I 
114TH CONGRESS 
1ST SESSION H. R. 1233 
To provide regulatory relief to community financial institutions, and for 
other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 4, 2015 
Mr. LUETKEMEYER introduced the following bill; which was referred to the 
Committee on Financial Services 
A BILL 
To provide regulatory relief to community financial 
institutions, and for other purposes. 
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 ‘‘Community Lending 
Enhancement and Regulatory Relief Act of 2015’’ or the 
‘‘CLEARR Act of 2015’’. 
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SEC. 2. EXCEPTION TO ANNUAL PRIVACY NOTICE REQUIRE-
MENT UNDER THE GRAMM-LEACH-BLILEY 
ACT. 
Section 503 of the Gramm-Leach-Bliley Act (15 
U.S.C. 6803) is amended by adding at the end the fol-
lowing: 
‘‘(f) EXCEPTION
TO ANNUAL NOTICE REQUIRE-
MENT.—A financial institution that— 
‘‘(1) provides nonpublic personal information 
only in accordance with the provisions of subsection 
(b)(2) or (e) of section 502 or regulations prescribed 
under section 504(b), and 
‘‘(2) has not changed its policies and practices 
with regard to disclosing nonpublic personal infor-
mation from the policies and practices that were dis-
closed in the most recent disclosure sent to con-
sumers in accordance with this section, 
shall not be required to provide an annual disclosure under 
this section until such time as the financial institution 
fails to comply with any criteria described in paragraph 
(1) or (2).’’. 
SEC. 3. COMMUNITY BANK MORTGAGE SERVICING ASSET 
CAPITAL REQUIREMENTS STUDY. 
(a) DEFINITIONS.—For purposes of this section: 
(1) BANKING INSTITUTION.—The term ‘‘bank-
ing institution’’ means an insured depository institu-
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tion, Federal credit union, State credit union, bank 
holding company, or savings and loan holding com-
pany. 
(2) BASEL III CAPITAL REQUIREMENTS.—The 
term ‘‘Basel III capital requirements’’ means the 
Global Regulatory Framework for More Resilient 
Banks and Banking Systems issued by the Basel 
Committee on Banking Supervision on December 16, 
2010, as revised on June 1, 2011. 
(3) FEDERAL BANKING AGENCIES.—The term 
‘‘Federal banking agencies’’ means the Board of 
Governors of the Federal Reserve System, the Office 
of the Comptroller of the Currency, the Federal De-
posit Insurance Corporation, and the National Cred-
it Union Administration. 
(4) MORTGAGE SERVICING ASSET.—The term 
‘‘mortgage servicing asset’’ means those assets that 
result from contracts to service loans secured by real 
estate, where such loans are owned by third parties. 
(5) 
NCUA 
CAPITAL
REQUIREMENTS.—The 
term ‘‘NCUA capital requirements’’ means the pro-
posed rule of the National Credit Union Administra-
tion titled ‘‘Risk-Based Capital’’ (80 Fed. Reg. 
4340; January 27, 2015). 
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(6) NONSYSTEMIC
BANKING
INSTITUTION.— 
The term ‘‘nonsystemic banking institution’’ means 
any banking institution other than an institution 
identified by the Financial Stability Board as a 
‘‘global systemically important bank’’. 
(7) OTHER DEFINITIONS.— 
(A) BANKING
DEFINITIONS.—The terms 
‘‘bank holding company’’, ‘‘insured depository 
institution’’, and ‘‘savings and loan holding 
company’’ have the meanings given such terms, 
respectively, under section 3 of the Federal De-
posit Insurance Act (12 U.S.C. 1813). 
(B) CREDIT
UNION
DEFINITIONS.—The 
terms ‘‘Federal credit union’’ and ‘‘State credit 
union’’ have the meanings given such terms, re-
spectively, under section 101 of the Federal 
Credit Union Act (12 U.S.C. 1752). 
(b) STUDY
OF
THE APPROPRIATE CAPITAL
FOR 
MORTGAGE SERVICING ASSETS.— 
(1) IN GENERAL.—The Federal banking agen-
cies shall, jointly, conduct a study of the appropriate 
capital requirements for mortgage servicing assets 
for nonsystemic banking institutions. 
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(F) an analysis of what the mortgage serv-
icing marketplace would look like if the Basel 
III capital requirements and the NCUA capital 
requirements on mortgage servicing assets were 
fully implemented; 
(G) the significance of problems with mort-
gage servicing assets, if any, in banking institu-
tion failures and problem banking institutions, 
including specifically identifying failed banking 
institutions where mortgage servicing assets 
contributed to the failure; and 
(H) an analysis of the relevance of the 
Basel III capital requirements and the NCUA 
capital requirements on mortgage servicing as-
sets to the banking systems of other significant 
developed countries. 
(3) REPORT TO CONGRESS.—Not later than the 
end of the 1-year period beginning on the date of the 
enactment of this Act, the Federal banking agencies 
shall issue a report to the Committee on Banking, 
Housing, and Urban Affairs of the Senate and the 
Committee on Financial Services of the House of 
Representatives containing— 
(A) the results of the study required under 
paragraph (1); and 
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(B) any analysis on the specific issue of 
mortgage servicing assets undertaken by the 
Federal banking agencies prior to finalizing 
regulations implementing the Basel III capital 
requirements and the NCUA capital require-
ments. 
(c) DELAY OF RULEMAKING.— 
(1) RULES ON MORTGAGE SERVICING ASSETS.— 
Notwithstanding any other provision of law, no regu-
lation to implement the Basel III capital require-
ments or the NCUA capital requirements with re-
spect to mortgage servicing assets for nonsystemic 
banking institutions shall take effect before the end 
of the 6-month period beginning on the date the re-
port is issued under subsection (b)(3). 
(2) FINAL RULE REQUIREMENTS.—Before any 
final rule is issued by a Federal banking agency with 
respect to capital requirements on mortgage serv-
icing assets for nonsystemic banking institutions, the 
Federal banking agency shall— 
(A) if the related proposed rule was issued 
before the date on which the report is issued 
under subsection (b)(3), issue a new proposed 
rule for public comment; and 
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(B) consider regulatory approaches to 
mortgage servicing assets that could address 
concerns about the value of and ability to sell 
mortgage servicing assets. 
SEC. 4. COMMUNITY INSTITUTION MORTGAGE RELIEF. 
(a) EXEMPTION FROM ESCROW REQUIREMENTS FOR 
LOANS HELD BY SMALL CREDITORS.—Section 129D(c) 
of the Truth in Lending Act (15 U.S.C. 1639d(c)), as 
added by section 1461(a) of the Dodd-Frank Wall Street 
Reform and Consumer Protection Act, is amended— 
(1) by redesignating paragraphs (1), (2), (3), 
and (4) as subparagraphs (A), (B), (C), and (D) 
and moving such subparagraphs 2 ems to the right; 
(2) by striking ‘‘The Board’’ and inserting the 
following: 
‘‘(1) IN GENERAL.—The Board’’; and 
(3) by adding at the end the following new 
paragraph: 
‘‘(2) TREATMENT OF LOANS HELD BY SMALLER 
CREDITORS.—The Board shall, by regulation, exempt 
from the requirements of subsection (a) any loan secured 
by a first lien on a consumer’s principle dwelling, if such 
loan is held by a creditor with assets of $10,000,000,000 
or less.’’. 
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(b) MODIFICATION
TO
EXEMPTION
FOR
SMALL 
SERVICERS OF MORTGAGE LOANS.—Section 6 of the Real 
Estate Settlement Procedures Act of 1974 (12 U.S.C. 
2605) is amended by adding at the end the following: 
‘‘(n) SMALL SERVICER EXEMPTION.—The Bureau 
shall, by regulation, provide exemptions to, or adjustments 
for, the provisions of this section for servicers that annu-
ally service 20,000 or fewer mortgage loans, in order to 
reduce regulatory burdens while appropriately balancing 
consumer protections.’’. 
SEC. 5. ACCESS TO AFFORDABLE MORTGAGES. 
(a) EXEMPTION FROM PROPERTY APPRAISAL RE-
QUIREMENTS
FOR LOWER-COST DWELLINGS.—Section 
129H of the Truth in Lending Act (15 U.S.C. 1639h) is 
amended by adding at the end the following new sub-
section: 
‘‘(g) EXEMPTION FOR HIGHER-RISK MORTGAGES.— 
This section shall not apply to a higher-risk mortgage loan 
of $250,000 or less if such loan appears on the balance 
sheet of the creditor of such loan for a period of not less 
than 3 years.’’. 
(b) EXEMPTION FROM PENALTIES FOR FAILURE TO 
REPORT APPRAISERS.—Paragraph (1) of section 129E(k) 
of the Truth in Lending Act (15 U.S.C. 1639e(k)(1)) is 
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amended by inserting after ‘‘this section’’ the following: 
‘‘, other than subsection (e),’’. 
(c) EXEMPTION FROM APPRAISAL STANDARD RE-
QUIREMENTS
FOR LOWER-COST DWELLINGS.—Section 
1110 of the Financial Institutions Reform, Recovery, and 
Enforcement Act of 1989 (12 U.S.C. 3339) is amended— 
(1) by striking ‘‘Each Federal financial institu-
tions regulatory agency’’ and inserting the following: 
‘‘(a) REAL ESTATE APPRAISALS
IN CONNECTION 
WITH
FEDERALLY
RELATED
TRANSACTIONS.—Each 
Federal financial institutions regulatory agency’’; 
(2) by striking ‘‘Each such agency or instru-
mentality’’ and inserting the following: 
‘‘(b) ADDITIONAL STANDARDS.—Each such agency 
or instrumentality described under subsection (a)’’; and 
(3) by adding at the end the following new sub-
section: 
‘‘(c) EXCEPTION FOR CERTAIN HIGHER-RISK MORT-
GAGE LOANS.—Standards prescribed under this section 
shall not apply to a real estate appraisal or evaluation con-
ducted in connection with a higher-risk mortgage loan (as 
defined in section 129H(f) of the Truth in Lending Act 
(15 U.S.C. 1639h(f))) of $250,000 or less if such loan 
appears on the balance sheet of the creditor of such loan 
for a period of not less than 3 years.’’. 
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SEC. 6. SHORT FORM CALL REPORT AND EXAMINATION 
CYCLE. 
(a) IN GENERAL.—Section 7(a) of the Federal De-
posit Insurance Act (12 U.S.C. 1817(a)) is amended by 
adding at the end the following: 
‘‘(12) SHORT FORM REPORTING.— 
‘‘(A) IN GENERAL.—The appropriate Fed-
eral banking agencies shall issue regulations al-
lowing for a reduced reporting requirement for 
covered depository institutions when making the 
first and third report of condition for a year, as 
required pursuant to paragraph (3). 
‘‘(B) COVERED DEPOSITORY INSTITUTION 
DEFINED.—For purposes of this paragraph, the 
term ‘covered depository institution’ means an 
insured depository institution that— 
‘‘(i) has a CAMELS 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 
institution; and 
‘‘(ii) satisfies such other criteria as 
the appropriate Federal banking agencies 
determine appropriate.’’. 
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(b) LONGER EXAMINATION CYCLE.—Section 10(d) of 
the Federal Deposit Insurance Act (12 U.S.C. 1820(d)) 
is amended— 
(1) by redesignating paragraphs (5) through 
(10) as paragraphs (6) through (11), respectively; 
(2) in each of paragraphs (8) and (9), as so re-
designated, by striking ‘‘paragraph (6)’’ and insert-
ing ‘‘paragraph (7)’’; and 
(3) by inserting after paragraph (4) the fol-
lowing: 
‘‘(5) 24-MONTH RULE FOR CERTAIN INSTITU-
TIONS.—With respect to an insured depository insti-
tution and notwithstanding paragraph (4), para-
graphs (1), (2), and (3) shall apply with ‘24-month’ 
substituted for ‘12-month’ if the insured depository 
institution— 
‘‘(A) meets the requirements under sub-
paragraphs (B) through (D) of paragraph (4); 
and 
‘‘(B) is a covered depository institution, as 
defined under section 7(a)(12)(B).’’. 
SEC. 7. COORDINATION AMONG FINANCIAL INSTITUTIONS. 
Chapter 53 of title 31, United States Code, is amend-
ed— 
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(1) by inserting after section 5332 the following 
new section: 
‘‘§ 5333. Coordination among financial institutions 
‘‘(a) IN GENERAL.—In the case of an entry received 
via an automated clearing house, no receiving depository 
financial institution shall be required to verify that the 
entry is not a prohibited transaction, if the originating de-
pository financial institution has warranted, pursuant to 
the automated clearing house rules governing such entry 
or otherwise, that the originating depository financial in-
stitution has complied with the sanctions programs admin-
istered by the Office of Foreign Assets Control in connec-
tion with such entry. 
‘‘(b) DEFINITIONS.—For purposes of this section: 
‘‘(1) 
AUTOMATED
CLEARING
HOUSE.—The 
term ‘automated clearing house’ means a funds 
transfer system governed by rules which provide for 
the interbank clearing of electronic entries for par-
ticipating depository financial institutions. 
‘‘(2) DEPOSITORY
FINANCIAL
INSTITUTION.— 
The term ‘depository financial institution’ means— 
‘‘(A) any insured depository institution, as 
such term is defined under section 3 of the 
Federal Deposit Insurance Act (12 U.S.C. 
1813); 
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‘‘(B) any depository institution which is el-
igible to apply to become an insured depository 
institution under section 5 of the Federal De-
posit Insurance Act (12 U.S.C. 1815); 
‘‘(C) any insured credit union, as defined 
in section 101 of the Federal Credit Union Act 
(12 U.S.C. 1752); and 
‘‘(D) any credit union which is eligible to 
apply to become an insured credit union pursu-
ant to section 201 of the Federal Credit Union 
Act (12 U.S.C. 1781). 
‘‘(3) ENTRY.—The term ‘entry’ means an order 
to request for the transfer of funds through an auto-
mated clearing house. 
‘‘(4) ORIGINATING DEPOSITORY FINANCIAL IN-
STITUTION.—The term ‘originating depository finan-
cial institution’ means a depository financial institu-
tion that transmits entries via an automated clearing 
house for transmittal to a receiving depository finan-
cial institution. 
‘‘(5) PROHIBITED
TRANSACTION.—The term 
‘prohibited transaction’ means a funds transfer 
originated on behalf of a person to or from whom 
funds transfers are restricted by a sanctions pro-
gram administered by the Office of Foreign Assets 
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Control, including persons appearing on the list of 
specially designated nationals and blocked persons 
maintained by the Office of Foreign Assets Control. 
‘‘(6) RECEIVING DEPOSITORY FINANCIAL INSTI-
TUTION.—The term ‘receiving depository financial 
institution’ means a depository financial institution 
that receives entries via an automated clearing house 
from an originating depository financial institution 
for debit or credit to the accounts of its customers.’’; 
and 
(2) in the table of contents for such chapter by 
inserting after the item relating to section 5332 the 
following new item: 
‘‘5333. Coordination among financial institutions.’’. 
SEC. 8. CHANGES REQUIRED TO SMALL BANK HOLDING 
COMPANY POLICY STATEMENT ON ASSESS-
MENT OF FINANCIAL AND MANAGERIAL FAC-
TORS. 
Before the end of the 6-month period beginning on 
the date of the enactment of this Act, the Board of Gov-
ernors of the Federal Reserve System shall revise the 
Small Bank Holding Company Policy Statement on As-
sessment of Financial and Managerial Factors (12 C.F.R. 
part 225—appendix C) to raise the consolidated asset 
threshold 
under 
such 
policy 
statement 
from 
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$1,000,000,000 (as adjusted by Public Law 113–250) to 
$5,000,000,000. 
SEC. 9. SAFE HARBOR FOR CERTAIN LOANS HELD ON 
PORTFOLIO. 
(a) IN GENERAL.—Section 129C of the Truth in 
Lending Act (15 U.S.C. 1639c) is amended by adding at 
the end the following: 
‘‘(j) SAFE HARBOR FOR CERTAIN LOANS HELD ON 
PORTFOLIO.— 
‘‘(1) SAFE HARBOR FOR CREDITORS THAT ARE 
DEPOSITORY INSTITUTIONS.— 
‘‘(A) IN GENERAL.—A creditor that is a 
depository institution shall not be subject to 
suit for failure to comply with subsection (a), 
(c)(1), or (f)(2) of this section or section 129H 
with respect to a residential mortgage loan, and 
the banking regulators shall treat such loan as 
a qualified mortgage, if— 
‘‘(i) the creditor has, since the origi-
nation of the loan, held the loan on the 
balance sheet of the creditor; and 
‘‘(ii) all prepayment penalties with re-
spect to the loan comply with the limita-
tions described under subsection (c)(3). 
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‘‘(B) EXCEPTION
FOR
CERTAIN
TRANS-
FERS.—In the case of a depository institution 
that transfers a loan originated by that institu-
tion to another depository institution by reason 
of the bankruptcy or failure of the originating 
depository institution or the purchase of the 
originating depository institution, the depository 
institution transferring such loan shall be 
deemed to have complied with the requirement 
under subparagraph (A)(i). 
‘‘(2) SAFE HARBOR FOR MORTGAGE ORIGINA-
TORS.—A mortgage originator shall not be subject 
to suit for a violation of section 129B(c)(3)(B) for 
steering a consumer to a residential mortgage loan 
if— 
‘‘(A) the creditor of such loan is a deposi-
tory institution and has informed the mortgage 
originator that the creditor intends to hold the 
loan on the balance sheet of the creditor for the 
life of the loan; and 
‘‘(B) the mortgage originator informs the 
consumer that the creditor intends to hold the 
loan on the balance sheet of the creditor for the 
life of the loan. 
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‘‘(3) DEFINITIONS.—For purposes of this sub-
section: 
‘‘(A) BANKING
REGULATORS.—The term 
‘banking regulators’ means the Federal banking 
agencies, the Bureau, and the National Credit 
Union Administration. 
‘‘(B) 
DEPOSITORY
INSTITUTION.—The 
term ‘depository institution’ has the meaning 
given that term under section 19(b)(1) of the 
Federal Reserve Act (12 U.S.C. 505(b)(1)). 
‘‘(C) FEDERAL BANKING AGENCIES.—The 
term ‘Federal banking agencies’ has the mean-
ing given that term under section 3 of the Fed-
eral Deposit Insurance Act.’’. 
(b) RULE
OF
CONSTRUCTION.—Nothing in the 
amendment made by this section may be construed as pre-
venting a balloon loan from qualifying for the safe harbor 
provided under section 129C(j) of the Truth in Lending 
Act if the balloon loan otherwise meets all of the require-
ments under such subsection (j), regardless of whether the 
balloon loan meets the requirements described under 
clauses (i) through (iv) of section 129C(b)(2)(E) of such 
Act. 
Æ 
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