term is used in connection with the term ‘Federal
branch’ or ‘insured branch’.
‘‘(2) DOMESTIC BRANCH.—The term ‘domestic
branch’ includes any branch bank, branch office,
branch agency, additional office, or any branch lo-
cated in any State at which deposits are received,
checks are paid, or money is lent.
‘‘(3) FOREIGN
BRANCH.—The term ‘foreign
branch’ means any office or place at which banking
operations are conducted and which is not located in
any State.’’.
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 BRANCHING AND AGENCY OPER-
ATIONS.—
‘‘(1) FEDERAL BRANCH OR AGENCY.—Subject
to the provisions of this Act and with the prior writ-
ten approval by the Board and the Comptroller of
the Currency of an application, a foreign bank may
establish and operate a Federal branch or agency in
any State outside the home State of such foreign
bank to the extent that the establishment and oper-
ation of such branch would be permitted under sec-
tion 5155 of the Revised Statutes if the foreign bank
were a national bank whose home State (as defined
in subsection (e)(5) of such section) is the same
State as the home State of the foreign bank.
‘‘(2) STATE BRANCH OR AGENCY.—Subject to
the provisions of this Act and with the prior written
approval by the Board and the appropriate State
bank supervisor of an application, a foreign bank
may establish and operate a State branch or agency
in any State outside the home State of such foreign
bank to the extent that such establishment and oper-
ation would be permitted under section 44 of the
Federal Deposit Insurance Act if the foreign bank
were a State bank whose home State (as defined in
subsection (g) of such section) is the same State as
the home State of the foreign bank.
‘‘(3) CRITERIA FOR DETERMINATION.—In ap-
proving an application under paragraph (1) or (2),
the Board and (in the case of an application under
paragraph (1)) the Comptroller of the Currency—
‘‘(A) shall apply the standards applicable
to the establishment of a foreign bank office in
the United States under section 7(d); and
‘‘(B) may not approve an application un-
less the Board and (in the case of an applica-
tion under paragraph (1)) the Comptroller of
the Currency—
‘‘(i) determine that the foreign bank’s
financial resources, including the capital
level of the bank, are equivalent to those
required for a domestic bank to be ap-
proved for branching under section 5155 of
the Revised Statutes and section 44 of the
Federal Deposit Insurance Act; and
‘‘(ii) consult with the Secretary of the
Treasury regarding capital equivalency.
‘‘(4) REQUIREMENT FOR A SEPARATE SUBSIDI-
ARY.—If the Board or the Comptroller of the Cur-
rency, taking into account differing regulatory or ac-
counting standards, finds that adherence by a for-
eign bank to capital requirements equivalent to those
imposed under section 5155 of the Revised Statutes
and section 44 of the Federal Deposit Insurance Act
could be verified only if the banking activities of
such bank in the United States are carried out in a
domestic banking subsidiary within the United
States, the Board and 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.
‘‘(5) ADDITIONAL AUTHORITY FOR INTERSTATE
BRANCHES AND AGENCIES OF FOREIGN BANKS.—
Notwithstanding paragraphs (1) and (2), a foreign
bank may, with the approval of the Comptroller of
the Currency, establish and operate a Federal
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) 
CONTINUED
AUTHORITY
FOR
LIMITED
BRANCHES, AGENCIES, OR COMMERCIAL LENDING COM-
PANIES.—Section 5(b) of the International Banking Act
of 1978 (12 U.S.C. 3103(b)) is amended by adding at the
end the following new sentence: ‘‘Notwithstanding sub-
section (a), a foreign bank may continue to operate, after
the enactment of the Interstate Banking Efficiency Act
of 1994, any Federal branch, State branch, Federal agen-
cy, State agency, or commercial lending company subsidi-
ary which such bank was operating on the day before the
date of the enactment of such Act to the extent the
branch, agency, or subsidiary continues, after the enact-
ment of such Act, to engage in operations which were law-
ful under the laws in effect on the day before such date.’’.
(c) CLARIFICATION OF BRANCHING RULES IN THE
CASE OF A FOREIGN BANK WITH A DOMESTIC BANK
SUBSIDIARY.—Section 5 of the International Banking Act
of 1978 (12 U.S.C. 3103) is amended by adding at the
end the following new subsection:
‘‘(d) CLARIFICATION OF BRANCHING RULES IN THE
CASE OF A FOREIGN BANK WITH A DOMESTIC BANK
SUBSIDIARY.—In the case of a foreign bank that has a
domestic bank subsidiary within the United States—
‘‘(1) the fact that such bank controls a domes-
tic bank shall not affect the authority of the foreign
bank to establish Federal and State branches or
agencies to the extent permitted under subsection
(a); and
‘‘(2) the fact that the domestic bank is con-
trolled by a foreign bank which has Federal or State
branches or agencies in States other than the home
State of such domestic bank shall not affect the au-
thority of the domestic bank to establish branches
outside the home State of the domestic bank to the
extent permitted under section 5155(d) of the Re-
vised Statutes or section 44 of the Federal Deposit
Insurance Act, as the case may be.’’.
(d) HOME STATE DETERMINATIONS.—Section 5(c)
of the International Banking Act of 1978 (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) in the case of a foreign bank that has any
branch, agency, subsidiary commercial lending com-
pany, or subsidiary bank in more than 1 State, the
home State of the foreign bank 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) in the case of a foreign bank that does not
have a branch, agency, subsidiary commercial lend-
ing company, or subsidiary bank in more than 1
State, the home State of the foreign bank is the
State in which the foreign bank has a branch, agen-
cy, subsidiary commercial lending company, or sub-
sidiary bank.’’.
SEC. 105. INTERSTATE CONSOLIDATIONS.
Section 18(d) of the Federal Deposit Insurance Act
(12 U.S.C. 1828(d)) is amended to read as follows:
‘‘(d) INTERSTATE CONSOLIDATIONS.—
‘‘(1) CONSOLIDATIONS AUTHORIZED.—
‘‘(A) IN GENERAL.—Except as provided in
section 3(d)(1)(B) of the Bank Holding Com-
pany Act of 1956 and notwithstanding any
other provision of Federal law or any provision
of State law (other than a law referred to in
subparagraph (B)), a bank holding company
which has bank subsidiaries in more than 1
State may, with the prior written approval by
the responsible agency (as determined in ac-
cordance with section 18(c)(2) of the Federal
Deposit Insurance Act) of an application and
subject to the requirements of subsection (c),
combine 2 or more of such banks into a single
bank by means of merger, consolidation, or
other similar transaction in accordance with
such subsection after the end of the 18-month
period beginning on the date of the enactment
of the Interstate Banking Efficiency Act of
1994.
‘‘(B) EXCEPTION FOR STATES WHICH PRO-
HIBIT THE ACQUISITION OF A BRANCH BY ANY
OUT-OF-STATE
BANK.—No bank which is lo-
cated in a State in which a law described in
section 5155(d)(3)(A) of the Revised Statutes
of the United States or section 44(c)(3)(A) is in
effect may be a party to a merger, consolida-
tion, or other similar transaction under sub-
paragraph (A) with any other bank affiliate of
such bank.
‘‘(C) EXCEPTION FOR CERTAIN BANKS AC-
QUIRED
DURING
TRANSITION
PERIOD.—No
bank subsidiary of a bank holding company, or
any branch of any such bank—
‘‘(i) control of which was acquired, di-
rectly or indirectly, by such company after
the end of the 18-month period beginning
on the date of the enactment of the Inter-
state Banking Efficiency Act of 1994; and
‘‘(ii) which is located in a State in
which the company did not control any
bank or branch as of the end of such 18-
month period,
may be a party to a merger, consolidation, or
other similar transaction under subparagraph
(A) with any other bank affiliate of such bank
before the end of the 3-year period beginning
on such date of enactment, unless the State in
which the bank or branch is located is a State
referred to in section 5155(d)(5) of the Revised
Statutes of the United States or section
44(c)(5).
‘‘(2) EFFECT
OF
STATE
PROHIBITION
ON
BRANCHING.—If a branch which results from a
transaction under paragraph (1) is located in a
State in which a law—
‘‘(A) takes effect after the consummation
of the transaction;
‘‘(B) is enacted during the period begin-
ning on January 1, 1990, and ending 3 years
after the date of the enactment of the Inter-
state Banking Efficiency Act of 1994;
‘‘(C) expressly prohibits all out-of-State
banks from acquiring a branch located in such
State through the acquisition of an existing
bank in the host State; and
‘‘(D) applies equally to national and State
banks,
the branch shall be promptly converted back into a
bank as the bank existed before such transaction, in
accordance with regulations of the Federal banking
agency or State bank supervisor which had jurisdic-
tion over the bank which was converted into a
branch.
‘‘(3) APPLICABILITY OF STATE AND FEDERAL
LAW TO INTERSTATE BRANCHING OPERATIONS.—If
a branch which results from a transaction under
paragraph (1) is the branch of a national bank, sec-
tion 5155(f) of the Revised Statutes of the United
States shall apply with respect to such branch.
‘‘(4) STATE
TAXATION
AUTHORITY
NOT
AF-
FECTED.—No provision of this subsection shall be
construed as affecting the authority of any State or
political subdivision of any State to apply and ad-
minister any tax or method of taxation to any bank
subsidiary or additional branch resulting from a con-
solidation or other transaction under paragraph (1)
or (2), any bank holding company which controls
any bank or branch resulting from any such consoli-
dation or other transaction, or any affiliate of any
such bank or company to the extent such tax or tax
method is otherwise permissible by or under the
Constitution of the United States of America or
other Federal law.
‘‘(5) 
PLAN
ON
MEETING
LOCAL
CREDIT
NEEDS.—The responsible agency (as determined
under subsection (c)(2)) may not approve any appli-
cation for any consolidation or other transaction
under this subsection unless the responsible agency
has considered a plan submitted by the applicant
bank holding company for meeting local credit needs
in the communities served by any bank subsidiary of
the company which is involved in the proposed con-
solidation or transaction, including the extent to
which the amount of the anticipated savings attrib-
utable to the proposed consolidation or other trans-
action will be available to meet such local credit
needs.’’.
SEC. 106. BRANCH CLOSURES.
Section 42 of the Federal Deposit Insurance Act (12
U.S.C. 1831r-1) is amended by adding at the end the fol-
lowing new subsection:
‘‘(d) BRANCH CLOSURES IN INTERSTATE BANKING
OR BRANCHING OPERATIONS.—
‘‘(1) NOTICE REQUIREMENTS.—In the case of
an interstate bank which proposes to close any
branch in a low- or moderate income area, the notice
required under subsection (b)(2) shall contain the
mailing address of the appropriate Federal banking
agency and a statement that comments on the pro-
posed closing of such branch may be mailed to such
agency.
‘‘(2) ACTION REQUIRED BY APPROPRIATE FED-
ERAL BANKING AGENCY.—If, in the case of a branch
referred to in paragraph (1)—
‘‘(A) a person from the area in which such
branch is located—
‘‘(i) submits a written request relating
to the closing of such branch to the appro-
priate Federal banking agency; and
‘‘(ii) includes a statement of specific
reasons for the request, including a discus-
sion of the adverse effect of such closing
on the availability of banking services in
the area affected by the closing of the
branch; and
‘‘(B) the agency concludes that the request
is not frivolous,
the agency shall consult with community leaders in
the affected area and convene a meeting of rep-
resentatives of the agency with community leaders in
the affected area and such other individuals, organi-
zations, and depository institutions (as defined in
section 19(b)(1)(A) of the Federal Reserve Act) as
the agency may determine to be appropriate, to ex-
plore the feasibility of obtaining adequate alternative
facilities and services for the affected area, including