IB
Union Calendar No. 238
105TH CONGRESS
2D SESSION
H. R. 3116
[Report No. 105–417]
To address the Year 2000 computer problems with regard to financial institu-
tions, to extend examination parity to the Director of the Office of
Thrift Supervision and the National Credit Union Administration, and
for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 28, 1998
Mr. LEACH (for himself, Mr. CASTLE, Mr. BACHUS, Mr. BAKER, and Mrs.
ROUKEMA) introduced the following bill; which was referred to the Com-
mittee on Banking and Financial Services
FEBRUARY 24, 1998
Additional sponsor: Mr. LAZIO of New York
FEBRUARY 24, 1998
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed in italic]
[For text of introduced bill, see copy of bill as introduced on January 28, 1998]
A BILL
To address the Year 2000 computer problems with regard
to financial institutions, to extend examination parity
to the Director of the Office of Thrift Supervision and
the National Credit Union Administration, and for other
purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; DEFINITION.
(a) SHORT TITLE.—This Act may be cited as the ‘‘Ex-
amination Parity and Year 2000 Readiness for Financial
Institutions Act’’.
(b) YEAR 2000 COMPUTER PROBLEM DEFINED.—For
purposes of this Act, the term ‘‘Year 2000 computer prob-
lem’’ means, with respect to information technology, any
problem which prevents such technology from accurately
processing, calculating, comparing, or sequencing date or
time data—
(1) from, into, or between—
(A) the 20th and 21st centuries; or
(B) the years 1999 and 2000; or
(2) with regard to leap year calculations.
SEC. 2. FINDINGS.
The Congress finds as follows:
(1) The Year 2000 computer problem poses a se-
rious challenge to the American economy, including
the Nation’s banking and financial services indus-
tries.
(2) Thousands of banks, savings associations,
and credit unions rely heavily on internal informa-
tion technology and computer systems, as well as out-
side service providers, for mission-critical functions,
such as check clearing, direct deposit, accounting,
automated teller machine networks, credit card proc-
essing, and data exchanges with domestic and inter-
national borrowers, customers, and other financial in-
stitutions.
(3) Federal financial regulatory agencies must
have sufficient examination authority to ensure that
the safety and soundness of the Nation’s financial in-
stitutions will not be at risk.
SEC. 3. SEMINARS AND MODEL APPROACHES TO YEAR 2000
COMPUTER PROBLEM.
(a) SEMINARS.—
(1) IN GENERAL.—Each Federal banking agency
and the National Credit Union Administration Board
shall offer seminars to all depository institutions and
credit unions under the jurisdiction of such agency on
the implication of the Year 2000 computer problem
for—
(A) the safe and sound operations of such
depository institutions and credit unions; and
(B) transactions with other financial insti-
tutions, including Federal reserve banks and
Federal home loan banks.
(2) CONTENT AND SCHEDULE.—The content and
schedule of seminars offered pursuant to paragraph
(1) shall be determined by each Federal banking agen-
cy and the National Credit Union Administration
Board taking into account the resources and exam-
ination priorities of such agency.
(b) MODEL APPROACHES.—
(1) IN GENERAL.—Each Federal banking agency
and the National Credit Union Administration Board
shall make available to all depository institutions and
credit unions under the jurisdiction of such agency
model approaches to common Year 2000 computer
problems, such as model approaches with regard to
project management, vendor contracts, testing re-
gimes, and business continuity planning.
(2) VARIETY
OF
APPROACHES.—In developing
model approaches to the Year 2000 computer problem
pursuant to paragraph (1), each Federal banking
agency and the National Credit Union Administra-
tion Board shall take into account the need to develop
a variety of approaches to correspond to the variety
of depository institutions or credit unions within the
jurisdiction of the agency.
(c) COOPERATION.—In carrying out this section, the
Federal banking agencies and the National Credit Union
Administration Board may cooperate and coordinate ac-
tivities with each other, the Financial Institutions Exam-
ination Council, and appropriate organizations represent-
ing depository institutions or credit unions.
(d) FEDERAL BANKING AGENCY DEFINED.—For pur-
poses of this section, the term ‘‘Federal banking agency’’
has the meaning given to such term in section 3(z) of the
Federal Deposit Insurance Act.
SEC. 4. REGULATION AND EXAMINATION OF SERVICE COR-
PORATIONS CONTROLLED BY SAVINGS ASSO-
CIATIONS AND SERVICE PROVIDERS.
Section 5(d) of the Home Owners’ Loan Act (12 U.S.C.
1464(d)) is amended by adding at the end the following
new paragraph:
‘‘(7) REGULATION AND EXAMINATION OF SERVICE
CORPORATIONS, SUBSIDIARIES, AND SERVICE PROVID-
ERS.—
‘‘(A) GENERAL
EXAMINATION
AND
REGU-
LATORY AUTHORITY.—
‘‘(i) IN GENERAL.—A service corpora-
tion or subsidiary that is owned in whole or
in part by a savings association shall be
subject to examination and regulation by
the Director to the same extent as such sav-
ings association.
‘‘(ii) EXAMINATION BY OTHER BANKING
AGENCIES.—The Director may authorize
any other Federal banking agency that su-
pervises any other person who maintains an
ownership interest in the service corpora-
tion or subsidiary to make an examination
of the corporation or subsidiary for pur-
poses of clause (i).
‘‘(B) APPLICABILITY OF SECTION 8 OF THE
FEDERAL DEPOSIT INSURANCE ACT.—
‘‘(i) IN GENERAL.—A service corpora-
tion or subsidiary that is owned in whole or
in part by a savings association shall be
subject to the provisions of section 8 of the
Federal Deposit Insurance Act as if the
service corporation or subsidiary were an
insured depository institution.
‘‘(ii) APPROPRIATE FEDERAL BANKING
AGENCY.—For purposes of clause (i), the
Director shall be the appropriate Federal
banking agency with regard to a service
corporation or subsidiary described in such
clause.
‘‘(C) SERVICE
PERFORMED
BY
CONTRACT
OR OTHERWISE.—Notwithstanding subparagraph
(A), if a savings association or subsidiary, or
any savings and loan holding company, affiliate,
or entity referred to in section 8(b)(9) of the Fed-
eral Deposit Insurance Act, that is regularly ex-
amined or subject to examination by the Direc-
tor, causes to be performed for itself, by contract
or otherwise, any services authorized under this
Act or any applicable State law, whether on or
off its premises—
‘‘(i) such performance shall be subject
to regulation and examination by the Direc-
tor to the same extent as if such services
were being performed by the savings asso-
ciation itself on its own premises; and
‘‘(ii) the savings association, service
corporation, subsidiary, holding company,
affiliate, or entity shall notify the Director
of the existence of the service relationship
before the end of the 30-day period begin-
ning on the earlier of—
‘‘(I) the date on which the con-
tract is entered into; or
‘‘(II) the date on which the per-
formance of the service is initiated.
‘‘(D) ADMINISTRATION
BY
THE
DIREC-
TOR.—The Director may prescribe such regula-
tions and issue such orders, including regula-
tions prescribed or orders issued pursuant to sec-
tion 8 of the Federal Deposit Insurance Act, as
may be necessary to enable the Director to ad-
minister and carry out the purposes of this
paragraph and prevent evasions of this para-
graph.’’.
SEC. 5. REGULATION AND EXAMINATION OF CREDIT UNION
ORGANIZATIONS AND SERVICE PROVIDERS.
Title II of the Federal Credit Union Act (12 U.S.C.
1781 et seq.) is amended by inserting after section 206 the
following new section:
‘‘SEC. 206A. REGULATION AND EXAMINATION OF CREDIT
UNION ORGANIZATIONS AND SERVICE PRO-
VIDERS.
‘‘(a) GENERAL EXAMINATION AND REGULATORY AU-
THORITY.—
‘‘(1) IN GENERAL.—A credit union organization
shall be subject to examination and regulation by the
Board to the same extent as an insured credit union.
‘‘(2) EXAMINATION BY OTHER FEDERAL AGEN-
CIES.—The Board may authorize—
‘‘(A) any Federal regulatory agency that su-
pervises any activity of a credit union organiza-
tion; or
‘‘(B) any Federal banking agency (as de-
fined in section 3(z) of the Federal Deposit In-
surance Act) that supervises any other person
who maintains an ownership interest in a credit
union organization,
to make an examination of the credit union organiza-
tion for purposes of paragraph (1).
‘‘(3) CREDIT UNION ORGANIZATION DEFINED.—
For purposes of this section, the term ‘credit union
organization’ means any entity that—
‘‘(A) is not a credit union;
‘‘(B) is an entity in which an insured cred-
it union may lawfully hold an ownership inter-
est or investment; and
‘‘(C) is owned in whole or in part by an in-
sured credit union.
‘‘(b) APPLICABILITY OF SECTION 206.—A credit union
organization shall be subject to the provisions of section 206
as if the credit union organization were an insured credit
union.
‘‘(c) SERVICE PERFORMED BY CONTRACT OR OTHER-
WISE.—Notwithstanding subsection (a), if an insured credit
union or a credit union organization that is regularly ex-
amined or subject to examination by the Board, causes to
be performed for itself, by contract or otherwise, any services
authorized under this Act or any applicable State law,
whether on or off its premises—
‘‘(1) the performance of such services shall be
subject to regulation and examination by the Board
to the same extent as if such services were being per-
formed by the insured credit union itself on its own
premises; and
‘‘(2) the insured credit union or credit union or-
ganization shall notify the Board of the existence of
the service relationship before the end of the 30-day
period beginning on the earlier of—
‘‘(A) the date on which the contract is en-
tered into; or
‘‘(B) the date on which the performance of
the service is initiated.
‘‘(d) ADMINISTRATION BY THE BOARD.—The Board
may prescribe such regulations and issue such orders as
may be necessary to enable the Board to administer and
carry out the purposes of this section and prevent evasions
of this section.
‘‘(e) EXPIRATION OF AUTHORITY.—This section, and
all power and authority of the Board under this section,
shall cease to be effective as of December 31, 2001.’’.
Union Calendar No. 238
105TH CONGRESS
2D SESSION
H. R. 3116
[Report No. 105–417]
A BILL
To address the Year 2000 computer problems with
regard to financial institutions, to extend exam-
ination parity to the Director of the Office of
Thrift Supervision and the National Credit
Union Administration, and for other purposes.
FEBRUARY 24, 1998
Reported with an amendment, committed to the Commit-
tee of the Whole House on the State of the Union, and
ordered to be printed