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(ii) by striking ‘‘and’’ at the end of 
clause (iii); 
(iii) by redesignating clause (iv) as 
clause (v); and 
(iv) by inserting the following new 
clause after clause (iii): 
‘‘(iv) the Director of the Office of 
Thrift Supervision, in the case of a savings 
association (as defined in section 3(b) of 
the Federal Deposit Insurance Act (12 
U.S.C. 1813(b))) the deposits of which are 
insured by the Federal Deposit Insurance 
Corporation, a savings and loan holding 
company, or a subsidiary of a savings and 
loan holding company when the appro-
priate regulatory agency for such clearing 
agency is not the Commission; and’’; 
(D) in subparagraph (D)— 
(i) by striking ‘‘and’’ at the end of 
clause (ii); 
(ii) by redesignating clause (iii) as 
clause (iv); and 
(iii) by inserting the following new 
clause after clause (ii): 
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‘‘(iii) the Director of the Office of 
Thrift Supervision, in the case of a savings 
association (as defined in section 3(b) of 
the Federal Deposit Insurance Act (12 
U.S.C. 1813(b))) the deposits of which are 
insured by the Federal Deposit Insurance 
Corporation; and’’; 
(E) in subparagraph (F)— 
(i) by redesignating clauses (ii), (iii), 
and (iv) as clauses (iii), (iv), and (v), re-
spectively; and 
(ii) by inserting the following new 
clause after clause (i): 
‘‘(ii) the Director of the Office of 
Thrift Supervision, in the case of a savings 
association (as defined in section 3(b) of 
the Federal Deposit Insurance Act (12 
U.S.C. 1813(b))) the deposits of which are 
insured by the Federal Deposit Insurance 
Corporation; and’’; 
(F) by moving subparagraph (H) and in-
serting such subparagraph after subparagraph 
(G); and 
(G) by adding at the end the following new 
sentence: ‘‘As used in this paragraph, the term 
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‘savings and loan holding company’ has the 
meaning given it in section 10(a) of the Home 
Owners’ Loan Act (12 U.S.C. 1467a(a)).’’. 
(b) INVESTMENT ADVISERS ACT OF 1940.— 
(1) DEFINITION OF BANK.—Section 202(a)(2) 
of the Investment Advisers Act of 1940 (15 U.S.C. 
80b–2(a)(2)) is amended— 
(A) in subparagraph (A) by inserting ‘‘or 
a Federal savings association, as defined in sec-
tion 2(5) of the Home Owners’ Loan Act’’ after 
‘‘a banking institution organized under the laws 
of the United States’’; and 
(B) in subparagraph (C)— 
(i) by inserting ‘‘, savings association 
as defined in section 2(4) of the Home 
Owners’ Loan Act,’’ after ‘‘banking insti-
tution’’; and 
(ii) by inserting ‘‘or savings associa-
tions’’ after ‘‘having supervision over 
banks’’. 
(2) CONFORMING
AMENDMENTS.—Subsections 
(a)(1)(A)(i), (a)(1)(B), (a)(2), and (b) of section 
210A of such Act (15 U.S.C. 80b–10a), as added by 
section 220 of the Gramm-Leach-Bliley Act, are 
each amended by striking ‘‘bank holding company’’ 
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each place it occurs and inserting ‘‘bank holding 
company or savings and loan holding company’’. 
(c) CONFORMING AMENDMENT TO THE INVESTMENT 
COMPANY ACT OF 1940.—Section 10(c) of the Investment 
Company Act of 1940 (15 U.S.C. 80a–10(c)), as amended 
by section 213(c) of the Gramm-Leach-Bliley Act, is 
amended by inserting after ‘‘1956)’’ the following: ‘‘or any 
one savings and loan holding company (together with its 
affiliates and subsidiaries) (as such terms are defined in 
section 10 of the Home Owners’ Loan Act)’’. 
SEC. 202. INVESTMENTS BY FEDERAL SAVINGS ASSOCIA-
TIONS AUTHORIZED TO PROMOTE THE PUB-
LIC WELFARE. 
(a) IN GENERAL.—Section 5(c)(3) of the Home Own-
ers’ Loan Act (12 U.S.C. 1464(c)) is amended by adding 
at the end the following new subparagraph: 
‘‘(D) DIRECT INVESTMENTS TO PROMOTE 
THE PUBLIC WELFARE.— 
‘‘(i) IN GENERAL.—A Federal savings 
association may make investments de-
signed primarily to promote the public wel-
fare, including the welfare of low- and 
moderate-income communities or families 
through the provision of housing, services, 
and jobs. 
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‘‘(ii) DIRECT INVESTMENTS OR ACQUI-
SITION
OF
INTEREST
IN
OTHER
COMPA-
NIES.—Investments under clause (i) may 
be made directly or by purchasing interests 
in an entity primarily engaged in making 
such investments. 
‘‘(iii) PROHIBITION ON UNLIMITED LI-
ABILITY.—No investment may be made 
under this subparagraph which would sub-
ject a Federal savings association to unlim-
ited liability to any person. 
‘‘(iv) SINGLE
INVESTMENT
LIMITA-
TION
TO
BE
ESTABLISHED
BY
DIREC-
TOR.—Subject to clauses (v) and (vi), the 
Director shall establish, by order or regula-
tion, limits on— 
‘‘(I) the amount any savings as-
sociation may invest in any 1 project; 
and 
‘‘(II) the aggregate amount of in-
vestment of any savings association 
under this subparagraph. 
‘‘(v) FLEXIBLE AGGREGATE INVEST-
MENT
LIMITATION.—The 
aggregate 
amount of investments of any savings asso-
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ciation under this subparagraph may not 
exceed an amount equal to the sum of 5 
percent of the savings association’s capital 
stock actually paid in and unimpaired and 
5 percent of the savings association’s 
unimpaired surplus, unless— 
‘‘(I) the Director determines that 
the savings association is adequately 
capitalized; and 
‘‘(II) the Director determines, by 
order, that the aggregate amount of 
investments in a higher amount than 
the limit under this clause will pose 
no significant risk to the affected de-
posit insurance fund. 
‘‘(vi) MAXIMUM AGGREGATE INVEST-
MENT
LIMITATION.—Notwithstanding 
clause (v), the aggregate amount of invest-
ments of any savings association under 
this subparagraph may not exceed an 
amount equal to the sum of 15 percent of 
the savings association’s capital stock actu-
ally paid in and unimpaired and 15 per-
cent 
of 
the 
savings 
association’s 
unimpaired surplus. 
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‘‘(vii) INVESTMENTS NOT SUBJECT TO 
OTHER
LIMITATION
ON
QUALITY
OF
IN-
VESTMENTS.—No obligation a Federal sav-
ings association acquires or retains under 
this subparagraph shall be taken into ac-
count for purposes of the limitation con-
tained in section 28(d) of the Federal De-
posit Insurance Act on the acquisition and 
retention of any corporate debt security 
not of investment grade.’’. 
(b) TECHNICAL AND CONFORMING AMENDMENT.— 
Section 5(c)(3)(A) of the Home Owners’ Loan Act (12 
U.S.C. 1464(c)(3)(A)) is amended to read as follows: 
‘‘(A) [Repealed].’’. 
SEC. 203. MERGERS AND CONSOLIDATIONS OF FEDERAL 
SAVINGS ASSOCIATIONS WITH NONDEPOSI-
TORY INSTITUTION AFFILIATES. 
Section 5(d)(3) of the Home Owners’ Loan Act (12 
U.S.C. 1464(d)(3)) is amended— 
(1) by redesignating subparagraph (B) as sub-
paragraph (C); and 
(2) by inserting after subparagraph (A) the fol-
lowing new subparagraph: 
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‘‘(B) MERGERS
AND
CONSOLIDATIONS 
WITH
NONDEPOSITORY
INSTITUTION
AFFILI-
ATES.— 
‘‘(i) IN GENERAL.—Upon the approval 
of the Director, a Federal savings associa-
tion may merge with any nondepository in-
stitution affiliate of the savings associa-
tion. 
‘‘(ii) RULE
OF
CONSTRUCTION.—No 
provision of clause (i) shall be construed 
as— 
‘‘(I) affecting the applicability of 
section 18(c) of the Federal Deposit 
Insurance Act; or 
‘‘(II) granting a Federal savings 
association any power or any author-
ity to engage in any activity that is 
not authorized for a Federal savings 
association under any other provision 
of this Act or any other provision of 
law.’’. 
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SEC. 204. REPEAL OF STATUTORY DIVIDEND NOTICE RE-
QUIREMENT FOR SAVINGS ASSOCIATION SUB-
SIDIARIES OF SAVINGS AND LOAN HOLDING 
COMPANIES. 
Section 10(f) of the Home Owners’ Loan Act (12 
U.S.C. 1467a(f)) is amended to read as follows: 
‘‘(f) DECLARATION
OF DIVIDEND.—The Director 
may— 
‘‘(1) require a savings association that is a sub-
sidiary of a savings and loan holding company to 
give prior notice to the Director of the intent of the 
savings association to pay a dividend on its guar-
anty, permanent, or other nonwithdrawable stock; 
and 
‘‘(2) establish conditions on the payment of 
dividends by such a savings association.’’. 
SEC. 205. MODERNIZING STATUTORY AUTHORITY FOR 
TRUST OWNERSHIP OF SAVINGS ASSOCIA-
TIONS. 
(a) IN GENERAL.—Section 10(a)(1)(C) of the Home 
Owners’ Loan Act (12 U.S.C. 1467a(a)(1)(C)) is amend-
ed— 
(1) by striking ‘‘trust,’’ and inserting ‘‘business 
trust,’’; and 
(2) by inserting ‘‘or any other trust unless by 
its terms it must terminate within 25 years or not 
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later than 21 years and 10 months after the death 
of individuals living on the effective date of the 
trust,’’ after ‘‘or similar organization,’’. 
(b) TECHNICAL AND CONFORMING AMENDMENT.— 
Section 10(a)(3) of the Home Owners’ Loan Act (12 
U.S.C. 1467a(a)(3)) is amended— 
(1) by striking ‘‘does not include—’’ and all 
that follows through ‘‘any company by virtue’’ where 
such term appears in subparagraph (A) and insert-
ing ‘‘does not include any company by virtue’’; 
(2) by striking ‘‘; and’’ at the end of subpara-
graph (A) and inserting a period; and 
(3) by striking subparagraph (B). 
SEC. 206. REPEAL OF OVERLAPPING RULES GOVERNING 
PURCHASED MORTGAGE SERVICING RIGHTS. 
Section 5(t) of the Home Owners’ Loan Act (12 
U.S.C. 1464(t)) is amended— 
(1) by striking paragraph (4) and inserting the 
following new paragraph: 
‘‘(4) [Repealed].’’; and 
(2) in paragraph (9)(A), by striking ‘‘intangible 
assets, plus’’ and all that follows through the period 
at the end and inserting ‘‘intangible assets.’’. 
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SEC. 207. RESTATEMENT OF AUTHORITY FOR FEDERAL 
SAVINGS ASSOCIATIONS TO INVEST IN SMALL 
BUSINESS INVESTMENT COMPANIES. 
Subparagraph (D) of section 5(c)(4) of the Home 
Owners’ Loan Act (12 U.S.C. 1464(c)(4)) is amended to 
read as follows: 
‘‘(D) SMALL BUSINESS INVESTMENT COM-
PANIES.—Any Federal savings association may 
invest in 1 or more small business investment 
companies, or in any entity established to invest 
solely in small business investment companies 
formed under the Small Business Investment 
Act of 1958, except that the total amount of in-
vestments under this subparagraph may not at 
any time exceed the amount equal to 5 percent 
of capital and surplus of the savings associa-
tion.’’. 
SEC. 208. REMOVAL OF LIMITATION ON INVESTMENTS IN 
AUTO LOANS. 
(a) IN GENERAL.—Section 5(c)(1) of the Home Own-
ers’ Loan Act (12 U.S.C. 1464(c)(1)) is amended by add-
ing at the end the following new subparagraph: 
‘‘(V) AUTO LOANS.—Loans and leases for 
motor vehicles acquired for personal, family, or 
household purposes.’’. 
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(b) TECHNICAL AND CONFORMING AMENDMENT RE-
LATING TO QUALIFIED THRIFT INVESTMENTS.—Section 
10(m)(4)(C)(ii) of the Home Owners’ Loan Act (12 
U.S.C. 1467a(m)(4)(C)(ii)) is amended by adding at the 
end the following new subclause: 
‘‘(VIII) Loans and leases for 
motor vehicles acquired for personal, 
family, or household purposes.’’. 
SEC. 209. SELLING AND OFFERING OF DEPOSIT PRODUCTS. 
Section 15(h) of the Securities Exchange Act of 1934 
(15 U.S.C. 78o(h)) is amended by adding at the end the 
following new paragraph: 
‘‘(4) SELLING
AND
OFFERING
OF
DEPOSIT 
PRODUCTS.—No law, rule, regulation, or order, or 
other administrative action of any State or political 
subdivision thereof shall directly or indirectly require 
any individual who is an agent of 1 Federal savings 
association (as such term is defined in section 2(5) 
of the Home Owners’ Loan Act (12 U.S.C. 1462(5)) 
in selling or offering deposit (as such term is defined 
in section 3 of the Federal Deposit Insurance Act 
(12 U.S.C. 1813(l)) products issued by such associa-
tion to qualify or register as a broker, dealer, associ-
ated person of a broker, or associated person of a 
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dealer, or to qualify or register in any other similar 
status or capacity, if the individual does not— 
‘‘(A) accept deposits or make withdrawals 
on behalf of any customer of the association; 
‘‘(B) offer or sell a deposit product as an 
agent for another entity that is not subject to 
supervision and examination by a Federal bank-
ing agency (as defined in section 3(z) of the 
Federal Deposit Insurance Act (12 U.S.C. 
1813(z)), the National Credit Union Adminis-
tration, or any officer, agency, or other entity 
of any State which has primary regulatory au-
thority over State banks, State savings associa-
tions, or State credit unions; 
‘‘(C) offer or sell a deposit product that is 
not an insured deposit (as defined in section 
3(m) of the Federal Deposit Insurance Act (12 
U.S.C. 1813(m))); 
‘‘(D) offer or sell a deposit product which 
contains a feature that makes it callable at the 
option of such Federal savings association; or 
‘‘(E) create a secondary market with re-
spect to a deposit product or otherwise add en-
hancements or features to such product inde-
pendent of those offered by the association.’’. 
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SEC. 210. FUNERAL- AND CEMETERY-RELATED FIDUCIARY 
SERVICES. 
Section 5(n) of the Home Owners’ Loan Act (12 
U.S.C. 1464(n)) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(11) FUNERAL- AND CEMETERY-RELATED FI-
DUCIARY SERVICES.— 
‘‘(A) IN GENERAL.—A funeral director or 
cemetery operator, when acting in such capac-
ity, (or any other person in connection with a 
contract or other agreement with a funeral di-
rector or cemetery operator) may engage any 
Federal savings association, regardless of where 
the association is located, to act in any fidu-
ciary capacity in which the savings association 
has the right to act in accordance with this sec-
tion, including holding funds deposited in trust 
or escrow by the funeral director or cemetery 
operator (or by such other party), and the sav-
ings association may act in such fiduciary ca-
pacity on behalf of the funeral director or ceme-
tery operator (or such other person). 
‘‘(B) DEFINITIONS.—For purposes of this 
paragraph, the following definitions shall apply: 
‘‘(i) CEMETERY.—The term ‘ceme-
tery’ means any land or structure used, or 
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intended to be used, for the interment of 
human remains in any form. 
‘‘(ii) 
CEMETERY
OPERATOR.—The 
term ‘cemetery operator’ means any person 
who contracts or accepts payment for mer-
chandise, endowment, or perpetual care 
services in connection with a cemetery. 
‘‘(iii) FUNERAL DIRECTOR.—The term 
‘funeral director’ means any person who 
contracts or accepts payment to provide or 
arrange— 
‘‘(I) services for the final disposi-
tion of human remains; or 
‘‘(II) funeral services, property, 
or merchandise (including cemetery 
services, property, or merchandise).’’. 
SEC. 211. REPEAL OF QUALIFIED THRIFT LENDER RE-
QUIREMENT 
WITH 
RESPECT 
TO 
OUT-OF- 
STATE BRANCHES. 
Section 5(r)(1) of the Home Owners’ Loan Act (12 
U.S.C. 1464(r)(1)) is amended by striking the last sen-
tence. 
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SEC. 212. SMALL BUSINESS AND OTHER COMMERCIAL 
LOANS. 
(a) ELIMINATION
OF LENDING LIMIT
ON SMALL 
BUSINESS LOANS.—Section 5(c)(1) of the Home Owners’ 
Loan Act (12 U.S.C. 1464(c)(1)) is amended by inserting 
after subparagraph (V) (as added by section 208 of this 
title) the following new subparagraph: 
‘‘(W) SMALL
BUSINESS
LOANS.—Small 
business loans, as defined in regulations which 
the Director shall prescribe.’’. 
(b) INCREASE IN LENDING LIMIT ON OTHER BUSI-
NESS LOANS.—Section 5(c)(2)(A) of the Home Owners’ 
Loan Act (12 U.S.C. 1464(c)(2)(A)) is amended by strik-
ing ‘‘, and amounts in excess of 10 percent’’ and all that 
follows through ‘‘by the Director’’. 
SEC. 213. CLARIFYING CITIZENSHIP OF FEDERAL SAVINGS 
ASSOCIATIONS FOR FEDERAL COURT JURIS-
DICTION. 
Section 5 of the Home Owners’ Loan Act (12 U.S.C. 
1464) is amended by adding at the end the following new 
subsection: 
‘‘(x) HOME STATE CITIZENSHIP.—In determining 
whether a Federal court has diversity jurisdiction over a 
case in which a Federal savings association is a party, the 
Federal savings association shall be considered to be a cit-
izen only of the States in which such savings association 
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has its home office and its principal place of business (if 
the principal place of business is in a different State than 
the home office).’’. 
SEC. 214. INCREASE IN LIMITS ON COMMERCIAL REAL ES-
TATE LOANS. 
Section 5(c)(2)(B)(i) of the Home Owners’ Loan Act 
(12 U.S.C. 1464(c)(2)(B)(i)) is amended by striking ‘‘400 
percent’’ and inserting ‘‘500 percent’’. 
SEC. 215. REPEAL OF ONE LIMIT ON LOANS TO ONE BOR-
ROWER. 
Subparagraph (A) of section 5(u)(2) of the Home 
Owners’ Loan Act (12 U.S.C. 1464(u)(2)(A)) is amend-
ed— 
(1) by striking subclause (I) of clause (ii); 
(2) by redesignating subclauses (II), (III), (IV), 
and (V) of clause (ii) as subclauses (I), (II), (III), 
and (IV), respectively; 
(3) in clause (i)— 
(A) by striking ‘‘for any’’ and inserting 
‘‘For any’’; and 
(B) by striking ‘‘; or’’ and inserting a pe-
riod; and 
(4) in clause (ii), by striking ‘‘to develop domes-
tic’’ and inserting ‘‘To develop domestic’’. 
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SEC. 216. SAVINGS ASSOCIATION CREDIT CARD BANKS. 
Section 10(a)(1)(A) of the Home Owners’ Loan Act 
(12 U.S.C. 1467a(a)(1)(A)) is amended by inserting ‘‘and 
such term does not include an institution described in sec-
tion 2(c)(2)(F) of the Bank Holding Company Act of 1956 
for purposes of subsections (a)(1)(E), (c)(3)(B)(i), 
(c)(9)(C)(i), and (e)(3)’’ before the period at the end. 
SEC. 217. INTERSTATE ACQUISITIONS BY S&L HOLDING 
COMPANIES. 
Section 10(e)(3) of the Home Owners’ Loan Act (12 
U.S.C. 1467a(e)(3)) is amended— 
(1) by redesignating subparagraphs (A), (B), 
and (C) as subparagraphs (B), (C), and (D), respec-
tively; and 
(2) by inserting before subparagraph (B) (as so 
redesignated) the following new subparagraph: 
‘‘(A) such acquisition would be permissible 
under section 3(d) of the Bank Holding Com-
pany Act of 1956 if the savings and loan hold-
ing company were a bank holding company and 
any savings association to be acquired were a 
bank;’’. 
SEC. 218. BUSINESS ORGANIZATION FLEXIBILITY FOR FED-
ERAL SAVINGS ASSOCIATIONS. 
(a) IN GENERAL.—Section 5 of the Home Owners’ 
Loan Act (12 U.S.C. 1464) is amended by inserting after 
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subsection (x) (as added by section 213) following new 
subsection: 
‘‘(y) ALTERNATIVE BUSINESS ORGANIZATION.— 
‘‘(1) IN GENERAL.—The Director may prescribe 
regulations that— 
‘‘(A) permit a Federal savings association 
to be organized other than as a corporation; 
and 
‘‘(B) provide requirements for the organi-
zational characteristics of a Federal savings as-
sociation organized and operating other than as 
a corporation, consistent with the safety and 
soundness of the Federal savings association. 
‘‘(2) EQUAL TREATMENT.—Except as otherwise 
provided in regulations prescribed under subsection 
(1), a Federal savings association that is operating 
other than as a corporation shall have the same 
rights and privileges and shall be subject to the 
same duties, restrictions, penalties, liabilities, condi-
tions, and limitations as a Federal savings associa-
tion that is organized as a corporation.’’. 
(b) TECHNICAL AND CONFORMING AMENDMENTS.— 
(1) Section 5(a)(1) of the Home Owners’ Loan 
Act (12 U.S.C. 1464(a)(1)) is amended by striking 
‘‘organization, incorporation,’’ and inserting ‘‘organi-
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zation (as a corporation or other form of business 
organization provided under regulations prescribed 
by the Director under subsection (x)),’’. 
(2) The last sentence of section 5(i)(1) of the 
Home Owners’ Loan Act (12 U.S.C. 1464(i)(1)) is 
amended by striking ‘‘incorporated’’ and inserting 
‘‘organized’’. 
(3) Section 5(o)(1) of the Home Owners’ Loan 
Act (12 U.S.C. 1464(a)(1)) is amended by striking 
‘‘organization, incorporation,’’ and inserting ‘‘organi-
zation (as a corporation or other form of business 
organization provided under regulations prescribed 
by the Director under subsection (x)),’’. 
TITLE III—CREDIT UNION 
PROVISIONS 
SEC. 301. PRIVATELY INSURED CREDIT UNIONS AUTHOR-
IZED TO BECOME MEMBERS OF A FEDERAL 
HOME LOAN BANK. 
(a) IN GENERAL.—Section 4(a) of the Federal Home 
Loan Bank Act (12 U.S.C. 1424(a)) is amended by adding 
at the end the following new paragraph: 
‘‘(5) CERTAIN
PRIVATELY
INSURED
CREDIT 
UNIONS.— 
‘‘(A) IN GENERAL.—A credit union which 
has been determined, in accordance with section 
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43(e)(1) of the Federal Deposit Insurance Act 
and subject to the requirements of subpara-
graph (B), to meet all eligibility requirements 
for Federal deposit insurance shall be treated 
as an insured depository institution for pur-
poses of determining the eligibility of such cred-
it union for membership in a Federal home loan 
bank under paragraphs (1), (2), and (3). 
‘‘(B) CERTIFICATION BY APPROPRIATE SU-
PERVISOR.— 
‘‘(i) IN
GENERAL.—For purposes of 
this paragraph and subject to clause (ii), a 
credit union which lacks Federal deposit 
insurance and which has applied for mem-
bership in a Federal home loan bank may 
be treated as meeting all the eligibility re-
quirements for Federal deposit insurance 
only if the appropriate supervisor of the 
State in which the credit union is char-
tered has determined that the credit union 
meets all the eligibility requirements for 
Federal deposit insurance as of the date of 
the application for membership. 
‘‘(ii) 
CERTIFICATION
DEEMED 
VALID.—If, in the case of any credit union 
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to which clause (i) applies, the appropriate 
supervisor of the State in which such cred-
it union is chartered fails to make a deter-
mination pursuant to such clause by the 
end of the 6-month period beginning on 
the date of the application, the credit 
union shall be deemed to have met the re-
quirements of clause (i). 
‘‘(C) SECURITY INTERESTS OF FEDERAL 
HOME LOAN BANK NOT AVOIDABLE.—Notwith-
standing any provision of State law authorizing 
a conservator or liquidating agent of a credit 
union to repudiate contracts, no such provision 
shall apply with respect to— 
‘‘(i) any extension of credit from any 
Federal home loan bank to any credit 
union which is a member of any such bank 
pursuant to this paragraph; or 
‘‘(ii) any security interest in the as-
sets of such credit union securing any such 
extension of credit.’’. 
(b) COPIES OF AUDITS OF PRIVATE INSURERS OF 
CERTAIN DEPOSITORY INSTITUTIONS REQUIRED TO BE 
PROVIDED
TO
SUPERVISORY
AGENCIES.—Section 
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43(a)(2) of the Federal Deposit Insurance Act (12 U.S.C. 
1831t(a)(2)) is amended— 
(1) by striking ‘‘and’’ at the end of subpara-
graph (A)(i); 
(2) by striking the period at the end of clause 
(ii) of subparagraph (A) and inserting a semicolon; 
(3) by inserting the following new clauses at the 
end of subparagraph (A): 
‘‘(iii) in the case of depository institu-
tions described in subsection (f)(2)(A) the 
deposits of which are insured by the pri-
vate insurer, the National Credit Union 
Administration, not later than 7 days after 
that audit is completed; and 
‘‘(iv) in the case of depository institu-
tions described in subsection (f)(2)(A) the 
deposits of which are insured by the pri-
vate insurer which are members of a Fed-
eral home loan bank, the Federal Housing 
Finance Board, not later than 7 days after 
that audit is completed.’’; and 
(4) by adding at the end the following new sub-
paragraph: 
‘‘(C) CONSULTATION.—The appropriate 
supervisory agency of each State in which a pri-
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vate deposit insurer insures deposits in an insti-
tution described in subsection (f)(2)(A) which— 
‘‘(i) lacks Federal deposit insurance; 
and 
‘‘(ii) has become a member of a Fed-
eral home loan bank, 
shall provide the National Credit Union Admin-
istration, upon request, with the results of any 
examination and reports related thereto con-
cerning the private deposit insurer to which 
such agency may have in its possession.’’. 
SEC. 302. LEASES OF LAND ON FEDERAL FACILITIES FOR 
CREDIT UNIONS. 
(a) IN GENERAL.—Section 124 of the Federal Credit 
Union Act (12 U.S.C. 1770) is amended— 
(1) by striking ‘‘Upon application by any credit 
union’’ and inserting ‘‘Notwithstanding any other 
provision of law, upon application by any credit 
union’’; 
(2) by inserting ‘‘on lands reserved for the use 
of, and under the exclusive or concurrent jurisdiction 
of, the United States or’’ after ‘‘officer or agency of 
the United States charged with the allotment of 
space’’; 
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(3) by inserting ‘‘lease land or’’ after ‘‘such of-
ficer or agency may in his or its discretion’’; and 
(4) by inserting ‘‘or the facility built on the 
lease land’’ after ‘‘credit union to be served by the 
allotment of space’’. 
(b) CLERICAL AMENDMENT.—The heading for sec-
tion 124 is amended by inserting ‘‘OR FEDERAL LAND’’ 
after ‘‘BUILDINGS’’. 
SEC. 303. INVESTMENTS IN SECURITIES BY FEDERAL CRED-
IT UNIONS. 
Section 107 of the Federal Credit Union Act (12 
U.S.C. 1757) is amended— 
(1) in the matter preceding paragraph (1) by 
striking ‘‘A Federal credit union’’ and inserting ‘‘(a) 
IN GENERAL.—Any Federal credit union’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(b) ADDITIONAL INVESTMENT AUTHORITY.— 
‘‘(1) IN GENERAL.—In addition to any invest-
ments otherwise authorized, a Federal credit union 
may purchase and hold for its own account such in-
vestment securities of investment grade as the 
Board may authorize by regulation, subject to such 
limitations and restrictions as the Board may pre-
scribe in the regulations. 
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‘‘(2) PERCENTAGE LIMITATIONS.— 
‘‘(A) SINGLE OBLIGOR.—In no event may 
the total amount of investment securities of any 
single obligor or maker held by a Federal credit 
union for the credit union’s own account exceed 
at any time an amount equal to 10 percent of 
the net worth of the credit union. 
‘‘(B) AGGREGATE
INVESTMENTS.—In no 
event may the aggregate amount of investment 
securities held by a Federal credit union for the 
credit union’s own account exceed at any time 
an amount equal to 10 percent of the assets of 
the credit union. 
‘‘(3) INVESTMENT SECURITY DEFINED.— 
‘‘(A) IN GENERAL.—For purposes of this 
subsection, the term ‘investment security’ 
means marketable obligations evidencing the in-
debtedness of any person in the form of bonds, 
notes, or debentures and other instruments 
commonly referred to as investment securities. 
‘‘(B) FURTHER DEFINITION BY BOARD.— 
The Board may further define the term ‘invest-
ment security’. 
‘‘(4) INVESTMENT GRADE DEFINED.—The term 
‘investment grade’ means with respect to an invest-
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ment security purchased by a credit union for its 
own account, an investment security that at the time 
of such purchase is rated in one of the 4 highest rat-
ing categories by at least 1 nationally recognized 
statistical rating organization. 
‘‘(5) CLARIFICATION
OF
PROHIBITION
ON 
STOCK OWNERSHIP.—No provision of this subsection 
shall be construed as authorizing a Federal credit 
union to purchase shares of stock of any corporation 
for the credit union’s own account, except as other-
wise permitted by law.’’. 
SEC. 304. INCREASE IN GENERAL 12-YEAR LIMITATION OF 
TERM OF FEDERAL CREDIT UNION LOANS TO 
15 YEARS. 
Section 107(a)(5) of the Federal Credit Union Act 
(12 U.S.C. 1757(5)) (as so designated by section 303 of 
this title) is amended— 
(1) in the matter preceding subparagraph (A), 
by striking ‘‘to make loans, the maturities of which 
shall not exceed twelve years except as otherwise 
provided herein’’ and inserting ‘‘to make loans, the 
maturities of which shall not exceed 15 years or any 
longer maturity as the Board may allow, in regula-
tions, except as otherwise provided in this Act’’; 
(2) in subparagraph (A)— 
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(A) by striking clause (ii); 
(B) by redesignating clauses (iii) through 
(x) as clauses (ii) through (ix), respectively; and 
(C) by inserting ‘‘and’’ after the semicolon 
at the end of clause (viii) (as so redesignated). 
SEC. 305. INCREASE IN 1 PERCENT INVESTMENT LIMIT IN 
CREDIT UNION SERVICE ORGANIZATIONS. 
Section 107(a)(7)(I) of the Federal Credit Union Act 
(12 U.S.C. 1757(7)(I)) (as so designated by section 303 
of this title) is amended by striking ‘‘up to 1 per centum 
of the total paid’’ and inserting ‘‘up to 3 percent of the 
total paid’’. 
SEC. 306. MEMBER BUSINESS LOAN EXCLUSION FOR LOANS 
TO NONPROFIT RELIGIOUS ORGANIZATIONS. 
Section 107A(a) of the Federal Credit Union Act (12 
U.S.C. 1757a(a)) is amended by inserting ‘‘, excluding 
loans made to nonprofit religious organizations,’’ after 
‘‘total amount of such loans’’. 
SEC. 307. CHECK CASHING AND MONEY TRANSFER SERV-
ICES OFFERED WITHIN THE FIELD OF MEM-
BERSHIP. 
Paragraph (12) of section 107(a) of the Federal 
Credit Union Act (12 U.S.C. 1757(12)) (as so designated 
by section 303 of this title) is amended to read as follows: 
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‘‘(12) in accordance with regulations prescribed 
by the Board— 
‘‘(A) to sell, to persons in the field of 
membership, negotiable checks (including trav-
elers checks), money orders, and other similar 
money transfer instruments (including inter-
national and domestic electronic fund trans-
fers); and 
‘‘(B) to cash checks and money orders and 
receive international and domestic electronic 
fund transfers for persons in the field of mem-
bership for a fee;’’. 
SEC. 308. VOLUNTARY MERGERS INVOLVING MULTIPLE 
COMMON-BOND CREDIT UNIONS. 
Section 109(d)(2) of the Federal Credit Union Act 
(12 U.S.C. 1759(d)(2)) is amended— 
(1) by striking ‘‘or’’ at the end of clause (ii) of 
subparagraph (B); 
(2) by striking the period at the end of sub-
paragraph (C) and inserting ‘‘; or’’; and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(D) a merger involving any such Federal 
credit union approved by the Board on or after 
August 7, 1998.’’. 
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SEC. 309. CONVERSIONS INVOLVING COMMON-BOND CRED-
IT UNIONS. 
Section 109(g) of the Federal Credit Union Act (12 
U.S.C. 1759(g)) is amended by inserting after paragraph 
(2) the following new paragraph: 
‘‘(3) CRITERIA FOR CONTINUED MEMBERSHIP 
OF CERTAIN MEMBER GROUPS IN COMMUNITY CHAR-
TER CONVERSIONS.—In the case of a voluntary con-
version of a common-bond credit union described in 
paragraph (1) or (2) of subsection (b) into a com-
munity credit union described in subsection (b)(3), 
the Board shall prescribe, by regulation, the criteria 
under which the Board may determine that a mem-
ber group or other portion of a credit union’s exist-
ing membership, that is located outside the well-de-
fined local community, neighborhood, or rural dis-
trict that shall constitute the community charter, 
can be satisfactorily served by the credit union and 
remain within the community credit union’s field of 
membership.’’. 
SEC. 310. CREDIT UNION GOVERNANCE. 
(a) EXPULSION OF MEMBERS FOR JUST CAUSE.— 
Subsection (b) of section 118 of the Federal Credit Union 
Act (12 U.S.C. 1764(b)) is amended to read as follows: 
‘‘(b) POLICY AND ACTIONS OF BOARDS OF DIREC-
TORS OF FEDERAL CREDIT UNIONS.— 
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‘‘(1) EXPULSION
OF
MEMBERS
FOR
NON-
PARTICIPATION OR FOR JUST CAUSE.—The board of 
directors of a Federal credit union may, by majority 
vote of a quorum of directors, adopt and enforce a 
policy with respect to expulsion from membership, 
by a majority vote of such board of directors, based 
on just cause, including disruption of credit union 
operations, or on nonparticipation by a member in 
the affairs of the credit union. 
‘‘(2) WRITTEN
NOTICE
OF
POLICY
TO
MEM-
BERS.—If a policy described in paragraph (1) is 
adopted, written notice of the policy as adopted and 
the effective date of such policy shall be provided 
to— 
‘‘(A) each existing member of the credit 
union not less than 30 days prior to the effec-
tive date of such policy; and 
‘‘(B) each new member prior to or upon 
applying for membership.’’. 
(b) TERM LIMITS AUTHORIZED FOR BOARD MEM-
BERS OF FEDERAL CREDIT UNIONS.—Section 111(a) of 
the Federal Credit Union Act (12 U.S.C. 1761(a)) is 
amended by adding at the end the following new sentence: 
‘‘The bylaws of a Federal credit union may limit the num-
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