I
104TH CONGRESS
2D SESSION
H. R. 4079
To reduce paperwork and additional regulatory burdens for depository
institutions.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 16, 1996
Mr. LEACH (by request) introduced the following bill; which was referred to
the Committee on Banking and Financial Services
A BILL
To reduce paperwork and additional regulatory burdens for
depository institutions.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Financial Institutions Regulatory Relief Act of 1996’’.
(b) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I—REDUCTIONS IN GOVERNMENT OVERREGULATION
Subtitle A—The Home Mortgage Process
Sec. 101. Amendments to the Real Estate Settlement Procedures Act of 1974.
Sec. 102. Simplification and unification of disclosures required under RESPA
and TILA for mortgage transactions.
Sec. 103. Increased regulatory flexibility under the Truth in Lending Act.
Sec. 104. Reductions in RESPA regulatory burdens; clarifying amendments.
Sec. 105. Disclosures for adjustable rate mortgages.
Sec. 106. Treatment of certain debt cancellation and deficiency waiver con-
tracts.
Sec. 107. Conforming definition of ‘‘application’’ in various consumer credit
laws so as to exclude requests for prequalification.
Sec. 108. Recovery of fees.
Sec. 109. Home ownership debt counseling notification.
Sec. 110. Home Mortgage Disclosure Act.
Sec. 111. Technical corrections.
Subtitle B—Consumer Banking Reforms
Sec. 141. Amendments to the Truth in Savings Act.
Sec. 142. Information sharing.
Sec. 143. Limit on restitution for Truth in Lending violations if safety and
soundness of violator would be affected.
Sec. 144. Applicability of Electronic Fund Transfer Act to certain transactions.
Subtitle C—Equal Credit Opportunity Act Amendments
Sec. 151. Short title.
Sec. 152. Findings and purpose.
Sec. 153. Equal Credit Opportunity Act amendments.
Sec. 154. Fair Credit Reporting Act amendments.
Sec. 155. Incentives for self-testing.
Sec. 156. Consultation by attorney general required in nonreferral cases.
Sec. 157. Effective date.
Subtitle D—Consumer Leasing Act Amendments
Sec. 161. Short title.
Sec. 162. Congressional findings and declaration of purpose.
Sec. 163. Regulations.
Sec. 164. Consumer lease advertising.
Sec. 165. Statutory penalties.
TITLE II—STREAMLINING GOVERNMENT REGULATIONS
Subtitle A—Regulatory Approval Issues
Sec. 201. No prior approval required for well capitalized and well managed fi-
nancial services holding companies.
Sec. 202. Streamlined bank acquisitions by well capitalized and well managed
banking organizations.
Sec. 203. Eliminate filing and approval requirements for insured depository in-
stitutions already controlled by the same holding company.
Sec. 204. Eliminate redundant approval requirement for Oakar transactions.
Sec. 205. Elimination of duplicative requirements imposed upon bank holding
companies and other regulatory relief under the Home Owners’
Loan Act.
Sec. 206. Eliminate requirement that approval be obtained for divestitures.
Sec. 207. Eliminate unnecessary branch applications.
Sec. 208. Eliminate branch applications and requirements for ATMs and simi-
lar facilities.
Sec. 209. Eliminate requirement for approval of investments in bank premises
for well capitalized and well managed banks.
Sec. 210. Eliminate unnecessary filing for officer and director appointments.
Sec. 211. Streamlining process for determining new nonbanking activities.
Sec. 212. Disposition of foreclosed assets.
Sec. 213. Increase in certain credit union loan ceilings.
Subtitle B—Streamlining of Government Regulations; Miscellaneous Provisions
Sec. 221. Eliminate the per-branch capital requirement for national banks and
State member banks.
Sec. 222. Branch closures.
Sec. 223. Amendments to the Depository Institutions Management Interlocks
Act.
Sec. 224. Acceleration of repayment to Treasury.
Sec. 225. Constraints on employee-wide benefit plans and home equity loans.
Sec. 226. Expanded regulatory discretion for small bank examinations.
Sec. 227. Cost reimbursement.
Sec. 228. Identification of foreign nonbank financial institution customers.
Sec. 229. Paperwork reduction review.
Sec. 230. Daily confirmations for hold-in-custody repurchase transactions.
Sec. 231. Required regulatory review of regulations.
Sec. 232. Country risk requirements.
Sec. 233. Audit costs.
Sec. 234. Standards for director and officer liability.
Sec. 235. Foreign bank applications.
Sec. 236. Duplicate examination of foreign banks.
Sec. 237. High-cost mortgages.
Sec. 238. Streamlining FDIC approval of new State bank powers.
Sec. 239. Repeal of call report attestation requirement.
Sec. 240. Authorizing bank service companies to organize as limited liability
partnerships.
Sec. 241. Bank investments in Edge Act and agreement corporations.
Sec. 242. Report on the reconciliation of differences between regulatory ac-
counting principles and generally accepted accounting prin-
ciples.
Sec. 243. Waivers authorized for residency requirement for national bank direc-
tors.
Sec. 244. Consultation among examiners.
Sec. 245. Antitying exemptive authority.
TITLE III—LENDER LIABILITY
Sec. 301. Lender liability.
TITLE IV—ANNUAL STUDY AND REPORT ON IMPACT ON
LENDING TO SMALL BUSINESS
Sec. 401. Annual study and report.
TITLE V—FINANCIAL SERVICE REFORM
Subtitle A—Reform of Holding Company Procedures
Sec. 501. Streamlined examination and reporting requirements for all financial
services holding companies.
Sec. 502. Holding company supervision for financial services holding companies
engaged primarily in nonbanking activities.
Sec. 503. Conversion of unitary savings and loan holding companies to financial
services holding companies.
Sec. 504. Coordination with State law.
Sec. 505. Conforming amendments to the Bank Holding Company Act of 1956.
Sec. 506. Conforming amendments to the Bank Holding Company Act Amend-
ments of 1970.
Sec. 507. Credit cards for business purposes.
Sec. 508. Prohibitions on certain depository institution associations with Gov-
ernment-sponsored enterprises.
Sec. 509. Provisions applicable to limited purpose banks.
Sec. 510. Discretion of Federal reserve board.
Sec. 511. Qualified family partnerships.
Subtitle B—Interagency Banking and Financial Services Task Force
Sec. 521. Interagency banking and financial services task force.
Sec. 522. Financial services advisory committee.
TITLE VI—DROUGHT RELIEF
Sec. 601. Cooperative efforts between depository institutions and farmers and
ranchers in drought-stricken areas.
TITLE VII—FINANCIAL ACTIVITIES
Sec. 701. Financial activities.
Sec. 702. Retirement certificates of deposits.
Sec. 703. GAO study of State supervision of national bank insurance activities.
Sec. 704. National bank licensing requirements.
TITLE VIII—DEPOSIT INSURANCE FUNDS
Sec. 801. Short title.
Sec. 802. Special assessment to capitalize SAIF.
Sec. 803. Financing Corporation funding.
Sec. 804. Merger of BIF and SAIF.
Sec. 805. Creation of SAIF special reserve.
Sec. 806. Refund of amounts in deposit insurance fund in excess of designated
reserve amount.
Sec. 807. Assessment rates for SAIF members may not be less than assessment
rates for BIF members.
Sec. 808. Assessments authorized only if needed to maintain the reserve ratio
of a deposit insurance fund.
Sec. 809. Treasury study of common depository institution charter.
Sec. 810. Definitions.
TITLE I—REDUCTIONS IN GOV-
ERNMENT OVERREGULATION
Subtitle A—The Home Mortgage
Process
SEC. 101. AMENDMENTS TO THE REAL ESTATE SETTLE-
MENT PROCEDURES ACT OF 1974.
(a) EMPLOYEE COMPENSATION.—Section 8(c) of the
Real Estate Settlement Procedures Act of 1974 (12
U.S.C. 2607) is amended—
(1) by redesignating paragraph (5) as para-
graph (6); and
(2) by striking ‘‘or’’ at the end of paragraph
(4) and inserting ‘‘(5) an employer’s payment to the
employer’s own bona fide employees for any referral
activities, or’’.
(b) INCREASED
SCIENTER
REQUIREMENT
FOR
CRIMINAL PENALTY.—Section 8(d) of the Real Estate
Settlement Procedures Act of 1974 (12 U.S.C. 2607(d))
is amended—
(1) in paragraph (1), by inserting ‘‘willfully’’
after ‘‘persons who’’; and
(2) in paragraph (3), by striking ‘‘was not in-
tentional and’’.
(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
following ‘‘(A)(i) at or before the time of a face-to-face
referral or referral made in writing (or within 3 business
days after a referral by telephone, electronic mail, or other
electronic media), a written disclosure is made of the exist-
ence of such an arrangement to the person being referred
and, in connection with such referral, such person is pro-
vided a written estimate of the charge or range of charges
generally made by the provider to which the person is re-
ferred, except that, in the case of a referral made by a
lender (including a referral by a lender to an affiliated
lender), such written estimate requirement may be deemed
to have been satisfied through the provision of the esti-
mates required under section 5(c), as of the time such esti-
mates are provided and (ii) a written receipt of any disclo-
sure required pursuant to clause (i) (without regard to the
manner in which the disclosure is made) is obtained before
the closing of the transaction,’’.
(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) 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’’.
(g) 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.
SEC. 102. 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
and the Secretary of Housing and Urban Development
shall take such action as may be necessary before the end
of the 3-month period beginning on the date of the enact-
ment of this Act—
(1) to simplify the disclosures applicable to such
transactions under such Acts, including 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 3-month period referred to in sub-
section (a).
(c) RECOMMENDATIONS FOR LEGISLATION.—If the
Board of Governors of the Federal Reserve System and
the Secretary of Housing and Urban Development find
that legislative action may be necessary or appropriate in
order to simplify and unify the disclosure requirements
under the Real Estate Settlement Procedures Act of 1974
and the Truth in Lending Act, the Board and the Sec-
retary shall submit a report containing recommendations
to the Congress concerning such action.
SEC. 103. INCREASED REGULATORY FLEXIBILITY UNDER
THE TRUTH IN LENDING ACT.
(a) REGULATORY FLEXIBILITY.—Section 104 of the
Truth in Lending Act (15 U.S.C. 1603) is amended by
adding at the end the following new paragraph:
‘‘(7) Transactions for which the Board, by reg-
ulation, determines that coverage under the Act is
not needed to carry out the purposes of the Act.’’.
(b) EXEMPTIVE AUTHORITY.—Section 105 of the
Truth in Lending Act (15 U.S.C. 1604) is amended—
(1) by redesignating subsections (b), (c), and
(d) as subsections (c), (d), and (e), respectively; and
(2) by inserting after subsection (a) the follow-
ing new subsection:
‘‘(b) EXEMPTIVE AUTHORITY.—
‘‘(1) IN
GENERAL.—The Board may exempt
from all or parts of this title any class of trans-
actions for which, in the Board’s judgment, coverage
under all or part of this title does not provide a
meaningful benefit to consumers in the form of use-
ful information or protection.
‘‘(2) FACTORS TO BE CONSIDERED.—In deter-
mining which classes of transactions to exempt in
whole or in part, the Board shall consider, among
other factors, the following:
‘‘(A) The amount of the loan or closing
costs and whether the disclosures, right of re-
scission, and other provisions are necessary,
particularly for small loans.
‘‘(B) Whether 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, including,
the borrowers’ related financial arrangements,
the financial sophistication of the borrower rel-
ative to the type of transaction, and the impor-
tance of the credit and related supporting prop-
erty to the borrower.’’.
SEC. 104. REDUCTIONS IN RESPA REGULATORY BURDENS;
CLARIFYING AMENDMENTS.
(a) UNNECESSARY DISCLOSURE.—Section 6(a) of the
Real Estate Settlement Procedures Act of 1974 (12
U.S.C. 2605) is amended to read as follows:
‘‘(a) DISCLOSURE TO APPLICANT RELATING TO AS-
SIGNMENT, SALE, OR TRANSFER OF LOAN SERVICING.—
‘‘(1) IN GENERAL.—Each person who makes a
federally related mortgage loan shall disclose to each
person who applies for any such loan, at the time of
application for the loan, whether the servicing of any
such loan may be assigned, sold, or transferred to
any other person at any time while such loan is out-
standing.
‘‘(2) SIGNATURE OF APPLICANT.—Any disclo-
sure of the information required under paragraph
(1) shall not be effective for purposes of this section
unless the disclosure is accompanied by a written
statement, in such form as the Secretary shall de-
velop before the expiration of the 180-day period be-
ginning on the date of the enactment of the Finan-
cial Institutions Regulatory Relief Act of 1996, that
the applicant has read and understood the disclosure
and that is evidenced by the signature of the appli-
cant at the place where such statement appears in
the application.’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall take effect 180 days after the date
of the enactment of this Act.
(c) SECOND MORTGAGES.—Section 3(1)(A) of the
Real Estate Settlement Procedures Act of 1974 (12
U.S.C. 2602(1)(A)) is amended by striking ‘‘or subordi-
nate’’.
(d) CONSISTENCY OF RESPA AND TRUTH IN LEND-
ING ACT EXEMPTION OF BUSINESS LOANS.—Section 7 of
the Real Estate Settlement Procedures Act of 1974 (12
U.S.C. 2606) is amended—
(1) by inserting ‘‘(a) IN GENERAL.—’’ before
‘‘This Act’’; and
(2) by inserting at the end the following new
subsection:
‘‘(b) INTERPRETATION.—In issuing regulations pur-
suant to section 19(a) of this Act, the Secretary shall en-
sure that, with regard to subsection (a), the exemption
for business credit includes all business credit which is ex-
empt from the Truth in Lending Act in accordance with
section 226.3(a) of the regulations prescribed by the
Board of Governors of the Federal Reserve System known
as ‘regulation Z’ (12 C.F.R. 226.3(a)), as in effect on the
date of enactment of the Financial Institutions Regulatory
Relief Act of 1996.’’.
SEC. 105. DISCLOSURES FOR ADJUSTABLE RATE MORT-
GAGES.
(a) IN GENERAL.—Section 127A(a)(2)(G) of the
Truth in Lending Act (15 U.S.C. 1637a(a)(2)(G)) is
amended by inserting before the semicolon ‘‘, or a state-
ment that the monthly payment may increase or decrease
significantly due to increases in the annual percentage
rate’’.
(b) TECHNICAL AND CONFORMING AMENDMENT.—
Section 127A(b)(3) of the Truth in Lending Act (15
U.S.C. 1637a(b)(3)) is amended by striking ‘‘required
under’’ and inserting ‘‘referred to in’’.
(c) ALTERNATIVE TO HISTORICAL EXAMPLE FOR
ADJUSTABLE RATE MORTGAGE DISCLOSURES.—Section
128 of the Truth in Lending Act (15 U.S.C. 1638) is
amended by adding at the end the following new sub-
section:
‘‘(e) DISCLOSURE IN LIEU OF HISTORICAL EXAM-
PLE.—
‘‘(1) IN GENERAL.—Any regulation prescribed
by the Board pursuant to section 105(a) which re-
quires disclosures with respect to any consumer
credit transaction other than under an open end
credit plan—
‘‘(A) which has a term to maturity of more
than 1 year and is secured by the principal
dwelling of the consumer;
‘‘(B) with respect to which the annual per-
centage rate on any outstanding balance may
increase after the extension is made,
the regulation shall allow the creditor the option of
providing the information described in paragraph (2)
with regard to such transaction in lieu of an histori-
cal example that illustrates the effects of interest
rate changes implemented in accordance with the
terms of the transaction.
‘‘(2) SUBSTITUTE
INFORMATION.—The infor-
mation referred to in paragraph (1) is a written no-
tice provided by the creditor that—
‘‘(A) states that the monthly rate of inter-
est on any outstanding balance may increase or
decrease substantially in accordance with the
terms of the consumer credit transactions; and
‘‘(B) indicates the maximum rate of inter-
est and monthly payment that would apply with
respect to a $10,000 loan if such loan had been
originated at a recent rate of interest, as deter-
mined in accordance with regulations prescribed
by the Board.’’.
(d) ENSURING HONORING OF LOCK-IN PROMISES.—
Section 128(b) of the Truth in Lending Act (15 U.S.C.
1638(b)) is amended by adding at the end the following
new paragraph:
‘‘(3) In the case of a residential mortgage trans-
action, the disclosures under subsection (a) shall include
the following:
‘‘(A) The note rate and points, and a state-
ment, if applicable, that these terms are subject to
change.
‘‘(B) A statement that the creditor must in-
clude the disclosed note rate and points in the credit
agreement unless, in relation to either or both of
those terms—
‘‘(i) the disclosure clearly and conspicu-
ously indicates that the term is subject to
change, or
‘‘(ii) in the case of any term to which
clause (i) does not apply—
‘‘(I) the creditor has clearly and con-
spicuously indicated that the term is condi-
tioned on closing the transaction within a
prescribed time;
‘‘(II) the creditor has promptly and
clearly communicated to the consumer the
information and documentation that the
consumer is required to provide to the
creditor; and
‘‘(III) the consumer has failed to pro-
vide such information and documentation
within a reasonable time after receiving
that communication.’’.
SEC. 106. TREATMENT OF CERTAIN DEBT CANCELLATION
AND DEFICIENCY WAIVER CONTRACTS.
Section 106(c) of the Truth in Lending Act (15
U.S.C. 1605(c)) is amended to read as follows:
‘‘(c) TREATMENT OF CERTAIN DEBT CANCELLATION
AND DEFICIENCY WAIVER CONTRACTS.—
‘‘(1) IN GENERAL.—Charges and premiums for
any applicable insurance or product written in con-
nection with any consumer credit transaction shall
be included in the finance charge unless a clear and
specific statement in writing is furnished by the
creditor to the consumer to whom credit is ex-
tended—
‘‘(A) setting forth the cost of the insurance
or product, if obtained from or through the
creditor; and
‘‘(B) stating that the consumer to whom
credit is extended may choose the person
through which the insurance or product is to be
obtained.
‘‘(2) APPLICABLE INSURANCE OR PRODUCT DE-
FINED.—For purposes of paragraph (1), the term
‘applicable insurance or product’ means—
‘‘(A) any insurance against—
‘‘(i) loss of or damage to property; or
‘‘(ii) liability arising out of the owner-
ship or use of property; and
‘‘(B) any voluntary insurance or noninsur-
ance product that provides protection against
part or all of the debtor’s liability for amounts
in excess of the value of the collateral securing
the debtor’s obligation.’’.
SEC. 107. CONFORMING DEFINITION OF ‘‘APPLICATION’’ IN
VARIOUS CONSUMER CREDIT LAWS SO AS TO
EXCLUDE 
REQUESTS 
FOR
PREQUALIFICATION.
(a) HOME MORTGAGE DISCLOSURE ACT.—Section
303 of the Home Mortgage Disclosure Act of 1975 (12
U.S.C. 2802) is amended—
(1) by striking ‘‘For purposes of’’ and inserting
‘‘(a) IN GENERAL.—For purposes of’’;
(2) by striking ‘‘and’’ at the end of paragraph
(5);
(3) by striking the period at the end of para-
graph (6) and inserting ‘‘; and’’; and
(4) by adding at the end the following:
‘‘(7) subject to subsection (b), the term ‘appli-
cation’—
‘‘(A) means oral or written request for an
extension of credit secured or to be secured by
an identified parcel of real estate or dwelling
that is made in accordance with procedures es-
tablished by the creditor for the type of credit
requested; and
‘‘(B) does not include a request by a pro-
spective loan applicant for a preliminary deter-
mination, whether or not a specific parcel of
real estate or dwelling is identified, of—
‘‘(i) the likelihood that the prospective
loan applicant would qualify for credit
under the standards established by the
creditor; or
‘‘(ii) the amount of credit for which
the prospective applicant would likely qual-
ify.
‘‘(b) DESIGNATION BY CONSUMER OF REQUEST AS
APPLICATION OR PREQUALIFICATION REQUEST.—If an
oral or written request by a prospective loan applicant re-
lates to an identified parcel of real estate or dwelling, the
applicant may designate whether the request shall be
treated by the creditor as an application described in sub-
paragraph (A) of subsection (a)(7) or as a request for a
preliminary determination described in subparagraph (B)
of subsection (a)(7).’’.
(b) REAL
ESTATE
SETTLEMENT
PROCEDURES
ACT.—Section 3 of the Real Estate Settlement Procedures
Act of 1974 (12 U.S.C. 2602) (as amended by section
101(a) of this subtitle) is amended by adding at the end
the following new paragraph:
‘‘(11) the term ‘application’ has the meaning
given such term in section 303(7) of the Home
Mortgage Disclosure Act of 1975.’’.
(c) EQUAL CREDIT OPPORTUNITY ACT.—
(1) PREQUALIFICATION
REQUEST
IS
NOT
AN
APPLICATION.—Section 702 of the Equal Credit Op-
portunity Act (15 U.S.C. 1691a) is amended by add-
ing at the end the following new subsection:
‘‘(h) PREQUALIFICATION REQUESTS.—
‘‘(1) IN GENERAL.—A person who makes a re-
quest described in subparagraph (B) of section
303(7) of the Home Mortgage Disclosure Act of
1975 shall not be treated as an applicant for pur-
poses of this title, and the request shall not be treat-
ed as an application, unless the request relates to
identified real or personal property and such person
elects to treat the request as an application.
‘‘(2) PERSON WHO MAKES A PREQUALIFICATION
REQUEST DEFINED.—The term ‘person who makes a
prequalification request’ means any person described
in paragraph (1) who has not elected to be treated
as an applicant.
‘‘(3) PREQUALIFICATION REQUEST DEFINED.—
The term ‘prequalification request’ means a request
described in subparagraph (B) of section 303(7) of
the Home Mortgage Disclosure Act of 1975.’’.
(2) DISCRIMINATION PROHIBITED AGAINST ANY
PERSON
WHO
MAKES
A
PREQUALIFICATION
RE-
QUEST.—Section 701(a) of the Equal Credit Oppor-
tunity Act (15 U.S.C. 1691(a)) is amended—
(A) by inserting ‘‘or any person who makes
a prequalification request’’ after ‘‘any appli-
cant’’;
(B) in paragraphs (1) and (3), by inserting
‘‘or person’’ after ‘‘the applicant’’; and
(C) in paragraph (2), by inserting ‘‘or per-
son’s’’ after ‘‘the applicant’s’’.
(3) ADVERSE RESPONSE TO PREQUALIFICATION
REQUEST NOT TREATED AS AN ADVERSE ACTION.—
The last sentence of section 701(d)(6) of the Equal
Credit Opportunity Act (15 U.S.C. 1691(d)(6)) is
amended by inserting ‘‘and, in the case of a federally
related mortgage loan (as defined in section 3(1) of
the Real Estate Settlement Procedures Act of 1974),
a creditor’s response to a prequalification request’’
before the period.
(d) TRUTH IN LENDING ACT.—Section 103 of the
Truth in Lending Act (15 U.S.C. 1602) is amended—
(1) in the 2d sentence of subsection (g) by in-
serting ‘‘(other than a bailment or lease which is ter-
minable without penalty at any time by the
consumer and was entered into in compliance with
such appropriate noncredit disclosures as the Board
may prescribe)’’ after ‘‘bailment or lease’’; and
(2) by adding at the end the following new sub-
section:
‘‘(cc) APPLICATION.—In the case of any federally re-
lated mortgage loan (as defined in section 3(1) of the Real
Estate Settlement Procedures Act of 1974), the term ‘ap-
plication’ has the meaning given to such term in section
303(7) of the Home Mortgage Disclosure Act of 1975.’’.
(e) FAIR CREDIT REPORTING ACT.—Section 615 of
the Fair Credit Reporting Act (15 U.S.C. 1681m) is
amended by adding at the end the following new sub-
section:
‘‘(d) CERTAIN PREQUALIFICATION REQUESTS EX-
CLUDED FROM SCOPE OF SECTION.—This section shall
not apply with respect to a creditor’s response to a
prequalification request (as defined in section 702(h)(3)
of the Equal Credit Opportunity Act) with respect to a
federally related mortgage loan (as defined in section 3(1)
of the Real Estate Settlement Procedures Act of 1974).’’.
SEC. 108. RECOVERY OF FEES.
Section 125(b) of the Truth in Lending Act (15
U.S.C. 1635) is amended—
(1) in the first sentence, by inserting ‘‘, except
any charge for an appraisal report or credit report’’
after ‘‘other charge’’; and
(2) in the second sentence, by striking ‘‘other-
wise’’ and inserting ‘‘as otherwise required under
this subsection’’.
SEC. 109. HOME OWNERSHIP DEBT COUNSELING NOTIFICA-
TION.
Section 106(c) of the Housing and Urban Develop-
ment Act of 1968 (12 U.S.C. 1701x(c)) is amended by
striking paragraph (5).
SEC. 110. HOME MORTGAGE DISCLOSURE ACT.
(a) Section 309 of the Home Mortgage Disclosure
Act of 1975 (12 U.S.C. 2808) is amended—
(1) in the second sentence, by striking
‘‘$10,000,000’’ and inserting ‘‘$50,000,000’’; and
(2) by inserting at the end the following new
sentence: ‘‘The dollar amount in this section shall be
adjusted annually after December 31, 1994, by the
annual percentage increase in the Consumer Price
Index for Urban Wage Earners and Clerical Work-
ers published by the Bureau of Labor Statistics.’’.
(b) 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) A depository institution shall be considered
to have satisfied the public availability requirements
of subsection (a) if such institution keeps the infor-
mation required under that subsection at its home
office and provides notice at the branch locations
specified in such subsection that such information is
available upon request from the home office of the
institution. A home office of the depository institu-
tion receiving a request for such information pursu-
ant to this subsection shall provide the information
pertinent to the location of the branch in question
within fifteen days of the receipt of the written re-
quest.
‘‘(2) In complying with paragraph (1), a deposi-
tory institution may provide the individual request-
ing such information, at the institution’s choice,
with—
‘‘(A) a paper copy of the information re-
quested; or
‘‘(B) if acceptable to the individual, the in-
formation through a form of electronic medium,
such as computer disc.’’.
SEC. 111. TECHNICAL CORRECTIONS.
Section 139(a) of the Truth in Lending Act (as added
by section 4 of the Truth in Lending Act Amendments
of 1995) is amended—
(1) in the matter preceding paragraph (1), by
striking ‘‘subject to this title’’ and inserting ‘‘re-
ferred to in section 106(f)’’; and
(2) in paragraph (3)(A), by striking ‘‘may’’ and
all that follows through ‘‘charge’’ the first place such
term appears.
Subtitle B—Consumer Banking
Reforms
SEC. 141. AMENDMENTS TO THE TRUTH IN SAVINGS ACT.
(a) REPEAL.—Section 271 of the Truth in Savings
Act (12 U.S.C. 4310) is hereby repealed.
(b) ON-PREMISES DISPLAYS.—Section 263(c) of the
Truth in Savings Act (12 U.S.C. 4302(c)) is amended—
(1) by striking paragraph (2);
(2) by striking ‘‘(1) IN GENERAL.—’’; and
(3) by redesignating subparagraphs (A) and
(B) as paragraphs (1) and (2), respectively, and in-
denting appropriately.
(c) DEPOSITORY INSTITUTION DEFINITION.—Section
274(6) of the Truth in Savings Act (12 U.S.C. 4313(6))
is amended by inserting before the period ‘‘, but does not
include any nonautomated credit union that was not re-
quired to comply with the requirements of this title as of
the date of enactment of the Economic Growth and Regu-
latory Paperwork Reduction Act of 1995, pursuant to the
determination of the National Credit Union Administra-
tion Board’’.
(d) TIME DEPOSITS.—Section 266(a)(3) of the Truth
in Savings Act (12 U.S.C. 4305(a)(3)) is amended by in-
serting ‘‘has a maturity of more than 30 days’’ after ‘‘de-
posit which’’.
SEC. 142. INFORMATION SHARING.
Section 18 of the Federal Deposit Insurance Act (12
U.S.C. 1828) is amended by adding at the end the follow-
ing new subsection:
‘‘(s) CUSTOMER ACCESS TO PRODUCTS.—
‘‘(1) IN GENERAL.—Notwithstanding any other
provision of law, any depository institution, or any
affiliate or subsidiary of any depository institution,
may share or exchange information or otherwise
transfer information between or among themselves
without any restriction or limitation if it is clearly
and conspicuously disclosed that the information
may be communicated among such persons and the
consumer is given the opportunity, before the time
that the information is initially communicated, to di-
rect that such information not be communicated
among such persons.
‘‘(2) DEFINITION.—For purposes of this sub-
section, the term ‘information’ means any and all
data, records, or other information and material ob-
tained or maintained by any depository institution or
any affiliate or subsidiary thereof in the ordinary
course of its business that relates in any way to a
person (as such term is defined in section 603(b) of
the Fair Credit Reporting Act) who applies for,
maintains, or has maintained an account or credit
relationship with or applied for, purchased or ob-
tained other products or services from any deposi-
tory institution or any affiliate or subsidiary of any
depository institution, regardless of the source of
manner in which the information is obtained or fur-
nished.
‘‘(3) RULE OF CONSTRUCTION.—Any depository
institution, or any affiliate or subsidiary of any de-
pository institution, relying on this subsection shall
not be deemed to be a consumer reporting agency,
user, or third party, and the information itself shall
not constitute a consumer report, within the mean-
ing of the Fair Credit Reporting Act or other similar
law.’’.
SEC. 143. LIMIT ON RESTITUTION FOR TRUTH IN LENDING
VIOLATIONS IF SAFETY AND SOUNDNESS OF
VIOLATOR WOULD BE AFFECTED.
Section 108(e)(3)(A) of the Truth in Lending Act (15
U.S.C. 1607(e)(3)(A)) is amended—
(1) by striking ‘‘in any such case, the agency
may require’’ and inserting ‘‘in any such case, the
agency may (i) require’’;
(2) by striking ‘‘, except that with respect to
any transaction consummated after the effective
date of section 608 of the Truth in Lending Sim-
plification and Reform Act, the agency shall’’ and
inserting ‘‘; or (ii)’’; and
(3) by striking ‘‘reasonable,’’ and inserting
‘‘reasonable if, in the case of an agency referred to
in paragraph (1), (2), or (3) of subsection (a), the
agency determines that a partial adjustment or the
making of partial payments over an extended period
is necessary to avoid causing the creditor to become
undercapitalized (as determined in accordance with
regulations prespellscribed by such agency under
section 38 of the Federal Deposit Insurance Act);’’.
SEC. 144. APPLICABILITY OF ELECTRONIC FUND TRANSFER
ACT TO CERTAIN TRANSACTIONS.
(a) STUDY REQUIRED.—The Board of Governors of
the Federal Reserve System shall conduct a study of
whether, and the extent to which, the Electronic Fund
Transfer Act is applicable to, or should or should not be
applicable to, any payment for transactions by a person
through the use of value stored on, or assigned to, a card,
device, or computer if the card, device, or computer is not
used to actually access an account in order to effect the
transaction.
(b) REPORT.—
(1) IN GENERAL.—The Board of Governors of
the Federal Reserve System shall submit a report on
the study required under subsection (a) to the Con-
gress before the end of the 90-day period beginning
on the date of the enactment of this Act.
(2) CONTENTS.—The report submitted under
paragraph (1) shall contain the findings and conclu-
sions of the Board of Governors of the Federal Re-
serve System and such recommendations for legisla-
tive and administrative action as the Board consid-
ers to be appropriate.
Subtitle C—Equal Credit
Opportunity Act Amendments
SEC. 151. SHORT TITLE.
This subtitle may be cited as the ‘‘Equal Credit Op-
portunity Act Amendments of 1996’’.
SEC. 152. FINDINGS AND PURPOSE.
(a) FINDINGS.—The Congress finds that both the
Equal Credit Opportunity Act (15 U.S.C. 1691, et seq.)
and the Fair Credit Reporting Act (15 U.S.C. 1681, et
seq.) contain requirements that applicants for consumer
credit be given certain information in the event that ad-
verse action is taken on the application. These require-
ments differ in both scope and content and for that reason
are confusing to both the consumer who receives the infor-
mation and the party required to furnish the information.
(b) PURPOSE.—It is the purpose of this subtitle to
combine and simplify the adverse action notification re-
quirements of the Equal Credit Opportunity Act and the
Fair Credit Reporting Act regarding applications for
consumer credit and to make the information that is re-
quired to be furnished more understandable.
SEC. 153. EQUAL CREDIT OPPORTUNITY ACT AMEND-
MENTS.
(a) 
NOTICE
OF
ADVERSE
ACTION.—Section
701(d)(2)(B) of the Equal Credit Opportunity Act (15
U.S.C. 1691(d)(2)(B)) is amended to read as follows:
‘‘(B) giving written notification of adverse
action which discloses—
‘‘(i) the applicant’s right to a state-
ment of reasons within 30 days after re-
ceipt by the creditor of a request made
within 60 days after such notification;
‘‘(ii) if credit is denied or the charge
for such credit is increased either wholly or
partly because of information contained in
a consumer report from a consumer re-
porting agency—
‘‘(I) that fact and the name, ad-
dress, and telephone number of the
consumer reporting agency making
the report;
‘‘(II) the consumer’s right to ob-
tain, under section 612, a free copy of
a consumer report on the consumer,
from the consumer reporting agency
referred to in subclause (I) within the
30-day period provided under such
section; and
‘‘(III) the consumer’s right to
dispute, under section 611, with a
consumer reporting agency the accu-
racy or completeness of any informa-
tion in a consumer report furnished
by the agency.
‘‘(iii) if credit is denied or the charge
for credit is increased either wholly or
partly because of information obtained
from a person other than a consumer re-
porting agency bearing upon the consum-
er’s credit worthiness, credit standing,
credit capacity, character, general reputa-
tion, personal characteristics or mode of
living, that fact and the right to receive
disclosure of the nature of the information
so received, within a reasonable period of
time, upon the consumer’s written request
for information within 60 days after learn-
ing of such adverse action; and
‘‘(iv) the identity of the person or of-
fice from which such notification may be
obtained.
Such statement of reasons may be given orally
if the written notification advises the applicant
of his right to have the statement of reasons
confirmed in writing on written request.’’.
(b) TECHNICAL AND CONFORMING AMENDMENT.—
Section 701(d)(3) of the Equal Credit Opportunity Act
(15 U.S.C. 1691(d)(3)) is amended by striking the period
at the end and adding the following: ‘‘and, to the extent
applicable, the name, address, and telephone number of
the consumer reporting agency identified in accordance
with the requirements of subsection (d)(3)(ii) and a state-
ment of the right to obtain disclosure of the nature of the
information upon which adverse action was taken as re-
quired by such subsection.’’.
(c) REASONABLE PROCEDURES TO ASSURE COMPLI-
ANCE.—Section 706 of the Equal Credit Opportunity Act
(15 U.S.C. 1691e) is amended by adding at the end the
following new subsection:
‘‘(l) REASONABLE PROCEDURES TO ASSURE COM-
PLIANCE.—No person shall be held liable for any violation
of subsection 701(d) if such person shows by a preponder-
ance of the evidence that at the time of the alleged viola-
tion the person maintained reasonable procedures to as-
sure compliance with the provisions of the subsection.’’.
SEC. 154. FAIR CREDIT REPORTING ACT AMENDMENTS.
(a) Section 615(a) of the Fair Credit Reporting Act
(15 U.S.C. 1681m(a)) is amended by striking ‘‘credit or’’
each place such term appears.
(b) Section 615 of the Fair Credit Reporting Act (15
U.S.C. 1681m) is amended by striking subsection (b) and
redesignating subsection (c) as subsection (b).
(c) Section 615(b) (as redesignated by this section)
of the Fair Credit Reporting Act (15 U.S.C. 1681m(b))
is amended by striking ‘‘subsections (a) and (b)’’ and in-
serting ‘‘subsection (a)’’.
SEC. 155. 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) IN GENERAL.—If a creditor—
‘‘(1) conducts, or authorizes an independent
third party to conduct, a self-test of the creditor’s
lending or any part of the creditor’s lending oper-
ations in order to determine the level or effectiveness
of compliance with this title by the creditor; and
‘‘(2) has identified discriminatory practices and
has taken or is taking appropriate corrective actions
to address the discrimination,
any report or results of such a self-test may not be ob-
tained or used by any applicant, department, or agency
in any proceeding or civil action brought under this title.
‘‘(b) RESULTS OF SELF-TESTING.—No provision of
this section shall be construed as preventing an applicant,
department, or agency from obtaining and using the re-
sults of any self-testing in any proceeding or civil action
brought under this title if—
‘‘(1) the creditor or any other entity conducted
such activity at the request of a department or agen-
cy;
‘‘(2) the creditor or any other entity, or any
person acting on behalf of the creditor or other en-
tity—
‘‘(A) voluntarily releases or discloses all, or
any part of, such results; or
‘‘(B) refers to or describes such results as
a defense to charges of unlawful discrimination
against such creditor, person, or entity; or
‘‘(3) the results are sought by the applicant, de-
partment, or agency by means of a discovery request
for the purposes of determining an appropriate pen-
alty or remedy for a violation of this title.
‘‘(c) REGULATIONS.—The appropriate Federal de-
partment or agency shall prescribe regulations, after no-
tice and opportunity for comment, which determine what
types of ‘self-tests’ are sufficiently extensive so as to con-
stitute a determination of the level or effectiveness of a
creditor’s compliance with this title.’’.
(2) REFERRALS
TO
THE
ATTORNEY
GEN-
ERAL.—Section 706(g) of the Equal Credit Oppor-
tunity Act (15 U.S.C. 1691e(g)) is amended—
(A) by striking ‘‘(g) The agencies’’ and in-
serting ‘‘(g) REFERRALS
TO
THE ATTORNEY
GENERAL.—
‘‘(1) IN GENERAL.—The agencies’’; and
(B) by adding at the end the following new
paragraphs:
‘‘(2) LIMITATION
ON
REFERRALS
OF
SELF-
TESTING RESULTS.—
‘‘(A) IN GENERAL.—No agency shall be re-
quired to refer any report or results of a self-
test relating to any creditor to the Attorney
General if the creditor—
‘‘(i) has already identified discrimina-
tory practices as the result of self-testing
instituted by the creditor to determine
compliance with this title; and
‘‘(ii) has taken or is taking appro-
priate corrective actions to address the dis-
crimination.
‘‘(3) ENFORCEMENT UNDER OTHER LAWS.—No
provision of this section shall be construed as limit-
ing the authority of the agency to enforce the provi-
sions of this title under any other provision of law.’’.
(3) REFERRALS TO HUD.—Section 706(k) of
the Equal Credit Opportunity Act (15 U.S.C.
1691e(k)) is amended by adding at the end the fol-
lowing: ‘‘No such agency shall be required to notify
the Secretary of Housing and Urban Development or
the applicant that the agency has reason to believe
that a violation of this title or the Fair Housing Act
occurred if the reason is based on a result of self-
testing instituted by the creditor to determine com-
pliance with this title, and the creditor has already
identified the possible violation and has taken or is
taking appropriate corrective actions to address the
possible violation. No provisions of this section shall
be construed as limiting the authority of the agency
to enforce the provisions of this title under any other
provision of law.’’.
(4) 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.—The Fair Housing Act (42
U.S.C. 3601 et seq.) is amended by inserting after section
814 the following new section:
‘‘SEC. 814A. SELF-TESTING ENHANCEMENT.
‘‘(a) IN GENERAL.—If any person—
‘‘(1) conducts, or authorizes an independent
third party to conduct, a self-test of that person’s
residential real estate related lending activities, or
any part of such activities, in order to determine the
level or effectiveness of compliance with this title by
the person; and
‘‘(2) has identified discriminatory practices and
has taken or is taking appropriate corrective actions
to address the discrimination,
any report or results of such a self-test may not be ob-
tained or used by any aggrieved person, complainant, de-
partment, or agency in any proceeding or civil action
brought under this title.
‘‘(b) RESULTS OF SELF-TESTING.—No provision of
this section shall be construed as preventing an aggrieved
person, complainant, department, or agency from obtain-
ing and using the results of any self-testing as described
in subsection (a) in any proceeding or civil action brought
under this title if—
‘‘(1) the creditor or any other entity conducted
such activity at the request of a department or agen-
cy;
‘‘(2) the creditor or any other entity, or any
person acting on behalf of the creditor or other en-
tity—
‘‘(A) voluntarily releases or discloses all, or
any part of, such results; or
‘‘(B) refers to or describes such results as
a defense to charges of unlawful discrimination
against such creditor, person, or entity; or
‘‘(3) the results are sought by the aggrieved
person, complainant, department, or agency by
means of a discovery request for the purposes of de-
termining an appropriate penalty or remedy for a
violation of this title.
‘‘(c) REGULATIONS.—The appropriate Federal de-
partment or agency shall prescribe regulations, after no-
tice and opportunity for comment, which determine what
types of ‘self-tests’ are sufficiently extensive so as to con-
stitute a determination of the level or effectiveness of a
creditor’s compliance with this title.’’.
SEC. 156. CONSULTATION BY ATTORNEY GENERAL RE-
QUIRED IN NONREFERRAL CASES.
(a) EQUAL CREDIT OPPORTUNITY.—Section 706(h)
of the Equal Credit Opportunity Act (15 U.S.C. 1691e(h))
is amended by adding at the end the following new sen-
tence: ‘‘Before bringing a civil action against any creditor
described in paragraph (1), (2), or (3) of section 704(a),
the Attorney General shall consult with the appropriate
agency under such paragraph.’’.
(b) FAIR HOUSING ACT.—Section 814(a) of the Fair
Housing Act (42 U.S.C. 3614(a)) is amended by adding
at the end the following new sentence: ‘‘Before bringing
a civil action under the preceding sentence against any
person or group of persons described in paragraph (1),
(2), or (3) of section 704(a) of the Equal Credit Oppor-
tunity Act with respect to a violation of 805(a) of this
title, the Attorney General shall consult with the appro-
priate agency under such paragraph.’’.
SEC. 157. EFFECTIVE DATE.
(a) IN GENERAL.—Except with respect to the re-
quirements of subsection (b), this subtitle shall take effect
at the end of the 270-day period beginning on the date
of the enactment of this Act.
(b) IMPLEMENTING REGULATIONS.—The Board of
Governors of the Federal Reserve System shall prescribe
regulations to implement this subtitle and such regulations
shall be published in final form before the end of the 180-
day period beginning on the date of the enactment of this
Act.
Subtitle D—Consumer Leasing Act
Amendments
SEC. 161. SHORT TITLE.
This subtitle may be cited as the ‘‘Consumer Leasing
Act Amendments of 1996’’.
SEC. 162. CONGRESSIONAL FINDINGS AND DECLARATION
OF PURPOSE.
(a) FINDINGS.—The Congress finds the following:
(1) Competition among the various financial in-
stitutions and other firms engaged in the business of
consumer leasing is greatest when there is informed
use of leasing. The informed use of leasing results
from an awareness of the cost of leasing by consum-
ers.
(2) There has been a continued trend toward
leasing automobiles and other durable goods for
consumer use as an alternative to installment credit
sales and that leasing product advances have oc-
curred such that lessors have been unable to provide
consistent industry-wide disclosures to fully account
for the competitive progress that has occurred.
(b) PURPOSES.—
(1) It is the purpose of this subtitle to assure
a simple, meaningful disclosure of leasing terms so
that the consumer will be able to compare more
readily the various leasing terms available to the
consumer and avoid the uninformed use of leasing,
and to protect the consumer against inaccurate and
unfair leasing practices.
(2) To provide for adequate cost disclosures
that reflect the marketplace without impairing com-
petition and the development of new leasing prod-
ucts, it is the purpose of this subtitle to provide the
Board with the regulatory authority to assure a sim-
plified, meaningful definition and disclosure of the
terms of certain leases of personal property for per-
sonal, family, or household purposes so as to enable
the lessee to compare more readily the various lease
terms available to the lessee, enable comparison of
lease terms with credit terms where appropriate and
to assure meaningful and accurate disclosures of
lease terms in advertisements.
SEC. 163. REGULATIONS.
(a) IN GENERAL.—Chapter 5 of title I of the
Consumer Credit Protection Act (15 U.S.C. 1601 et seq.)
is amended by adding at the end the following new section:
‘‘SEC. 187. REGULATIONS.
‘‘(a) REGULATIONS AUTHORIZED.—
‘‘(1) IN GENERAL.—The Board shall write reg-
ulations or staff commentary, if appropriate, to up-
date and clarify the requirements and definitions for
lease disclosures, contracts, and any other specific
issues related to consumer leasing which would carry
out the purposes of this chapter, to prevent any cir-
cumvention of the chapter, and to facilitate compli-
ance with the requirements of the chapter.
‘‘(2) CLASSIFICATIONS, 
ADJUSTMENTS.—The
regulations prescribed under paragraph (1) may con-
tain classifications and differentiations and may pro-
vide for adjustments and exceptions for any class of
transaction.
‘‘(b) MODEL DISCLOSURES.—The Board shall pub-
lish model disclosure forms and clauses to facilitate com-
pliance with the disclosure requirements and to aid the
consumer in understanding the transaction. In designing
forms, the Board shall consider the use by lessors of data
processing or similar automated equipment. Use of the
models shall be optional. A lessor who properly uses the
material aspects of the models shall be deemed to be in
compliance with the disclosure requirements.
‘‘(c) EFFECTIVE DATES.—
‘‘(1) IN
GENERAL.—Any regulation of the
Board, or any amendment or interpretation of any
regulation of the Board, that requires a disclosure
different from the disclosures previously required
shall have an effective date of the October 1 that fol-
lows the date of promulgation by at least 6 months.
‘‘(2) LONGER PERIOD.—The Board may, in the
Board’s discretion, lengthen the period of time re-
ferred to in paragraph (1) to permit lessors to ad-
just their forms to accommodate new requirements.
‘‘(3) SHORTER PERIOD.—The Board may also
shorten the period of time referred to in paragraph
(1) if the Board makes a specific finding that such
action is necessary to comply with the findings of a
court or to prevent unfair or deceptive practices.
‘‘(4) COMPLIANCE BEFORE EFFECTIVE DATE.—
Lessors may comply with any newly promulgated
disclosure requirement before the effective date of
such requirement.’’.
(b) CLERICAL AMENDMENT.—The table of sections
for chapter 5 of title I of the Consumer Credit Protection
Act (15 U.S.C. 1601 et seq.) is amended by inserting after
the item relating to section 186 the following new item:
‘‘187. Regulations.’’.
SEC. 164. CONSUMER LEASE ADVERTISING.
Section 184 of the Consumer Credit Protection Act
(15 U.S.C. 1667c) is amended to read as follows:
‘‘SEC. 184. CONSUMER LEASE ADVERTISING.
‘‘(a) IN
GENERAL.—If an advertisement for a
consumer lease states the amount of any payment or
states that any or no initial payment is required, the ad-
vertisement shall also clearly and conspicuously state the
following terms which shall be segregated from all other
information and identified as ‘Important Information for
Consumers’:
‘‘(1) That the transaction advertised is a lease.
‘‘(2) The total of initial payments required at
or before consummation of the lease or delivery of
the property, whichever is later.
‘‘(3) Whether a security deposit is required.
‘‘(4) The number, amounts, and timing of
scheduled payments.
‘‘(5) The capitalized cost as defined by the
Board and stated as a dollar amount that represents
either the actual capitalized cost at which the lessor
is willing to lease the property or the average cap-
italized cost as a percentage of manufacturer’s sug-
gested retail price of all similar property leased by
the advertiser or lessor during the most recent 6-
month period ending either December 31, or June
30.
‘‘(6) For a lease in which the consumer’s liabil-
ity at the end of the lease term is based on the an-
ticipated residual value of the property, whether an
extra charge may be imposed at the end of the lease
term.
‘‘(b) CLEARLY AND CONSPICUOUSLY.—
‘‘(1) The disclosures required by this section
shall be given clearly and conspicuously in accord-
ance with the following requirements:
‘‘(A) In print advertisements, the required
disclosure shall appear in a type size, shade,
contrast, prominence, and location as to be
readily noticeable, readable, and comprehensible
to an ordinary consumer.
‘‘(B) In advertisements on the Internet,
the required disclosures shall appear in a type
size, shade, contrast, prominence, and location
as to be readily readable and comprehensible to
users and shall be separated from marketing
and promotional information and easily acces-
sible under the label or heading ‘Important In-
formation for Consumers’.
‘‘(C) In any other form of advertising, the
disclosures shall be made in accordance with
regulations prescribed by the Board which shall
require that the disclosures be made in a simi-
lar manner to the disclosures required under
subparagraphs (A) and (B) to the extent appro-
priate and practicable.
‘‘(c) ADVERTISEMENT FOR LEASE.—No adver-
tisement to promote or assist, directly or indirectly,
any consumer lease for personal use of any property
shall—
‘‘(1) state that no downpayment is required on
the lease when the lessor requires a capitalized cost
reduction payment, acquisition fee, property trade-
in, or other payment upon initiation of the lease, ex-
cept that payment of the first monthly payment on
the lease, and any refundable deposit shall not be
considered a downpayment;
‘‘(2) incorporate within the same advertisement
the amounts of any payment, downpayment, or other
term pertaining to both a lease transaction and to
an alternative installment credit transaction, except
with respect to print advertisements where lease in-
formation must be clearly and conspicuously sepa-
rated from nonlease information;
‘‘(3) include the amounts of any payment,
downpayment, or other term of leases that the lessor
does not customarily provide or will offer only to se-
lected consumers, or the amounts of any payment,
downpayment, or other term of leases of property
that the lessor does not have in sufficient quantities
to meet reasonably anticipated consumer demand for
the property at such advertised terms;
‘‘(4) display any lease term, including the
amount of any monthly payment, or downpayment
or no downpayment more prominently than the term
‘lease’ or more prominently than the amount of the
total payment required to be paid at the inception
of the lease; and
‘‘(5) fail to include a prominent statement of
the limitations on use of leased property, such as
mileage.
‘‘(d) LIMITATION.—Nothing contrary to, inconsistent
with, or in mitigation of the required disclosures shall be
used in any advertisement in any medium and no audio,
videos, or print technique shall be used that is likely to
obscure or detract significantly from the communication
of the disclosures.
‘‘(e) ADVERTISING
MEDIUM
NOT
LIABLE.—Any
owner or personnel of any medium, including the owner
of any home page on the Internet, in which an advertise-
ment appears or through which it is disseminated shall
not be liable under this section.’’
SEC. 165. STATUTORY PENALTIES.
Section 185(a) of the Consumer Credit Protection
Act (15 U.S.C. 1667d(a)) is amended by adding at the
end the following new sentence: ‘‘Notwithstanding the pre-
ceding sentence, a creditor shall only have liability deter-
mined under section 130(a)(2) for failing to comply with
the requirements of paragraph (2), (8), (9), or (10) of sec-
tion 182 or for failing to comply with disclosure require-
ments under State law for any term which the Board has
determined to be substantially the same in meaning under
section 186 as any of the terms referred to in section
182.’’.
TITLE II—STREAMLINING
GOVERNMENT REGULATIONS
Subtitle A—Regulatory Approval
Issues
SEC. 201. NO PRIOR APPROVAL REQUIRED FOR WELL CAP-
ITALIZED AND WELL MANAGED FINANCIAL
SERVICES HOLDING COMPANIES.
Section 4(j) of the Bank Holding Company Act of
1956 (12 U.S.C. 1843(j)) is amended—
(1) in paragraph (1), by striking ‘‘No’’ and in-
serting ‘‘Except as provided in paragraph (3), no’’;
and
(2) by adding at the end the following new
paragraphs:
‘‘(3) NO
NOTICE
REQUIRED
FOR
CERTAIN
TRANSACTIONS.—Notwithstanding paragraph (1), no
notice under subsection (c)(8) or (a)(2)(B) is re-
quired for a proposal by a financial services holding
company to engage in any activity or acquire or re-
tain the shares or assets of any company if the pro-
posal 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 financial services
holding company is well capitalized;
‘‘(ii) the lead depository institution of
such holding company is well capitalized;
‘‘(iii) well capitalized depository insti-
tutions control at least 80 percent of the
aggregate total risk-weighted assets of de-
pository institutions controlled by such
holding company; and
‘‘(iv) no depository institution con-
trolled by such holding company is under-
capitalized.
‘‘(B) MANAGERIAL CRITERIA.—
‘‘(i) WELL MANAGED.—At the time of
the transaction, the acquiring financial
services holding company, the lead deposi-
tory institution of such holding company,
and depository institutions that control at
least 80 percent of the aggregate total
risk-weighted assets of depository institu-
tions controlled by such holding company
are well managed.
‘‘(ii) LIMITATION
ON
POORLY
MAN-
AGED INSTITUTIONS.—No depository insti-
tution which is controlled by the acquiring
financial services holding company has re-
ceived any of the lowest 2 composite rat-
ings at the later of the institution’s most
recent examination or subsequent review.
‘‘(iii) RECENTLY ACQUIRED INSTITU-
TIONS.—Depository institutions acquired
by the financial services holding company
during the 12-month period ending on the
date of the proposed transaction may be
excluded for purposes of clause (ii) if—
‘‘(I) the financial services holding
company has developed a plan accept-
able to the appropriate Federal bank-
ing agency for the institution to re-
store the capital and management of
the institution; and
‘‘(II) all such depository institu-
tions represent, in the aggregate, less
than 25 percent of the total risk-
weighted assets of all depository insti-
tutions controlled by the financial
services holding company.
‘‘(C) ACTIVITIES PERMISSIBLE.—Following
consummation of the proposed transaction, the
financial services holding company engages di-
rectly or through a subsidiary solely in—
‘‘(i) activities that are permissible
under subsection (c)(8), as determined by
the Board by any regulation, order, or ad-
visory opinion under such subsection that
is in effect at the time of the proposed
transaction, subject to all of the restric-
tions, terms, and conditions of such sub-
section and such regulation, order, or advi-
sory opinion; and
‘‘(ii) such other activities as are other-
wise permissible under this Act, subject to
the restrictions, terms and conditions, in-
cluding any prior notice or approval re-
quirements, provided in this Act.
‘‘(D) SIZE OF ACQUISITION.—
‘‘(i) ASSET SIZE.—The book value of
the total risk-weighted assets acquired does
not exceed 10 percent of the consolidated
total risk-weighted assets of the acquiring
financial services 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
financial services holding company.
‘‘(E) NOTICE
NOT
OTHERWISE
WAR-
RANTED.—For proposals described in para-
graph (5)(C), the Board has not, before the
conclusion of the period described in such para-
graph, advised the financial services holding
company that a notice under paragraph (1) is
required.
‘‘(F) SPECIAL PROVISION FOR THE ACQUI-
SITION OF SAVINGS ASSOCIATIONS.—In the case
of an acquisition of the shares or assets of a
savings association in accordance with para-
graph (5), the lead insured depository institu-
tion subsidiary of the acquiring financial serv-
ices holding company and insured depository in-
stitution subsidiaries of such holding company
which control at least 80 percent of the aggre-
gate total risk-weighted assets of insured depos-
itory institutions controlled by such holding
company, have received a rating of ‘satisfactory’
or better in meeting community credit needs
pursuant to section 807 of the Community Re-
investment Act of 1977 during the most recent
examinations of such depository institutions.
‘‘(5) NOTIFICATION.—
‘‘(A) COMMENCEMENT OF ACTIVITIES AP-
PROVED BY RULE.—A financial services holding
company that qualifies under paragraph (4)
and proposes to engage de novo, directly or
through a subsidiary, in any activity that is per-
missible under subsection (c)(8), as determined
by the Board by regulation, may commence that
activity without prior notice to the Board.
‘‘(B) SUBSEQUENT
NOTICE.—A financial
services holding company that commences an
activity under subsection (c)(8) without prior
notice to the Board shall provide written notice
to the Board no later than 10 business days
after commencing the activity.
‘‘(C) ACTIVITIES
PERMITTED
BY
ORDER
AND ACQUISITIONS.—
‘‘(i) IN GENERAL.—At least 12 busi-
ness days prior to commencing any activity
(other than an activity described in sub-
paragraph (A)) or acquiring shares or as-
sets of any company in a proposal that
qualifies under paragraph (4), the financial
services holding company shall provide
written notice to the Board of the pro-
posal, unless the Board determines that no
notice or a shorter notice period is appro-
priate.
‘‘(ii) DESCRIPTION OF PROPOSED AC-
TIVITIES.—A notice under clause (i) shall
include a description of the proposed ac-
tivities and the terms of any proposed ac-
quisition.
‘‘(D) ACQUISITIONS OF SAVINGS ASSOCIA-
TIONS.—
‘‘(i) IN
GENERAL.—Notwithstanding
subparagraphs (A) and (C) and except as
provided in clause (ii), a financial services
holding company which proposes to acquire
the shares or assets of a savings associa-
tion pursuant to this paragraph shall, at
least 30 days before the acquisition—
‘‘(I) provide the Board written
notification of the proposal, and
‘‘(II) publish notice of the pro-
posal in a newspaper of general cir-
culation in the affected communities
for the purpose of soliciting comments
on performance under the Community
Reinvestment Act.
‘‘(ii) EXCEPTION IN CASE OF COMPLI-
ANCE WITH APPROVED STRATEGIC PLAN.—
Clause (i) shall not apply with respect to
a financial services holding company re-
ferred to in such clause if, at the time of
the transaction, the lead insured depository
institution of such holding company, and
insured depository institutions that control
at least 80 percent of the aggregate total
risk-weighted assets of insured depository
institutions controlled by such holding
company, have received a rating of ‘satis-
factory’ or better in the most recent eval-
uation of compliance with strategic plans
which have been—
‘‘(I) submitted by such institu-
tions to the appropriate Federal fi-
nancial supervisory agency (as defined
in section 803(1) of the Community
Reinvestment Act of 1977) in accord-
ance 
with 
regulations 
prescribed
under the Community Reinvestment
Act of 1977; and
‘‘(II) approved by each such
agency.
‘‘(6) ADJUSTMENT OF AMOUNTS.—The Board
may, by regulation, adjust the amounts and the
manner in which the percentage of depository insti-
tutions is calculated under subparagraph (B)(i),
(B)(iii)(II), or (D) of paragraph (4) if the Board de-
termines that any such adjustment is consistent with
safety and soundness and the purposes of this Act.
‘‘(7) EXPEDITED PROCEDURE FOR NEW ACTIVI-
TIES.—
‘‘(A) EXPEDITED
PREACQUISITION
RE-
VIEW.—After the end of the 12-day period re-
ferred to in paragraph (5)(C) and subject to
any final ruling under subparagraph (B), a fi-
nancial services holding company may acquire a
company engaged in activities that the company
believes are financial in nature for purposes of
subsection (c)(8) and that the Board has not
previously reviewed under such subsection if—
‘‘(i) the proposal qualifies under all of
the criteria in paragraph (4) other than
paragraph (4)(C);
‘‘(ii) the financial services holding
company provides the notice required
under paragraph (5)(C), and includes with
such notice an explanation of the facts and
circumstances that provide a reasonable
basis for concluding that the proposed ac-
tivities are financial in nature or incidental
to such financial activities; and
‘‘(iii) before the end of such 12-day
period, the Board has not—
‘‘(I) required a notice under
paragraph (1) with respect to the pro-
posed transaction; or
‘‘(II) advised the financial serv-
ices holding company that the com-
pany has failed to provide a reason-
able basis for concluding that the pro-
posed activities are financial in nature
or incidental to such financial activi-
ties.
‘‘(B) POSTACQUISITION REVIEW.—
‘‘(i) NOTICE
PROCEDURE.—A finan-
cial services holding company which is per-
mitted to make an acquisition under this
paragraph shall file a notice with the
Board in accordance with paragraph (1)
before the end of the 30-day period begin-
ning on the date of the consummation of
the acquisition.
‘‘(ii) LIMITED REVIEW.—The Board’s
review of a postconsummation notice re-
quired under this subparagraph shall be
limited to determining whether the pro-
posed activities are permissible under sub-
section (c)(8), including whether the pro-
posal meets the criteria in paragraph
(2)(A).
‘‘(iii) CONDITIONAL ACTION.—No pro-
vision of this paragraph shall be construed
as limiting in any way the authority of the
Board under this section to impose condi-
tions on the conduct of any activity or the
ownership of any company.
‘‘(iv) DIVESTITURE
OF
IMPERMIS-
SIBLE
ACTIVITIES.—If the Board deter-
mines that any proposed activity is not
permissible under subsection (c)(8), the fi-
nancial services holding company shall ter-
minate the activity or divest the company
acquired in reliance on this paragraph be-
fore the end of the 2-year period beginning
on the date of such determination.
‘‘(C) INITIAL DECISION NOT PREJUDICIAL
TO SUBSEQUENT DETERMINATION.—A decision
by the Board under subparagraph (A) not to
require a notice under paragraph (1) during the
12-day period referred to in such subparagraph
shall not prejudice the Board’s decision under
subparagraph (B).’’.
SEC. 202. STREAMLINED BANK ACQUISITIONS BY WELL
CAPITALIZED AND WELL MANAGED BANKING
ORGANIZATIONS.
Section 3 of the Bank Holding Company Act (12
U.S.C. 1842) is amended by adding at the end the follow-
ing new subsection:
‘‘(h) NO APPROVAL REQUIRED FOR CERTAIN TRANS-
ACTIONS.—
‘‘(1) IN GENERAL.—Notwithstanding paragraph
(3) or (5) of subsection (a) and subject to para-
graphs (5) and (6), an acquisition of shares by a
registered bank holding company, or a merger or
consolidation between registered bank holding com-
panies, shall be deemed approved at the conclusion
of the period specified in subparagraph (G) if all of
the following conditions have been met:
‘‘(A) FINANCIAL
AND
MANAGERIAL
CRI-
TERIA.—
‘‘(i) WELL CAPITALIZED BANK HOLD-
ING COMPANY.—Both at the time of and
immediately after the proposed trans-
action, the acquiring bank holding com-
pany is well capitalized.
‘‘(ii) WELL
CAPITALIZED
LEAD
IN-
SURED
DEPOSITORY
INSTITUTION.—Both
at the time of and immediately after the
proposed transaction, the lead insured de-
pository institution of the acquiring bank
holding company is well capitalized.
‘‘(iii) CAPITAL
OF
OTHER
INSURED
DEPOSITORY INSTITUTIONS.—At the time
of the transaction, well capitalized insured
depository institutions control at least 80
percent of the aggregate total risk-weight-
ed assets of insured depository institutions
controlled by the acquiring bank holding
company.
‘‘(iv) 
NO
UNDERCAPITALIZED
IN-
SURED
DEPOSITORY
INSTITUTIONS.—At
the time of the transaction, no insured de-
pository institution controlled by the ac-
quiring bank holding company is under-
capitalized.
‘‘(v) WELL MANAGED.—
‘‘(I) IN GENERAL.—At the time
of the transaction, the acquiring bank
holding company, its lead insured de-
pository institution, and insured de-
pository institutions that control at
least 90 percent of the aggregate total
risk-weighted assets of insured deposi-
tory institutions controlled by such
holding company are well managed.
‘‘(II) NO POORLY MANAGED IN-
STITUTIONS.—Except with respect to
insured depository institutions de-
scribed in paragraph (2), no insured
depository institution controlled by
the acquiring bank holding company
has received 1 of the 2 lowest compos-
ite ratings at the later of the institu-
tion’s most recent examination or sub-
sequent review.
‘‘(B) CRA RATINGS.—Except with respect
to insured depository institutions described in
paragraph (3), the lead insured depository insti-
tution subsidiary of the acquiring financial serv-
ices holding company and insured depository in-
stitution subsidiaries of such holding company
which control at least 80 percent of the aggre-
gate total risk-weighted assets of insured depos-
itory institutions controlled by such holding
company have received a rating of ‘satisfactory’
or better in meeting community credit needs
pursuant to section 807 of the Community Re-
investment Act of 1977 during the most recent
examinations of such depository institutions.
‘‘(C) 
COMPETITIVE
CRITERIA.—Con-
summation of the proposal complies with guide-
lines established by the Board by regulation,
after consultation with the Attorney General,
that identify proposals that are not likely to
have a significantly adverse effect on competi-
tion in any relevant market.
‘‘(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.
‘‘(E) INTERSTATE
ACQUISITIONS.—Board
approval of the transaction is not prohibited
under subsection (d).
‘‘(F) COMPLIANCE
CRITERION.—During
the 12-month period ending on the date of the
transaction, no administrative enforcement ac-
tion has been commenced, and no cease and de-
sist order has been issued pursuant to section
8 of the Federal Deposit Insurance Act, against
any bank holding company involved in the
transaction or any depository institution sub-