title LXII of the Revised Statutes of the 
United States (12 U.S.C. 21 et seq.) is amended by insert-
ing after the item relating to section 5136B the following 
new item:
‘‘5136C. Alternative business organization.’’.
SEC. 111. CLARIFICATION OF THE MAIN PLACE OF BUSI-
NESS OF A NATIONAL BANK. 
Title LXII of the Revised Statutes of the United States 
is amended—
(1) in the paragraph designated the ‘‘Second’’ of 
section 5134 (12 U.S.C. 22), by striking ‘‘The place 
where its operations of discount and deposit are to be 
carried on’’ and inserting ‘‘The place where the main 
office of the national bank is, or is to be, located’’; 
and 
(2) in section 5190 (12 U.S.C. 81), by striking 
‘‘the place specified in its organization certificate’’ 
and inserting ‘‘the main office of the national bank’’.
TITLE II—SAVINGS ASSOCIATION 
PROVISIONS 
SEC. 201. PARITY FOR SAVINGS ASSOCIATIONS UNDER THE 
SECURITIES EXCHANGE ACT OF 1934 AND THE 
INVESTMENT ADVISERS ACT OF 1940. 
(a) SECURITIES EXCHANGE ACT OF 1934.—
(1) DEFINITION
OF
BANK.—Section 3(a)(6) of 
the Securities Exchange Act of 1934 (15 U.S.C. 
78c(a)(6)) is amended—
(A) in subparagraph (A), by inserting ‘‘or 
a Federal savings association, as defined in sec-
tion 2(5) of the Home Owners’ Loan Act’’ after 
‘‘a banking institution organized under the laws 
of the United States’’; and 
(B) in subparagraph (C)—
(i) by inserting ‘‘or savings association 
as defined in section 2(4) of the Home Own-
ers’ Loan Act,’’ after ‘‘banking institution,’’; 
and 
(ii) by inserting ‘‘or savings associa-
tions’’ 
after 
‘‘having 
supervision 
over 
banks’’. 
(2) INCLUDE OTS UNDER THE DEFINITION OF 
APPROPRIATE
REGULATORY
AGENCY
FOR
CERTAIN 
PURPOSES.—Section 3(a)(34) of such Act (15 U.S.C. 
78c(a)(34)) is amended—
(A) in subparagraph (A)—
(i) in clause (ii), by striking ‘‘(i) or 
(iii)’’ and inserting ‘‘(i), (iii), or (iv)’’; 
(ii) by striking ‘‘and’’ at the end of 
clause (iii); 
(iii) by redesignating clause (iv) as 
clause (v); and
(iv) by inserting the following new 
clause after clause (iii): 
‘‘(iv) the Director of the Office of 
Thrift Supervision, in the case of a savings 
association (as defined in section 3(b) of the 
Federal Deposit Insurance Act (12 U.S.C. 
1813(b))) the deposits of which are insured 
by the Federal Deposit Insurance Corpora-
tion, a subsidiary or a department or divi-
sion of any such savings association, or a 
savings and loan holding company; and’’;
(B) in subparagraph (B)—
(i) in clause (ii), by striking ‘‘(i) or 
(iii)’’ and inserting ‘‘(i), (iii), or (iv)’’; 
(ii) by striking ‘‘and’’ at the end of 
clause (iii); 
(iii) by redesignating clause (iv) as 
clause (v); and 
(iv) by inserting the following new 
clause after clause (iii): 
‘‘(iv) the Director of the Office of 
Thrift Supervision, in the case of a savings 
association (as defined in section 3(b) of the 
Federal Deposit Insurance Act (12 U.S.C. 
1813(b))) the deposits of which are insured
by the Federal Deposit Insurance Corpora-
tion, or a subsidiary of any such savings 
association, or a savings and loan holding 
company; and’’; 
(C) in subparagraph (C)—
(i) in clause (ii), by striking ‘‘(i) or 
(iii)’’ and inserting ‘‘(i), (iii), or (iv)’’; 
(ii) by striking ‘‘and’’ at the end of 
clause (iii); 
(iii) by redesignating clause (iv) as 
clause (v); and 
(iv) by inserting the following new 
clause after clause (iii): 
‘‘(iv) the Director of the Office of 
Thrift Supervision, in the case of a savings 
association (as defined in section 3(b) of the 
Federal Deposit Insurance Act (12 U.S.C. 
1813(b))) the deposits of which are insured 
by the Federal Deposit Insurance Corpora-
tion, a savings and loan holding company, 
or a subsidiary of a savings and loan hold-
ing company when the appropriate regu-
latory agency for such clearing agency is 
not the Commission; and’’; 
(D) in subparagraph (D)—
(i) by striking ‘‘and’’ at the end of 
clause (ii); 
(ii) by redesignating clause (iii) as 
clause (iv); and 
(iii) by inserting the following new 
clause after clause (ii): 
‘‘(iii) the Director of the Office of 
Thrift Supervision, in the case of a savings 
association (as defined in section 3(b) of the 
Federal Deposit Insurance Act (12 U.S.C. 
1813(b))) the deposits of which are insured 
by the Federal Deposit Insurance Corpora-
tion; and’’; 
(E) in subparagraph (F)—
(i) by redesignating clauses (ii), (iii), 
and (iv) as clauses (iii), (iv), and (v), re-
spectively; and 
(ii) by inserting the following new 
clause after clause (i): 
‘‘(ii) the Director of the Office of Thrift 
Supervision, in the case of a savings asso-
ciation (as defined in section 3(b) of the 
Federal Deposit Insurance Act (12 U.S.C. 
1813(b))) the deposits of which are insured
by the Federal Deposit Insurance Corpora-
tion; and’’; 
(F) by moving subparagraph (H) and in-
serting such subparagraph after subparagraph 
(G); and 
(G) by adding at the end the following new 
sentence: ‘‘As used in this paragraph, the term 
‘savings and loan holding company’ has the 
meaning given it in section 10(a) of the Home 
Owners’ Loan Act (12 U.S.C. 1467a(a)).’’. 
(b) INVESTMENT ADVISERS ACT OF 1940.—
(1) DEFINITION OF BANK.—Section 202(a)(2) of 
the Investment Advisers Act of 1940 (15 U.S.C. 80b–
2(a)(2)) is amended—
(A) in subparagraph (A) by inserting ‘‘or a 
Federal savings association, as defined in section 
2(5) of the Home Owners’ Loan Act’’ after ‘‘a 
banking institution organized under the laws of 
the United States’’; and 
(B) in subparagraph (C)—
(i) by inserting ‘‘, savings association 
as defined in section 2(4) of the Home Own-
ers’ Loan Act,’’ after ‘‘banking institution’’; 
and
(ii) by inserting ‘‘or savings associa-
tions’’ 
after 
‘‘having 
supervision 
over 
banks’’. 
(2) 
CONFORMING
AMENDMENTS.—Subsections 
(a)(1)(A)(i), (a)(1)(B), (a)(2), and (b) of section 210A 
of such Act (15 U.S.C. 80b–10a), as added by section 
220 of the Gramm-Leach-Bliley Act, are each amend-
ed by striking ‘‘bank holding company’’ each place it 
occurs and inserting ‘‘bank holding company or sav-
ings and loan holding company’’. 
(c) CONFORMING AMENDMENT TO THE INVESTMENT 
COMPANY ACT OF 1940.—Section 10(c) of the Investment 
Company Act of 1940 (15 U.S.C. 80a–10(c)), as amended 
by section 213(c) of the Gramm-Leach-Bliley Act, is amend-
ed by inserting after ‘‘1956)’’ the following: ‘‘or any one 
savings and loan holding company (together with its affili-
ates and subsidiaries) (as such terms are defined in section 
10 of the Home Owners’ Loan Act)’’. 
SEC. 202. INVESTMENTS BY FEDERAL SAVINGS ASSOCIA-
TIONS AUTHORIZED TO PROMOTE THE PUB-
LIC WELFARE. 
(a) IN GENERAL.—Section 5(c)(3) of the Home Own-
ers’ Loan Act (12 U.S.C. 1464(c)) is amended by adding 
at the end the following new subparagraph:
‘‘(D) DIRECT
INVESTMENTS
TO
PROMOTE 
THE PUBLIC WELFARE.—
‘‘(i) IN GENERAL.—A Federal savings 
association may make investments designed 
primarily to promote the public welfare, in-
cluding the welfare of low- and moderate-in-
come communities or families through the 
provision of housing, services, and jobs. 
‘‘(ii) DIRECT INVESTMENTS OR ACQUI-
SITION
OF
INTEREST
IN
OTHER
COMPA-
NIES.—Investments under clause (i) may be 
made directly or by purchasing interests in 
an entity primarily engaged in making 
such investments. 
‘‘(iii) PROHIBITION ON UNLIMITED LI-
ABILITY.—No investment may be made 
under this subparagraph which would sub-
ject a Federal savings association to unlim-
ited liability to any person. 
‘‘(iv) SINGLE INVESTMENT LIMITATION 
TO BE ESTABLISHED BY DIRECTOR.—Sub-
ject to clauses (v) and (vi), the Director 
shall establish, by order or regulation, lim-
its on—