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scribes, one of the options available under sub-
section (b)’’.
SEC. 203. IN-SERVICE WITHDRAWALS; WITHDRAWAL ELEC-
TIONS, FEDERAL EMPLOYEES RETIREMENT
SYSTEM PARTICIPANTS.
(a) IN GENERAL.—Section 8433 of title 5, United
States Code, is amended—
(1) by striking out subsections (b) and (c) and
inserting in lieu thereof the following:
‘‘(b) Subject to section 8435 of this title, any em-
ployee or Member who separates from Government em-
ployment is entitled and may elect to withdraw from the
Thrift Savings Fund the balance of the employee’s or
Member’s account as—
‘‘(1) an annuity;
‘‘(2) a single payment;
‘‘(3) 2 or more substantially equal payments to
be made not less frequently than annually; or
‘‘(4) any combination of payments as provided
under paragraphs (1) through (3) as the Executive
Director may prescribe by regulation.
‘‘(c)(1) In addition to the right provided under sub-
section (b) to withdraw the balance of the account, an em-
ployee or Member who separates from Government service
and who has not made a withdrawal under subsection
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(h)(1)(A) may make one withdrawal of any amount as a
single payment in accordance with subsection (b)(2) from
the employee’s or Member’s account.
‘‘(2) An employee or Member may request that the
amount withdrawn from the Thrift Savings Fund in ac-
cordance with subsection (b)(2) be transferred to an eligi-
ble retirement plan.
‘‘(3) The Executive Director shall make each transfer
elected under paragraph (2) directly to an eligible retire-
ment plan or plans (as defined in section 402(c)(8) of the
Internal Revenue Code of 1986) identified by the em-
ployee, Member, former employee, or former Member for
whom the transfer is made.
‘‘(4) A transfer may not be made for an employee,
Member, former employee, or former Member under para-
graph (2) until the Executive Director receives from that
individual the information required by the Executive Di-
rector specifically to identify the eligible retirement plan
or plans to which the transfer is to be made.’’;
(2) in subsection (d)—
(A) in paragraph (1) by striking out ‘‘Sub-
ject to paragraph (3)(A)’’ and inserting in lieu
thereof ‘‘Subject to paragraph (3)’’;
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(B) by striking out paragraph (2) and re-
designating paragraph (3) as paragraph (2);
and
(C) in paragraph (2) (as redesignated
under subparagraph (B) of this paragraph)—
(i) in subparagraph (A) by striking
out ‘‘(A) by striking out ‘‘(A)’’; and
(ii) by striking out subparagraph (B);
(3) in subsection (f)(1)—
(A) by striking out ‘‘$3,500 or less’’ and
inserting in lieu thereof ‘‘less than an amount
that the Executive Director prescribes by regu-
lation; and
(B) by striking out ‘‘unless the employee
or Member elects, at such time and otherwise in
such manner as the Executive Director pre-
scribes, one of the options available under sub-
section (b), or’’ and inserting a comma;
(4) in subsection (f)(2)—
(A) by striking out ‘‘February 1’’ and in-
serting in lieu thereof ‘‘April 1’’;
(B) in subparagraph (A)—
(i) by striking out ‘‘65’’ and inserting
in lieu thereof ‘‘701⁄2’’; and
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(ii) by inserting ‘‘or’’ after the semi-
colon;
(C) by striking out subparagraph (B); and
(D) by redesignating subparagraph (C) as
subparagraph (B);
(5) in subsection (g)—
(A) in paragraph (1) by striking out ‘‘after
December 31, 1987, and’’, and by adding at the
end of the paragraph the following sentence:
‘‘Before a loan is issued, the Executive Director
shall provide in writing the employee or Mem-
ber with appropriate information concerning the
cost of the loan relative to other sources of fi-
nancing, as well as the lifetime cost of the loan,
including the difference in interest rates be-
tween the funds offered by the Thrift Savings
Fund, and any other effect of such loan on the
employee’s or Member’s final account balance.’’;
and
(B) by striking out paragraph (2) and re-
designating paragraphs (3) through (5) as
paragraphs (2) through (4), respectively; and
(6) by adding after subsection (g) the following
new subsection:
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‘‘(h)(1) An employee or Member may apply, be-
fore separation, to the Board for permission to withdraw
an amount from the employee’s or Member’s account
based upon—
‘‘(A) the employee or Member having attained
age 591⁄2; or
‘‘(B) financial hardship.
‘‘(2) A withdrawal under paragraph (1)(A) shall
be available to each eligible participant one time only.
‘‘(3) A withdrawal under paragraph (1)(B) shall
be available only for an amount not exceeding the value
of that portion of such account which is attributable to
contributions made by the employee or Member under
section 8432(a) of this title.
‘‘(4) Withdrawals under paragraph (1) shall be
subject to such other conditions as the Executive Director
may prescribe by regulation.
‘‘(5) A withdrawal may not be made under this
subsection unless the requirements of section 8435(e) of
this title are satisfied.’’.
(b) INVALIDITY
OF
CERTAIN
PRIOR
ELEC-
TIONS.—Any election made under section 8433(b)(2) of
title 5, United States Code (as in effect before the effec-
tive date of this title), with respect to an annuity which
has not commenced before the implementation date of
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this title as provided by regulation by the Executive Di-
rector in accordance with section 207 of this title, shall
be invalid.
SEC. 204. SURVIVOR ANNUITIES FOR FORMER SPOUSES;
NOTICE TO FEDERAL EMPLOYEES RETIRE-
MENT SYSTEM SPOUSES FOR IN-SERVICE
WITHDRAWALS.
Section 8435 of title 5, United States Code, is
amended—
(1) in subsection (a)(1)(A)—
(A) by striking out ‘‘may make an election
under subsection (b)(3) or (b)(4) or section
8433 of this title or change an election pre-
viously made under subsection (b)(1) or (b)(2)
of such section’’ and inserting in lieu thereof
‘‘may withdraw all or part of a Thrift Savings
Fund account under subsection (b) (2), (3), or
(4) of section 8433 of this title or change a
withdrawal election’’; and
(B) by adding at the end thereof ‘‘A mar-
ried employee or Member (or former employee
or Member) may make a withdrawal from a
Thrift Savings Fund account under subsection
(c)(1) of section 8433 of this title only if the
employee or Member (or former employee or
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Member) satisfies the requirements of subpara-
graph (B).’’;
(2) in subsection (c)—
(A) in paragraph (1)—
(i) by striking out ‘‘An election,
change of election, or modification of the
commencement date of a deferred annuity’’
and inserting in lieu thereof ‘‘An election
or change of election’’; and
(ii) by striking out ‘‘modification, or transfer’’
and inserting in lieu thereof ‘‘or transfer’’; and
(B) in paragraph (2) in the matter follow-
ing subparagraph (B)(ii) by striking out ‘‘modi-
fication,’’;
(3) in subsection (e)—
(A) in paragraph (1)—
(i) in subparagraph (A)—
(I) by inserting ‘‘or withdrawal’’
after ‘‘A loan;’’;
(II) by inserting ‘‘and (h)’’ after
‘‘8433(g)’’; and
(III) by inserting ‘‘or with-
drawal’’ after ‘‘such loan’’;
(ii) in subparagraph (B) by inserting
‘‘or withdrawal’’ after ‘‘loan’’; and
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(iii) in subparagraph (C)—
(I) by inserting ‘‘or withdrawal’’
after ‘‘to a loan’’; and
(II) by inserting ‘‘or withdrawal’’
after ‘‘for such loan’’; and
(B) in paragraph (2)—
(i) by inserting ‘‘or withdrawal’’ after
‘‘loan’’; and
(ii) by inserting ‘‘and (h)’’ after
‘‘8344(g)’’; and
(4) in subsection (g)—
(A) by inserting ‘‘or withdrawals’’ after
‘‘loans’’; and
(B) 
by 
inserting 
‘‘and 
(h)’’ 
after
‘‘8344(g)’’.
SEC. 205. DE MINIMUS ACCOUNTS RELATING TO THE JUDI-
CIARY.
(a) JUSTICES AND JUDGES.—Section 8440a(b)(7)
of title 5, United States Code, is amended—
(1) by striking out ‘‘$3,500 or less’’ and insert-
ing in lieu thereof ‘‘less than an amount that the
Executive Director prescribes by regulation’’; and
(2) by striking out ‘‘unless the justice or judge
elects, at such time and otherwise in such manner
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as the Executive Director prescribes, one of the op-
tions available under section 8433(b)’’.
(b) BANKRUPTCY JUDGES AND MAGISTRATES.—
Section 8440b(b) of title 5, United States Code, is
amended—
(1) in paragraph (7) in the first sentence by in-
serting ‘‘of the distribution’’ after ‘‘equal to the
amount’’; and
(2) in paragraph (8)—
(A) by striking out ‘‘$3,500 or less’’ and
inserting in lieu thereof ‘‘less than an amount
that the Executive Director prescribes by regu-
lation’’; and
(B) by striking out ‘‘unless the bankruptcy
judge or magistrate elects, at such time and
otherwise in such manner as the Executive Di-
rector prescribes, one of the options available
under subsection (b)’’.
(c) FEDERAL CLAIMS JUDGES.—Section 8440c(b)
of title 5, United States Code, is amended—
(1) in paragraph (7) in the first sentence by in-
serting ‘‘of the distribution’’ after ‘‘equal to the
amount’’; and
(2) in paragraph (8)—
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(A) by striking out ‘‘$3,500 or less’’ and
inserting in lieu thereof ‘‘less than an amount
that the Executive Director prescribes by regu-
lation’’; and
(B) by striking out ‘‘unless the judge
elects, at such time and otherwise in such man-
ner as the Executive Director prescribes, one of
the options available under section 8433(b)’’.
SEC. 206. DEFINITION OF BASIC PAY.
(a) IN GENERAL.—(1) Section 8401(4) of title 5,
United States Code, is amended by striking out ‘‘except
as provided in subchapter III of this chapter,’’.
(2) Section 8431 of title 5, United States Code,
is repealed.
(b) 
TECHNICAL
AND
CONFORMING
AMEND-
MENTS.—(1) The table of sections for chapter 84 of title
5, United States Code, is amended by striking out the
item relating to section 8431.
(2) Section 5545a(h)(2)(A) of title 5, United
States Code, is amended by striking out ‘‘8431,’’.
(3) Section 615(f) of the Treasury, Postal Service,
and General Government Appropriations Act, 1996 (Pub-
lic Law 104–52; 109 Stat. 500; 5 U.S.C. 5343 note) is
amended by striking out ‘‘section 8431 of title 5, United
States Code,’’.
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SEC. 207. EFFECTIVE DATE.
This title shall take effect on the date of the en-
actment of this Act and withdrawals and elections as pro-
vided under the amendments made by this title shall be
made at the earliest practicable date as determined by
the Executive Director in regulations.
SEC. 660. Notwithstanding Section 613, inter-
agency financing is authorized to carry out the purposes
of the National Bioethics Advisory Commission.
SEC. 661. (a) DESIGNATION.—The United States
courthouse to be constructed at 111 South 18th Plaza,
Omaha, Nebraska, shall be known and designated as the
‘‘Roman L. Hruska United States Courthouse’’.
(b) REFERENCES.—Any reference in a law, map,
regulation, document, paper, or other record of the Unit-
ed States to the United States courthouse referred to in
section 1 shall be deemed to be a reference to the
‘‘Roman L. Hruska United States Courthouse’’.
SEC. 662. (a) PROVISIONS RELATING TO TITLE
39, UNITED STATES CODE.—
‘‘(1) APPOINTMENT AND REMOVAL OF INSPEC-
TOR
GENERAL.—Section 202 of title 39, United
States Code, is amended by adding at the end the
following:
‘‘(e)(1) The Governors shall appoint and shall
have the power to remove the Inspector General.
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‘‘(2) The Inspector General shall be appointed—
‘‘(A) for a term of 7 years;
‘‘(B) without regard to political affiliation; and
‘‘(C) solely on the basis of integrity and dem-
onstrated ability in accounting, auditing, financial
analysis, law, management analysis, public adminis-
tration, or investigations.
‘‘(3) The Inspector General may at any time be
removed upon the written concurrence of at least 7 Gov-
ernors, but only for cause. Nothing in this subsection
shall be considered to exempt the Governors from the re-
quirements of section 8G(e) of the Inspector General Act
of 1978.’’.
(2) DEFINITION.—Section 102 of title 39, Unit-
ed States Code, is amended—
(A) by striking ‘‘and’’ at the end of para-
graph (2);
(B) by striking the period at the end of
paragraph (3) and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(4) ‘Inspector General’ means the Inspector
General appointed under section 202(e) of this
title.’’.
(3) SEPARATE ITEM IN ANNUAL BUDGET.—For
purposes of the fifth sentence of section 2009 of title
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39, United States Code, the operations of the Office
of Inspector General of the United States Postal
Service shall be considered a major type of activity.
(b) AMENDMENTS TO THE INSPECTOR GENERAL
ACT OF 1978.—
(1) GOVERNORS
AS
HEAD
OF
THE
POSTAL
SERVICE.—Section 8G(a)(4) of the Inspector Gen-
eral Act of 1978 (5 U.S.C. App.) is amended by
striking ‘‘except that’’ and all that follows through
the semicolon and inserting ‘‘except that—
‘‘(A) with respect to the National Science
Foundation, such term means the National
Science Board; and
‘‘(B) with respect to the United States
Postal Service, such term means the Governors
(within the meaning of section 102(3) of title
39, United States Code);’’.
(2) SPECIAL RULES RELATING TO THE UNITED
STATES POSTAL SERVICE.—Subsection (f) of section
8G of such Act is amended to read as follows:
‘‘(f)(1) For purposes of carrying out subsection
(c) with respect to the United States Postal Service, the
appointment provisions of section 202(e) of title 39,
United States Code, shall be applied.
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‘‘(2) In carrying out the duties and responsibilities
specified in this Act, the Inspector General of the United
States Postal Service (hereinafter in this subsection re-
ferred to as the ‘Inspector General’) shall have oversight
responsibility for all activities of the Postal Inspection
Service, including any internal investigation performed by
the Postal Inspection Service. The Chief Postal Inspector
shall promptly report the significant activities being car-
ried out by the Postal Inspection Service to such Inspec-
tor General.
‘‘(3)(A)(i) Notwithstanding subsection (d), the In-
spector General shall be under the authority, direction,
and control of the Governors with respect to audits or in-
vestigations, or the issuance of subpoenas, which require
access to sensitive information concerning—
‘‘(I) ongoing civil or criminal investigations or
proceedings;
‘‘(II) undercover operations;
‘‘(III) the identity of confidential sources, in-
cluding protected witnesses;
‘‘(IV) intelligence or counterintelligence mat-
ters; or
‘‘(V) other matters the disclosure of which
would constitute a serious threat to national secu-
rity.
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‘‘(ii) With respect to the information described
under clause (i), the Governors may prohibit the Inspec-
tor General from carrying out or completing any audit or
investigation, or from issuing any subpoena, after such
Inspector General has decided to initiate, carry out, or
complete such audit or investigation or to issue such sub-
poena, if the Governors determine that such prohibition
is necessary to prevent the disclosure of any information
described under clause (i) or to prevent the significant
impairment to the national interests of the United States.
‘‘(iii) If the Governors exercise any power under
clause (i) or (ii), the Governors shall notify the Inspector
General in writing stating the reasons for such exercise.
Within 30 days after receipt of any such notice, the In-
spector General shall transmit a copy of such notice to
the Committee on Governmental Affairs of the Senate
and the Committee on Government Reform and Oversight
of the House of Representatives, and to other appropriate
committees or subcommittees of the Congress.
‘‘(B) In carrying out the duties and responsibil-
ities specified in this Act, the Inspector General—
‘‘(i) may initiate, conduct and supervise such
audits and investigations in the United States Postal
Service as the Inspector General considers appro-
priate; and
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‘‘(ii) shall give particular regard to the activities
of the Postal Inspection Service with a view toward
avoiding duplication and insuring effective coordina-
tion and cooperation.
‘‘(C) Any report required to be transmitted by the
Governors to the appropriate committees or subcommit-
tees of the Congress under section 5(d) shall also be
transmitted, within the seven-day period specified under
such section, to the Committee on Governmental Affairs
of the Senate and the Committee on Government Reform
and Oversight of the House of Representatives.
‘‘(3) Nothing in this Act shall restrict, eliminate,
or otherwise adversely affect any of the rights, privileges,
or benefits of either employees of the United States Post-
al Service, or labor organizations representing employees
of the United States Postal Service, under chapter 12
of title 39, United States Code, the National Labor Rela-
tions Act, any handbook or manual affecting employee
labor relations with the United States Postal Service, or
any collective bargaining agreement.
‘‘(4) As used in this subsection, the term ‘Gov-
ernors’ has the meaning given such term by section
102(3) of title 39, United States Code.’’.
(3) TECHNICAL
CORRECTION.—The Inspector
General Act of 1978 is amended by redesignating
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the second section which is designated as section 8G
as section 8H.
(c) PROVISIONS RELATING TO COMPENSATION.—
(1) INSPECTOR
GENERAL.—Section 5315 of
title 5, United States Code, is amended by adding
at the end the following:
‘‘Inspector General, United States Postal Serv-
ice.’’.
The amendment made by the preceding sentence shall
apply notwithstanding section 410 or any other provision
of title 39, United States Code.
(2) OFFICERS AND EMPLOYEES OF THE OFFICE
OF INSPECTOR GENERAL OF THE UNITED STATES
POSTAL SERVICE; POSTAL INSPECTORS.—
(A) IN GENERAL.—Sectin 1003 of title 39,
United States Code, is amended—
(i) by redesignating subsection (b) as
subsection (d); and
(ii) by inserting after subsection (a)
the following:
‘‘(b) Compensation and benefits for all officers
and employees serving in or under the Office of Inspector
General of the United States Postal Service shall be
maintained on a standard of comparability to the com-
pensation and benefits paid for comparable levels of work
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in the respective Offices of Inspector General of the var-
ious establishments named in section 11(2) of the Inspec-
tor General Act of 1978.
‘‘(c) Compensation and benefits for all Postal In-
spectors shall be maintained on a standard of com-
parability to the compensation and benefits paid for com-
parable levels of work in the executive branch of the Gov-
ernment outside of the Postal Service. As used in this
subsection, the term ‘Postal Inspector’ included any
agent to whom any investigative powers are granted
under section 3061 of title 18.’’.
(B) CONFORMING AMENDMENT.—The first
sentence of section 1003(a) of title 39, United
States Code, is amended by striking ‘‘chapters
2 and 12 of this title’’ and inserting ‘‘chapters
2 and 12 of this title, section 8G of the Inspec-
tor General Act of 1978,’’.
(d) STRATEGIC PLANS.—
(1) OFFICE OF INSPECTOR GENERAL OF THE
UNITED STATES POSTAL SERVICE.—
(A) IN GENERAL.—Strategic plans shall be
prepared under this paragraph addressing staff-
ing requirements, general goals and objectives
for major functions and operations of the Office
of Inspector General of the United States Post-
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al Service, and how goals and objectives of the
Office are to be achieved, including a descrip-
tion of operational processes, skills and tech-
nology, and the human, capital, information,
and other resources required to meet those
goals and objectives.
(B) 
SPECIFIC
REQUIREMENTS.—Plans
under this paragraph—
(i) shall be prepared by the Inspector
General of the United States Postal Serv-
ice;
(ii) shall each cover a 5-year period
(the beginning and ending dates of which
shall be specified in each such plan); and
(iii) shall be included, as part of the
annual budget required under section 2009
of title 39, United States Code, at least
every 3 years.
(C) FIRST
SUBMISSION.—The first plan
under this paragraph shall be prepared in time
to be included with the annual budget under
section 2009 of title 39, United States Code,
next due to be submitted after the end of the
6-month period beginning on the date of the ap-
pointment of the first Inspector General to be
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(3) TRANSITION PROVISION.—The Chief Postal
Inspector may continue to serve as Inspector Gen-
eral of the United States Postal Service until the
date on which an Inspector General is appointed
under paragraph (1) or, if earlier, the end of the pe-
riod referred to in such paragraph. Compensation
for any service under this paragraph shall be deter-
mined as if this section had not been enacted.
(f) 
TECHNICAL
AND
CONFORMING
AMEND-
MENTS.—
(1) Section 410(b) of title 39, United States
Code, is amended—
(A) by striking ‘‘and’’ at the end of para-
graph (9); and
(B) by amending paragraph (10) to read
as follows:
‘‘(10) the Inspector General Act of 1978; and’’
(2)(A) Section 204 of such title 39 is amend-
ed—
(i) by amending the section heading to read as fol-
lows:
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‘‘§ 204. General Counsel; Judicial Officer; Chief Postal
Inspector’’;
(ii) in the first sentence by striking ‘‘and a Judi-
cial Officer.’’ and inserting ‘‘a Judicial Officer, and a
Chief Postal Inspector.’’;
(iii) in the second sentence by striking ‘‘and the
Judicial Officer’’ and inserting ‘‘the Judicial Officer, and
the Chief Postal Inspector’’; and
(iv) by adding at the end the following: ‘‘The
Chief Postal Inspector shall report to, and be under the
general supervision of, the Postmaster General. The
Postmaster General shall promptly notify the Governors
and both Houses of Congress in writing if he or she re-
moves the Chief Postal Inspector or transfers the Chief
Postal Inspector to another position or location within
the Postal Service, and shall include in any such notifica-
tion the reasons for the removal or transfer.’’.
(B) The table of sections for chapter 2 of such
title 39 is amended by striking the item relating to
section 204 and inserting the following:
‘‘204. General Counsel; Judicial Officer; Chief Postal Inspector.’’.
SEC. 663. VOLUNTARY SEPARATION INCENTIVES
FOR EMPLOYEES OF CERTAIN FEDERAL AGENCIES.—(a)
DEFINITIONS.—For the purposes of this section—
(1) the term ‘‘agency’’ means any Executive
agency (as defined in section 105 of title 5, United
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States Code), other than an Executive agency (ex-
cept an agency receiving such authority in the De-
partment of Transportation Appropriations Act,
1997) that is authorized by any other provision of
this Act or any other Act to provide voluntary sepa-
ration incentive payments during all, or any part of,
fiscal year 1997; and
(2) the term ‘‘employee’’ means an employee
(as defined by section 2105 of title 5, United States
Code) who is employed by an agency, is serving
under an appointment without time limitation, and
has been currently employed for a continuous period
of at least 3 years, but does not include—
(A) a reemployed annuitant under sub-
chapter III of chapter 83 or chapter 84 of title
5, United States Code, or another retirement
system for employees of the agency;
(B) an employee having a disability on the
basis of which such employee is or would be eli-
gible for disability retirement under subchapter
III of chapter 83 or chapter 84 of title 5, Unit-
ed States Code, or another retirement system
for employees of the agency;
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(C) an employee who is in receipt of a spe-
cific notice of involuntary separation for mis-
conduct or unacceptable performance;
(D) an employee who, upon completing an
additional period of service as referred to in
section 3(b)(2)(B)(ii) of the Federal Workforce
Restructuring Act of 1994 (5 U.S.C. 5597
note), would qualify for a voluntary separation
incentive payment under section 3 of such Act;
(E) an employee who has previously re-
ceived any voluntary separation incentive pay-
ment by the Federal Government under this
section or any other authority and has not re-
paid such payment;
(F) an employee covered by statutory re-
employment rights who is on transfer to an-
other organization; or
(G) any employee who, during the twenty
four month period preceding the date of separa-
tion, has received a recruitment or relocation
bonus under section 5753 of title 5, United
States Code, or who, within the twelve month
period preceding the date of separation, re-
ceived a retention allowance under section 5754
of title 5, United States Code.
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(b) AGENCY STRATEGIC PLAN.—
(1) IN GENERAL.—The head of each agency,
prior to obligating any resources for voluntary sepa-
ration incentive payments, shall submit to the House
and Senate Committees on Appropriations and the
Committee on Governmental Affairs of the Senate
and the Committee on Government Reform and
Oversight of the House of Representatives a strate-
gic plan outlining the intended use of such incentive
payments and a proposed organizational chart for
the agency once such incentive payments have been
completed.
(2) CONTENTS.—The agency’s plan shall in-
clude—
(A) the positions and functions to be re-
duced or eliminated, identified by organizational
unit, geographic location, occupational category
and grade level;
(B) the number and amounts of voluntary
separation incentive payments to be offered;
and
(C) a description of how the agency will
operate without the eliminated positions and
functions.
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(c) AUTHORITY TO PROVIDE VOLUNTARY SEPA-
RATION INCENTIVE PAYMENTS.—
(1) IN GENERAL.—A voluntary separation in-
centive payment under this section may be paid by
an agency to any employee only to the extent nec-
essary to eliminate the positions and functions iden-
tified by the strategic plan.
(2) AMOUNT AND TREATMENT OF PAYMENTS.—
A voluntary separation incentive payment—
(A) shall be paid in a lump sum after the
employee’s separation;
(B) shall be paid from appropriations or
funds available for the payment of the basic pay
of the employees;
(C) shall be equal to the lesser of—
(i) an amount equal to the amount
the employee would be entitled to receive
under section 5595(c) of title 5, United
States Code; or
(ii) an amount determined by the
agency head not to exceed $25,000;
(D) may not be made except in the case of
any qualifying employee who voluntarily sepa-
rates (whether by retirement or resignation) be-
fore December 31, 1997;
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(E) shall not be a basis for payment, and
shall not be included in the computation, of any
other type of Government benefit; and
(F) shall not be taken into account in de-
termining the amount of any severance pay to
which the employee may be entitled under sec-
tion 5595 of title 5, United States Code, based
on any other separation.
(d) ADDITIONAL
AGENCY
CONTRIBUTIONS
TO
THE RETIREMENT FUND.—
(1) IN
GENERAL.—In addition to any other
payments which it is required to make under sub-
chapter III of chapter 83 of title 5, United States
Code, an agency shall remit to the Office of Person-
nel Management for deposit in the Treasury of the
United States to the credit of the Civil Service Re-
tirement and Disability Fund an amount equal to 15
percent of the final basic pay of each employee of
the agency who is covered under subchapter III of
chapter 83 or chapter 84 of title 5, United States
Code, to whom a voluntary separation incentive has
been paid under this section.
(2) DEFINITION.—For the purpose of para-
graph (1), the term ‘‘final basic pay’’, with respect
to an employee, means the total amount of basic pay
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which would be payable for a year of service by such
employee, computed using the employee’s final rate
of basic pay, and, if last serving on other than a
full-time basis, with appropriate adjustment there-
for.
(e) EFFECT
OF
SUBSEQUENT
EMPLOYMENT
WITH THE GOVERNMENT.—An individual who has re-
ceived a voluntary separation incentive payment under
this section and accepts any employment for compensa-
tion with the Government of the United States, or who
works for any agency of the United States Government
through a personal services contract, within 5 years after
the date of the separation on which the payment is based
shall be required to pay, prior to the individual’s first day
of employment, the entire amount of the incentive pay-
ment to the agency that paid the incentive payment.
(f) REDUCTION OF AGENCY EMPLOYMENT LEV-
ELS.—
(1) IN GENERAL.—The total number of funded
employee positions in the agency shall be reduced by
one position for each vacancy created by the separa-
tion of any employee who has received, or is due to
receive, a voluntary separation incentive payment
under this section. For the purposes of this sub-
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section, positions shall be counted on a full-time
equivalent basis.
(2) ENFORCEMENT.—The President, through
the Office of Management and Budget, shall monitor
the agency and take any action necessary to ensure
that the requirements of this subsection are met.
(g) EFFECTIVE DATE.—This section shall take ef-
fect October 1, 1996.
SEC. 664. ELECTRONIC BENEFIT TRANSFER PILOT.
Title 31, United States Code, is amended by in-
serting after section 3335 the following new section:
‘‘§ 3336. Electronic benefit transfer pilot
‘‘(a) The Congress finds that:
‘‘(1) Electronic benefit transfer (EBT) is a
safe, reliable, and economical way to provide benefit
payments to individuals who do not have an account
at a financial institution.
‘‘(2) The designation of financial institutions as
financial agents of the Federal Government for EBT
is an appropriate and reasonable use of the Sec-
retary’s authority to designate financial agents.
‘‘(3) A joint federal-state EBT system offers
convenience and economies of scale for those states
(and their citizens) that wish to deliver state-admin-
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istered benefits on a single card by entering into a
partnership with the federal government.
‘‘(4) The Secretary’s designation of a financial
agent to deliver EBT is a specialized service not
available through ordinary business channels and
may be offered to the states pursuant to section
6501 et seq. of this title.
‘‘(b) The Secretary shall continue to carry out the
existing EBT pilot to disburse benefit payments elec-
tronically to recipients who do not have an account at a
financial institution, which shall include the designation
of one or more financial institutions as a financial agent
of the Government, and the offering to the participating
states of the opportunity to contract with the financial
agent selected by the Secretary, as described in the Invi-
tation for Expressions of Interest to Acquire EBT Serv-
ices for the Southern Alliance of States dated March 9,
1995, as amended as of June 30, 1995, July 7, 1995,
and August 1, 1995.
‘‘(c) The selection and designation of financial
agents, the design of the pilot program, and any other
matter associated with or related to the EBT pilot de-
scribed in subsection (b) shall not be subject to judicial
review.’’
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SEC. 665. DESIGNATION OF FINANCIAL AGENTS.
1. 12 U.S.C. 90 is amended by adding at the end
thereof the following:
‘‘Notwithstanding the Federal Property and Administra-
tive Services Act of 1949, as amended, the Secretary may
select associations as financial agents in accordance with
any process the Secretary deems appropriate and their
reasonable duties may include the provision of electronic
benefit transfer services (including State-administered
benefits with the consent of the States), as defined by the
Secretary.’’.
2. Make conforming amendments to 12 U.S.C.
265, 266, 391, 1452(d), 1767, 1789a, 2013, 2122 and
to 31 U.S.C. 3122 and 3303.
TITLE VII—COUNTER-TERRORISM AND DRUG
LAW ENFORCEMENT
DEPARTMENT OF THE TREASURY
DEPARTMENTAL OFFICES
SALARIES AND EXPENSES
For an additional amount for the necessary ex-
penses of the Office of Foreign Assets Control, $288,000:
Provided, That of the amount provided, $288,000 is des-
ignated by Congress as an emergency requirement pursu-
ant to section 251(b)(2)(D)(i) of the Balanced Budget
and Emergency Deficit Control Act of 1985, as amended.
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OFFICE OF INSPECTOR GENERAL
SALARIES AND EXPENSES
For an additional amount for the necessary ex-
penses of the Office of Inspector General, $34,000, to re-
main available until expended: Provided, That of the
amount provided, $34,000 is designated by Congress as
an 
emergency 
requirement 
pursuant 
to 
section
251(b)(2)(D)(i) of the Balanced Budget and Emergency
Deficit Control Act of 1985, as amended.
COUNTER-TERRORISM FUND
For necessary expenses, as determined by the Sec-
retary, $15,000,000, to remain available until expended,
to reimburse any Department of the Treasury organiza-
tion for the costs of providing support to counter, inves-
tigate, or prosecute terrorism, including payment of re-
wards in connection with these activities: Provided, That
the entire amount of this appropriation shall be available
only to the extent that an official budget request for a
specific dollar amount, that includes designation of the
entire amount of the request as an emergency require-
ment as defined in the Balanced Budget and Emergency
Deficit Control Act of 1985, is transmitted by the Presi-
dent to Congress: Provided further, That the entire
amount is designated by Congress as an emergency ap-
propriation pursuant to section 251(b)(2)(D)(i) of such
Act.
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FEDERAL LAW ENFORCEMENT TRAINING CENTER
SALARIES AND EXPENSES
For an additional amount for the necessary ex-
penses of the Federal Law Enforcement Training Center,
$1,354,000, to remain available until expended: Provided,
That of the amount provided, $1,354,000 is designated
by Congress as an emergency requirement pursuant to
section 251(b)(2)(D)(i) of the Balanced Budget and
Emergency Deficit Control Act of 1985, as amended.
ACQUISITION, CONSTRUCTION, IMPROVEMENT, AND
RELATED EXPENSES
For an additional amount for the necessary ex-
penses for the acquisition, construction, improvement,
and related expenses, $2,700,000, to remain available
until expended: Provided, That of the amount provided,
$2,700,00 is designated by Congress as an emergency re-
quirement pursuant to section 251(b)(2)(D)(i) of the
Balanced Budget and Emergency Deficit Control Act of
1985, as amended.
FINANCIAL MANAGEMENT SERVICE
SALARIES AND EXPENSES
For an additional amount for the necessary ex-
penses of the Financial Management Service, $449,000,
to remain available until expended: Provided, That of the
amount provided, $449,000 is designated by Congress as
an 
emergency 
requirement 
pursuant 
to 
section
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251(b)(2)(D)(i) of the Balanced Budget and Emergency
Deficit Control Act of 1985, as amended.
BUREAU OF ALCOHOL, TOBACCO AND FIREARMS
SALARIES AND EXPENSES
For an additional amount for the necessary ex-
penses of the Bureau of Alcohol, Tobacco and Firearms,
$66,423,000; of which $3,500,000 shall be available for
the construction and expansion of a canine training facil-
ity, to remain available until expended, of which
$3,000,000 shall be available for conducting a study of
car bomb explosives, to remain available until expended;
and of which $6,700,000, to remain available until ex-
pended, for relocation of the Bureau’s headquarters
building and laboratory facilities: Provided, That of the
amount provided, $66,423,000 is designated by Congress
as an emergency requirement pursuant to section
251(b)(2)(D)(i) of the Balanced Budget and Emergency
Deficit Control Act of 1985, as amended.
UNITED STATES CUSTOMS SERVICE
SALARIES AND EXPENSES
For an additional amount for the necessary ex-
pense 
of 
the 
United 
States 
Customs 
Service,
$62,335,000; of which not to exceed $26,400,000 shall be
available until expended for funding non-competitive co-
operative agreements with air carriers, airports, or other
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cargo authorities, which provide for the Customs Service
to purchase and assist in installing advanced air cargo in-
spection equipment for the joint use of such entities and
the United States Customs Service: Provided, That of the
amount provided, $62,335,000 is designated by Congress
as an emergency requirement pursuant to section
251(b)(2)(D)(i) of the Balanced Budget and Emergency
Deficit Control Act of 1985, as amended.
INTERNAL REVENUE SERVICE
PROCESSING, ASSISTANCE AND MANAGEMENT
For an additional amount for the necessary ex-
penses for the processing, assistance and management,
$10,488,000, to remain available until expended: Pro-
vided, That of the amount provided, $10,488,000 is des-
ignated by Congress as an emergency requirement pursu-
ant to section 251(b)(2)(D)(i) of the Balanced Budget
and Emergency Deficit Control Act of 1985, as amended.
UNITED STATES SECRET SERVICE,
SALARIES AND EXPENSES
For an additional amount for the necessary ex-
penses of the United States Secret Service $3,026,000, to
remain available until expended: Provided, That of the
amount provided, $3,026,000 is designated by Congress
as an emergency requirement pursuant to section
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251(b)(2)(D)(i) of the Balanced Budget and Emergency
Deficit Control Act of 1985, as amended.
INDEPENDENT AGENCIES
OFFICE OF PERSONNEL MANAGEMENT
SALARIES AND EXPENSES
For an additional amount for the necessary ex-
penses of the Office of Personnel Management $210,000,
to remain available until expended: Provided, That of the
amount provided, $210,000 is designated by Congress as
an 
emergency 
requirement 
pursuant 
to 
section
251(b)(2)(D)(i) of the Balanced Budget and Emergency
Deficit Control Act of 1985, as amended.
FUNDS APPROPRIATED TO THE PRESIDENT
FEDERAL DRUG CONTROL PROGRAMS
SPECIAL FORFEITURE FUND
(INCLUDING TRANSFER OF FUNDS)
For activities authorized by Public Law 100–690,
as amended, $112,900,000, of which $42,000,000 shall
be transferred to the United States Customs Service for
the conversion of one P–3AEW aircraft for the air inter-
diction program; of which $10,000,000 shall be available
for transfer to other Federal agencies for methamphet-
amine reduction efforts; and of which $60,900,000 shall
be available to the Director of the Office of National
Drug Control Policy for enhancing other drug control ac-
tivities, including transfer to other Federal agencies: Pro-
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vided, That of the amount provided, $112,900,000 is des-
ignated by Congress as an emergency requirement pursu-
ant to section 251(b)(2)(D)(i) of the Balanced Budget
and Emergency Deficit Control Act of 1985, as amended
to become available only upon receipt by the Congress of
a supplemental request from the President requesting
such designation.
TITLE VIII—FEDERAL FINANCIAL
MANAGEMENT IMPROVEMENT
SEC. 801. SHORT TITLE.
This title may be cited as the ‘‘Federal Financial
Management Improvement Act of 1996.’’
SEC. 802. FINDINGS AND PURPOSES.
(a) FINDINGS.—The Congress finds the following:
(1) Much effort has been devoted to strengthen-
ing Federal internal accounting controls in the past.
Although progress has been made in recent years,
Federal accounting standards have not been uni-
formly implemented in financial management sys-
tems for agencies.
(2) Federal financial management continues to
be seriously deficient, and Federal financial manage-
ment and fiscal practices have failed to—
(A) identify costs fully;
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(B) reflect the total liabilities of congres-
sional actions; and
(C) accurately report the financial condi-
tion of the Federal Government.
(3) Current Federal accounting practices do not
accurately report financial results of the Federal
Government or the full costs of programs and activi-
ties. The continued use of these practices under-
mines the Government’s ability to provide credible
and reliable financial data and encourages already
widespread Government waste, and will not assist in
achieving a balanced budget.
(4) Waste and inefficiency in the Federal Gov-
ernment undermine the confidence of the American
people in the government and reduce the federal
Government’s ability to address vital public needs
adequately.
(5) To rebuild the accountability and credibility
of the Federal Government, and restore public con-
fidence in the Federal Government, agencies must
incorporate accounting standards and reporting ob-
jectives established for the Federal Government into
their financial management systems so that all the
assets and liabilities, revenues, and expenditures or
expenses, and the full costs of programs and activi-
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ties of the Federal Government can be consistently
and accurately recorded, monitored, and uniformly
reported throughout the Federal Government.
(6) Since its establishment in October 1990, the
Federal Accounting Standards Advisory Board
(hereinafter referred to as the ‘‘FASAB’’) has made
substantial progress toward developing and rec-
ommending a comprehensive set of accounting con-
cepts and standards for the Federal Government.
When the accounting concepts and standards devel-
oped by FASB are incorporated into Federal finan-
cial management systems, agencies will be able to
provide cost and financial information that will as-
sist the Congress and financial managers to evaluate
the cost and performance of Federal programs and
activities, and will therefore provide important infor-
mation that has been lacking, but is needed for im-
proved decision making by financial managers and
the Congress.
(7) The development of financial management
systems with the capacity to support these standards
and concepts will, over the long term, improve Fed-
eral financial management.
(b) PURPOSE.—The purposes of this Act are to—
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(1) provide for consistency of accounting by an
agency from one fiscal year to the next, and uniform
accounting standards throughout the Federal Gov-
ernment;
(2) require Federal financial management sys-
tems to support full disclosure of Federal financial
data, including the full costs of Federal programs
and activities, to the citizens, the Congress, the
President, and agency management, so that pro-
grams and activities can be considered based on
their full costs and merits;
(3) increase the accountability and credibility of
federal financial management;
(4) improve performance, productivity and effi-
ciency of Federal Government financial manage-
ment;
(5) establish financial management systems to
support controlling the cost of Federal Government;
(6) build upon and complement the Chief Fi-
nancial Officers Act of 1990 (Public Law 101–576;
104 Stat. 2838), the Government Performance and
Results Act of 1993 (Public Law 103–62; 107 Stat.
285) and the Government Management Reform Act
of 1994 (Public Law 103–356; 108 Stat. 3410); and
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(7) increase the capability of agencies to mon-
itor execution of the budget by more readily permit-
ting reports that compare spending of resources to
results of activities.
SEC. 803 IMPLEMENTATION OF FEDERAL FINANCIAL MAN-
AGEMENT IMPROVEMENTS.
(a) IN GENERAL.—Each agency shall implement
and maintain financial management systems that comply
substantially with Federal financial management systems
requirements, applicable Federal accounting standards,
and the United States Government Standard General
Ledger at the transaction level.
(b) AUDIT COMPLIANCE FINDING.—
(1) IN GENERAL.—Each audit required by sec-
tion 3521(e) of title 31, United States Code, shall
report whether the agency financial management
systems comply with the requirements of subsection
(a).
(2) CONTENT OF REPORTS.—When the person
performing the audit required by section 3521(e) of
title 31, United States Code, reports that the agency
financial management systems do not comply with
the requirements of subsection (a), the person per-
forming the audit shall include in the report on the
audit—
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(A) the entity or organization responsible
for the financial management systems that have
been found not to comply with the requirements
of subsection (a);
(B) all facts pertaining to the failure to
comply with the requirements of subsection (a),
including—
(i) the nature and extent of the non-
compliance including areas in which there
is substantial but not full compliance;
(ii) the primary reason or cause of the
noncompliance;
(iii) the entity or organization respon-
sible for the non-compliance; and
(iv) any relevant comments from any
responsible officer or employee; and
(C) a statement with respect to the rec-
ommended remedial actions and the time
frames to implement such actions.
(c) COMPLIANCE IMPLEMENTATION.—
(1) DETERMINATION.—No later than the date
described under paragraph (2), the Head of an
agency shall determine whether the financial man-
agement systems of the agency comply with the re-
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quirements of subsection (a). Such determination
shall be based on—
(A) a review of the report on the applicable
agency-wide audited financial statement;
(B) any other information the Head of the
agency considers relevant and appropriate.
(2) DATE
OF
DETERMINATION.—The deter-
mination under paragraph (1) shall be made no later
than 120 days after the earlier of—
(A) the date of the receipt of an agency-
wide audited financial statement; or
(B) the last day of the fiscal year following
the year covered by such statement.
(3) REMEDIATION PLAN.—
(A) If the Head of an agency determines
that the agency’s financial management systems
do not comply with the requirements of sub-
section (a), the head of the agency, in consulta-
tion with the Director, shall establish a remedi-
ation plan that shall include resources, rem-
edies, and intermediate target dates necessary
to bring the agency’s financial management sys-
tems into substantial compliance.
(B) If the determination of the head of the
agency differs from the audit compliance find-
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ings required in subsection (b), the Director
shall review such determinations and provide a
report on the findings to the appropriate com-
mittees of the Congress.
(4) TIME PERIOD FOR COMPLIANCE.—A reme-
diation plan shall bring the agency’s financial man-
agement systems into substantial compliance no
later than 3 years after the date a determination is
made under paragraph (1), unless the agency, with
concurrence of the Director—
(A) determines that the agency’s financial
management systems cannot comply with the
requirements of subsection (a) within 3 years;
(B) specifies the most feasible date for
bringing the agency’s financial management
systems into compliance with the requirements
of subsection (a); and
(C) designates an official of the agency
who shall be responsible for bringing the agen-
cy’s financial management systems into compli-
ance with the requirements of subsection (a) by
the date specified under subparagraph (B).
SEC. 804. REPORTING REQUIREMENTS.
(a) REPORTS BY THE DIRECTOR.—No later than
March 31 of each year, the Director shall submit a report
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to the Congress regarding implementation of this Act.
The Director may include the report in the financial
management status report and the 5-year financial man-
agement plan submitted under section 3512(a)(1) of title
31, United States Code.
(b) REPORTS
BY
THE INSPECTOR GENERAL.—
Each Inspector General who prepares a report under sec-
tion 5(a) of the Inspector General Act of 1978 (5 U.S.C.
App.) shall report to Congress instances and reasons
when an agency has not met the intermediate target
dates established in the remediation plan required under
section 3(c). Specifically the report shall include—
(1) the entity or organization responsible for
the non-compliance;
(2) the facts pertaining to the failure to comply
with the requirements of subsection (a), including
the nature and extent of the non-compliance, the
primary reason or cause for the failure to comply,
and any extenuating circumstances; and
(3) a statement of the remedial actions needed
to comply.
(c) REPORTS BY THE COMPTROLLER GENERAL.—
No later than October 1, 1997, and October 1, of each
year thereafter, the Comptroller General of the United
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States shall report to the appropriate committees of the
Congress concerning—
(1) compliance with the requirements of section
3(a) of this Act, including whether the financial
statements of the Federal Government have been
prepared in accordance with applicable accounting
standards; and
(2) the adequacy of applicable accounting
standards for the Federal Government.
SEC. 805. CONFORMING AMENDMENTS.
(a) AUDITS BY AGENCIES.—Section 3521(f)(1) of
title 31, United States Code, is amended in the first sen-
tence by inserting ‘‘and the Controller of the Office of
Federal Financial Management’’ before the period.
(b) FINANCIAL MANAGEMENT STATUS REPORT.—
Section 3512(a)(2) of title 31, United States Code, is
amended by—
(1) in subparagraph (D) by striking ‘‘and’ after
the semicolon;
(2) by redesignating subparagraph (E) as sub-
paragraph (F); and
(3) by inserting after subparagraph (D) the fol-
lowing:
‘‘(E) a listing of agencies whose financial
management systems do not comply substan-
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tially with the requirements of Section 3(a) the
Federal Financial Management Improvement
Act of 1996, and a summary statement of the
efforts underway to remedy the noncompliance;
and’’
(c) INSPECTOR GENERAL ACT OF 1978.—Section
5(a) of the Inspector General Act of 1978 is amended—
(1) in paragraph (11) by striking ‘‘and’’ after
the semicolon;
(2) in paragraph (12) by striking the period
and inserting ‘‘; and’’; and
(3) by adding at the end the following new
paragraph:
‘‘(13) the information described under section
05(b) of the Federal Financial Management Im-
provement Act of 1996.’’
SEC. 806. DEFINITIONS.
For purposes of this title:
(1) AGENCY.—The term ‘‘agency’’ means a de-
partment or agency of the United States Govern-
ment as defined in section 901(b) of title 31, United
States Code.
(2) DIRECTOR.—The term ‘‘Director’’ means
the Director of the Office of Management and Budg-
et.
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(3) FEDERAL ACCOUNTING STANDARDS.—The
term ‘‘Federal accounting standards’’ means appli-
cable accounting principles, standards, and require-
ments consistent with section 902(a)(3)(A) of title
31, United States Code.
(4) FINANCIAL
MANAGEMENT
SYSTEMS.—The
term ‘‘financial management systems’’ includes the
financial systems and the financial portions of mixed
systems necessary to support financial management,
including automated and manual processes, proce-
dures, controls, data, hardware, software, and sup-
port personnel dedicated to the operation and main-
tenance of system functions.
(5) FINANCIAL SYSTEM.—The term ‘‘financial
system’’ includes an information system, comprised
of one or more applications, that is used for—
(A) collecting, processing, maintaining,
transmitting, or reporting data about financial
events;
(B) supporting financial planning or budg-
eting activities;
(C) accumulating and reporting costs in-
formation; or
(D) supporting the preparation of financial
statements.
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(6) MIXED
SYSTEM.—The term ‘‘mixed
system’’ means an information system that sup-
ports both financial and nonfinancial functions
of the Federal Government or components
thereof.
SEC. 807. EFFECTIVE DATE.
This title shall take effect for the fiscal year end-
ing September 30, 1997.
SEC. 808. REVISION OF SHORT TITLES.
(a) Section 4001 of Public Law 104–106 (110
Stat. 642; 41 U.S.C. 251 note) is amended to read as fol-
lows:
‘‘SEC. 4001. SHORT TITLE.
‘‘This division and division E may be cited as the
‘Clinger-Cohen Act of 1996’.’’.
(b) Section 5001 of Public Law 104–106 (110
Stat. 679; 40 U.S.C. 1401 note) is amended to read as
follows:
‘‘SEC. 5001. SHORT TITLE.
‘‘This division and division D may be cited as the
‘Clinger-Cohen Act of 1996’.’’
(c) Any reference in any law, regulation, docu-
ment, record, or other paper of the United States to the
Federal Acquisition Reform Act of 1996 or to the Infor-
mation Technology Management Reform Act of 1996
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shall be considered to be a reference to the Clinger-Cohen
Act of 1996.
This Act may be cited as the ‘‘Treasury, Postal
Service, and General Government Appropriations Act,
1997’’.
TITLE II—ECONOMIC GROWTH
AND 
REGULATORY 
PAPER-
WORK REDUCTION
SEC. 2001. SHORT TITLE; TABLE OF CONTENTS; DEFINI-
TIONS.
(a) SHORT TITLE.—This title may be cited as the
‘‘Economic Growth and Regulatory Paperwork Reduction
Act of 1996’’.
(b) TABLE OF CONTENTS.—The table of contents for
this title is as follows:
TITLE II—ECONOMIC GROWTH AND REGULATORY PAPERWORK
REDUCTION
Sec. 2001. Short title; table of contents; definitions
Subtitle A—Streamlining the Home Mortgage Lending Process
Sec. 2101. Simplification and unification of disclosures required under RESPA
and TILA for mortgage transactions.
Sec. 2102. General exemption authority for loans.
Sec. 2103. Reductions in Real Estate Settlement Procedures Act of 1974 regu-
latory burdens.
Sec. 2104. Waiver for certain borrowers.
Sec. 2105. Alternative disclosures for adjustable rate mortgages.
Sec. 2106. Restitution for violations of the Truth in Lending Act.
Sec. 2107. Limitation on liability under the Truth in Lending Act.
Subtitle B—Streamlining Government Regulation
CHAPTER 1—ELIMINATING UNNECESSARY REGULATORY REQUIREMENTS
AND PROCEDURES
Sec. 2201. Elimination of redundant approval requirement for Oakar trans-
actions.
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Sec. 2202. Elimination of duplicative requirements imposed upon bank holding
companies.
Sec. 2203. Elimination of the per branch capital requirement for national
banks and State member banks.
Sec. 2204. Elimination of branch application requirements for automatic teller
machines.
Sec. 2205. Elimination of requirement for approval of investments in bank
premises for well capitalized and well managed banks.
Sec. 2206. Elimination of approval requirement for divestitures.
Sec. 2207. Streamlined nonbanking acquisitions by well capitalized and well
managed banking organizations.
Sec. 2208. Elimination of unnecessary filing for officer and director appoint-
ments.
Sec. 2209. Amendments to the Depository Institution Management Interlocks
Act.
Sec. 2210. Elimination of recordkeeping and reporting requirements for offi-
cers.
Sec. 2211. Repayment of Treasury loan.
Sec. 2212. Branch closures.
Sec. 2213. Foreign banks.
Sec. 2214. Disposition of foreclosed assets.
Sec. 2215. Exemption authority for antitying provision.
Sec. 2216. FDIC approval of new State bank powers.
CHAPTER 2—ELIMINATING UNNECESSARY REGULATORY BURDENS
Sec. 2221. Small bank examination cycle.
Sec. 2222. Required review of regulations.
Sec. 2223. Repeal of identification of nonbank financial institution customers.
Sec. 2224. Repeal of certain reporting requirements.
Sec. 2225. Increase in home mortgage disclosure exemption threshold.
Sec. 2226. Elimination of stock loan reporting requirement.
Sec. 2227. Credit availability assessment.
CHAPTER 3—REGULATORY MICROMANAGEMENT
Sec. 2241. National bank directors.
Sec. 2242. Paperwork reduction review.
Sec. 2243. State bank representation on Board of Directors of the FDIC.
Sec. 2244. Consultation among examiners.
Subtitle C—Regulatory Impact on Cost of Credit and Credit Availability
Sec. 2301. Audit costs.
Sec. 2302. Incentives for self-testing.
Sec. 2303. Qualified thrift investment amendments.
Sec. 2304. Limited purpose banks.
Sec. 2305. Amendment to Fair Debt Collection Practices Act.
Sec. 2306. Increase in certain credit union loan ceilings.
Sec. 2307. Bank investments in Edge Act and agreement corporations.
Subtitle D—Consumer Credit
CHAPTER 1—CREDIT REPORTING REFORM
Sec. 2401. Short title.
Sec. 2402. Definitions.
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Sec. 2403. Furnishing consumer reports; use for employment purposes.
Sec. 2404. Use of consumer reports for prescreening and direct marketing; pro-
hibition on unauthorized or uncertified use of information.
Sec. 2405. Consumer consent required to furnish consumer report containing
medical information.
Sec. 2406. Obsolete information and information contained in consumer re-
ports.
Sec. 2407. Compliance procedures.
Sec. 2408. Consumer disclosures.
Sec. 2409. Procedures in case of the disputed accuracy of any information in
a consumer’s file.
Sec. 2410. Charges for certain disclosures.
Sec. 2411. Duties of users of consumer reports.
Sec. 2412. Civil liability.
Sec. 2413. Responsibilities of persons who furnish information to consumer re-
porting agencies.
Sec. 2414. Investigative consumer reports.
Sec. 2415. Increased criminal penalties for obtaining information under false
pretenses.
Sec. 2416. Administrative enforcement.
Sec. 2417. State enforcement of Fair Credit Reporting Act.
Sec. 2418. Federal Reserve Board authority.
Sec. 2419. Preemption of State law.
Sec. 2420. Effective date.
Sec. 2421. Relationship to other law.
Sec. 2422. Federal Reserve Board study.
CHAPTER 2—CREDIT REPAIR ORGANIZATIONS
Sec. 2451. Regulation of credit repair organizations.
Sec. 2452. Credit worthiness.
Subtitle E—Asset Conservation, Lender Liability, and Deposit Insurance
Protection
Sec. 2501. Short title.
Sec. 2502. CERCLA lender and fiduciary liability limitations amendments.
Sec. 2503. Conforming amendment.
Sec. 2504. Lender liability rule.
Sec. 2505. Effective date.
Subtitle F—Miscellaneous
Sec. 2601. Federal Reserve Board study.
Sec. 2602. Treatment of claims arising from breach of contracts executed by
the receiver or conservator.
Sec. 2603. Criminal sanctions for fictitious financial instruments and counter-
feiting.
Sec. 2604. Amendments to the Truth in Savings Act.
Sec. 2605. Consumer Leasing Act amendments.
Sec. 2606. Study of corporate credit unions.
Sec. 2607. Report on the reconciliation of differences between regulatory ac-
counting principles and generally accepted accounting prin-
ciples.
Sec. 2608. State-by-State and metropolitan area-by-metropolitan area study of
bank fees.
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Sec. 2609. Prospective application of gold clauses in contracts.
Sec. 2610. Qualified family partnerships.
Sec. 2611. Cooperative efforts between depository institutions and farmers and
ranchers in drought-stricken areas.
Sec. 2612. Streamlining process for determining new nonbanking activities.
Sec. 2613. Authorizing bank service companies to organize as limited liability
partnerships.
Sec. 2614. Retirement certificates of deposits.
Sec. 2615. Prohibitions on certain depository institution associations with Gov-
ernment-sponsored enterprises.
Subtitle G—Deposit Insurance Funds
Sec. 2701. Short title.
Sec. 2702. Special assessment to capitalize SAIF.
Sec. 2703. Financing corporation funding.
Sec. 2704. Merger of BIF and SAIF.
Sec. 2705. Creation of SAIF special reserve.
Sec. 2706. Refund of amounts in deposit insurance fund in excess of designated
reserve amount.
Sec. 2707. Assessment rates for SAIF members may not be less than assess-
ment rates for BIF members.
Sec. 2708. Assessments authorized only if needed to maintain the reserve ratio
of a deposit insurance fund.
Sec. 2709. Treasury study of common depository institution charter.
Sec. 2710. Definitions.
Sec. 2711. Deductions for special assessments.
(c) DEFINITIONS.—Except as otherwise specified in
this title, the following definitions shall apply for purposes
of this title:
(1) APPRAISAL
SUBCOMMITTEE.—The term
‘‘Appraisal Subcommittee’’ means the Appraisal
Subcommittee established under section 1011 of the
Federal Financial Institutions Examination Council
Act of 1978 (as in existence on the day before the
date of enactment of this Act).
(2) APPROPRIATE FEDERAL
BANKING
AGEN-
CY.—The term ‘‘appropriate Federal banking agen-
cy’’ has the same meaning as in section 3 of the
Federal Deposit Insurance Act.
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(3) BOARD.—The term ‘‘Board’’ means the
Board of Governors of the Federal Reserve System.
(4) CORPORATION.—The term ‘‘Corporation’’
means the Federal Deposit Insurance Corporation.
(5) COUNCIL.—The term ‘‘Council’’ means the
Financial Institutions Examination Council estab-
lished under section 1004 of the Federal Financial
Institutions Examination Council Act of 1978.
(6) INSURED CREDIT UNION.—The term ‘‘in-
sured credit union’’ has the same meaning as in sec-
tion 101 of the Federal Credit Union Act.
(7) INSURED DEPOSITORY INSTITUTION.—The
term ‘‘insured depository institution’’ has the same
meaning as in section 3 of the Federal Deposit In-
surance Act.
Subtitle A—Streamlining the Home
Mortgage Lending Process
SEC. 2101. SIMPLIFICATION AND UNIFICATION OF DISCLO-
SURES REQUIRED UNDER RESPA AND TILA
FOR MORTGAGE TRANSACTIONS.
(a) IN GENERAL.—With respect to credit trans-
actions which are subject to the Real Estate Settlement
Procedures Act of 1974 and the Truth in Lending Act,
the Board of Governors of the Federal Reserve System
(hereafter in this section referred to as the ‘‘Board’’) and
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the Secretary of Housing and Urban Development (here-
after in this section referred to as the ‘‘Secretary’’) shall
take such action as may be necessary before the end of
the 6-month period beginning on the date of enactment
of this Act—
(1) to simplify and improve the disclosures ap-
plicable to such transactions under such Acts, in-
cluding the timing of the disclosures; and
(2) to provide a single format for such disclo-
sures which will satisfy the requirements of each
such Act with respect to such transactions.
(b) REGULATIONS.—To the extent that it is nec-
essary to prescribe any regulation in order to effect any
changes required to be made under subsection (a), the pro-
posed regulation shall be published in the Federal Register
before the end of the 6-month period referred to in sub-
section (a).
(c) RECOMMENDATIONS FOR LEGISLATION.—If the
Board and the Secretary find that legislative action may
be necessary or appropriate in order to simplify and unify
the disclosure requirements under the Real Estate Settle-
ment Procedures Act of 1974 and the Truth in Lending
Act, the Board and the Secretary shall submit a report
containing recommendations to the Congress concerning
such action.
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SEC. 2102. GENERAL EXEMPTION AUTHORITY FOR LOANS.
(a) REGULATORY FLEXIBILITY.—Section 104 of the
Truth in Lending Act (15 U.S.C. 1603) is amended—
(1) by redesignating paragraphs (5) and (6) as
paragraphs (6) and (7), respectively; and
(2) by inserting after paragraph (4) the follow-
ing new paragraph:
‘‘(5) Transactions for which the Board, by rule,
determines that coverage under this title is not nec-
essary to carry out the purposes of this title.’’.
(b) EXEMPTION AUTHORITY.—Section 105 of the
Truth in Lending Act (15 U.S.C. 1604) is amended by
adding at the end the following new subsection:
‘‘(f) EXEMPTION AUTHORITY.—
‘‘(1) IN GENERAL.—The Board may exempt, by
regulation, from all or part of this title any class of
transactions, other than transactions involving any
mortgage described in section 103(aa), for which, in
the determination of the Board, coverage under all
or part of this title does not provide a meaningful
benefit to consumers in the form of useful informa-
tion or protection.
‘‘(2) FACTORS FOR CONSIDERATION.—In deter-
mining which classes of transactions to exempt in
whole or in part under paragraph (1), the Board
shall consider the following factors and publish its
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rationale at the time a proposed exemption is pub-
lished for comment:
‘‘(A) The amount of the loan and whether
the disclosures, right of rescission, and other
provisions provide a benefit to the consumers
who are parties to such transactions, as deter-
mined by the Board.
‘‘(B) The extent to which the requirements
of this title complicate, hinder, or make more
expensive the credit process for the class of
transactions.
‘‘(C) The status of the borrower, includ-
ing—
‘‘(i) any related financial arrange-
ments of the borrower, as determined by
the Board;
‘‘(ii) the financial sophistication of the
borrower relative to the type of trans-
action; and
‘‘(iii) the importance to the borrower
of the credit, related supporting property,
and coverage under this title, as deter-
mined by the Board;
‘‘(D) whether the loan is secured by the
principal residence of the consumer; and
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‘‘(E) whether the goal of consumer protec-
tion would be undermined by such an exemp-
tion.’’.
SEC. 2103. REDUCTIONS IN REAL ESTATE SETTLEMENT
PROCEDURES ACT OF 1974 REGULATORY
BURDENS.
(a) UNNECESSARY DISCLOSURE.—Section 6(a) of the
Real Estate Settlement Procedures Act of 1974 (12
U.S.C. 2605(a)) is amended to read as follows:
‘‘(a) DISCLOSURE TO APPLICANT RELATING TO AS-
SIGNMENT, SALE, OR TRANSFER OF LOAN SERVICING.—
Each person who makes a federally related mortgage loan
shall disclose to each person who applies for the loan, at
the time of application for the loan, whether the servicing
of the loan may be assigned, sold, or transferred to any
other person at any time while the loan is outstanding.’’.
(b) CONSISTENCY OF REAL ESTATE SETTLEMENT
PROCEDURES ACT AND TRUTH IN LENDING ACT EXEMP-
TION OF BUSINESS LOANS.—Section 7 of the Real Estate
Settlement Procedures Act of 1974 (12 U.S.C. 2606) is
amended—
(1) by striking ‘‘This Act’’ and inserting the
following:
‘‘(a) IN GENERAL.—This Act’’; and
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(2) by adding at the end the following new sub-
section:
‘‘(b) INTERPRETATION.—In prescribing regulations
under section 19(a), the Secretary shall ensure that, with
respect to subsection (a) of this section, the exemption for
credit transactions involving extensions of credit primarily
for business, commercial, or agricultural purposes, as pro-
vided in section 7(1) of the Real Estate Settlement Proce-
dures Act of 1974 shall be the same as the exemption for
such credit transactions under section 104(1) of the Truth
in Lending Act.’’.
(c) REDESIGNATION OF CONTROLLED BUSINESS AR-
RANGEMENTS
AS
AFFILIATED
BUSINESS
ARRANGE-
MENTS.—The Real Estate Settlement Procedures Act of
1974 (12 U.S.C. 2601 et seq.) is amended—
(1) in section 3(7), by striking ‘‘controlled busi-
ness arrangement’’ and inserting ‘‘affiliated business
arrangement’’; and
(2) in subsections (c)(4) and (d)(6) of section
8, by striking ‘‘controlled business arrangements’’
and inserting ‘‘affiliated business arrangements’’.
(d) DISCLOSURES BY TELEPHONE OR ELECTRONIC
MEDIA.—Section 8(c)(4) of the Real Estate Settlement
Procedures Act of 1974 (12 U.S.C. 2607(c)(4)(A)) is
amended by striking subparagraph (A) and inserting the
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following ‘‘(A) a disclosure is made of the existence of such
an arrangement to the person being referred and, in con-
nection with such referral, such person is provided a writ-
ten estimate of the charge or range of charges generally
made by the provider to which the person is referred (i)
in the case of a face-to-face referral or a referral made
in writing or by electronic media, at or before the time
of the referral (and compliance with this requirement in
such case may be evidenced by a notation in a written,
electronic, or similar system of records maintained in the
regular course of business); (ii) in the case of a referral
made by telephone, within 3 business days after the refer-
ral by telephone, (and in such case an abbreviated verbal
disclosure of the existence of the arrangement and the fact
that a written disclosure will be provided within 3 business
days shall be made to the person being referred during
the telephone referral); or (iii) in the case of a referral
by a lender (including a referral by a lender to an affili-
ated lender), at the time the estimates required under sec-
tion 5(c) are provided (notwithstanding clause (i) or (ii));
and any required written receipt of such disclosure (with-
out regard to the manner of the disclosure under clause
(i), (ii), or (iii)) may be obtained at the closing or settle-
ment (except that a person making a face-to-face referral
who provides the written disclosure at or before the time
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of the referral shall attempt to obtain any required written
receipt of such disclosure at such time and if the person
being referred chooses not to acknowledge the receipt of
the disclosure at that time, that fact shall be noted in the
written, electronic, or similar system of records main-
tained in the regular course of business by the person
making the referral),’’.
(e) LIMITATION ON CLAIMS ARISING FROM VIOLA-
TIONS OF REQUIREMENTS FOR SERVICING MORTGAGES
AND ADMINISTERING ESCROW ACCOUNTS.—Section 16 of
the Real Estate Settlement Procedures Act of 1974 (12
U.S.C. 2614) is amended—
(1) by striking ‘‘section 8 or 9’’ and inserting
‘‘section 6, 8, or 9’’; and
(2) by striking ‘‘within one year’’ and inserting
‘‘within 3 years in the case of a violation of section
6 and 1 year in the case of a violation of section 8
or 9’’.
(f) DELAY OF EFFECTIVENESS OF RECENT FINAL
REGULATION RELATING
TO PAYMENTS
TO EMPLOY-
EES.—Section 19 of the Real Estate Settlement Proce-
dures Act of 1974 (12 U.S.C. 2617) is amended by adding
at the end the following new subsection:
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‘‘(d) DELAY OF EFFECTIVENESS OF RECENT FINAL
REGULATION RELATING
TO PAYMENTS
TO EMPLOY-
EES.—
‘‘(1) IN
GENERAL.—The amendment to part
3500 of title 24 of the Code of Federal Regulations
contained in the final regulation prescribed by the
Secretary and published in the Federal Register on
June 7, 1996, which will, as of the effective date of
such amendment—
‘‘(A) eliminate the exemption for payments
by an employer to employees of such employer
for referral activities which is currently codified
as section 3500.14(g)(1)(vii) of such title 24;
and
‘‘(B) replace such exemption with a more
limited exemption in new clauses (vii), (viii),
and (ix) of section 3500.14 of such title 24,
shall not take effect before July 31, 1997.
‘‘(2) CONTINUATION
OF
PRIOR
RULE.—The
regulation codified as section 3500.14(g)(1)(vii) of
title 24 of the Code of Federal Regulations, relating
to employer-employee payments, as in effect on May
1, 1996, shall remain in effect until the date the
amendment referred to in paragraph (1) takes effect
in accordance with such paragraph.
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‘‘(3) PUBLIC NOTICE OF EFFECTIVE DATE.—
The Secretary shall provide public notice of the date
on which the amendment referred to in paragraph
(1) will take effect in accordance with such para-
graph not less than 90 days and not more than 180
days before such effective date.’’.
(g) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) Section 4(a) of the Real Estate Settlement
Procedures Act of 1974 (12 U.S.C. 2603(a)) is
amended by striking ‘‘Federal Home Loan Bank
Board’’ and inserting ‘‘Director of the Office of
Thrift Supervision’’.
(2) Section 10(c)(1)(C) of the Real Estate Set-
tlement Procedures Act of 1974 (12 U.S.C.
2609(c)(1)(C)) is amended by striking ‘‘Not later
than the expiration of the 90-day period beginning
on the date of the enactment of the Cranston-Gon-
zalez National Affordable Housing Act, the’’ and in-
serting ‘‘The’’.
(h) REPEAL OF OBSOLETE PROVISIONS.—The Real
Estate Settlement Procedures Act of 1974 (12 U.S.C.
2601 et seq.) is amended by striking sections 13, 14 and
15.
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SEC. 2104. WAIVER FOR CERTAIN BORROWERS.
Section 105 of the Truth in Lending Act (15 U.S.C.
1604) is amended by adding at the end the following new
subsection:
‘‘(g) WAIVER FOR CERTAIN BORROWERS.—
‘‘(1) IN GENERAL.—The Board, by regulation,
may exempt from the requirements of this title cer-
tain credit transactions if—
‘‘(A) the transaction involves a consumer—
‘‘(i) with an annual earned income of
more than $200,000; or
‘‘(ii) having net assets in excess of
$1,000,000 at the time of the transaction;
and
‘‘(B) a waiver that is handwritten, signed,
and dated by the consumer is first obtained
from the consumer.
‘‘(2) ADJUSTMENTS
BY
THE
BOARD.—The
Board, at its discretion, may adjust the annual
earned income and net asset requirements of para-
graph (1) for inflation.’’.
SEC. 2105. ALTERNATIVE DISCLOSURES FOR ADJUSTABLE
RATE MORTGAGES.
Section 128(a) of the Truth in Lending Act (15
U.S.C. 1638(a)) is amended by adding at the end the fol-
lowing new paragraph:
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‘‘(14) In the case of any variable interest rate
residential mortgage transaction, in disclosures pro-
vided at application as prescribed by the Board for
a variable rate transaction secured by the consum-
er’s principal dwelling, at the option of the creditor,
a statement that the periodic payments may increase
or decrease substantially, and the maximum interest
rate and payment for a $10,000 loan originated at
a recent interest rate, as determined by the Board,
assuming the maximum periodic increases in rates
and payments under the program, or a historical ex-
ample illustrating the effects of interest rate changes
implemented according to the loan program.’’.
SEC. 2106. RESTITUTION FOR VIOLATIONS OF THE TRUTH
IN LENDING ACT.
Section 108(e)(3) of the Truth in Lending Act (15
U.S.C. 2602(3)) is amended—
(1) by striking ‘‘ordered (A) if’’ and inserting
the following: ‘‘ordered—
‘‘(A) if’’;
(2) by striking ‘‘may require a partial’’ and in-
serting ‘‘may—
‘‘(i) require a partial’’;
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(3) by striking ‘‘, except that with respect’’ and
all that follows through ‘‘Act, the agency shall re-
quire’’ and inserting ‘‘; or
‘‘(ii) require’’;
(4) by striking ‘‘reasonable, (B) the’’ and in-
serting the following: ‘‘reasonable, if (in the case of
an agency referred to in paragraph (1), (2), or (3)
of subsection (a)), the agency determines that a par-
tial adjustment or making partial payments over an
extended period is necessary to avoid causing the
creditor to become undercapitalized pursuant to sec-
tion 38 of the Federal Deposit Insurance Act;
‘‘(B) the’’; and
(5) by striking ‘‘(C) except’’ and inserting the
following:
‘‘(C) except’’.
SEC. 2107. LIMITATION ON LIABILITY UNDER THE TRUTH
IN LENDING ACT.
(a) IN GENERAL.—Section 139(a) of the Truth in
Lending Act (15 U.S.C. 1649(a)) is amended by striking
‘‘For any consumer credit transaction subject to this title’’
and inserting ‘‘For any closed end consumer credit trans-
action that is secured by real property or a dwelling, that
is subject to this title, and’’.
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(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall be effective as of September 30,
1995.
Subtitle B—Streamlining
Government Regulation
CHAPTER 1—ELIMINATING UNNECESSARY
REGULATORY 
REQUIREMENTS 
AND
PROCEDURES
SEC. 2201. ELIMINATION OF REDUNDANT APPROVAL RE-
QUIREMENT FOR OAKAR TRANSACTIONS.
(a) IN GENERAL.—Section 5(d)(3) of the Federal
Deposit Insurance Act (12 U.S.C. 1815(d)(3)) is amend-
ed—
(1) in subparagraph (A), by striking ‘‘with the
prior written approval of’’ and inserting ‘‘if the
transaction is approved by’’;
(2) in subparagraph (E)—
(A) by striking clauses (i) and (iv);
(B) by redesignating clauses (ii) and (iii)
as clauses (i) and (ii), respectively; and
(C) by adding at the end the following new
clause:
‘‘(iii) CAPITAL
REQUIREMENTS.—A
transaction described in this paragraph
shall not be approved under section
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18(c)(2) unless the acquiring, assuming, or
resulting depository institution will meet
all applicable capital requirements upon
consummation of the transaction.’’;
(3) by striking subparagraph (G); and
(4) 
by 
redesignating 
subparagraphs 
(H)
through (J) as subparagraphs (G) through (I), re-
spectively.
(b) CONFORMING AMENDMENTS.—
(1) REVISED STATUTES.—Section 5156A(b)(1)
of the Revised Statutes of the United States (12
U.S.C. 215c(b)(1)) is amended by striking ‘‘by sec-
tion 5(d)(3) of the Federal Deposit Insurance Act or
any other’’ and inserting ‘‘under any’’.
(2) 
HOME
OWNERS’ 
LOAN
ACT.—Section
10(s)(2)(A) of the Home Owners’ Loan Act (12
U.S.C. 1467a(s)(2)(A)) is amended by striking
‘‘under section 5(d)(3) of the Federal Deposit Insur-
ance Act or any other’’ and inserting ‘‘under any’’.
SEC. 2203. ELIMINATION OF DUPLICATIVE REQUIREMENTS
IMPOSED UPON BANK HOLDING COMPANIES.
(a) EXEMPTION FOR BANK HOLDING COMPANIES.—
Section 10 of the Home Owners’ Loan Act (12 U.S.C.
1467a) is amended by adding at the end the following new
subsection:
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‘‘(t) EXEMPTION
FOR
BANK
HOLDING
COMPA-
NIES.—This section shall not apply to a bank holding com-
pany that is subject to the Bank Holding Company Act
of 1956, or any company controlled by such bank holding
company.’’.
(b) DEFINITION.—Section 10(a)(1)(D) of the Home
Owners’ Loan Act (12 U.S.C. 1467a(a)(1)(D)) is amend-
ed to read as follows:
‘‘(D) SAVINGS AND LOAN HOLDING COM-
PANY.—
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (ii), the term ‘savings and
loan holding company’ means any company
that directly or indirectly controls a sav-
ings association or that controls any other
company that is a savings and loan holding
company.
‘‘(ii) EXCLUSION.—The term ‘savings
and loan holding company’ does not in-
clude a bank holding company that is reg-
istered under, and subject to, the Bank
Holding Company Act of 1956, or to any
company directly or indirectly controlled by
such company (other than a savings asso-
ciation).’’.
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(c) ACQUISITIONS.—Section 10(e)(1) of the Home
Owners’ Loan Act (12 U.S.C. 1467a(e)(1)) is amended—
(1) in subparagraph (A)(iii)(VII), by inserting
‘‘or’’ at the end;
(2) in subparagraph (A)(iv), by inserting ‘‘and’’
at the end; and
(3) in subparagraph (B)—
(A) by striking ‘‘or (ii)’’ and inserting
‘‘(ii)’’; and
(B) by inserting before the first period ‘‘,
or (iii) acquired by a bank holding company
that is registered under, and subject to, the
Bank Holding Company Act of 1956, or any
company controlled by such bank holding com-
pany’’.
(d) AMENDMENTS TO THE BANK HOLDING COMPANY
ACT OF 1956.—Section 4(i) of the Bank Holding Com-
pany Act of 1956 (12 U.S.C. 1843(i)) is amended by add-
ing at the end the following new paragraphs:
‘‘(4) SOLICITATION OF VIEWS.—
‘‘(A) NOTICE TO DIRECTOR.—Upon receiv-
ing any application or notice by a bank holding
company to acquire, directly or indirectly, a
savings association under subsection (c)(8), the
Board shall solicit comments and recommenda-
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‘‘(6) COORDINATION
OF
ENFORCEMENT
EF-
FORTS.—The Board and the Director shall cooper-
ate in any enforcement action against any bank
holding company that controls a savings association,
if the relevant conduct involves such association.
‘‘(7) DIRECTOR
DEFINED.—For purposes of
this section, the term ‘Director’ means the Director
of the Office of Thrift Supervision.’’.
SEC. 2204. ELIMINATION OF THE PER BRANCH CAPITAL RE-
QUIREMENT 
FOR 
NATIONAL 
BANKS 
AND
STATE MEMBER BANKS.
Section 5155(h) of the Revised Statutes of the United
States (12 U.S.C. 36(h)) is amended to read as follows:
‘‘(h) [Repealed]’’.
SEC. 2205. ELIMINATION OF BRANCH APPLICATION RE-
QUIREMENTS FOR AUTOMATIC TELLER MA-
CHINES.
(a) ‘‘BRANCH’’ UNDER NATIONAL BANK ACT.—Sec-
tion 5155(j) of the Revised Statutes of the United States
(12 U.S.C. 36(j)) is amended by adding at the end the
following: ‘‘The term ‘branch’, as used in this section, does
not include an automated teller machine or a remote serv-
ice unit.’’.
(b) ‘‘DOMESTIC BRANCH’’ UNDER
THE FEDERAL
DEPOSIT INSURANCE ACT.—Section 3(o) of the Federal
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Deposit Insurance Act (12 U.S.C. 1813(o)) is amended
by striking ‘‘lent; and the’’ and inserting ‘‘lent. The term
‘domestic branch’ does not include an automated teller
machine or a remote service unit. The’’.
SEC. 2206. ELIMINATION OF REQUIREMENT FOR APPROVAL
OF INVESTMENTS IN BANK PREMISES FOR
WELL CAPITALIZED AND WELL MANAGED
BANKS.
Section 24A of the Federal Reserve Act (12 U.S.C.
371d) is amended to read as follows:
‘‘SEC. 24A. INVESTMENT IN BANK PREMISES OR STOCK OF
CORPORATION HOLDING PREMISES.
‘‘(a) CONDITIONS
OF INVESTMENT.—No national
bank or State member bank shall invest in bank premises,
or in the stock, bonds, debentures, or other such obliga-
tions of any corporation holding the premises of such
bank, or make loans to or upon the security of any such
corporation—
‘‘(1) unless the bank receives the prior approval
of the Comptroller of the Currency (with respect to
a national bank) or the Board (with respect to a
State member bank);
‘‘(2) unless the aggregate of all such invest-
ments and loans, together with the amount of any
indebtedness incurred by any such corporation that
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is an affiliate of the bank, is less than or equal to
the amount of the capital stock of such bank; or
‘‘(3) unless—
‘‘(A) the aggregate of all such investments
and loans, together with the amount of any in-
debtedness incurred by any such corporation
that is an affiliate of the bank, is less than or
equal to 150 percent of the capital and surplus
of the bank; and
‘‘(B) the bank—
‘‘(i) has a CAMEL composite rating
of 1 or 2 under the Uniform Financial In-
stitutions Rating System (or an equivalent
rating under a comparable rating system)
as of the most recent examination of such
bank;
‘‘(ii) is well capitalized and will con-
tinue to be well capitalized after the invest-
ment or loan; and
‘‘(iii) provides notification to the
Comptroller of the Currency (with respect
to a national bank) or to the Board (with
respect to a State member bank) not later
than 30 days after making the investment
or loan.
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‘‘(b) DEFINITIONS.—For purposes of this section—
‘‘(1) the term ‘affiliate’ has the same meaning
as in section 2 of the Banking Act of 1933; and
‘‘(2) the term ‘well capitalized’ has the same
meaning as in section 38(b) of the Federal Deposit
Insurance Act.’’.
SEC. 2207. ELIMINATION OF APPROVAL REQUIREMENT FOR
DIVESTITURES.
Section 2(g) of the Bank Holding Company Act of
1956 (12 U.S.C. 1841(g)) is amended—
(1) in paragraph (1), by adding ‘‘and’’ at the
end;
(2) in paragraph (2), by striking ‘‘; and’’ and
inserting a period; and
(3) by striking paragraph (3).
SEC. 2208. STREAMLINED NONBANKING ACQUISITIONS BY
WELL CAPITALIZED AND WELL MANAGED
BANKING ORGANIZATIONS.
(a) NOTICE REQUIREMENTS.—Section 4(j) of the
Bank Holding Company Act of 1956 (12 U.S.C. 1843(j))
is amended—
(1) in paragraph (1)(A), by striking ‘‘No’’ and
inserting ‘‘Except as provided in paragraph (3), no’’;
and
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(2) by adding at the end the following new
paragraphs:
‘‘(3) NO
NOTICE
REQUIRED
FOR
CERTAIN
TRANSACTIONS.—No notice under paragraph (1) of
this subsection or under subsection (c)(8) or
(a)(2)(B) is required for a proposal by a bank hold-
ing company to engage in any activity or acquire the
shares or assets of any company, other than an in-
sured depository institution, if the proposal qualifies
under paragraph (4).
‘‘(4) CRITERIA FOR STATUTORY APPROVAL.—A
proposal qualifies under this paragraph if all of the
following criteria are met:
‘‘(A) FINANCIAL
CRITERIA.—Both before
and immediately after the proposed trans-
action—
‘‘(i) the acquiring bank holding com-
pany is well capitalized;
‘‘(ii) the lead insured depository insti-
tution of such holding company is well cap-
italized;
‘‘(iii) well capitalized insured deposi-
tory institutions control at least 80 percent
of the aggregate total risk-weighted assets
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of insured depository institutions controlled
by such holding company; and
‘‘(iv) no insured depository institution
controlled by such holding company is
undercapitalized.
‘‘(B) MANAGERIAL CRITERIA.—
‘‘(i) WELL MANAGED.—At the time of
the transaction, the acquiring bank holding
company, its lead insured depository insti-
tution, and insured depository institutions
that control at least 90 percent of the ag-
gregate total risk-weighted assets of in-
sured depository institutions controlled by
such holding company are well managed.
‘‘(ii) LIMITATION
ON
POORLY
MAN-
AGED INSTITUTIONS.—Except as provided
in paragraph (6), no insured depository in-
stitution controlled by the acquiring bank
holding company has received 1 of the 2
lowest composite ratings at the later of the
institution’s most recent examination or
subsequent review.
‘‘(C) ACTIVITIES PERMISSIBLE.—Following
consummation of the proposal, the bank holding
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company engages directly or through a subsidi-
ary solely in—
‘‘(i) activities that are permissible
under subsection (c)(8), as determined by
the Board by regulation or order there-
under, subject to all of the restrictions,
terms, and conditions of such subsection
and such regulation or order; and
‘‘(ii) such other activities as are other-
wise permissible under this section, subject
to the restrictions, terms and conditions,
including any prior notice or approval re-
quirements, provided in this section.
‘‘(D) SIZE OF ACQUISITION.—
‘‘(i) ASSET SIZE.—The book value of
the total assets to be acquired does not ex-
ceed 10 percent of the consolidated total
risk-weighted assets of the acquiring bank
holding company.
‘‘(ii) 
CONSIDERATION.—The 
gross
consideration to be paid for the securities
or assets does not exceed 15 percent of the
consolidated Tier 1 capital of the acquiring
bank holding company.
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‘‘(E) NOTICE
NOT
OTHERWISE
WAR-
RANTED.—For proposals described in para-
graph (5)(B), the Board has not, before the
conclusion of the period provided in paragraph
(5)(B), advised the bank holding company that
a notice under paragraph (1) is required.
‘‘(F) COMPLIANCE
CRITERION.—During
the 12-month period ending on the date on
which the bank holding company proposes to
commence an activity or acquisition, no admin-
istrative enforcement action has been com-
menced, and no cease and desist order has been
issued pursuant to section 8 of the Federal De-
posit Insurance Act, against the bank holding
company or any depository institution subsidi-
ary of the holding company, and no such en-
forcement action, order, or other administrative
enforcement proceeding is pending as of such
date.
‘‘(5) NOTIFICATION.—
‘‘(A) COMMENCEMENT OF ACTIVITIES AP-
PROVED BY RULE.—A bank holding company
that qualifies under paragraph (4) and that
proposes to engage de novo, directly or through
a subsidiary, in any activity that is permissible
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under subsection (c)(8), as determined by the
Board by regulation, may commence that activ-
ity without prior notice to the Board and must
provide written notification to the Board not
later than 10 business days after commencing
the activity.
‘‘(B) ACTIVITIES
PERMITTED
BY
ORDER
AND ACQUISITIONS.—
‘‘(i) IN GENERAL.—At least 12 busi-
ness days before commencing any activity
pursuant to paragraph (3) (other than an
activity described in subparagraph (A) of
this paragraph) or acquiring shares or as-
sets of any company pursuant to para-
graph (3), the bank holding company shall
provide written notice of the proposal to
the Board, unless the Board determines
that no notice or a shorter notice period is
appropriate.
‘‘(ii) DESCRIPTION
OF
ACTIVITIES
AND
TERMS.—A notification under this
subparagraph shall include a description of
the proposed activities and the terms of
any proposed acquisition.
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‘‘(6) RECENTLY
ACQUIRED
INSTITUTIONS.—
Any insured depository institution which has been
acquired by a bank holding company during the 12-
month period preceding the date on which the com-
pany proposes to commence an activity or acquisi-
tion pursuant to paragraph (3) may be excluded for
purposes of paragraph (4)(B)(ii) if—
‘‘(A) the bank holding company has devel-
oped a plan for the institution to restore the
capital and management of the institution
which is acceptable to the appropriate Federal
banking agency; and
‘‘(B) all such insured depository institu-
tions represent, in the aggregate, less than 10
percent of the aggregate total risk-weighted as-
sets of all insured depository institutions con-
trolled by the bank holding company.
‘‘(7) ADJUSTMENT
OF
PERCENTAGES.—The
Board may, by regulation, adjust the percentages
and the manner in which the percentages of insured
depository institutions are calculated under para-
graph (4)(B)(i), (4)(D), or (6)(B) if the Board de-
termines that any such adjustment is consistent with
safety and soundness and the purposes of this Act.’’.
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(b) DEFINITIONS.—Section 2(o) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1841(o)) is amended—
(1) by striking paragraph (1) and inserting the
following new paragraph:
‘‘(1) CAPITAL TERMS.—
‘‘(A) 
INSURED
DEPOSITORY
INSTITU-
TIONS.—With respect to insured depository in-
stitutions, the terms ‘well capitalized’, ‘ade-
quately capitalized’, and ‘undercapitalized’ have
the same meanings as in section 38(b) of the
Federal Deposit Insurance Act.
‘‘(B) BANK HOLDING COMPANY.—
‘‘(i) 
ADEQUATELY
CAPITALIZED.—
With respect to a bank holding company,
the term ‘adequately capitalized’ means a
level of capitalization which meets or ex-
ceeds all applicable Federal regulatory cap-
ital standards.
‘‘(ii) WELL
CAPITALIZED.—A bank
holding company is ‘well capitalized’ if it
meets the required capital levels for well
capitalized bank holding companies estab-
lished by the Board.
‘‘(C) OTHER CAPITAL TERMS.—The terms
‘Tier 1’ and ‘risk-weighted assets’ have the
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meanings given those terms in the capital
guidelines or regulations established by the
Board for bank holding companies.’’; and
(2) by adding at the end the following new
paragraphs:
‘‘(8) LEAD
INSURED
DEPOSITORY
INSTITU-
TIONS.—
‘‘(A) IN
GENERAL.—The term ‘lead in-
sured depository institution’ means the largest
insured depository institution controlled by the
subject bank holding company at any time,
based on a comparison of the average total risk-
weighted assets controlled by each insured de-
pository institution during the previous 12-
month period.
‘‘(B) BRANCH OR AGENCY.—For purposes
of this paragraph and section 4(j)(4), the term
‘insured depository institution’ includes any
branch or agency operated in the United States
by a foreign bank.
‘‘(9) WELL MANAGED.—The term ‘well man-
aged’ means—
‘‘(A) in the case of any company or deposi-
tory institution which receives examinations, the
achievement of—
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‘‘(i) a CAMEL composite rating of 1
or 2 (or an equivalent rating under an
equivalent rating system) in connection
with the most recent examination or subse-
quent review of such company or institu-
tion; and
‘‘(ii) at least a satisfactory rating for
management, if such rating is given; or
‘‘(B) in the case of a company or deposi-
tory institution that has not received an exam-
ination rating, the existence and use of manage-
rial resources which the Board determines are
satisfactory.’’.
SEC. 2209. ELIMINATION OF UNNECESSARY FILING FOR OF-
FICER AND DIRECTOR APPOINTMENTS.
Section 32 of the Federal Deposit Insurance Act (12
U.S.C. 1831i) is amended—
(1) in subsection (a)—
(A) by inserting ‘‘(or such other period, as
determined by the appropriate Federal banking
agency)’’ after ‘‘30 days’’;
(B) by striking ‘‘if the insured depository
institution or depository institution holding
company’’ and inserting ‘‘if ’’;
(C) by striking paragraphs (1) and (2);
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(D) by redesignating paragraph (3) as
paragraph (1);
(E) in paragraph (1), as redesignated—
(i) by inserting ‘‘the insured deposi-
tory institution or depository institution
holding company’’ before ‘‘is not in compli-
ance’’; and
(ii) by striking the period at the end
and inserting ‘‘; or’’; and
(F) by adding at the end the following new
paragraph:
‘‘(2) the agency determines, in connection with
the review by the agency of the plan required under
section 38 or otherwise, that such prior notice is ap-
propriate.’’; and
(2) in subsection (b), by striking ‘‘30-day pe-
riod’’ and inserting ‘‘notice period, not to exceed 90
days,’’.
SEC. 2210. AMENDMENTS TO THE DEPOSITORY INSTITU-
TION MANAGEMENT INTERLOCKS ACT.
(a) DUAL SERVICE AMONG LARGER ORGANIZA-
TIONS.—Section 204 of the Depository Institution Man-
agement Interlocks Act (12 U.S.C. 3203) is amended—
(1) by striking ‘‘$1,000,000,000’’ and inserting
‘‘$2,500,000,000’’;
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(2) by striking ‘‘$500,000,000’’ and inserting
‘‘$1,500,000,000’’; and
(3) by adding at the end the following: ‘‘In
order to allow for inflation or market changes, the
appropriate Federal depository institutions regu-
latory agencies may, by regulation, adjust, as nec-
essary, the amount of total assets required for de-
pository institutions or depository holding companies
under this section.’’.
(b) EXTENSION OF GRANDFATHER EXEMPTION.—
Section 206 of the Depository Institution Management
Interlocks Act (12 U.S.C. 3205) is amended—
(1) in subsection (a), by striking ‘‘for a period
of, subject to the requirements of subsection (c), 20
years after the date of enactment of this title’’;
(2) in subsection (b), by striking the second
sentence; and
(3) by striking subsection (c).
(c) REGULATIONS.—Section 209 of the Depository
Institution Management Interlocks Act (12 U.S.C. 3207)
is amended—
(1) in subsection (a)—
(A) by striking ‘‘(a) IN GENERAL.—Rules
and regulations’’ and inserting ‘‘Regulations’’;
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(B) by inserting ‘‘, including regulations
that permit service by a management official
that would otherwise be prohibited by section
203 or section 204, if such service would not re-
sult in a monopoly or substantial lessening of
competition,’’ after ‘‘title’’;
(C) in paragraph (4)—
(i) by striking ‘‘Federal Home Loan
Bank Board’’ and inserting ‘‘Director of
the Office of Thrift Supervision’’; and
(ii) by striking ‘‘Savings and Loan’’
and inserting ‘‘Deposit’’; and
(2) by striking subsections (b) and (c).
SEC. 2211. ELIMINATION OF RECORDKEEPING AND RE-
PORTING REQUIREMENTS FOR OFFICERS.
(a) EMPLOYEE BENEFIT PLANS.—Section 22(h)(2)
of the Federal Reserve Act (12 U.S.C. 375b(2)) is amend-
ed—
(1) by redesignating subparagraphs (A) through
(C) as clauses (i) through (iii), respectively, and in-
denting appropriately;
(2) by striking ‘‘(2) PREFERENTIAL
TERMS
PROHIBITED.—’’ and inserting the following:
‘‘(2) PREFERENTIAL TERMS PROHIBITED.—
‘‘(A) IN GENERAL.—’’; and
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(3) by adding at the end the following new sub-
paragraph:
‘‘(B) EXCEPTION.—Nothing in this para-
graph shall prohibit any extension of credit
made pursuant to a benefit or compensation
program—
‘‘(i) that is widely available to employ-
ees of the member bank; and
‘‘(ii) that does not give preference to
any officer, director, or principal share-
holder of the member bank, or to any re-
lated interest of such person, over other
employees of the member bank.’’.
(b) EXCEPTION FOR EXTENSIONS OF CREDIT TO EX-
ECUTIVE OFFICERS AND DIRECTORS OF AFFILIATES.—
Section 22(h)(8)(B) of the Federal Reserve Act (12
U.S.C. 375b(8)(B)) is amended to read as follows:
‘‘(B) EXCEPTION.—The Board may, by
regulation, make exceptions to subparagraph
(A) for any executive officer or director of a
subsidiary of a company that controls the mem-
ber bank if—
‘‘(i) the executive officer or director
does not have authority to participate, and
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does not participate, in major policymaking
functions of the member bank; and
‘‘(ii) the assets of such subsidiary do
not exceed 10 percent of the consolidated
assets of a company that controls the
member bank and such subsidiary (and is
not controlled by any other company).’’.
SEC. 2212. REPAYMENT OF TREASURY LOAN.
Section 1108 of the Federal Financial Institutions
Reform, Recovery, and Enforcement Act of 1989 (12
U.S.C. 3337) is amended by adding at the end the follow-
ing new subsection.—
‘‘(c) REPAYMENT OF TREASURY LOAN.—Not later
than September 30, 1998, the Appraisal Subcommittee
shall repay to the Secretary of the Treasury the unpaid
portion of the $5,000,000 paid to the Appraisal Sub-
committee pursuant to this section.’’.
SEC. 2213. 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:
‘‘(e) SCOPE OF APPLICATION.—This section shall not
apply with respect to—
‘‘(1) an automated teller machine;
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‘‘(2) the relocation of a branch or consolidation
of one or more branches into another branch, if the
relocation or consolidation—
‘‘(A) occurs within the immediate neigh-
borhood; and
‘‘(B) does not substantially affect the na-
ture of the business or customers served; or
‘‘(3) a branch that is closed in connection
with—
‘‘(A) an emergency acquisition under—
‘‘(i) section 11(n); or
‘‘(ii) subsection (f) or (k) of section
13; or
‘‘(B) any assistance provided by the Cor-
poration under section 13(c).’’.
SEC. 2214. FOREIGN BANKS.
(a) EXAMINATION OF BRANCHES AND AGENCIES BY
BOARD.—Section 7(c) of the International Banking Act
of 1978 (12 U.S.C. 3105(c)) is amended—
(1) by striking ‘‘(c)’’ and inserting the follow-
ing:
‘‘(c) FOREIGN BANK EXAMINATIONS AND REPORT-
ING.—’’;
(2) in paragraph (1)(B), by adding at the end
the following new clause:
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‘‘(iii) AVOIDANCE OF DUPLICATION.—
In exercising its authority under this para-
graph, the Board shall take all reasonable
measures to reduce burden and avoid un-
necessary duplication of examinations.’’;
(3) by striking subparagraph (C) of paragraph
(1) and inserting the following:
‘‘(C) ON-SITE EXAMINATION.—Each Fed-
eral branch or agency, and each State branch
or agency, of a foreign bank shall be subject to
on-site examination by an appropriate Federal
banking agency or State bank supervisor as fre-
quently as would a national bank or a State
bank, respectively, by the appropriate Federal
banking agency.’’; and
(4) in paragraph (1)(D), by inserting before the
period at the end the following: ‘‘, only to the same
extent that fees are collected by the Board for exam-
ination of any State member bank’’.
(b) ESTABLISHMENT OF FOREIGN BANK OFFICES IN
THE UNITED STATES.—Section 7(d) of the International
Banking Act of 1978 (12 U.S.C. 3105(d)) is amended—
(1) in paragraph (2), by striking ‘‘The Board’’
and inserting ‘‘Except as provided in paragraph (6),
the Board’’;
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(2) in paragraph (5), by striking ‘‘Consistent
with the standards for approval in paragraph (2),
the’’; and inserting ‘‘The’’; and
(3) by adding at the end the following new
paragraphs:
‘‘(6) EXCEPTION.—
‘‘(A) IN GENERAL.—If the Board is unable
to find, under paragraph (2), that a foreign
bank is subject to comprehensive supervision or
regulation on a consolidated basis by the appro-
priate authorities in its home country, the
Board may nevertheless approve an application
by such foreign bank under paragraph (1) if—
‘‘(i) the appropriate authorities in the
home country of the foreign bank are ac-
tively working to establish arrangements
for the consolidated supervision of such
bank; and
‘‘(ii) all other factors are consistent
with approval.
‘‘(B) OTHER CONSIDERATIONS.—In decid-
ing whether to use its discretion under subpara-
graph (A), the Board shall also consider wheth-
er the foreign bank has adopted and imple-
ments procedures to combat money laundering.
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The Board may also take into account whether
the home country of the foreign bank is devel-
oping a legal regime to address money launder-
ing or is participating in multilateral efforts to
combat money laundering.
‘‘(C) ADDITIONAL
CONDITIONS.—In ap-
proving an application under this paragraph,
the Board, after requesting and taking into
consideration the views of the appropriate State
bank supervisor or the Comptroller of the Cur-
rency, as the case may be, may impose such
conditions or restrictions relating to the activi-
ties or business operations of the proposed
branch, agency, or commercial lending company
subsidiary, including restrictions on sources of
funding, as are considered appropriate. The
Board shall coordinate with the appropriate
State bank supervisor or the Comptroller of the
Currency, as appropriate, in the implementation
of such conditions or restrictions.
‘‘(D) MODIFICATION
OF
CONDITIONS.—
Any condition or restriction imposed by the
Board in connection with the approval of an ap-
plication under authority of this paragraph may
be modified or withdrawn.
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‘‘(7) TIME PERIOD FOR BOARD ACTION.—
‘‘(A) FINAL
ACTION.—The Board shall
take final action on any application under para-
graph (1) not later than 180 days after receipt
of the application, except that the Board may
extend for an additional 180 days the period
within which to take final action on such appli-
cation after providing notice of, and the reasons
for, the extension to the applicant foreign bank
and any appropriate State bank supervisor or
the Comptroller of the Currency, as appro-
priate.
‘‘(B) FAILURE
TO
SUBMIT
INFORMA-
TION.—The Board may deny any application if
it does not receive information requested from
the applicant foreign bank or appropriate au-
thorities in the home country of the foreign
bank in sufficient time to permit the Board to
evaluate such information adequately within the
time periods for final action set forth in sub-
paragraph (A).
‘‘(C) WAIVER.—A foreign bank may waive
the applicability of this paragraph with respect
to any application under paragraph (1).’’.
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(c) TERMINATION OF FOREIGN BANK OFFICES IN
THE UNITED STATES.—Section 7(e)(1)(A) of the Inter-
national Banking Act of 1978 (12 U.S.C. 3105(e)(1)(A))
is amended—
(1) by inserting ‘‘(i)’’ after ‘‘(A)’’;
(2) by striking ‘‘or’’ at the end and inserting
‘‘and’’; and
(3) by adding at the end the following new
clause:
‘‘(ii) the appropriate authorities in the
home country of the foreign bank are not mak-
ing demonstrable progress in establishing ar-
rangements for the comprehensive supervision
or regulation of such foreign bank on a consoli-
dated basis; or’’.
SEC. 2215. DISPOSITION OF FORECLOSED ASSETS.
Section 4(c)(2) of the Bank Holding Company Act
of 1956 (12 U.S.C. 1843(c)(2)) is amended—
(1) by striking ‘‘for not more than one year at
a time’’; and
(2) by striking ‘‘but no such extensions shall ex-
tend beyond a date five years’’ and inserting ‘‘and,
in the case of a bank holding company which has
not disposed of such shares within 5 years after the
date on which such shares were acquired, the Board
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may, upon the application of such company, grant
additional exemptions if, in the judgment of the
Board, such extension would not be detrimental to
the public interest and, either the bank holding com-
pany has made a good faith attempt to dispose of
such shares during such 5-year period, or the dis-
posal of such shares during such 5-year period
would have been detrimental to the company, except
that the aggregate duration of such extensions shall
not extend beyond 10 years’’.
SEC. 2216. EXEMPTION AUTHORITY FOR ANTITYING PROVI-
SION.
(a) FEDERAL RESERVE BOARD AUTHORITY.—Sec-
tion 106(b)(1) of the Bank Holding Company Act Amend-
ments of 1970 (12 U.S.C. 1972(1)) is amended in the last
sentence, by inserting ‘‘and the prohibitions of section
4(f)(9) and 4(h)(2) of the Bank Holding Company Act
of 1956’’ after ‘‘prohibition’’.
(b) OTS AUTHORITY.—Section 5(q) of the Home
Owners’ Loan Act (12 U.S.C. 1464(q)) is amended by
adding at the end the following new paragraph:
‘‘(6) EXCEPTIONS.—The Director may, by reg-
ulation or order, permit such exceptions to the pro-
hibitions of this subsection as the Director considers
will not be contrary to the purposes of this sub-
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section and which conform to exceptions granted by
the Board of Governors of the Federal Reserve Sys-
tem pursuant to section 106(b) of the Bank Holding
Company Act Amendments of 1970.’’.
SEC. 2217. FDIC APPROVAL OF NEW STATE BANK POWERS.
Section 24 of the Federal Deposit Insurance Act (12
U.S.C. 1831a) is amended—
(1) in subsection (a)—
(A) by redesignating paragraphs (1) and
(2) as subparagraphs (A) and (B), respectively,
and indenting appropriately;
(B) by striking ‘‘IN GENERAL.—’’ and in-
serting the following: ‘‘PERMISSIBLE
ACTIVI-
TIES.—
‘‘(1) IN GENERAL.—’’; and
(C) by adding at the end the following new
paragraph:
‘‘(2) PROCESSING PERIOD.—
‘‘(A) IN GENERAL.—The Corporation shall
make a determination under paragraph (1)(A)
not later than 60 days after receipt of a com-
pleted application that may be required under
this subsection.
‘‘(B) EXTENSION OF TIME PERIOD.—The
Corporation may extend the 60-day period re-
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ferred to in subparagraph (A) for not more
than 30 additional days, and shall notify the
applicant of any such extension.’’; and
(2) in subsection (d), by adding at the end the
following new paragraph:
‘‘(3) PROCESSING PERIOD.—
‘‘(A) IN GENERAL.—The Corporation shall
make a determination under paragraph (1)(A)
not later than 60 days after receipt of a com-
pleted application that may be required under
this subsection.
‘‘(B) EXTENSION OF TIME PERIOD.—The
Corporation may extend the 60-day period re-
ferred to in subparagraph (A) for not more
than 30 additional days, and shall notify the
applicant of any such extension.’’.
CHAPTER 2—ELIMINATING UNNECESSARY
REGULATORY BURDENS
SEC. 2221. SMALL BANK EXAMINATION CYCLE.
Section 10(d) of the Federal Deposit Insurance Act
(12 U.S.C. 1820(d)) is amended—
(1) by redesignating the second paragraph des-
ignated as paragraph (8) as paragraph (10), and by
inserting that paragraph, as redesignated, imme-
diately after paragraph (9); and
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(2) in paragraph (10), as redesignated, by
striking 
‘‘$175,000,000’’ 
and 
inserting
‘‘$250,000,000’’.
SEC. 2222. REQUIRED REVIEW OF REGULATIONS.
(a) IN GENERAL.—Not less frequently than once
every 10 years, the Council and each appropriate Federal
banking agency represented on the Council shall conduct
a review of all regulations prescribed by the Council or
by any such appropriate Federal banking agency, respec-
tively, in order to identify outdated or otherwise unneces-
sary regulatory requirements imposed on insured deposi-
tory institutions.
(b) PROCESS.—In conducting the review under sub-
section (a), the Council or the appropriate Federal bank-
ing agency shall—
(1) categorize the regulations described in sub-
section (a) by type (such as consumer regulations,
safety and soundness regulations, or such other des-
ignations as determined by the Council, or the ap-
propriate Federal banking agency); and
(2) at regular intervals, provide notice and so-
licit public comment on a particular category or cat-
egories of regulations, requesting commentators to
identify areas of the regulations that are outdated,
unnecessary, or unduly burdensome.
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(c) COMPLETE REVIEW.—The Council or the appro-
priate Federal banking agency shall ensure that the notice
and comment period described in subsection (b)(2) is con-
ducted with respect to all regulations described in sub-
section (a) not less frequently than once every 10 years.
(d) REGULATORY RESPONSE.—The Council or the
appropriate Federal banking agency shall—
(1) publish in the Federal Register a summary
of the comments received under this section, identi-
fying significant issues raised and providing com-
ment on such issues; and
(2) eliminate unnecessary regulations to the ex-
tent that such action is appropriate.
(e) REPORT TO CONGRESS.—Not later than 30 days
after carrying out subsection (d)(1), the Council shall sub-
mit to the Congress a report, which shall include—
(1) a summary of any significant issues raised
by public comments received by the Council and the
appropriate Federal banking agencies under this sec-
tion and the relative merits of such issues; and
(2) an analysis of whether the appropriate Fed-
eral banking agency involved is able to address the
regulatory burdens associated with such issues by
regulation, or whether such burdens must be ad-
dressed by legislative action.
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SEC. 2223. REPEAL OF IDENTIFICATION OF NONBANK FI-
NANCIAL INSTITUTION CUSTOMERS.
Subchapter II of chapter 53 of title 31, United States
Code, is amended—
(1) by striking section 5327;
(2) in the chapter analysis, by striking the item
relating to section 5327; and
(3) in section 5321(a), by striking paragraph
(7).
SEC. 2224. REPEAL OF CERTAIN REPORTING REQUIRE-
MENTS.
(a) FDIA.—Section 477 of the Federal Deposit In-
surance Corporation Improvement Act of 1991 (12 U.S.C.
251) is repealed.
(b) FIRREA.—Section 918 of the Financial Institu-
tions Reform, Recovery, and Enforcement Act of 1989 (12
U.S.C. 1833 note) is repealed.
(c) ILS.—Section 913 of the International Lending
Supervision Act of 1983 (12 U.S.C. 3912) is repealed.
SEC. 2225. INCREASE IN HOME MORTGAGE DISCLOSURE EX-
EMPTION THRESHOLD.
(a) IN GENERAL.—Section 309 of the Home Mort-
gage Disclosure Act of 1975 (12 U.S.C. 2808) is amend-
ed—
(1) by striking ‘‘This title’’ and inserting ‘‘(a)
IN GENERAL.—This title’’;
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(2) in the 3d sentence, by inserting ‘‘(as deter-
mined without regard to the adjustment made by
subsection (b))’’ before the period; and
(2) by adding at the end the following new sub-
section:
‘‘(b) CPI ADJUSTMENTS.—
‘‘(1) IN GENERAL.—Subject to paragraph (2),
the dollar amount applicable with respect to institu-
tions described in section 303(2)(A) under the 2d
sentence of subsection (a) shall be adjusted annually
after December 31, 1996, by the annual percentage
increase in the Consumer Price Index for Urban
Wage Earners and Clerical Workers published by
the Bureau of Labor Statistics.
‘‘(2) 1-TIME ADJUSTMENT FOR PRIOR INFLA-
TION.—The first adjustment made under paragraph
(1) after the date of the enactment of the Economic
Growth and Regulatory Paperwork Reduction Act of
1996 shall be the percentage by which—
‘‘(A) the Consumer Price Index described
in such paragraph for the calendar year 1996,
exceeds
‘‘(B) such Consumer Price Index for the
calendar year 1975.
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‘‘(3) ROUNDING.—The dollar amount applicable
under paragraph (1) for any calendar year shall be
the amount determined in accordance with subpara-
graphs (A) and (B) of paragraph (2) and rounded
to the nearest multiple of $1,000,000.’’.
(b) OPPORTUNITY TO REDUCE COMPLIANCE BUR-
DEN.—Section 304 of the Home Mortgage Disclosure Act
of 1975 (12 U.S.C. 2803) is amended by adding at the
end the following new subsection:
‘‘(m) OPPORTUNITY TO REDUCE COMPLIANCE BUR-
DEN.—
‘‘(1) IN GENERAL.—
‘‘(A) SATISFACTION OF PUBLIC AVAILABIL-
ITY REQUIREMENTS.—A depository institution
shall be deemed to have satisfied the public
availability requirements of subsection (a) if the
institution compiles the information required
under that subsection at the home office of the
institution and provides notice at the branch lo-
cations specified in subsection (a) that such in-
formation is available from the home office of
the institution upon written request.
‘‘(B) PROVISION OF INFORMATION UPON
REQUEST.—Not later than 15 days after the re-
ceipt of a written request for any information
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required to be compiled under subsection (a),
the home office of the depository institution re-
ceiving the request shall provide the information
pertinent to the location of the branch in ques-
tion to the person requesting the information.
‘‘(2) FORM
OF
INFORMATION.—In complying
with paragraph (1), a depository institution shall, in
the sole discretion of the institution, provide the per-
son requesting the information with—
‘‘(A) a paper copy of the information re-
quested; or
‘‘(B) if acceptable to the person, the infor-
mation through a form of electronic medium,
such as a computer disk.’’.
SEC. 2226. ELIMINATION OF STOCK LOAN REPORTING RE-
QUIREMENT.
Section 7(j) of the Federal Deposit Insurance Act (12
U.S.C. 1817(j)) is amended—
(1) in paragraph (9)(A)—
(A) by striking ‘‘financial institution and
any affiliate of any financial institution’’ and
inserting ‘‘foreign bank, or any affiliate there-
of,’’; and
(B) by striking ‘‘by the financial institu-
tion and such institution’s affiliates’’ and in-
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serting ‘‘by the foreign bank or any affiliate
thereof’’;
(2) in paragraph (9)(B)—
(A) by striking ‘‘paragraph—’’ and insert-
ing ‘‘paragraph, the following definitions shall
apply:’’;
(B) by striking clause (i) and inserting the
following:
‘‘(i) FOREIGN BANK.—The terms ‘for-
eign bank’ and ‘affiliate’ have the same
meanings as in section 1 of the Inter-
national Banking Act of 1978.’’; and
(C) in clause (iii), by striking ‘‘financial in-
stitution’’ and inserting ‘‘foreign bank or any
affiliate thereof’’;
(3) in paragraph (9)(C)—
(A) by striking ‘‘financial institution or
any of its affiliates’’ and inserting ‘‘foreign
bank or any affiliate thereof’’; and
(B) by striking ‘‘financial institution or its
affiliates’’ and inserting ‘‘foreign bank or any
affiliate thereof’’;
(4) in paragraph (9)(D)—
(A) in clause (i)—
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(i) by striking ‘‘the financial institu-
tion and all affiliates of the institution’’
and inserting ‘‘the foreign bank and all af-
filiates thereof’’; and
(ii) by striking ‘‘financial institution
or any such affiliate’’ and inserting ‘‘for-
eign bank or affiliate thereof’’;
(B) in clause (ii), by striking ‘‘financial in-
stitution and any affiliate of such institution’’
and inserting ‘‘foreign bank and any affiliate
thereof’’; and
(C) in clause (iii), by striking ‘‘financial in-
stitution’’ and inserting ‘‘foreign bank or any
affiliate thereof’’; and
(5) in paragraph (9)(E)—
(A) in clause (i)—
(i) by striking ‘‘a financial institution
and the affiliates of such institution’’ and
inserting ‘‘a foreign bank or any affiliate
thereof’’; and
(ii) by striking ‘‘institution or affili-
ate’’ each place such term appears and in-
serting ‘‘foreign bank or any affiliate
thereof’’; and
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(B) in clause (ii), by striking ‘‘financial in-
stitution and any affiliate of such institution’’
and inserting ‘‘foreign bank and any affiliate
thereof’’.
SEC. 2227. CREDIT AVAILABILITY ASSESSMENT.
(a) STUDY.—
(1) IN GENERAL.—Not later than 12 months
after the date of enactment of this Act, and once
every 60 months thereafter, the Board, in consulta-
tion with the Director of the Office of Thrift Super-
vision, the Comptroller of the Currency, the Board
of Directors of the Corporation, the Administrator of
the National Credit Union Administration, the Ad-
ministrator of the Small Business Administration,
and the Secretary of Commerce, shall conduct a
study and submit a report to the Congress detailing
the extent of small business lending by all creditors.
(2) CONTENTS OF STUDY.—The study required
under paragraph (1) shall identify, to the extent
practicable, those factors which provide policymakers
with insights into the small business credit market,
including—
(A) the demand for small business credit,
including consideration of the impact of eco-
nomic cycles on the levels of such demand;
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CHAPTER 3—REGULATORY
MICROMANAGEMENT RELIEF
SEC. 2241. NATIONAL BANK DIRECTORS.
Section 5146 of the Revised Statutes of the United
States (12 U.S.C. 72) is amended in the first sentence,
by striking ‘‘except’’ and all that follows through the end
of the sentence and inserting the following: ‘‘except that
the Comptroller may, in the discretion of the Comptroller,
waive the requirement of residency.’’.
SEC. 2242. PAPERWORK REDUCTION REVIEW.
Section 303(a) of the Riegle Community Develop-
ment and Regulatory Improvement Act of 1994 (12
U.S.C. 4803(a)) is amended—
(1) by redesignating paragraphs (2) and (3) as
paragraphs (3) and (4), respectively; and
(2) by inserting after paragraph (1) the follow-
ing new paragraph:
‘‘(2) review the extent to which existing regula-
tions require insured depository institutions and in-
sured credit unions to produce unnecessary internal
written policies and eliminate such requirements,
where appropriate;’’.
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SEC. 2243. STATE BANK REPRESENTATION ON BOARD OF
DIRECTORS OF THE FDIC.
Section 2(a)(1)(C) of the Federal Deposit Insurance
Act (12 U.S.C. 1812(a)(1)(C)) is amended by inserting
before the period ‘‘, 1 of whom shall have State bank su-
pervisory experience’’.
SEC. 2244. CONSULTATION AMONG EXAMINERS.
(a) IN GENERAL.—Section 10 of the Federal Deposit
Insurance Act (12 U.S.C. 1820) is amended by adding at
the end the following new subsection:
‘‘(j) CONSULTATION AMONG EXAMINERS.—
‘‘(1) IN GENERAL.—Each appropriate Federal
banking agency shall take such action as may be
necessary to ensure that examiners employed by the
agency—
‘‘(A) consult on examination activities with
respect to any depository institution; and
‘‘(B) achieve an agreement and resolve any
inconsistencies in the recommendations to be
given to such institution as a consequence of
any examinations.
‘‘(2) EXAMINER-IN-CHARGE.—Each appropriate
Federal banking agency shall consider appointing an
examiner-in-charge with respect to a depository in-
stitution to ensure consultation on examination ac-
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tivities among all of the examiners of that agency in-
volved in examinations of the institution.’’.
(b) COORDINATED
AND
UNIFIED
EXAMINATION
FLEXIBILITY.—Section 10(d)(6)(B) of the Federal De-
posit Insurance Act (12 U.S.C. 1820(d)(6)(B)) is amend-
ed by inserting ‘‘or State bank supervisors’’ after ‘‘one of
the Federal agencies’’.
Subtitle C—Regulatory Impact on
Cost of Credit and Credit Avail-
ability
SEC. 2301. AUDIT COSTS.
(a) AUDITOR ATTESTATIONS.—Section 36 of the
Federal Deposit Insurance Act (12 U.S.C. 1831m) is
amended by striking subsection (e) and inserting the fol-
lowing:
‘‘(e) [Repealed]’’.
(b) INDEPENDENT AUDIT COMMITTEES.—Section
36(g)(1) of the Federal Deposit Insurance Act (12 U.S.C.
1831m(g)(1)) is amended—
(1) in subparagraph (A), by inserting ‘‘, except
as provided in subparagraph (D)’’ after ‘‘manage-
ment of the institution’’; and
(2) by adding at the end the following new sub-
paragraph:
‘‘(D) EXEMPTION AUTHORITY.—
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‘‘(i) IN
GENERAL.—An appropriate
Federal banking agency may, by order or
regulation, permit the independent audit
committee of an insured depository institu-
tion to be made up of less than all, but no
fewer than a majority of, outside directors,
if the agency determines that the institu-
tion has encountered hardships in retain-
ing and recruiting a sufficient number of
competent outside directors to serve on the
internal audit committee of the institution.
‘‘(ii) FACTORS TO BE CONSIDERED.—
In determining whether an insured deposi-
tory institution has encountered hardships
referred to in clause (i), the appropriate
Federal banking agency shall consider fac-
tors such as the size of the institution, and
whether the institution has made a good
faith effort to elect or name additional
competent outside directors to the board of
directors of the institution who may serve
on the internal audit committee.’’.
(c) PUBLIC AVAILABILITY.—Section 36(a)(3) of the
Federal Deposit Insurance Act (12 U.S.C. 1831m(a)(3))
is amended by adding at the end the following: ‘‘Notwith-
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standing the preceding sentence, the Corporation and the
appropriate Federal banking agencies may designate cer-
tain information as privileged and confidential and not
available to the public.’’.
SEC. 2302. INCENTIVES FOR SELF-TESTING.
(a) EQUAL CREDIT OPPORTUNITY.—
(1) IN
GENERAL.—The Equal Credit Oppor-
tunity Act (15 U.S.C. 1691 et seq.) is amended by
inserting after section 704 the following new section:
‘‘SEC. 704A. INCENTIVES FOR SELF-TESTING AND SELF-
CORRECTION.
‘‘(a) PRIVILEGED INFORMATION.—
‘‘(1) CONDITIONS FOR PRIVILEGE.—A report or
result of a self-test (as that term is defined by regu-
lations of the Board) shall be considered to be privi-
leged under paragraph (2) if a creditor—
‘‘(A) conducts, or authorizes an independ-
ent third party to conduct, a self-test of any as-
pect of a credit transaction by a creditor, in
order to determine the level or effectiveness of
compliance with this title by the creditor; and
‘‘(B) has identified any possible violation
of this title by the creditor and has taken, or
is taking, appropriate corrective action to ad-
dress any such possible violation.
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‘‘(2) PRIVILEGED
SELF-TEST.—If a creditor
meets the conditions specified in subparagraphs (A)
and (B) of paragraph (1) with respect to a self-test
described in that paragraph, any report or results of
that self-test—
‘‘(A) shall be privileged; and
‘‘(B) may not be obtained or used by any
applicant, department, or agency in any—
‘‘(i) proceeding or civil action in which
one or more violations of this title are al-
leged; or
‘‘(ii) examination or investigation re-
lating to compliance with this title.
‘‘(b) RESULTS OF SELF-TESTING.—
‘‘(1) IN GENERAL.—No provision of this section
may be construed to prevent an applicant, depart-
ment, or agency from obtaining or using a report or
results of any self-test in any proceeding or civil ac-
tion in which a violation of this title is alleged, or
in any examination or investigation of compliance
with this title if—
‘‘(A) the creditor or any person with lawful
access to the report or results—
‘‘(i) voluntarily releases or discloses
all, or any part of, the report or results to
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the applicant, department, or agency, or to
the general public; or
‘‘(ii) refers to or describes the report
or results as a defense to charges of viola-
tions of this title against the creditor to
whom the self-test relates; or
‘‘(B) the report or results are sought in
conjunction with an adjudication or admission
of a violation of this title for the sole purpose
of determining an appropriate penalty or rem-
edy.
‘‘(2) DISCLOSURE
FOR
DETERMINATION
OF
PENALTY OR REMEDY.—Any report or results of a
self-test that are disclosed for the purpose specified
in paragraph (1)(B)—
‘‘(A) shall be used only for the particular
proceeding in which the adjudication or admis-
sion referred to in paragraph (1)(B) is made;
and
‘‘(B) may not be used in any other action
or proceeding.
‘‘(c) ADJUDICATION.—An applicant, department, or
agency that challenges a privilege asserted under this sec-
tion may seek a determination of the existence and appli-
cation of that privilege in—
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‘‘(1) a court of competent jurisdiction; or
‘‘(2) an administrative law proceeding with ap-
propriate jurisdiction.’’.
(2) REGULATIONS.—
(A) IN
GENERAL.—Not later than 6
months after the date of enactment of this Act,
in consultation with the Secretary of Housing
and Urban Development and the agencies re-
ferred to in section 704 of the Equal Credit Op-
portunity Act, and after providing notice and
an opportunity for public comment, the Board
shall prescribe final regulations to implement
section 704A of the Equal Credit Opportunity
Act, as added by this section.
(B) SELF-TEST.—
(i) 
DEFINITION.—The 
regulations
prescribed under subparagraph (A) shall
include a definition of the term ‘‘self-test’’
for purposes of section 704A of the Equal
Credit Opportunity Act, as added by this
section.
(ii) REQUIREMENT FOR SELF-TEST.—
The regulations prescribed under subpara-
graph (A) shall specify that a self-test
shall be sufficiently extensive to constitute
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a determination of the level and effective-
ness of compliance by a creditor with the
Equal Credit Opportunity Act.
(iii) SUBSTANTIAL
SIMILARITY
TO
CERTAIN
FAIR
HOUSING
ACT
REGULA-
TIONS.—The regulations prescribed under
subparagraph (A) shall be substantially
similar to the regulations prescribed by the
Secretary of Housing and Urban Develop-
ment to carry out section 814A(d) of the
Fair Housing Act, as added by this sec-
tion.
(3) CLERICAL AMENDMENT.—The table of sec-
tions for title VII of the Consumer Credit Protection
Act is amended by inserting after the item relating
to section 704 the following new item:
‘‘704A. Incentives for self-testing and self-correction.’’.
(b) FAIR HOUSING.—
(1) IN GENERAL.—The Fair Housing Act (42
U.S.C. 3601 et seq.) is amended by inserting after
section 814 the following new section:
‘‘SEC. 814A. INCENTIVES FOR SELF-TESTING AND SELF-
CORRECTION.
‘‘(a) PRIVILEGED INFORMATION.—
‘‘(1) CONDITIONS FOR PRIVILEGE.—A report or
result of a self-test (as that term is defined by regu-
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lation of the Secretary) shall be considered to be
privileged under paragraph (2) if any person—
‘‘(A) conducts, or authorizes an independ-
ent third party to conduct, a self-test of any as-
pect of a residential real estate related lending
transaction of that person, or any part of that
transaction, in order to determine the level or
effectiveness of compliance with this title by
that person; and
‘‘(B) has identified any possible violation
of this title by that person and has taken, or is
taking, appropriate corrective action to address
any such possible violation.
‘‘(2) PRIVILEGED
SELF-TEST.—If a person
meets the conditions specified in subparagraphs (A)
and (B) of paragraph (1) with respect to a self-test
described in that paragraph, any report or results of
that self-test—
‘‘(A) shall be privileged; and
‘‘(B) may not be obtained or used by any
applicant, department, or agency in any—
‘‘(i) proceeding or civil action in which
one or more violations of this title are al-
leged; or
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‘‘(ii) examination or investigation re-
lating to compliance with this title.
‘‘(b) RESULTS OF SELF-TESTING.—
‘‘(1) IN GENERAL.—No provision of this section
may be construed to prevent an aggrieved person,
complainant, department, or agency from obtaining
or using a report or results of any self-test in any
proceeding or civil action in which a violation of this
title is alleged, or in any examination or investiga-
tion of compliance with this title if—
‘‘(A) the person to whom the self-test re-
lates or any person with lawful access to the re-
port or the results—
‘‘(i) voluntarily releases or discloses
all, or any part of, the report or results to
the aggrieved person, complainant, depart-
ment, or agency, or to the general public;
or
‘‘(ii) refers to or describes the report
or results as a defense to charges of viola-
tions of this title against the person to
whom the self-test relates; or
‘‘(B) the report or results are sought in
conjunction with an adjudication or admission
of a violation of this title for the sole purpose
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of determining an appropriate penalty or rem-
edy.
‘‘(2) DISCLOSURE
FOR
DETERMINATION
OF
PENALTY OR REMEDY.—Any report or results of a
self-test that are disclosed for the purpose specified
in paragraph (1)(B)—
‘‘(A) shall be used only for the particular
proceeding in which the adjudication or admis-
sion referred to in paragraph (1)(B) is made;
and
‘‘(B) may not be used in any other action
or proceeding.
‘‘(c) ADJUDICATION.—An aggrieved person, com-
plainant, department, or agency that challenges a privilege
asserted under this section may seek a determination of
the existence and application of that privilege in—
‘‘(1) a court of competent jurisdiction; or
‘‘(2) an administrative law proceeding with ap-
propriate jurisdiction.’’.
(2) REGULATIONS.—
(A) IN
GENERAL.—Not later than 6
months after the date of enactment of this Act,
in consultation with the Board and after provid-
ing notice and an opportunity for public com-
ment, the Secretary of Housing and Urban De-
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velopment shall prescribe final regulations to
implement section 814A of the Fair Housing
Act, as added by this section.
(B) SELF-TEST.—
(i) 
DEFINITION.—The 
regulations
prescribed by the Secretary under subpara-
graph (A) shall include a definition of the
term ‘‘self-test’’ for purposes of section
814A of the Fair Housing Act, as added
by this section.
(ii) REQUIREMENT FOR SELF-TEST.—
The regulations prescribed by the Sec-
retary under subparagraph (A) shall speci-
fy that a self-test shall be sufficiently ex-
tensive to constitute a determination of the
level and effectiveness of the compliance by
a person engaged in residential real estate
related lending activities with the Fair
Housing Act.
(iii) SUBSTANTIAL
SIMILARITY
TO
CERTAIN
EQUAL
CREDIT
OPPORTUNITY
ACT REGULATIONS.—The regulations pre-
scribed under subparagraph (A) shall be
substantially similar to the regulations pre-
scribed by the Board to carry out section
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704A of the Equal Credit Opportunity Act,
as added by this section.
(c) APPLICABILITY.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the privilege provided for in section 704A
of the Equal Credit Opportunity Act or section
814A of the Fair Housing Act (as those sections are
added by this section) shall apply to a self-test (as
that term is defined pursuant to the regulations pre-
scribed under subsection (a)(2) or (b)(2) of this sec-
tion, as appropriate) conducted before, on, or after
the effective date of the regulations prescribed under
subsection (a)(2) or (b)(2), as appropriate.
(2) EXCEPTION.—The privilege referred to in
paragraph (1) does not apply to such a self-test con-
ducted before the effective date of the regulations
prescribed under subsection (a) or (b), as appro-
priate, if—
(A) before that effective date, a complaint
against the creditor or person engaged in resi-
dential real estate related lending activities (as
the case may be) was—
(i) formally filed in any court of com-
petent jurisdiction; or
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(ii) the subject of an ongoing adminis-
trative law proceeding;
(B) in the case of section 704A of the
Equal Credit Opportunity Act, the creditor has
waived the privilege pursuant to subsection
(b)(1)(A)(i) of that section; or
(C) in the case of section 814A of the Fair
Housing Act, the person engaged in residential
real estate related lending activities has waived
the privilege pursuant to subsection (b)(1)(A)(i)
of that section.
SEC. 2303. QUALIFIED THRIFT INVESTMENT AMENDMENTS.
(a) CREDIT CARDS.—Section 5(b) of the Home Own-
ers’ Loan Act (12 U.S.C. 1464(b)) is amended—
(1) by striking paragraph (4); and
(2) by redesignating paragraph (5) as para-
graph (4).
(b) LOANS OR INVESTMENTS WITHOUT PERCENTAGE
OF ASSETS LIMITATION.—Section 5(c)(1) of the Home
Owners’ Loan Act (12 U.S.C. 1464(c)(1)) is amended by
adding at the end the following new subparagraphs:
‘‘(T) CREDIT CARD LOANS.—Loans made
through credit cards or credit card accounts.
‘‘(U) EDUCATIONAL LOANS.—Loans made
for the payment of educational expenses.’’.
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(c) COMMERCIAL
AND
OTHER
LOANS.—Section
5(c)(2)(A) of the Home Owners’ Loan Act (12 U.S.C.
1464(c)(2)(A)) is amended to read as follows:
‘‘(A) COMMERCIAL AND OTHER LOANS.—
Secured or unsecured loans for commercial, cor-
porate, business, or agricultural purposes. The
aggregate amount of loans made under this
subparagraph may not exceed 20 percent of the
total assets of the Federal savings association,
and amounts in excess of 10 percent of such
total assets may be used under this subpara-
graph only for small business loans, as that
term is defined by the Director.’’.
(d) LOANS OR INVESTMENTS LIMITED TO 5 PER-
CENT OF ASSETS.—Section 5(c)(3) of the Home Owners’
Loan Act (12 U.S.C. 1464(c)(3)) is amended—
(1) by striking subparagraph (A); and
(2) by redesignating subparagraphs (B), (C),
and (D) as subparagraphs (A), (B), and (C), respec-
tively.
(e) QUALIFIED THRIFT LENDER TEST.—Section
10(m)(1) of the Home Owners’ Loan Act (12 U.S.C.
1467a(m)(1)) is amended—
(1) by redesignating subparagraph (B) as
clause (ii);
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(2) in subparagraph (A), by striking ‘‘(A) the
savings’’ and inserting ‘‘(B)(i) the savings’’; and
(3) by inserting after ‘‘if—’’ the following new
subparagraph:
‘‘(A) the savings association qualifies as a
domestic building and loan association, as such
term is defined in section 7701(a)(19) of the
Internal Revenue Code of 1986; or’’.
(f) BRANCHING.—Section 5(r) of the Home Owners’
Loan Act (12 U.S.C. 1464(r)) is amended—
(1) in paragraph (1)—
(A) in the first sentence—
(i) by inserting before the period ‘‘, or
qualifies as a qualified thrift lender, as de-
termined under section 10(m) of this Act’’;
and
(ii) by striking ‘‘(c)’’ and inserting
‘‘(C)’’; and
(B) in the second sentence, by inserting
before the period ‘‘or as a qualified thrift lend-
er, as determined under section 10(m) of this
Act, as applicable’’; and
(2) in paragraph (2), by striking subparagraph
(C) and inserting the following:
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‘‘(C) the law of the State where the branch is
located, or is to be located, would permit establish-
ment of the branch if the association was a savings
association or savings bank chartered by the State
in which its home office is located; or’’.
(g) DEFINITION.—Section 10(m)(4) of the Home
Owners’ Loan Act (12 U.S.C. 1467a(m)(4)) is amended—
(1) by striking ‘‘subsection—’’ and inserting
‘‘subsection, the following definitions shall apply:’’;
(2) in subparagraph (C)—
(A) in clause (ii), by adding at the end the
following new subclause:
‘‘(VII) Loans for educational
purposes, loans to small businesses,
and loans made through credit cards
or credit card accounts.’’; and
(B) in clause (iii), by striking subclause
(VI) and inserting the following:
‘‘(VI) Loans for personal, family,
or household purposes (other than
loans for personal, family, or house-
hold purposes described in clause
(ii)(VII)).’’; and
(3) by adding at the end the following new sub-
paragraphs:
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‘‘(D) CREDIT
CARD.—The Director shall
issue such regulations as may be necessary to
define the term ‘credit card’.
‘‘(E) SMALL
BUSINESS.—The Director
shall issue such regulations as may be necessary
to define the term ‘small business’.’’.
SEC. 2304. LIMITED PURPOSE BANKS.
(a) GROWTH CAP RELIEF.—Section 4(f)(3)(B) of the
Bank Holding Company Act of 1956 (12 U.S.C.
1843(f)(3)(B)) is amended—
(1) in clause (ii), by adding ‘‘or’’ at the end;
(2) in clause (iii), by striking ‘‘; or’’ at the end
and inserting a period; and
(3) by striking clause (iv).
(b) LIMITED PURPOSE BANK EXCEPTION.—Section
2(c)(2)(F) of the Bank Holding Company Act of 1956 (12
U.S.C. 1841(c)(2)(F)) is amended by inserting ‘‘, includ-
ing an institution that accepts collateral for extensions of
credit by holding deposits under $100,000, and by other
means’’ after ‘‘An institution’’.
SEC. 2305. AMENDMENT TO FAIR DEBT COLLECTION PRAC-
TICES ACT.
(a) IN GENERAL.—Section 807(11) of the Fair Debt
Collection Practices Act (15 U.S.C. 1692e(11)) is amend-
ed to read as follows:
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‘‘(11) The failure to disclose in the initial writ-
ten communication with the consumer and, in addi-
tion, if the initial communication with the consumer
is oral, in that initial oral communication, that the
debt collector is attempting to collect a debt and
that any information obtained will be used for that
purpose, and the failure to disclose in subsequent
communications that the communication is from a
debt collector, except that this paragraph shall not
apply to a formal pleading made in connection with
a legal action.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect 90 days after the date of
enactment of this Act and shall apply to all communica-
tions made after that date of enactment.
SEC. 2306. INCREASE IN CERTAIN CREDIT UNION LOAN
CEILINGS.
Section 107(5)(A) of the Federal Credit Union Act
(12 U.S.C. 1757(5)(A)) is amended—
(1) in clause (iv), by striking ‘‘$10,000’’ and in-
serting ‘‘$20,000’’; and
(2) in clause (v), by striking ‘‘$10,000’’ and in-
serting ‘‘$20,000’’.
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SEC. 2307. BANK INVESTMENTS IN EDGE ACT AND AGREE-
MENT CORPORATIONS.
The 10th undesignated paragraph of section 25A of
the Federal Reserve Act (12 U.S.C. 618) is amended by
striking the last sentence and inserting the following:
‘‘Any national bank may invest in the stock of any cor-
poration organized under this section. The aggregate
amount of stock held by any national bank in all corpora-
tions engaged in business of the kind described in this sec-
tion or section 25 shall not exceed an amount equal to
10 percent of the capital and surplus of such bank unless
the Board determines that the investment of an additional
amount by the bank would not be unsafe or unsound and,
in any case, shall not exceed an amount equal to 20 per-
cent of the capital and surplus of such bank.’’.
Subtitle D—Consumer Credit
CHAPTER 1—CREDIT REPORTING
REFORM
SEC. 2401. SHORT TITLE.
This chapter may be cited as the ‘‘Consumer Credit
Reporting Reform Act of 1996’’.
SEC. 2402. DEFINITIONS.
(a) ADVERSE ACTION.—Section 603 of the Fair
Credit Reporting Act (15 U.S.C. 1681a) is amended by
adding at the end the following new subsection:
‘‘(k) ADVERSE ACTION.—
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‘‘(1) ACTIONS INCLUDED.—The term ‘adverse
action’—
‘‘(A) has the same meaning as in section
701(d)(6) of the Equal Credit Opportunity Act;
and
‘‘(B) means—
‘‘(i) a denial or cancellation of, an in-
crease in any charge for, or a reduction or
other adverse or unfavorable change in the
terms of coverage or amount of, any insur-
ance, existing or applied for, in connection
with the underwriting of insurance;
‘‘(ii) a denial of employment or any
other decision for employment purposes
that adversely affects any current or pro-
spective employee;
‘‘(iii) a denial or cancellation of, an
increase in any charge for, or any other
adverse or unfavorable change in the terms
of, any license or benefit described in sec-
tion 604(a)(3)(D); and
‘‘(iv) an action taken or determination
that is—
‘‘(I) made in connection with an
application that was made by, or a
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transaction that was initiated by, any
consumer, or in connection with a re-
view of an account under section
604(a)(3)(F)(ii); and
‘‘(II) adverse to the interests of
the consumer.
‘‘(2) APPLICABLE FINDINGS, DECISIONS, COM-
MENTARY, AND ORDERS.—For purposes of any de-
termination of whether an action is an adverse ac-
tion under paragraph (1)(A), all appropriate final
findings, decisions, commentary, and orders issued
under section 701(d)(6) of the Equal Credit Oppor-
tunity Act by the Board of Governors of the Federal
Reserve System or any court shall apply.’’.
(b) FIRM OFFER OF CREDIT OR INSURANCE.—Sec-
tion 603 of the Fair Credit Reporting Act (15 U.S.C.
1681a) (as amended by subsection (a) of this section) is
amended by adding at the end the following new sub-
section:
‘‘(l) FIRM OFFER OF CREDIT OR INSURANCE.—The
term ‘firm offer of credit or insurance’ means any offer
of credit or insurance to a consumer that will be honored
if the consumer is determined, based on information in
a consumer report on the consumer, to meet the specific
criteria used to select the consumer for the offer, except
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that the offer may be further conditioned on one or more
of the following:
‘‘(1) The consumer being determined, based on
information in the consumer’s application for the
credit or insurance, to meet specific criteria bearing
on credit worthiness or insurability, as applicable,
that are established—
‘‘(A) before selection of the consumer for
the offer; and
‘‘(B) for the purpose of determining
whether to extend credit or insurance pursuant
to the offer.
‘‘(2) Verification—
‘‘(A) that the consumer continues to meet
the specific criteria used to select the consumer
for the offer, by using information in a
consumer report on the consumer, information
in the consumer’s application for the credit or
insurance, or other information bearing on the
credit 
worthiness 
or 
insurability 
of 
the
consumer; or
‘‘(B) of the information in the consumer’s
application for the credit or insurance, to deter-
mine that the consumer meets the specific cri-
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teria bearing on credit worthiness or insurabil-
ity.
‘‘(3) The consumer furnishing any collateral
that is a requirement for the extension of the credit
or insurance that was—
‘‘(A) established before selection of the
consumer for the offer of credit or insurance;
and
‘‘(B) disclosed to the consumer in the offer
of credit or insurance.’’.
(c) CREDIT OR INSURANCE TRANSACTION THAT IS
NOT INITIATED BY THE CONSUMER.—Section 603 of the
Fair Credit Reporting Act (15 U.S.C. 1681a) (as amended
by subsection (b) of this section) is amended by adding
at the end the following new subsection:
‘‘(m) CREDIT OR INSURANCE TRANSACTION THAT IS
NOT INITIATED BY THE CONSUMER.—The term ‘credit or
insurance transaction that is not initiated by the
consumer’ does not include the use of a consumer report
by a person with which the consumer has an account or
insurance policy, for purposes of—
‘‘(1) reviewing the account or insurance policy;
or
‘‘(2) collecting the account.’’.
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(d) STATE.—Section 603 of the Fair Credit Report-
ing Act (15 U.S.C. 1681a) (as amended by subsection (c)
of this section) is amended by adding at the end the fol-
lowing new subsection:
‘‘(n) STATE.—The term ‘State’ means any State, the
Commonwealth of Puerto Rico, the District of Columbia,
and any territory or possession of the United States.’’.
(e) DEFINITION OF CONSUMER REPORT.—Section
603(d) of the Fair Credit Reporting Act (15 U.S.C.
1681a(d)) is amended—
(1) by striking ‘‘(d) The term’’ and inserting
the following:
‘‘(d) CONSUMER REPORT.—
‘‘(1) IN GENERAL.—The term’’;
(2) by striking ‘‘for (1) credit’’ and inserting
the following: ‘‘for—
‘‘(A) credit’’;
(3) by striking ‘‘purposes, or (2)’’ and all that
follows through ‘‘section 604.’’ and inserting the fol-
lowing: ‘‘purposes;
‘‘(B) employment purposes; or
‘‘(C) any other purpose authorized under
section 604.’’; and
(4) by striking the second sentence and insert-
ing the following:
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‘‘(2) EXCLUSIONS.—The term ‘consumer re-
port’ does not include—
‘‘(A) any—
‘‘(i) report containing information
solely as to transactions or experiences be-
tween the consumer and the person mak-
ing the report;
‘‘(ii) communication of that informa-
tion among persons related by common
ownership or affiliated by corporate con-
trol; or
‘‘(iii) any communication of other in-
formation among persons related by com-
mon ownership or affiliated by corporate
control, if it is clearly and conspicuously
disclosed to the consumer that the infor-
mation may be communicated among such
persons and the consumer is given the op-
portunity, before the time that the infor-
mation is initially communicated, to direct
that such information not be commu-
nicated among such persons;
‘‘(B) any authorization or approval of a
specific extension of credit directly or indirectly
by the issuer of a credit card or similar device;
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‘‘(C) any report in which a person who has
been requested by a third party to make a spe-
cific extension of credit directly or indirectly to
a consumer conveys his or her decision with re-
spect to such request, if the third party advises
the consumer of the name and address of the
person to whom the request was made, and
such person makes the disclosures to the
consumer required under section 615; or
‘‘(D) a communication described in sub-
section (o).’’.
(f) EXCLUSION OF CERTAIN COMMUNICATIONS BY
EMPLOYMENT
AGENCIES
FROM
DEFINITION
OF
CONSUMER REPORT.—Section 603 of the Fair Credit Re-
porting Act (15 U.S.C. 1681a) is amended by adding at
the end the following new subsection:
‘‘(o) EXCLUDED COMMUNICATIONS.—A communica-
tion is described in this subsection if it is a communica-
tion—
‘‘(1) that, but for subsection (d)(2)(E), would
be an investigative consumer report;
‘‘(2) that is made to a prospective employer for
the purpose of—
‘‘(A) procuring an employee for the em-
ployer; or
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‘‘(B) procuring an opportunity for a natu-
ral person to work for the employer;
‘‘(3) that is made by a person who regularly
performs such procurement;
‘‘(4) that is not used by any person for any
purpose other than a purpose described in subpara-
graph (A) or (B) of paragraph (2); or
‘‘(5) with respect to which—
‘‘(A) the consumer who is the subject of
the communication—
‘‘(i) consents orally or in writing to
the nature and scope of the communica-
tion, before the collection of any informa-
tion for the purpose of making the commu-
nication;
‘‘(ii) consents orally or in writing to
the making of the communication to a pro-
spective employer, before the making of the
communication; and
‘‘(iii) in the case of consent under
clause (i) or (ii) given orally, is provided
written confirmation of that consent by the
person making the communication, not
later than 3 business days after the receipt
of the consent by that person;
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‘‘(B) the person who makes the commu-
nication does not, for the purpose of making
the communication, make any inquiry that if
made by a prospective employer of the
consumer who is the subject of the communica-
tion would violate any applicable Federal or
State equal employment opportunity law or reg-
ulation; and
‘‘(C) the person who makes the commu-
nication—
‘‘(i) discloses in writing to the
consumer who is the subject of the commu-
nication, not later than 5 business days
after receiving any request from the
consumer for such disclosure, the nature
and substance of all information in the
consumer’s file at the time of the request,
except that the sources of any information
that is acquired solely for use in making
the communication and is actually used for
no other purpose, need not be disclosed
other than under appropriate discovery
procedures in any court of competent juris-
diction in which an action is brought; and
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‘‘(ii) notifies the consumer who is the
subject of the communication, in writing,
of the consumer’s right to request the in-
formation described in clause (i).’’.
(g) CONSUMER REPORTING AGENCY THAT COM-
PILES
AND
MAINTAINS
FILES
ON
A
NATIONWIDE
BASIS.—Section 603 of the Fair Credit Reporting Act (15
U.S.C. 1681a) (as amended by subsection (f) of this sec-
tion) is amended by adding at the end the following new
subsection:
‘‘(p) CONSUMER REPORTING AGENCY THAT COM-
PILES AND MAINTAINS FILES ON CONSUMERS ON A NA-
TIONWIDE BASIS.—The term ‘consumer reporting agency
that compiles and maintains files on consumers on a na-
tionwide basis’ means a consumer reporting agency that
regularly engages in the practice of assembling or evaluat-
ing, and maintaining, for the purpose of furnishing
consumer reports to third parties bearing on a consumer’s
credit worthiness, credit standing, or credit capacity, each
of the following regarding consumers residing nationwide:
‘‘(1) Public record information.
‘‘(2) Credit account information from persons
who furnish that information regularly and in the
ordinary course of business.’’.
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SEC. 2403. FURNISHING CONSUMER REPORTS; USE FOR EM-
PLOYMENT PURPOSES.
(a) FURNISHING CONSUMER REPORTS FOR BUSI-
NESS TRANSACTIONS.—Section 604 of the Fair Credit Re-
porting Act (15 U.S.C. 1681b) is amended—
(1) by inserting ‘‘(a) IN GENERAL.—’’ before
‘‘A consumer reporting agency’’; and
(2) in subsection (a)(3) (as so designated by
paragraph (1) of this subsection), by striking sub-
paragraph (E) and inserting the following:
‘‘(E) intends to use the information, as a
potential investor or servicer, or current in-
surer, in connection with a valuation of, or an
assessment of the credit or prepayment risks
associated with, an existing credit obligation; or
‘‘(F) otherwise has a legitimate business
need for the information—
‘‘(i) in connection with a business
transaction 
that 
is 
initiated 
by 
the
consumer; or
‘‘(ii) to review an account to deter-
mine whether the consumer continues to
meet the terms of the account.’’.
(b) FURNISHING AND USING CONSUMER REPORTS
FOR EMPLOYMENT PURPOSES.—Section 604 of the Fair
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Credit Reporting Act (15 U.S.C. 1681b) is amended by
adding at the end the following new subsection:
‘‘(b) CONDITIONS
FOR FURNISHING
AND USING
CONSUMER REPORTS FOR EMPLOYMENT PURPOSES.—
‘‘(1) CERTIFICATION FROM USER.—A consumer
reporting agency may furnish a consumer report for
employment purposes only if—
‘‘(A) the person who obtains such report
from the agency certifies to the agency that—
‘‘(i) the person has complied with
paragraph 
(2) 
with 
respect 
to 
the
consumer report, and the person will com-
ply with paragraph (3) with respect to the
consumer report if paragraph (3) becomes
applicable; and
‘‘(ii) information from the consumer
report will not be used in violation of any
applicable Federal or State equal employ-
ment opportunity law or regulation; and
‘‘(B) the consumer reporting agency pro-
vides with the report a summary of the consum-
er’s rights under this title, as prescribed by the
Federal 
Trade 
Commission 
under 
section
609(c)(3).
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‘‘(2) DISCLOSURE
TO
CONSUMER.—A person
may not procure a consumer report, or cause a
consumer report to be procured, for employment
purposes with respect to any consumer, unless—
‘‘(A) a clear and conspicuous disclosure
has been made in writing to the consumer at
any time before the report is procured or
caused to be procured, in a document that con-
sists solely of the disclosure, that a consumer
report may be obtained for employment pur-
poses; and
‘‘(B) the consumer has authorized in writ-
ing the procurement of the report by that per-
son.
‘‘(3) CONDITIONS ON USE FOR ADVERSE AC-
TIONS.—In using a consumer report for employment
purposes, before taking any adverse action based in
whole or in part on the report, the person intending
to take such adverse action shall provide to the
consumer to whom the report relates—
‘‘(A) a copy of the report; and
‘‘(B) a description in writing of the rights
of the consumer under this title, as prescribed
by the Federal Trade Commission under section
609(c)(3).’’.
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SEC. 
2404. 
USE 
OF 
CONSUMER 
REPORTS 
FOR
PRESCREENING; 
PROHIBITION 
ON 
UNAU-
THORIZED OR UNCERTIFIED USE OF INFOR-
MATION.
(a) IN GENERAL.—Section 604 of the Fair Credit
Reporting Act (15 U.S.C. 1681b) (as amended by section
2403 of this chapter) is amended—
(1) in subsection (a), by striking ‘‘A consumer
reporting agency’’ and inserting ‘‘Subject to sub-
section (c), any consumer reporting agency’’; and
(2) by adding at the end the following new sub-
sections:
‘‘(c) FURNISHING REPORTS IN CONNECTION WITH
CREDIT OR INSURANCE TRANSACTIONS THAT ARE NOT
INITIATED BY THE CONSUMER.—
‘‘(1) IN
GENERAL.—A consumer reporting
agency may furnish a consumer report relating to
any consumer pursuant to subparagraph (A) or (C)
of subsection (a)(3) in connection with any credit or
insurance transaction that is not initiated by the
consumer only if—
‘‘(A) the consumer authorizes the agency
to provide such report to such person; or
‘‘(B)(i) the transaction consists of a firm
offer of credit or insurance;
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‘‘(ii) the consumer reporting agency has
complied with subsection (e); and
‘‘(iii) there is not in effect an election by
the consumer, made in accordance with sub-
section (e), to have the consumer’s name and
address excluded from lists of names provided
by the agency pursuant to this paragraph.
‘‘(2) 
LIMITS
ON
INFORMATION
RECEIVED
UNDER PARAGRAPH (1)(B).—A person may receive
pursuant to paragraph (1)(B) only—
‘‘(A) the name and address of a consumer;
‘‘(B) an identifier that is not unique to the
consumer and that is used by the person solely
for the purpose of verifying the identity of the
consumer; and
‘‘(C) other information pertaining to a
consumer that does not identify the relationship
or experience of the consumer with respect to a
particular creditor or other entity.
‘‘(3) INFORMATION
REGARDING
INQUIRIES.—
Except as provided in section 609(a)(5), a consumer
reporting agency shall not furnish to any person a
record of inquiries in connection with a credit or in-
surance transaction that is not initiated by a
consumer.
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‘‘(d) RESERVED.
‘‘(e) ELECTION OF CONSUMER TO BE EXCLUDED
FROM LISTS.—
‘‘(1) IN GENERAL.—A consumer may elect to
have the consumer’s name and address excluded
from any list provided by a consumer reporting
agency under subsection (c)(1)(B) in connection
with a credit or insurance transaction that is not ini-
tiated by the consumer by notifying the agency in
accordance with paragraph (2) that the consumer
does not consent to any use of a consumer report re-
lating to the consumer in connection with any credit
or insurance transaction that is not initiated by the
consumer.
‘‘(2) MANNER OF NOTIFICATION.—A consumer
shall notify a consumer reporting agency under
paragraph (1)—
‘‘(A) through the notification system main-
tained by the agency under paragraph (5); or
‘‘(B) by submitting to the agency a signed
notice of election form issued by the agency for
purposes of this subparagraph.
‘‘(3) RESPONSE OF AGENCY AFTER NOTIFICA-
TION THROUGH SYSTEM.—Upon receipt of notifica-
tion of the election of a consumer under paragraph
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(1) through the notification system maintained by
the agency under paragraph (5), a consumer report-
ing agency shall—
‘‘(A) inform the consumer that the election
is effective only for the 2-year period following
the election if the consumer does not submit to
the agency a signed notice of election form is-
sued by the agency for purposes of paragraph
(2)(B); and
‘‘(B) provide to the consumer a notice of
election form, if requested by the consumer, not
later than 5 business days after receipt of the
notification of the election through the system
established under paragraph (5), in the case of
a request made at the time the consumer pro-
vides notification through the system.
‘‘(4) EFFECTIVENESS OF ELECTION.—An elec-
tion of a consumer under paragraph (1)—
‘‘(A) shall be effective with respect to a
consumer reporting agency beginning 5 busi-
ness days after the date on which the consumer
notifies the agency in accordance with para-
graph (2);
‘‘(B) shall be effective with respect to a
consumer reporting agency—
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‘‘(i) subject to subparagraph (C), dur-
ing the 2-year period beginning 5 business
days after the date on which the consumer
notifies the agency of the election, in the
case of an election for which a consumer
notifies the agency only in accordance with
paragraph (2)(A); or
‘‘(ii) until the consumer notifies the
agency under subparagraph (C), in the
case of an election for which a consumer
notifies the agency in accordance with
paragraph (2)(B);
‘‘(C) shall not be effective after the date on
which the consumer notifies the agency,
through the notification system established by
the agency under paragraph (5), that the elec-
tion is no longer effective; and
‘‘(D) shall be effective with respect to each
affiliate of the agency.
‘‘(5) NOTIFICATION SYSTEM.—
‘‘(A) IN
GENERAL.—Each consumer re-
porting agency that, under subsection (c)(1)(B),
furnishes a consumer report in connection with
a credit or insurance transaction that is not ini-
tiated by a consumer shall—
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‘‘(i) establish and maintain a notifica-
tion system, including a toll-free telephone
number, which permits any consumer
whose consumer report is maintained by
the agency to notify the agency, with ap-
propriate identification, of the consumer’s
election to have the consumer’s name and
address excluded from any such list of
names and addresses provided by the agen-
cy for such a transaction; and
‘‘(ii) publish by not later than 365
days after the date of enactment of the
Consumer Credit Reporting Reform Act of
1996, and not less than annually there-
after, in a publication of general circula-
tion in the area served by the agency—
‘‘(I) a notification that informa-
tion in consumer files maintained by
the agency may be used in connection
with such transactions; and
‘‘(II) the address and toll-free
telephone number for consumers to
use to notify the agency of the con-
sumer’s election under clause (i).
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‘‘(B) ESTABLISHMENT AND MAINTENANCE
AS
COMPLIANCE.—Establishment and mainte-
nance of a notification system (including a toll-
free telephone number) and publication by a
consumer reporting agency on the agency’s own
behalf and on behalf of any of its affiliates in
accordance with this paragraph is deemed to be
compliance with this paragraph by each of
those affiliates.
‘‘(6) NOTIFICATION
SYSTEM
BY
AGENCIES
THAT OPERATE NATIONWIDE.—Each consumer re-
porting agency that compiles and maintains files on
consumers on a nationwide basis shall establish and
maintain a notification system for purposes of para-
graph (5) jointly with other such consumer reporting
agencies.’’.
(b) USE
OF INFORMATION OBTAINED FROM RE-
PORTS.—Section 604 of the Fair Credit Reporting Act (15
U.S.C. 1681b) (as amended by subsection (a) of this sec-
tion) is amended by adding at the end the following new
subsection:
‘‘(f) CERTAIN USE OR OBTAINING OF INFORMATION
PROHIBITED.—A person shall not use or obtain a
consumer report for any purpose unless—
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‘‘(1) the consumer report is obtained for a pur-
pose for which the consumer report is authorized to
be furnished under this section; and
‘‘(2) the purpose is certified in accordance with
section 607 by a prospective user of the report
through a general or specific certification.’’.
(c) FTC GUIDELINES REGARDING PRESCREENING
FOR INSURANCE TRANSACTIONS.—The Federal Trade
Commission may issue such guidelines as it deems nec-
essary with respect to the use of consumer reports in con-
nection with insurance transactions that are not initiated
by the consumer pursuant to section 604(c) of the Fair
Credit Reporting Act, as added by subsection (a) of this
section.
SEC. 2405. CONSUMER CONSENT REQUIRED TO FURNISH
CONSUMER REPORT CONTAINING MEDICAL
INFORMATION.
Section 604 of the Fair Credit Reporting Act (15
U.S.C. 1681b) is amended by adding at the end the follow-
ing new subsection:
‘‘(g) FURNISHING REPORTS CONTAINING MEDICAL
INFORMATION.—A consumer reporting agency shall not
furnish for employment purposes, or in connection with
a credit or insurance transaction or a direct marketing
transaction, a consumer report that contains medical in-
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formation about a consumer, unless the consumer con-
sents to the furnishing of the report.’’.
SEC. 2406. OBSOLETE INFORMATION AND INFORMATION
CONTAINED IN CONSUMER REPORTS.
(a) AMENDMENT TO LARGE-DOLLAR EXCEPTION.—
Section 605 of the Fair Credit Reporting Act (15 U.S.C.
1681c) is amended—
(1) by inserting ‘‘INFORMATION
EXCLUDED
FROM CONSUMER REPORTS.—’’ after ‘‘(a)’’;
(2) in subsection (b)—
(A) 
in 
paragraph 
(1), 
by 
striking
‘‘$50,000’’ and inserting ‘‘$150,000’’;
(B) 
in 
paragraph 
(2), 
by 
striking
‘‘$50,000’’ and inserting ‘‘$150,000’’; and
(C) 
in 
paragraph 
(3), 
by 
striking
‘‘$20,000’’ and inserting ‘‘$75,000’’.
(b) CLARIFICATION OF REPORTING PERIOD.—Sec-
tion 605 of the Fair Credit Reporting Act (15 U.S.C.
1681c) (as amended by subsection (a) of this section) is
amended by adding at the end the following new sub-
section:
‘‘(c) RUNNING OF REPORTING PERIOD.—
‘‘(1) IN GENERAL.—The 7-year period referred
to in paragraphs (4) and (6) of subsection (a) shall
begin, with respect to any delinquent account that is
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placed for collection (internally or by referral to a
third party, whichever is earlier), charged to profit
and loss, or subjected to any similar action, upon the
expiration of the 180-day period beginning on the
date of the commencement of the delinquency which
immediately preceded the collection activity, charge
to profit and loss, or similar action.
‘‘(2) EFFECTIVE
DATE.—Paragraph (1) shall
apply only to items of information added to the file
of a consumer on or after the date that is 455 days
after the date of enactment of the Consumer Credit
Reporting Reform Act of 1996.’’.
(c) ADDITIONAL INFORMATION
ON BANKRUPTCY
FILINGS REQUIRED.—Section 605 of the Fair Credit Re-
porting Act (15 U.S.C. 1681c) is amended by adding at
the end the following new subsection:
‘‘(d) INFORMATION REQUIRED TO BE DISCLOSED.—
Any consumer reporting agency that furnishes a consumer
report that contains information regarding any case in-
volving the consumer that arises under title 11, United
States Code, shall include in the report an identification
of the chapter of such title 11 under which such case
arises if provided by the source of the information. If any
case arising or filed under title 11, United States Code,
is withdrawn by the consumer before a final judgment, the
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consumer reporting agency shall include in the report that
such case or filing was withdrawn upon receipt of docu-
mentation certifying such withdrawal.’’.
(d) INDICATION OF CLOSURE OF ACCOUNT; INDICA-
TION OF DISPUTE BY CONSUMER.—Section 605 of the
Fair Credit Reporting Act (15 U.S.C. 1681c) is amended
by adding at the end the following new subsections:
‘‘(e) INDICATION
OF CLOSURE
OF ACCOUNT
BY
CONSUMER.—If a consumer reporting agency is notified
pursuant to section 623(a)(4) that a credit account of a
consumer was voluntarily closed by the consumer, the
agency shall indicate that fact in any consumer report that
includes information related to the account.
‘‘(f) INDICATION OF DISPUTE BY CONSUMER.—If a
consumer reporting agency is notified pursuant to section
623(a)(3) that information regarding a consumer who was
furnished to the agency is disputed by the consumer, the
agency shall indicate that fact in each consumer report
that includes the disputed information.’’.
(e) CONFORMING AMENDMENTS.—
(1) Section 605 of the Fair Credit Reporting
Act (15 U.S.C. 1681c) is amended in the section
heading, by striking ‘‘OBSOLETE INFORMA-
TION’’ and inserting ‘‘REQUIREMENTS RE-
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LATING TO INFORMATION CONTAINED
IN CONSUMER REPORTS’’.
(2) The table of sections for the Fair Credit
Reporting Act (15 U.S.C. 1681a et seq.) is amended
by striking the item relating to section 605 and in-
serting the following:
‘‘605. Requirements relating to information contained in consumer reports.’’.
SEC. 2407. COMPLIANCE PROCEDURES.
(a) DISCLOSURE
OF
CONSUMER
REPORTS
BY
USERS.—Section 607 of the Fair Credit Reporting Act
(15 U.S.C. 1681e) is amended by adding at the end the
following new subsection:
‘‘(c) DISCLOSURE
OF
CONSUMER
REPORTS
BY
USERS ALLOWED.—A consumer reporting agency may not
prohibit a user of a consumer report furnished by the
agency on a consumer from disclosing the contents of the
report to the consumer, if adverse action against the
consumer has been taken by the user based in whole or
in part on the report.’’.
(b) NOTICE TO USERS AND PROVIDERS OF INFORMA-
TION TO ENSURE COMPLIANCE.—Section 607 of the Fair
Credit Reporting Act (15 U.S.C. 1681e) is amended by
adding after subsection (c) (as added by subsection (a)
of this section) the following new subsection:
‘‘(d) NOTICE TO USERS AND FURNISHERS OF INFOR-
MATION.—
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‘‘(1) NOTICE REQUIREMENT.—A consumer re-
porting agency shall provide to any person—
‘‘(A) who regularly and in the ordinary
course of business furnishes information to the
agency with respect to any consumer; or
‘‘(B) to whom a consumer report is pro-
vided by the agency;
a notice of such person’s responsibilities under this
title.
‘‘(2) CONTENT
OF
NOTICE.—The Federal
Trade Commission shall prescribe the content of no-
tices under paragraph (1), and a consumer reporting
agency shall be in compliance with this subsection if
it provides a notice under paragraph (1) that is sub-
stantially similar to the Federal Trade Commission
prescription under this paragraph.’’.
(c) RECORD OF IDENTITY OF USERS AND PURPOSES
CERTIFIED BY USERS OF REPORTS.—Section 607 of the
Fair Credit Reporting Act (15 U.S.C. 1681e) is amended
by adding after subsection (d) (as added by subsection (b)
of this section) the following new subsection:
‘‘(e) PROCUREMENT OF CONSUMER REPORT FOR RE-
SALE.—
‘‘(1) DISCLOSURE.—A person may not procure
a consumer report for purposes of reselling the re-
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port (or any information in the report) unless the
person discloses to the consumer reporting agency
that originally furnishes the report—
‘‘(A) the identity of the end-user of the re-
port (or information); and
‘‘(B) each permissible purpose under sec-
tion 604 for which the report is furnished to
the end-user of the report (or information).
‘‘(2) RESPONSIBILITIES
OF
PROCURERS
FOR
RESALE.—A person who procures a consumer report
for purposes of reselling the report (or any informa-
tion in the report) shall—
‘‘(A) establish and comply with reasonable
procedures designed to ensure that the report
(or information) is resold by the person only for
a purpose for which the report may be fur-
nished under section 604, including by requir-
ing that each person to which the report (or in-
formation) is resold and that resells or provides
the report (or information) to any other per-
son—
‘‘(i) identifies each end user of the re-
sold report (or information);
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‘‘(ii) certifies each purpose for which
the report (or information) will be used;
and
‘‘(iii) certifies that the report (or in-
formation) will be used for no other pur-
pose; and
‘‘(B) before reselling the report, make rea-
sonable efforts to verify the identifications and
certifications made under subparagraph (A).’’.
SEC. 2408. CONSUMER DISCLOSURES.
(a) ALL INFORMATION IN CONSUMER’S FILE RE-
QUIRED TO BE DISCLOSED.—Section 609(a)(1) of the
Fair Credit Reporting Act (15 U.S.C. 1681g(a)(1)) is
amended to read as follows:
‘‘(1) All information in the consumer’s file at
the time of the request, except that nothing in this
paragraph shall be construed to require a consumer
reporting agency to disclose to a consumer any in-
formation concerning credit scores or any other risk
scores or predictors relating to the consumer.’’.
(b) MORE INFORMATION CONCERNING RECIPIENTS
OF REPORTS REQUIRED.—Section 609(a)(3) of the Fair
Credit Reporting Act (15 U.S.C. 1681g(a)) is amended
to read as follows:
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‘‘(3)(A) Identification of each person (including
each end-user identified under section 607(e)(1))
that procured a consumer report—
‘‘(i) for employment purposes, during the
2-year period preceding the date on which the
request is made; or
‘‘(ii) for any other purpose, during the 1-
year period preceding the date on which the re-
quest is made.
‘‘(B) An identification of a person under sub-
paragraph (A) shall include—
‘‘(i) the name of the person or, if applica-
ble, the trade name (written in full) under
which such person conducts business; and
‘‘(ii) upon request of the consumer, the ad-
dress and telephone number of the person.’’.
(c) INFORMATION REGARDING INQUIRIES.—Section
609(a) of the Fair Credit Reporting Act (15 U.S.C.
1681g(a)) is amended by adding at the end the following
new paragraph:
‘‘(5) A record of all inquiries received by the
agency during the 1-year period preceding the re-
quest that identified the consumer in connection
with a credit or insurance transaction that was not
initiated by the consumer.’’.
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(d) SUMMARY OF RIGHTS REQUIRED TO BE IN-
CLUDED WITH DISCLOSURE.—
(1) IN
GENERAL.—Section 609 of the Fair
Credit Reporting Act (15 U.S.C. 1681g) is amended
by adding at the end the following new subsection:
‘‘(c) SUMMARY OF RIGHTS REQUIRED TO BE IN-
CLUDED WITH DISCLOSURE.—
‘‘(1) SUMMARY OF RIGHTS.—A consumer re-
porting agency shall provide to a consumer, with
each written disclosure by the agency to the
consumer under this section—
‘‘(A) a written summary of all of the rights
that the consumer has under this title; and
‘‘(B) in the case of a consumer reporting
agency that compiles and maintains files on
consumers on a nationwide basis, a toll-free
telephone number established by the agency, at
which personnel are accessible to consumers
during normal business hours.
‘‘(2) SPECIFIC
ITEMS
REQUIRED
TO
BE
IN-
CLUDED.—The summary of rights required under
paragraph (1) shall include—
‘‘(A) a brief description of this title and all
rights of consumers under this title;
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‘‘(B) an explanation of how the consumer
may exercise the rights of the consumer under
this title;
‘‘(C) a list of all Federal agencies respon-
sible for enforcing any provision of this title
and the address and any appropriate phone
number of each such agency, in a form that will
assist the consumer in selecting the appropriate
agency;
‘‘(D) a statement that the consumer may
have additional rights under State law and that
the consumer may wish to contact a State or
local consumer protection agency or a State at-
torney general to learn of those rights; and
‘‘(E) a statement that a consumer report-
ing agency is not required to remove accurate
derogatory information from a consumer’s file,
unless the information is outdated under sec-
tion 605 or cannot be verified.
‘‘(3) FORM OF SUMMARY OF RIGHTS.—For pur-
poses of this subsection and any disclosure by a
consumer reporting agency required under this title
with respect to consumers’ rights, the Federal Trade
Commission (after consultation with each Federal
agency referred to in section 621(b)) shall prescribe
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the form and content of any such disclosure of the
rights of consumers required under this title. A
consumer reporting agency shall be in compliance
with this subsection if it provides disclosures under
paragraph (1) that are substantially similar to the
Federal Trade Commission prescription under this
paragraph.
‘‘(4) EFFECTIVENESS.—No disclosures shall be
required under this subsection until the date on
which the Federal Trade Commission prescribes the
form and content of such disclosures under para-
graph (3).’’.
(2) 
TECHNICAL
AMENDMENT.—Section
606(a)(1)(B) of the Fair Credit Reporting Act (15
U.S.C. 1681d(a)(1)(B)) is amended by inserting
‘‘and the written summary of the rights of the
consumer prepared pursuant to section 609(c)’’ be-
fore the semicolon.
(e) FORM OF DISCLOSURES.—
(1) IN GENERAL.—Subsections (a) and (b) of
section 610 of the Fair Credit Reporting Act (15
U.S.C. 1681h) are amended to read as follows:
‘‘(a) IN GENERAL.—
‘‘(1) PROPER
IDENTIFICATION.—A consumer
reporting agency shall require, as a condition of
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making the disclosures required under section 609,
that the consumer furnish proper identification.
‘‘(2) DISCLOSURE IN WRITING.—Except as pro-
vided in subsection (b), the disclosures required to
be made under section 609 shall be provided under
that section in writing.
‘‘(b) OTHER FORMS OF DISCLOSURE.—
‘‘(1) 
IN
GENERAL.—If 
authorized 
by 
a
consumer, a consumer reporting agency may make
the disclosures required under 609—
‘‘(A) other than in writing; and
‘‘(B) in such form as may be—
‘‘(i) specified by the consumer in ac-
cordance with paragraph (2); and
‘‘(ii) available from the agency.
‘‘(2) FORM.—A consumer may specify pursuant
to paragraph (1) that disclosures under section 609
shall be made—
‘‘(A) in person, upon the appearance of the
consumer at the place of business of the
consumer reporting agency where disclosures
are regularly provided, during normal business
hours, and on reasonable notice;
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‘‘(B) by telephone, if the consumer has
made a written request for disclosure by tele-
phone;
‘‘(C) by electronic means, if available from
the agency; or
‘‘(D) by any other reasonable means that
is available from the agency.’’.
(2) SIMPLIFIED DISCLOSURE.—Not later than
90 days after the date of enactment of this Act, each
consumer reporting agency shall develop a form on
which such consumer reporting agency shall make
the disclosures required under section 609(a) of the
Fair Credit Reporting Act, for the purpose of maxi-
mizing the comprehensibility and standardization of
such disclosures.
(3) GOALS.—The Federal Trade Commission
shall take appropriate action to assure that the goals
of 
comprehensibility 
and 
standardization 
are
achieved in accordance with paragraph (2).
(4) DEFAMATION.—Section 610(e) of the Fair
Credit Reporting Act (15 U.S.C. 1681h(e)) is
amended by inserting ‘‘or based on information dis-
closed by a user of a consumer report to or for a
consumer against whom the user has taken adverse
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action, based in whole or in part on the report’’ be-
fore ‘‘except’’.
(5) CONFORMING
AMENDMENTS.—The Fair
Credit Reporting Act (15 U.S.C. 1681 et seq.) is
amended—
(A) in section 609(a), in the matter pre-
ceding paragraph (1), by striking ‘‘and proper
identification of any consumer’’ and inserting ‘‘,
and subject to section 610(a)(1)’’;
(B) in section 610, in the section heading,
by inserting ‘‘AND FORM’’ after ‘‘CONDI-
TIONS’’; and
(C) in the table of sections at the begin-
ning of that Act, in the item relating to section
610, by inserting ‘‘and form’’ after ‘‘condi-
tions’’.
SEC. 2409. PROCEDURES IN CASE OF THE DISPUTED ACCU-
RACY OF ANY INFORMATION IN A CONSUM-
ER’S FILE.
(a) IN GENERAL.—Section 611(a) of the Fair Credit
Reporting Act (15 U.S.C. 1681i(a)) is amended to read
as follows:
‘‘(a) REINVESTIGATIONS
OF DISPUTED INFORMA-
TION.—
‘‘(1) REINVESTIGATION REQUIRED.—
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‘‘(A) IN GENERAL.—If the completeness or
accuracy of any item of information contained
in a consumer’s file at a consumer reporting
agency is disputed by the consumer and the
consumer notifies the agency directly of such
dispute, the agency shall reinvestigate free of
charge and record the current status of the dis-
puted information, or delete the item from the
file in accordance with paragraph (5), before
the end of the 30-day period beginning on the
date on which the agency receives the notice of
the dispute from the consumer.
‘‘(B) EXTENSION OF PERIOD TO REINVES-
TIGATE.—Except as provided in subparagraph
(C), the 30-day period described in subpara-
graph (A) may be extended for not more than
15 additional days if the consumer reporting
agency receives information from the consumer
during that 30-day period that is relevant to
the reinvestigation.
‘‘(C) LIMITATIONS ON EXTENSION OF PE-
RIOD TO REINVESTIGATE.—Subparagraph (B)
shall not apply to any reinvestigation in which,
during the 30-day period described in subpara-
graph (A), the information that is the subject
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of the reinvestigation is found to be inaccurate
or incomplete or the consumer reporting agency
determines that the information cannot be veri-
fied.
‘‘(2) PROMPT
NOTICE
OF
DISPUTE
TO
FUR-
NISHER OF INFORMATION.—
‘‘(A) IN GENERAL.—Before the expiration
of the 5-business-day period beginning on the
date on which a consumer reporting agency re-
ceives notice of a dispute from any consumer in
accordance with paragraph (1), the agency shall
provide notification of the dispute to any person
who provided any item of information in dis-
pute, at the address and in the manner estab-
lished with the person. The notice shall include
all relevant information regarding the dispute
that 
the 
agency 
has 
received 
from 
the
consumer.
‘‘(B) PROVISION OF OTHER INFORMATION
FROM
CONSUMER.—The consumer reporting
agency shall promptly provide to the person
who provided the information in dispute all rel-
evant information regarding the dispute that is
received by the agency from the consumer after
the period referred to in subparagraph (A) and
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before the end of the period referred to in para-
graph (1)(A).
‘‘(3) DETERMINATION THAT DISPUTE IS FRIVO-
LOUS OR IRRELEVANT.—
‘‘(A) IN GENERAL.—Notwithstanding para-
graph (1), a consumer reporting agency may
terminate a reinvestigation of information dis-
puted by a consumer under that paragraph if
the agency reasonably determines that the dis-
pute by the consumer is frivolous or irrelevant,
including by reason of a failure by a consumer
to provide sufficient information to investigate
the disputed information.
‘‘(B) NOTICE OF DETERMINATION.—Upon
making any determination in accordance with
subparagraph (A) that a dispute is frivolous or
irrelevant, a consumer reporting agency shall
notify the consumer of such determination not
later than 5 business days after making such
determination, by mail or, if authorized by the
consumer for that purpose, by any other means
available to the agency.
‘‘(C) CONTENTS
OF
NOTICE.—A notice
under subparagraph (B) shall include—
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‘‘(i) the reasons for the determination
under subparagraph (A); and
‘‘(ii) identification of any information
required to investigate the disputed infor-
mation, which may consist of a standard-
ized form describing the general nature of
such information.
‘‘(4) CONSIDERATION OF CONSUMER INFORMA-
TION.—In conducting any reinvestigation under
paragraph (1) with respect to disputed information
in the file of any consumer, the consumer reporting
agency shall review and consider all relevant infor-
mation submitted by the consumer in the period de-
scribed in paragraph (1)(A) with respect to such dis-
puted information.
‘‘(5) TREATMENT OF INACCURATE OR UNVERI-
FIABLE INFORMATION.—
‘‘(A) IN GENERAL.—If, after any reinves-
tigation under paragraph (1) of any informa-
tion disputed by a consumer, an item of the in-
formation is found to be inaccurate or incom-
plete or cannot be verified, the consumer re-
porting agency shall promptly delete that item
of information from the consumer’s file or mod-
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ify that item of information, as appropriate,
based on the results of the reinvestigation.
‘‘(B) REQUIREMENTS
RELATING
TO
RE-
INSERTION
OF
PREVIOUSLY
DELETED
MATE-
RIAL.—
‘‘(i) CERTIFICATION OF ACCURACY OF
INFORMATION.—If any information is de-
leted from a consumer’s file pursuant to
subparagraph (A), the information may
not be reinserted in the file by the
consumer reporting agency unless the per-
son who furnishes the information certifies
that the information is complete and accu-
rate.
‘‘(ii) NOTICE TO CONSUMER.—If any
information that has been deleted from a
consumer’s file pursuant to subparagraph
(A) is reinserted in the file, the consumer
reporting agency shall notify the consumer
of the reinsertion in writing not later than
5 business days after the reinsertion or, if
authorized by the consumer for that pur-
pose, by any other means available to the
agency.
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‘‘(iii) ADDITIONAL INFORMATION.—As
part of, or in addition to, the notice under
clause (ii), a consumer reporting agency
shall provide to a consumer in writing not
later than 5 business days after the date of
the reinsertion—
‘‘(I) a statement that the dis-
puted 
information 
has 
been 
re-
inserted;
‘‘(II) the business name and ad-
dress of any furnisher of information
contacted and the telephone number
of such furnisher, if reasonably avail-
able, or of any furnisher of informa-
tion that contacted the consumer re-
porting agency, in connection with the
reinsertion of such information; and
‘‘(III) a notice that the consumer
has the right to add a statement to
the consumer’s file disputing the accu-
racy or completeness of the disputed
information.
‘‘(C) PROCEDURES
TO
PREVENT
RE-
APPEARANCE.—A consumer reporting agency
shall maintain reasonable procedures designed
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to prevent the reappearance in a consumer’s
file, and in consumer reports on the consumer,
of information that is deleted pursuant to this
paragraph (other than information that is re-
inserted in accordance with subparagraph
(B)(i)).
‘‘(D) AUTOMATED REINVESTIGATION SYS-
TEM.—Any consumer reporting agency that
compiles and maintains files on consumers on a
nationwide basis shall implement an automated
system through which furnishers of information
to that consumer reporting agency may report
the results of a reinvestigation that finds in-
complete or inaccurate information in a con-
sumer’s file to other such consumer reporting
agencies.
‘‘(6) NOTICE
OF
RESULTS
OF
REINVESTIGA-
TION.—
‘‘(A) IN GENERAL.—A consumer reporting
agency shall provide written notice to a
consumer of the results of a reinvestigation
under this subsection not later than 5 business
days after the completion of the reinvestigation,
by mail or, if authorized by the consumer for
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that purpose, by other means available to the
agency.
‘‘(B) CONTENTS.—As part of, or in addi-
tion to, the notice under subparagraph (A), a
consumer reporting agency shall provide to a
consumer in writing before the expiration of the
5-day period referred to in subparagraph (A)—
‘‘(i) a statement that the reinvestiga-
tion is completed;
‘‘(ii) a consumer report that is based
upon the consumer’s file as that file is re-
vised as a result of the reinvestigation;
‘‘(iii) a notice that, if requested by the
consumer, a description of the procedure
used to determine the accuracy and com-
pleteness of the information shall be pro-
vided to the consumer by the agency, in-
cluding the business name and address of
any furnisher of information contacted in
connection with such information and the
telephone number of such furnisher, if rea-
sonably available;
‘‘(iv) a notice that the consumer has
the right to add a statement to the con-
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sumer’s file disputing the accuracy or com-
pleteness of the information; and
‘‘(v) a notice that the consumer has
the right to request under subsection (d)
that the consumer reporting agency fur-
nish notifications under that subsection.
‘‘(7) DESCRIPTION OF REINVESTIGATION PRO-
CEDURE.—A consumer reporting agency shall pro-
vide to a consumer a description referred to in para-
graph (6)(B)(iv) by not later than 15 days after re-
ceiving a request from the consumer for that de-
scription.
‘‘(8) EXPEDITED DISPUTE RESOLUTION.—If a
dispute regarding an item of information in a con-
sumer’s file at a consumer reporting agency is re-
solved in accordance with paragraph (5)(A) by the
deletion of the disputed information by not later
than 3 business days after the date on which the
agency receives notice of the dispute from the
consumer in accordance with paragraph (1)(A), then
the agency shall not be required to comply with
paragraphs (2), (6), and (7) with respect to that dis-
pute if the agency—
‘‘(A) provides prompt notice of the deletion
to the consumer by telephone;
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‘‘(B) includes in that notice, or in a writ-
ten notice that accompanies a confirmation and
consumer report provided in accordance with
subparagraph (C), a statement of the consum-
er’s right to request under subsection (d) that
the agency furnish notifications under that sub-
section; and
‘‘(C) provides written confirmation of the
deletion and a copy of a consumer report on the
consumer that is based on the consumer’s file
after the deletion, not later than 5 business
days after making the deletion.’’.
(b) CONFORMING AMENDMENT.—Section 611(d) of
the Fair Credit Reporting Act (15 U.S.C. 1681i(d)) is
amended by striking ‘‘The consumer reporting agency
shall clearly’’ and all that follows through the end of the
subsection.
SEC. 2410. CHARGES FOR CERTAIN DISCLOSURES.
Section 612 of the Fair Credit Reporting Act (15
U.S.C. 1681j) is amended to read as follows:
‘‘SEC. 612. CHARGES FOR CERTAIN DISCLOSURES.
‘‘(a) REASONABLE CHARGES ALLOWED FOR CER-
TAIN DISCLOSURES.—
‘‘(1) IN GENERAL.—Except as provided in sub-
sections (b), (c), and (d), a consumer reporting
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agency may impose a reasonable charge on a
consumer—
‘‘(A) for making a disclosure to the
consumer pursuant to section 609, which
charge—
‘‘(i) shall not exceed $8; and
‘‘(ii) 
shall 
be 
indicated 
to 
the
consumer before making the disclosure;
and
‘‘(B) for furnishing, pursuant to section
611(d), following a reinvestigation under sec-
tion 611(a), a statement, codification, or sum-
mary to a person designated by the consumer
under that section after the 30-day period be-
ginning on the date of notification of the
consumer under paragraph (6) or (8) of section
611(a) with respect to the reinvestigation,
which charge—
‘‘(i) shall not exceed the charge that
the agency would impose on each des-
ignated recipient for a consumer report;
and
‘‘(ii) 
shall 
be 
indicated 
to 
the
consumer before furnishing such informa-
tion.
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‘‘(2) MODIFICATION OF AMOUNT.—The Federal
Trade Commission shall increase the amount re-
ferred to in paragraph (1)(A)(i) on January 1 of
each year, based proportionally on changes in the
Consumer Price Index, with fractional changes
rounded to the nearest fifty cents.
‘‘(b) FREE DISCLOSURE AFTER ADVERSE NOTICE
TO CONSUMER.—Each consumer reporting agency that
maintains a file on a consumer shall make all disclosures
pursuant to section 609 without charge to the consumer
if, not later than 60 days after receipt by such consumer
of a notification pursuant to section 615, or of a notifica-
tion from a debt collection agency affiliated with that
consumer reporting agency stating that the consumer’s
credit rating may be or has been adversely affected, the
consumer makes a request under section 609.
‘‘(c) FREE DISCLOSURE UNDER CERTAIN OTHER
CIRCUMSTANCES.—Upon the request of the consumer, a
consumer reporting agency shall make all disclosures pur-
suant to section 609 once during any 12-month period
without charge to that consumer if the consumer certifies
in writing that the consumer—
‘‘(1) is unemployed and intends to apply for
employment in the 60-day period beginning on the
date on which the certification is made;
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‘‘(2) is a recipient of public welfare assistance;
or
‘‘(3) has reason to believe that the file on the
consumer at the agency contains inaccurate informa-
tion due to fraud.
‘‘(d) OTHER CHARGES PROHIBITED.—A consumer
reporting agency shall not impose any charge on a
consumer for providing any notification required by this
title or making any disclosure required by this title, except
as authorized by subsection (a).’’.
SEC. 2411. DUTIES OF USERS OF CONSUMER REPORTS.
(a) DUTIES OF USERS TAKING ADVERSE ACTIONS.—
Section 615(a) of the Fair Credit Reporting Act (15
U.S.C. 1681m(a)) is amended to read as follows:
‘‘(a) DUTIES OF USERS TAKING ADVERSE ACTIONS
ON
THE
BASIS
OF
INFORMATION
CONTAINED
IN
CONSUMER REPORTS.—If any person takes any adverse
action with respect to any consumer that is based in whole
or in part on any information contained in a consumer
report, the person shall—
‘‘(1) provide oral, written, or electronic notice of
the adverse action to the consumer;
‘‘(2) provide to the consumer orally, in writing,
or electronically—
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‘‘(A) the name, address, and telephone
number of the consumer reporting agency (in-
cluding a toll-free telephone number established
by the agency if the agency compiles and main-
tains files on consumers on a nationwide basis)
that furnished the report to the person; and
‘‘(B) a statement that the consumer re-
porting agency did not make the decision to
take the adverse action and is unable to provide
the consumer the specific reasons why the ad-
verse action was taken; and
‘‘(3) provide to the consumer an oral, written,
or electronic notice of the consumer’s right—
‘‘(A) to obtain, under section 612, a free
copy of a consumer report on the consumer
from the consumer reporting agency referred to
in paragraph (2), which notice shall include an
indication of the 60-day period under that sec-
tion for obtaining such a copy; and
‘‘(B) to dispute, under section 611, with a
consumer reporting agency the accuracy or
completeness of any information in a consumer
report furnished by the agency.’’.
(b) DUTIES OF USERS MAKING CERTAIN CREDIT SO-
LICITATIONS.—Section 615 of the Fair Credit Reporting
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Act (15 U.S.C. 1681m) is amended by adding at the end
the following new subsection:
‘‘(d) DUTIES OF USERS MAKING WRITTEN CREDIT
OR INSURANCE SOLICITATIONS ON THE BASIS OF INFOR-
MATION CONTAINED IN CONSUMER FILES.—
‘‘(1) IN
GENERAL.—Any person who uses a
consumer report on any consumer in connection with
any credit or insurance transaction that is not initi-
ated by the consumer, that is provided to that per-
son under section 604(c)(1)(B), shall provide with
each written solicitation made to the consumer re-
garding the transaction a clear and conspicuous
statement that—
‘‘(A) information contained in the consum-
er’s consumer report was used in connection
with the transaction;
‘‘(B) the consumer received the offer of
credit or insurance because the consumer satis-
fied the criteria for credit worthiness or insur-
ability under which the consumer was selected
for the offer;
‘‘(C) if applicable, the credit or insurance
may not be extended if, after the consumer re-
sponds to the offer, the consumer does not meet
the criteria used to select the consumer for the
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mining whether or not to extend credit or insurance
pursuant to the offer, and any requirement for the
furnishing of collateral as a condition of the exten-
sion of credit or insurance, until the expiration of
the 3-year period beginning on the date on which the
offer is made to the consumer.
‘‘(4) AUTHORITY OF FEDERAL AGENCIES RE-
GARDING
UNFAIR
OR
DECEPTIVE
ACTS
OR
PRAC-
TICES NOT AFFECTED.—This section is not intended
to affect the authority of any Federal or State agen-
cy to enforce a prohibition against unfair or decep-
tive acts or practices, including the making of false
or misleading statements in connection with a credit
or insurance transaction that is not initiated by the
consumer.’’.
(c) DUTIES OF USERS MAKING OTHER SOLICITA-
TIONS.—Section 615 of the Fair Credit Reporting Act (15
U.S.C. 1681m) is amended by adding at the end the fol-
lowing new subsection:
‘‘(e)
(d) CONFORMING AMENDMENT.—Section 615(c) of
the Fair Credit Reporting Act (15 U.S.C. 1681m(c)) is
amended by striking ‘‘subsections (a) and (b)’’ and insert-
ing ‘‘this section’’.
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(e) DUTIES OF PERSON TAKING CERTAIN ACTIONS
BASED ON INFORMATION PROVIDED BY AFFILIATE.—
Section 615(b) of the Fair Credit Reporting Act (15
U.S.C. 1681m(b)) is amended—
(1) by striking ‘‘(b) Whenever credit’’ and in-
serting the following:
‘‘(b) ADVERSE ACTION BASED ON INFORMATION OB-
TAINED FROM THIRD PARTIES OTHER THAN CONSUMER
REPORTING AGENCIES.—
‘‘(1) IN GENERAL.—Whenever credit’’;
(2) by adding at the end the following new
paragraph:
‘‘(2) DUTIES OF PERSON TAKING CERTAIN AC-
TIONS BASED ON INFORMATION PROVIDED BY AF-
FILIATE.—
‘‘(A) DUTIES, GENERALLY.—If a person
takes an action described in subparagraph (B)
with respect to a consumer, based in whole or
in part on information described in subpara-
graph (C), the person shall—
‘‘(i) notify the consumer of the action,
including a statement that the consumer
may obtain the information in accordance
with clause (ii); and
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‘‘(ii) upon a written request from the
consumer received within 60 days after
transmittal of the notice required by clause
(i), disclose to the consumer the nature of
the information upon which the action is
based by not later than 30 days after re-
ceipt of the request.
‘‘(B) ACTION DESCRIBED.—An action re-
ferred to in subparagraph (A) is an adverse ac-
tion described in section 603(k)(1)(A), taken in
connection with a transaction initiated by the
consumer, or any adverse action described in
clause (i) or (ii) of section 603(k)(1)(B).
‘‘(C) INFORMATION DESCRIBED.—Informa-
tion referred to in subparagraph (A)—
‘‘(i) except as provided in clause (ii),
is information that—
‘‘(I) is furnished to the person
taking the action by a person related
by common ownership or affiliated by
common corporate control to the per-
son taking the action; and
‘‘(II) bears on the credit worthi-
ness, credit standing, credit capacity,
character, general reputation, per-
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sonal characteristics, or mode of living
of the consumer; and
‘‘(ii) does not include—
‘‘(I) information solely as to
transactions or experiences between
the consumer and the person furnish-
ing the information; or
‘‘(II) information in a consumer
report.’’.
SEC. 2412. CIVIL LIABILITY.
(a) CIVIL LIABILITY
FOR WILLFUL NONCOMPLI-
ANCE.—Section 616 of the Fair Credit Reporting Act (15
U.S.C. 1681n) is amended by striking ‘‘Any consumer re-
porting agency or user of information which’’ and insert-
ing ‘‘(a) IN GENERAL.—Any person who’’.
(b) MINIMUM CIVIL LIABILITY FOR WILLFUL NON-
COMPLIANCE.—Section 616(a)(1) of the Fair Credit Re-
porting Act (15 U.S.C. 1681n(1)), as so designated by
subsection (a) of this section, is amended to read as fol-
lows:
‘‘(1)(A) any actual damages sustained by the
consumer as a result of the failure or damages of
not less than $100 and not more than $1,000; or
‘‘(B) in the case of liability of a natural person
for obtaining a consumer report under false pre-
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tenses or knowingly without a permissible purpose,
actual damages sustained by the consumer as a re-
sult of the failure or $1,000, whichever is greater;’’.
(c) CIVIL LIABILITY
FOR KNOWING NONCOMPLI-
ANCE.—Section 616 of the Fair Credit Reporting Act (15
U.S.C. 1681n) is amended by adding at the end the follow-
ing new subsection:
‘‘(b) CIVIL LIABILITY FOR KNOWING NONCOMPLI-
ANCE.—Any person who obtains a consumer report from
a consumer reporting agency under false pretenses or
knowingly without a permissible purpose shall be liable to
the consumer reporting agency for actual damages sus-
tained by the consumer reporting agency or $1,000,
whichever is greater.’’.
(d) CIVIL LIABILITY FOR NEGLIGENT NONCOMPLI-
ANCE.—Section 617 of the Fair Credit Reporting Act (15
U.S.C. 1681o) is amended by striking ‘‘Any consumer re-
porting agency or user of information which’’ and insert-
ing ‘‘(a) IN GENERAL.—Any person who’’.
(e) ATTORNEY’S FEES.—
(1) WILLFUL
NONCOMPLIANCE.—Section 616
of the Fair Credit Reporting Act (15 U.S.C. 1681n)
is amended by adding at the end the following new
subsection:
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‘‘(c) ATTORNEY’S FEES.—Upon a finding by the
court that an unsuccessful pleading, motion, or other
paper filed in connection with an action under this section
was filed in bad faith or for purposes of harassment, the
court shall award to the prevailing party attorney’s fees
reasonable in relation to the work expended in responding
to the pleading, motion, or other paper.’’.
(2) 
NEGLIGENT
NONCOMPLIANCE.—Section
617 of the Fair Credit Reporting Act (15 U.S.C.
1681o) is amended by adding at the end the follow-
ing new subsection:
‘‘(b) ATTORNEY’S FEES.—On a finding by the court
that an unsuccessful pleading, motion, or other paper filed
in connection with an action under this section was filed
in bad faith or for purposes of harassment, the court shall
award to the prevailing party attorney’s fees reasonable
in relation to the work expended in responding to the
pleading, motion, or other paper.’’.
SEC. 2413. RESPONSIBILITIES OF PERSONS WHO FURNISH
INFORMATION TO CONSUMER REPORTING
AGENCIES.
(a) IN GENERAL.—The Fair Credit Reporting Act
(15 U.S.C. 1681 et seq.) is amended—
(1) by redesignating section 623 as section 624;
and
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(2) by inserting after section 622 the following:
‘‘SEC. 623. RESPONSIBILITIES OF FURNISHERS OF INFOR-
MATION TO CONSUMER REPORTING AGEN-
CIES.
‘‘(a) DUTY OF FURNISHERS OF INFORMATION TO
PROVIDE ACCURATE INFORMATION.—
‘‘(1) PROHIBITION.—
‘‘(A) REPORTING INFORMATION WITH AC-
TUAL KNOWLEDGE OF ERRORS.—A person shall
not furnish any information relating to a
consumer to any consumer reporting agency if
the person knows or consciously avoids knowing
that the information is inaccurate.
‘‘(B) REPORTING
INFORMATION
AFTER
NOTICE
AND
CONFIRMATION
OF
ERRORS.—A
person shall not furnish information relating to
a consumer to any consumer reporting agency
if—
‘‘(i) the person has been notified by
the consumer, at the address specified by
the person for such notices, that specific
information is inaccurate; and
‘‘(ii) the information is, in fact, inac-
curate.
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‘‘(C) NO ADDRESS REQUIREMENT.—A per-
son who clearly and conspicuously specifies to
the consumer an address for notices referred to
in subparagraph (B) shall not be subject to
subparagraph (A); however, nothing in subpara-
graph (B) shall require a person to specify such
an address.
‘‘(2) DUTY TO CORRECT AND UPDATE INFOR-
MATION.—A person who—
‘‘(A) regularly and in the ordinary course
of business furnishes information to one or
more consumer reporting agencies about the
person’s transactions or experiences with any
consumer; and
‘‘(B) has furnished to a consumer report-
ing agency information that the person deter-
mines is not complete or accurate,
shall promptly notify the consumer reporting agency
of that determination and provide to the agency any
corrections to that information, or any additional in-
formation, that is necessary to make the information
provided by the person to the agency complete and
accurate, and shall not thereafter furnish to the
agency any of the information that remains not com-
plete or accurate.
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‘‘(3) DUTY TO PROVIDE NOTICE OF DISPUTE.—
If the completeness or accuracy of any information
furnished by any person to any consumer reporting
agency is disputed to such person by a consumer,
the person may not furnish the information to any
consumer reporting agency without notice that such
information is disputed by the consumer.
‘‘(4) DUTY TO PROVIDE NOTICE OF CLOSED AC-
COUNTS.—A person who regularly and in the ordi-
nary course of business furnishes information to a
consumer reporting agency regarding a consumer
who has a credit account with that person shall no-
tify the agency of the voluntary closure of the ac-
count by the consumer, in information regularly fur-
nished for the period in which the account is closed.
‘‘(5) DUTY
TO
PROVIDE
NOTICE
OF
DELIN-
QUENCY OF ACCOUNTS.—A person who furnishes in-
formation to a consumer reporting agency regarding
a delinquent account being placed for collection,
charged to profit or loss, or subjected to any similar
action shall, not later than 90 days after furnishing
the information, notify the agency of the month and
year of the commencement of the delinquency that
immediately preceded the action.
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‘‘(b) DUTIES
OF FURNISHERS
OF INFORMATION
UPON NOTICE OF DISPUTE.—
‘‘(1) IN GENERAL.—After receiving notice pur-
suant to section 611(a)(2) of a dispute with regard
to the completeness or accuracy of any information
provided by a person to a consumer reporting agen-
cy, the person shall—
‘‘(A) conduct an investigation with respect
to the disputed information;
‘‘(B) review all relevant information pro-
vided by the consumer reporting agency pursu-
ant to section 611(a)(2);
‘‘(C) report the results of the investigation
to the consumer reporting agency; and
‘‘(D) if the investigation finds that the in-
formation is incomplete or inaccurate, report
those results to all other consumer reporting
agencies to which the person furnished the in-
formation and that compile and maintain files
on consumers on a nationwide basis.
‘‘(2) DEADLINE.—A person shall complete all
investigations, reviews, and reports required under
paragraph (1) regarding information provided by the
person to a consumer reporting agency, before the
expiration of the period under section 611(a)(1)
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within which the consumer reporting agency is re-
quired to complete actions required by that section
regarding that information.
‘‘(c) LIMITATION ON LIABILITY.—Sections 616 and
617 do not apply to any failure to comply with subsection
(a), except as provided in section 621(c)(1)(B).
‘‘(d) LIMITATION
ON ENFORCEMENT.—Subsection
(a) shall be enforced exclusively under section 621 by the
Federal agencies and officials and the State officials iden-
tified in that section.’’.
(b) CONFORMING AMENDMENT.—The table of sec-
tions at the beginning of the Fair Credit Reporting Act
(15 U.S.C. 1681a et seq.) is amended by striking the item
relating to section 623 and inserting the following:
‘‘623. Responsibilities of furnishers of information to consumer reporting agen-
cies.
‘‘624. Relation to State laws.’’.
SEC. 2414. INVESTIGATIVE CONSUMER REPORTS.
Section 606 of the Fair Credit Reporting Act (15
U.S.C. 1681d) is amended—
(1) in subsection (a)(1), by striking ‘‘or’’ at the
end and inserting ‘‘and’’;
(2) by striking subsection (a)(2) and inserting
the following:
‘‘(2) the person certifies or has certified to the
consumer reporting agency that—