I 
115TH CONGRESS 
1ST SESSION H. R. 1595 
To amend the Federal Deposit Insurance Act to allow mutual capital 
certificates to satisfy capital requirements for mutual depositories. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 17, 2017 
Mr. ROTHFUS (for himself and Mr. STIVERS) introduced the following bill; 
which was referred to the Committee on Financial Services 
A BILL 
To amend the Federal Deposit Insurance Act to allow mutual 
capital certificates to satisfy capital requirements for mu-
tual depositories. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Mutual Bank Capital 
Opportunity Act of 2017’’. 
SEC. 2. TREATMENT OF MUTUAL CAPITAL CERTIFICATES. 
(a) IN GENERAL.—Section 38 of the Federal Deposit 
Insurance Act (12 U.S.C. 1831o) is amended— 
(1) in subsection (b)(2)— 
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(A) by redesignating subparagraphs (F) 
through (I) as subparagraphs (H) through (K), 
respectively; and 
(B) by inserting after subparagraph (E) 
the following new subparagraphs: 
‘‘(F) MUTUAL
CAPITAL
CERTIFICATE.— 
The term ‘mutual capital certificate’ means a 
financial instrument issued by a mutual deposi-
tory pursuant to subsection (c)(1)(C) that— 
‘‘(i) is subordinate to all claims 
against such mutual depository; 
‘‘(ii) is unsecured by the assets of 
such mutual depository; 
‘‘(iii) does not permit preemptive 
rights; 
‘‘(iv) does not provide voting or mem-
ber rights to the holder unless the board of 
directors of such mutual depository pro-
poses to change the specific terms of any 
class of such certificates in a manner ad-
verse to the interests of the holder; 
‘‘(v) is not eligible for use as collateral 
for any loan made by such mutual deposi-
tory; 
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‘‘(vi) if declared by the board of direc-
tors of such mutual depository, entitles the 
holder to a payment of fixed, variable, or 
participating dividends; and 
‘‘(vii) is not redeemable until the date 
that is 5 years after the date of issuance, 
except in the case of merger, conversion, or 
consolidation of such mutual depository, or 
reorganization of such mutual depository 
into a mutual holding company or a Fed-
eral mutual bank holding company (as 
such term is defined in section 5133A(a) 
of the Revised Statutes of the United 
States). 
‘‘(G) MUTUAL
DEPOSITORY.—The term 
‘mutual depository’ means an insured deposi-
tory institution operating in a non-stock form, 
including a Federal non-stock depository and 
any form of non-stock depository provided for 
under State law, the deposits of which are in-
sured by an instrumentality of the Federal Gov-
ernment.’’; and 
(2) in subsection (c)(1)— 
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(A) in subparagraph (A), by inserting 
‘‘and subparagraph (C)’’ after ‘‘subparagraph 
(B)(ii)’’; and 
(B) by inserting after subparagraph (B) 
the following new subparagraph: 
‘‘(C) MUTUAL CAPITAL CERTIFICATES.—A 
mutual depository is authorized to issue mutual 
capital certificates that shall qualify as common 
equity Tier 1 capital (as such term is defined 
by the appropriate Federal banking agency) for 
purposes of any capital requirements mandated 
by any Federal law or regulation.’’. 
(b) REGULATIONS.— 
(1) IMPLEMENTATION.—Not later than 180 
days after the date of the enactment of this section, 
the appropriate Federal banking agencies (as de-
fined in section 3 of the Federal Deposit Insurance 
Act (12 U.S.C. 1813)) shall jointly issue regulations 
to implement this section. 
(2) OTHER FINANCIAL INSTRUMENTS.— 
(A) IN GENERAL.—Not later than 90 days 
after the date of the enactment of this section, 
the appropriate Federal banking agencies shall 
jointly issue regulations identifying other finan-
cial instruments, aside from mutual capital cer-
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tificates, that mutual depositories may issue 
that shall qualify as additional Tier 1 capital 
(as such term is defined by the appropriate 
Federal banking agency) for purposes of any 
capital requirements mandated by any Federal 
law or regulation. 
(B) DEFINITIONS.—The terms ‘‘mutual 
capital certificate’’ and ‘‘mutual depository’’ 
have the meaning given such terms in section 
38(b)(2) of the Federal Deposit Insurance Act 
(12 U.S.C. 1831o(b)(2)). 
(c) REPORT
TO
CONGRESS.—Not later than 6 
months after the date of the enactment of this section, 
and every 6 months thereafter until the date which is 3 
years after the date of the enactment of this section, the 
appropriate Federal banking agencies shall submit a re-
port to Congress on the progress of such agencies in pro-
mulgating the regulations described in subsection (b). 
Such report shall include a description of outreach efforts 
to the financial industry and any barriers to implementa-
tion of the requirements of this section. 
Æ 
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