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shall promptly submit a recommended opin-
ion on all issues considered in such hearing
to the Council.
‘‘(F) FINAL DECISION BY COUNCIL.—
‘‘(i) DETERMINATION
AFTER
HEAR-
ING.—If a hearing was requested under this
paragraph, the Council shall, before the end
of the 60-day period beginning on the date
the recommended opinion of the administra-
tive law judge is filed with the Council,
make a final determination regarding the
matter on the basis of the record of the hear-
ing.
‘‘(ii) DETERMINATION IF NO HEARING
IS REQUESTED.—If a hearing was not re-
quested with regard to a petition filed with
the Council under subparagraph (B)(i), the
Council shall, before the end of the 60-day
period beginning on the date by which the
Council received such petition and any re-
sponse to such petition pursuant to sub-
paragraph (D)(i), make a final determina-
tion regarding the matter.
‘‘(G) APPEAL OF FINAL DECISION.—
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‘‘(i) IN GENERAL.—Any State insur-
ance supervisory agency which filed a peti-
tion under subparagraph (B)(i), the Comp-
troller of the Currency (if the Comptroller
filed a response to such petition or partici-
pated as a party in a hearing with regard
to such petition), or an affected party (if
the party filed a response to the petition or
participated as a party in a hearing with
regard to the petition) may obtain judicial
review of the final decision of the Council
with regard to such petition by the United
States court of appeals for the circuit in
which the State insurance supervisory agen-
cy is located or the United States Circuit
Court of Appeals for the District of Colum-
bia Circuit, in accordance with section 706
of title 5, United States Code, and title 28
of such Code, by filing a notice of appeal in
such court within 10 days after the date of
the final determination of the Council.
‘‘(ii) NOTICE TO COUNCIL AND OTHER
PARTIES.—Any party who petitions for ju-
dicial review of any final decision of the
Council under this paragraph shall simulta-
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neously send a copy of such petition to the
Council and the Comptroller of the Cur-
rency, the State insurance supervisory agen-
cy, and any affected party, as the case may
be, by registered or certified mail.
‘‘(iii) SUBMISSION
OF
RECORD.—The
Council shall promptly certify and file in
the appropriate court of appeal the record
on which a final decision was based.
‘‘(3) DEFINITIONS.—For purposes of this sub-
section, the following definitions shall apply:
‘‘(A) INSURANCE.—The term ‘insurance’
shall include any product regulated as insurance
as of January 1, 1997, in accordance with the
relevant State insurance law in the State in
which the product is to be provided, any new
form of such product that is developed after Jan-
uary 1, 1997, and any annuity contract the in-
come on which is tax deferred under section 72
of the Internal Revenue Code of 1986.
‘‘(B) AFFECTED PARTY.—The term ‘affected
party’ means any party that sought or otherwise
was a party to the determination that is the sub-
ject of the petition filed with the Council under
paragraph (2)(B)(i).
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‘‘(4) AUTHORITY.—
‘‘(A) IN
GENERAL.—For purposes of this
subsection, national banks had authority to pro-
vide a product in any State as of January 1,
1997, if on or before such date—
‘‘(i) the Comptroller of the Currency
had determined, in writing, that national
banks may provide the product; or
‘‘(ii) national banks were providing
the product.
‘‘(B) EXCEPTION.—Notwithstanding sub-
paragraph (A), national banks did not have au-
thority to provide a product in a State as of
January 1, 1997, if on or before such date a
court of relevant jurisdiction for such State had,
by final judgment, overturned a determination of
the Comptroller of the Currency that national
banks may provide such product.’’.
(b) AUTHORITY TO UNDERWRITE CERTAIN MUNICIPAL
BONDS.—The paragraph designated the Seventh of section
5136(a) of the Revised Statutes of the United States (12
U.S.C. 24(7)) (as amended by subsection (a) of this section)
is amended by adding at the end the following new sentence:
‘‘In addition to the provisions in this paragraph for dealing
in, underwriting or purchasing securities, the limitations
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and restrictions contained in this paragraph as to dealing
in, underwriting, and purchasing investment securities for
the national bank’s own account shall not apply to obliga-
tions (including limited obligation bonds, revenue bonds,
and obligations that satisfy the requirements of section
142(b)(1) of the Internal Revenue Code of 1986) issued by
or on behalf of any state or political subdivision of a state,
including any municipal corporate instrumentality of 1 or
more states, or any public agency or authority of any state
or political subdivision of a state, if the national banking
association is well capitalized (as defined in section 38 of
the Federal Deposit Insurance Act).’’.
(c) AUTHORITY TO SELL AND UNDERWRITE TITLE IN-
SURANCE.—
(1) IN
GENERAL.—Notwithstanding any other
provision of this Act or any other law, no national
bank, and no subsidiary of a national bank, may en-
gage in any activity involving the underwriting or
sale of title insurance other than title insurance sales
activities in which such national bank or subsidiary
was actively and lawfully engaged before the date of
the enactment of this Act.
(2) PROHIBITION
ON
BANKING
ACTIVITIES
BY
TITLE INSURANCE UNDERWRITER.—No company en-
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gaged in the provision of title insurance may own a
subsidiary engaged in banking.
SEC. 152. BANKING PRODUCTS DEFINED.
Section 18 of the Federal Deposit Insurance Act (12
U.S.C. 1828) is amended by adding at the end the following
new subsection:
‘‘(t) BANKING PRODUCTS DEFINITION.—
‘‘(1) DEFINITION.—The term ‘banking product’,
as used in paragraphs (4) and (5) of section 3(a) of
the Securities Exchange Act of 1934, means—
‘‘(A) a deposit account, savings account,
certificate of deposit, or other deposit instrument
issued by a bank;
‘‘(B) a banker’s acceptance;
‘‘(C) a letter of credit issued by a bank;
‘‘(D) a debit account at a bank arising from
a credit card or similar arrangement;
‘‘(E) a loan or loan participation issued in
the ordinary course of bank business, including
any debt security issued in connection with sov-
ereign debt restructuring which a bank purchases
and sells pursuant to such bank’s lending au-
thority;
‘‘(F) a qualified financial contract (as de-
fined in or determined pursuant to section
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11(e)(8)(D)(i)), except that such term does not
include—
‘‘(i) any securities contract (as defined
in section 11(e)(8)(D)(ii)) that is based on
or directly relates to a security that section
5136 of the Revised Statutes of the United
States does not expressly authorize a na-
tional bank to underwrite or deal in, unless
the appropriate Federal banking agency de-
termines that such securities contract is ap-
propriate for a bank to underwrite or deal
in, taking into account other qualified fi-
nancial contracts which a bank is permitted
to underwrite or deal in; and
‘‘(ii) any agreement, contract, or
transaction that the Corporation determines
(in a regulation prescribed after the date of
the enactment of the Financial Services
Competition Act of 1997) to be a qualified
financial contract, unless the appropriate
Federal banking agency determines that
such agreement, contract, or transaction
shall be treated as a qualified financial con-
tract for purposes of this subsection;
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‘‘(G) notwithstanding subparagraph (F),
swap agreements (as defined in or pursuant to
section 11(e)(8)(D)(vi) of the Federal Deposit In-
surance Act) including credit swaps and equity
swaps, unless the appropriate Federal banking
agency determines that crdit swaps and equity
swaps shall not be included in the definition of
such term; and
‘‘(H) any other product that is available in
the course of a banking business if the Board of
Governors of the Federal Reserve System, after
consultation with the Securities and Exchange
Commission, determines by order or regula-
tion—
‘‘(i) that the product is more appro-
priately regulated as a banking product;
and
‘‘(ii) that regulation of the product as
a banking product is consistent with the
maintenance of fair and orderly markets
and the protection of investors.
‘‘(2) SECURITIZATION.—Paragraph (1) does not
authorize any agency to exempt from the require-
ments of paragraphs (4) and (5) of section 3(a) of the
Securities Exchange Act of 1934 securities backed by
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or representing an interest in notes, drafts, accept-
ances, loans, leases, receivables, other obligations, or
pools of any such obligations.
‘‘(3) EXEMPTION LIMITED.—Exemption of a par-
ticular product as a banking product pursuant to this
subsection shall not be construed as finding or imply-
ing that such product is or is not a security for any
purpose other than defining the term ‘banking prod-
uct’ in paragraphs (4) and (5) of section 3(a) of the
Securities Exchange Act of 1934.’’.
SEC. 153. REPEAL OF STOCK LOAN LIMIT IN FEDERAL RE-
SERVE ACT.
Section 11 of the Federal Reserve Act (12 U.S.C. 248)
is amended by striking subsection (m).
Subtitle G—Noninsured Depository
Institutions
SEC. 161. WHOLESALE FINANCIAL INSTITUTIONS.
(a) NATIONAL
WHOLESALE
FINANCIAL
INSTITU-
TIONS.—
(1) IN GENERAL.—Chapter one of title LXII of
the Revised Statutes of the United States (12 U.S.C.
21 et seq.) is amended by inserting after section
5136A the following new section:
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‘‘SEC. 5136B. NATIONAL WHOLESALE FINANCIAL INSTITU-
TIONS.
‘‘(a) AUTHORIZATION
OF
THE COMPTROLLER RE-
QUIRED.—A national bank may apply to the Comptroller,
on such forms and in accordance with such regulations as
the Comptroller may prescribe, for permission to operate
as a national wholesale financial institution.
‘‘(b) REGULATION.—A national wholesale financial in-
stitution may exercise, in accordance with such institu-
tion’s articles of incorporation and regulations issued by
the Comptroller, all the powers and privileges of a national
bank formed in accordance with section 5133 of the Revised
Statutes of the United States, subject to the same limita-
tions and restrictions imposed under section 9B of the Fed-
eral Reserve Act.
‘‘(c) COMMUNITY REINVESTMENT ACT OF 1977.—A
national wholesale financial institution shall be subject to
the Community Reinvestment Act of 1977.’’.
(2) CLERICAL AMENDMENT.—The table of sec-
tions for chapter one of title LXII of the Revised Stat-
utes of the United States is amended by inserting
after the item relating to section 5136A (as added by
section 141(b) of this title) the following new item:
‘‘5136B. National wholesale financial institutions.’’.
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(b) STATE WHOLESALE FINANCIAL INSTITUTIONS.—
The Federal Reserve Act (12 U.S.C. 221 et seq.) is amended
by inserting after section 9A the following new section:
‘‘SEC. 9B. STATE WHOLESALE FINANCIAL INSTITUTIONS.
‘‘(a) APPLICATION FOR MEMBERSHIP AS WHOLESALE
FINANCIAL INSTITUTION.—
‘‘(1) APPLICATION REQUIRED.—
‘‘(A) IN GENERAL.—Any State bank may
apply to the Board of Governors of the Federal
Reserve System to become a wholesale financial
institution and as a wholesale financial institu-
tion, to subscribe to the stock of the Federal re-
serve bank organized within the district where
the applying bank is located.
‘‘(B) TREATMENT AS MEMBER BANK.—Any
application under subparagraph (A) shall be
treated as an application under, and shall be
subject to the provisions of, section 9.
‘‘(2) INSURANCE TERMINATION.—No bank that is
insured under the Federal Deposit Insurance Act may
become a wholesale financial institution unless it has
met all requirements under that Act for voluntary ter-
mination of deposit insurance.
‘‘(b) GENERAL
REQUIREMENTS
APPLICABLE
TO
WHOLESALE FINANCIAL INSTITUTIONS.—
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‘‘(1) FEDERAL RESERVE ACT.—Except as other-
wise provided in this section, wholesale financial in-
stitutions shall be member banks and shall be subject
to the provisions of this Act that apply to member
banks to the same extent and in the same manner as
State member insured banks, except that a wholesale
financial institution may terminate membership
under this Act only with the prior written approval
of the Board and on terms and conditions that the
Board determines are appropriate to carry out the
purposes of this Act.
‘‘(2) PROMPT CORRECTIVE ACTION.—A wholesale
financial institution shall be deemed to be an insured
depository institution for purposes of section 38 of the
Federal Deposit Insurance Act except that—
‘‘(A) the relevant capital levels and capital
measures for each capital category shall be the
levels specified by the Board for wholesale finan-
cial institutions; and
‘‘(B) all references to the appropriate Fed-
eral banking agency or to the Corporation in
that section shall be deemed to be references to
the Board.
‘‘(3) ENFORCEMENT
AUTHORITY.—Subsections
(j) and (k) of section 7, subsections (b) through (n),
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(s), (u), and (v) of section 8, and section 19 of the
Federal Deposit Insurance Act shall apply to a whole-
sale financial institution in the same manner and to
the same extent as such provisions apply to State
member insured banks and any reference in such sec-
tions to an insured depository institution shall be
deemed to include a reference to a wholesale financial
institution.
‘‘(4) CERTAIN OTHER STATUTES APPLICABLE.—
A wholesale financial institution shall be deemed to
be a banking institution, and the Board shall be the
appropriate Federal banking agency for such bank
and all such bank’s affiliates, for purposes of the
International Lending Supervision Act.
‘‘(5) BANK MERGER ACT.—A wholesale financial
institution shall be subject to provisions of sections
18(c) and 44 of the Federal Deposit Insurance Act in
the same manner and to the same extent the wholesale
financial institution would be subject to such sections
if the institution were a State member insured bank.
‘‘(6) COMMUNITY REINVESTMENT ACT OF 1977.—
A State wholesale financial institution shall be subject
to the Community Reinvestment Act of 1977.
‘‘(c) 
SPECIFIC
REQUIREMENTS
APPLICABLE
TO
WHOLESALE FINANCIAL INSTITUTIONS.—
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‘‘(1) LIMITATIONS ON DEPOSITS.—
‘‘(A) MINIMUM AMOUNT.—
‘‘(i) IN GENERAL.—No wholesale finan-
cial institution may receive initial deposits
of $100,000 or less, other than on an inci-
dental and occasional basis.
‘‘(ii) LIMITATION
ON
DEPOSITS
OF
LESS
THAN
$100,000.—No bank may be
treated as a wholesale financial institution
if the total amount of the initial deposits of
$100,000 or less at such bank constitute
more than 5 percent of the bank’s total de-
posits.
‘‘(B) NO DEPOSIT INSURANCE.—No deposits
held by a wholesale financial institution shall be
insured deposits under the Federal Deposit In-
surance Act.
‘‘(C) ADVERTISING AND DISCLOSURE.—The
Board shall prescribe regulations pertaining to
advertising and disclosure by wholesale financial
institutions to ensure that each depositor is noti-
fied that deposits at the wholesale financial in-
stitution are not federally insured or otherwise
guaranteed by the United States Government.
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‘‘(2) SPECIAL CAPITAL REQUIREMENTS APPLICA-
BLE TO WHOLESALE FINANCIAL INSTITUTIONS.—
‘‘(A) IN
GENERAL.—The Board shall, by
regulation, adopt capital requirements for whole-
sale financial institutions—
‘‘(i) to account for the status of whole-
sale financial institutions as institutions
that accept deposits that are not insured
under the Federal Deposit Insurance Act;
and
‘‘(ii) to provide for the safe and sound
operation of the wholesale financial institu-
tion without undue risk to creditors or other
persons, including Federal reserve banks,
engaged in transactions with the bank.
‘‘(B) MINIMUM TIER 1 CAPITAL RATIO.—The
minimum ratio of tier 1 capital to total risk-
weighted assets of wholesale financial institu-
tions shall be not less than the level required for
a State member insured bank to be well capital-
ized unless the Board determines otherwise, con-
sistent with safety and soundness.
‘‘(3) ADDITIONAL
REQUIREMENTS
APPLICABLE
TO WHOLESALE FINANCIAL INSTITUTIONS.—In addi-
tion to any requirement otherwise applicable to State
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member banks or applicable, under this section, to
wholesale financial institutions, the Board may pre-
scribe, by regulation or order, for wholesale financial
institutions—
‘‘(A) limitations on transactions with affili-
ates to prevent—
‘‘(i) the transfer of risk to the deposit
insurance funds; or
‘‘(ii) an affiliate from gaining access
to, or the benefits of, credit from a Federal
reserve bank, including overdrafts at a Fed-
eral reserve bank;
‘‘(B) special clearing balance requirements;
‘‘(C) any additional requirements that the
Board determines to be appropriate or necessary
to—
‘‘(i) promote the safety and soundness
of the wholesale financial institution or any
insured depository institution affiliate of
the wholesale financial institution;
‘‘(ii) prevent the transfer of risk to the
deposit insurance funds; or
‘‘(iii) protect creditors and other per-
sons, including Federal reserve banks, en-
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gaged in transactions with the wholesale fi-
nancial institution; and
‘‘(D) any additional requirements that the
Board determines to be appropriate or necessary
to assure compliance with the Community Rein-
vestment Act of 1977.
‘‘(4) EXEMPTIONS FOR WHOLESALE FINANCIAL
INSTITUTIONS.—The Board may, by regulation or
order, exempt any wholesale financial institution
from any provision applicable to a member bank that
is not a wholesale financial institution (other than
the provisions of this section), if the Board finds that
such exemption is not inconsistent with—
‘‘(A) the promotion of the safety and sound-
ness of the wholesale financial institution or any
insured depository institution affiliate of the
wholesale financial institution;
‘‘(B) the protection of the deposit insurance
funds; and
‘‘(C) the protection of creditors and other
persons, including Federal reserve banks, en-
gaged in transactions with the wholesale finan-
cial institution.
‘‘(5) LIMITATION ON TRANSACTIONS BETWEEN A
WHOLESALE
FINANCIAL
INSTITUTION
AND
AN
IN-
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SURED BANK.—For purposes of section 23A(d)(1) of
the Federal Reserve Act, a wholesale financial institu-
tion that is affiliated with an insured bank shall not
be a bank.
‘‘(6) NO EFFECT ON OTHER PROVISIONS.—This
section shall not be construed as limiting the Board’s
authority over member banks under any other provi-
sion of law, or to create any obligation for any Fed-
eral reserve bank to make, increase, renew, or extend
any advance or discount under this Act to any mem-
ber bank or other depository institution.
‘‘(d) CONSERVATORSHIP AUTHORITY.—
‘‘(1) IN GENERAL.—The Board may appoint a
conservator to take possession and control of a whole-
sale financial institution to the same extent and in
the same manner as the Comptroller of the Currency
may appoint a conservator for a national bank under
section 203 of the Bank Conservation Act, and the
conservator shall exercise the same powers, functions,
and duties, subject to the same limitations, as are
provided under such Act for conservators of national
banks.
‘‘(2) BOARD AUTHORITY.—The Board shall have
the same authority with respect to any conservator
appointed under paragraph (1) and the wholesale fi-
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nancial institution for which such conservator has
been appointed as the Comptroller of the Currency
has under the Bank Conservation Act with respect to
a conservator appointed under such Act and a na-
tional bank for which the conservator has been ap-
pointed.
‘‘(e) EXCLUSIVE JURISDICTION.—Subsections (c) and
(e) of section 43 of the Federal Deposit Insurance Act shall
not apply to any wholesale financial institution.’’.
(c) TECHNICAL AND CONFORMING AMENDMENTS TO
THE BANK HOLDING COMPANY ACT OF 1956.—
(1) DEFINITION OF BANK.—Section 2(c)(1) of the
Bank Holding Company Act of 1956 (12 U.S.C.
1841(c)(1)) is amended by inserting after subpara-
graph (B) the following new subparagraph:
‘‘(C) A wholesale financial institution char-
tered under section 5136B of the Revised Stat-
utes of the United States or section 9B of the
Federal Reserve Act the deposits of which are not
insured by the Federal Deposit Insurance Cor-
poration.’’.
(2) EXCEPTION
TO
INSURED
BANK
REQUIRE-
MENT.—Section 3(e) of the Bank Holding Company
Act of 1956 (12 U.S.C. 1842(e)) is amended by strik-
ing ‘‘Every bank’’ and inserting ‘‘Except with regard
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to a wholesale financial institution described in sec-
tion 2(c)(1)(C), every bank’’.
(d) VOLUNTARY TERMINATION OF INSURED STATUS BY
CERTAIN INSTITUTIONS.—
(1) SECTION 8 DESIGNATIONS.—Section 8(a) of
the Federal Deposit Insurance Act (12 U.S.C.
1818(a)) is amended—
(A) by striking paragraph (1); and
(B) 
by 
redesignating 
paragraphs 
(2)
through (10) as paragraphs (1) through (9), re-
spectively.
(2) VOLUNTARY TERMINATION OF INSURED STA-
TUS.—The Federal Deposit Insurance Act (12 U.S.C.
1811 et seq.) is amended by inserting after section 8
the following new section:
‘‘SEC. 8A. VOLUNTARY TERMINATION OF STATUS AS IN-
SURED DEPOSITORY INSTITUTION.
‘‘(a) IN GENERAL.—Except as provided in subsection
(b), an insured State bank or a national bank may volun-
tarily terminate such bank’s status as an insured depository
institution in accordance with regulations of the Corpora-
tion if—
‘‘(1) the bank provides written notice of the
bank’s intent to terminate such insured status—
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‘‘(A) to the Corporation and the Board of
Governors of the Federal Reserve System not less
than 6 months before the effective date of such
termination; and
‘‘(B) to all depositors at such bank, not less
than 6 months before the effective date of the ter-
mination of such status; and
‘‘(2) either—
‘‘(A) the deposit insurance fund of which
such bank is a member equals or exceeds the
fund’s designated reserve ratio as of the date the
bank provides a written notice under paragraph
(1) and the Corporation determines that the fund
will equal or exceed the applicable designated re-
serve ratio for the 2 semiannual assessment peri-
ods immediately following such date; or
‘‘(B) the Corporation and the Board of Gov-
ernors of the Federal Reserve System approve the
termination of the bank’s insured status and the
bank pays an exit fee in accordance with sub-
section (e).
‘‘(b) EXCEPTION.—Subsection (a) shall not apply with
respect to—
‘‘(1) an insured savings association;
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‘‘(2) an insured branch that is required to be in-
sured under subsection (a) or (b) of section 6 of the
International Banking Act of 1978; or
‘‘(3) any institution described in section 2(c)(2)
of the Bank Holding Company Act of 1956.
‘‘(c) ELIGIBILITY
FOR INSURANCE TERMINATED.—
Any bank that voluntarily elects to terminate the bank’s
insured status under subsection (a) shall not be eligible for
insurance on any deposits or any assistance authorized
under this Act after the period specified in subsection (f)(1).
‘‘(d) INSTITUTION MUST BECOME WHOLESALE FINAN-
CIAL INSTITUTION OR TERMINATE DEPOSIT-TAKING AC-
TIVITIES.—Any depository institution which voluntarily
terminates such institution’s status as an insured deposi-
tory institution under this section may not, upon termi-
nation of insurance, accept any deposits unless the institu-
tion is a wholesale financial institution under section 9B
of the Federal Reserve Act.
‘‘(e) EXIT FEES.—
‘‘(1) IN GENERAL.—Any bank that voluntarily
terminates such bank’s status as an insured deposi-
tory institution under this section shall pay an exit
fee in an amount that the Corporation determines is
sufficient to account for the institution’s pro rata
share of the amount (if any) which would be required