980
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.
981
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.
982
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.
983
(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
984
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.
985
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
986
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
987
‘‘(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
988
(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
989
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
990
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:
991
‘‘(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.
992
‘‘(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.
993
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:
994
‘‘(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’’;
995
(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’’.
996
(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
997
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:
998
‘‘(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).’’.
999
(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-
1000
tions from the Director with respect to such ac-
quisition.
‘‘(B) COMMENT PERIOD.—The comments
and recommendations of the Director under
subparagraph (A) with respect to any acquisi-
tion subject to such subparagraph shall be
transmitted to the Board not later than 30 days
after the receipt by the Director of the notice
relating to such acquisition (or such shorter pe-
riod as the Board may specify if the Board ad-
vises the Director that an emergency exists that
requires expeditious action).
‘‘(5) EXAMINATION.—
‘‘(A) SCOPE.—The Board shall consult
with the Director, as appropriate, in establish-
ing the scope of an examination by the Board
of a bank holding company that directly or indi-
rectly controls a savings association.
‘‘(B) ACCESS TO INSPECTION REPORTS.—
Upon the request of the Director, the Board
shall furnish the Director with a copy of any in-
spection report, additional examination mate-
rials, or supervisory information relating to any
bank holding company that directly or indirectly
controls a savings association.
1001
‘‘(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
1002
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
1003
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.
1004
‘‘(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
1005
(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
1006
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
1007
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.
1008
‘‘(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
1009
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.
1010
‘‘(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.’’.
1011
(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
1012
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—
1013
‘‘(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);
1014
(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’’;
1015
(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’’;
1016
(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
1017
(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
1018
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;
1019
‘‘(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:
1020
‘‘(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’’;
1021
(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.
1022
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.
1024
(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
1025
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-
1026
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-
1027
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
1028
(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.
1029
(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.
1030
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’’;
1031
(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.
1032
‘‘(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
1033
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-
1034
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)—
1035
(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
1036
(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;
1037
(B) the availability of credit to small busi-
nesses;
(C) the range of credit options available to
small businesses, such as those available from
insured depository institutions and other pro-
viders of credit;
(D) the types of credit products used to fi-
nance small business operations, including the
use of traditional loans, leases, lines of credit,
home equity loans, credit cards, and other
sources of financing;
(E) the credit needs of small businesses,
including, if appropriate, the extent to which
such needs differ, based upon product type, size
of business, cash flow requirements, character-
istics of ownership or investors, or other aspects
of such business;
(F) the types of risks to creditors in pro-
viding credit to small businesses; and
(G) such other factors as the Board deems
appropriate.
(b) USE OF EXISTING DATA.—The studies required
by this section shall not increase the regulatory or paper-
work burden on regulated financial institutions, other
sources of small business credit, or small businesses.
1038
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;’’.
1039
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-
1040
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.—
1041
‘‘(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-
1042
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.
1043
‘‘(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
1044
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—
1045
‘‘(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
1046
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-
1047
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
1048
‘‘(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
1049
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-
1050
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
1051
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
1052
(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.’’.
1053
(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);
1054
(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:
1055
‘‘(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:
1056
‘‘(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:
1057
‘‘(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’’.
1058
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.—
1059
‘‘(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
1060
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
1061
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-
1062
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.’’.
1063
(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:
1064
‘‘(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;
1065
‘‘(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
1066
‘‘(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;
1067
‘‘(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
1068
‘‘(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.’’.
1069
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
1090
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