I 
109TH CONGRESS 
1ST SESSION H. R. 3505
To provide regulatory relief and improve productivity for insured depository 
institutions, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 28, 2005
Mr. HENSARLING (for himself and Mr. MOORE of Kansas) introduced the 
following bill; which was referred to the Committee on Financial Services 
A BILL 
To provide regulatory relief and improve productivity for 
insured depository institutions, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Financial Services Regulatory Relief Act of 2005’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows:
Sec. 1. Short title; table of contents. 
TITLE I—NATIONAL BANK PROVISIONS 
Sec. 101. National bank directors. 
Sec. 102. Voting in shareholder elections. 
Sec. 103. Simplifying dividend calculations for national banks.
Sec. 104. Repeal of obsolete limitation on removal authority of the Comptroller 
of the Currency. 
Sec. 105. Repeal of intrastate branch capital requirements. 
Sec. 106. Clarification of waiver of publication requirements for bank merger 
notices. 
Sec. 107. Equal treatment for Federal agencies of foreign banks. 
Sec. 108. Maintenance of a Federal branch and a Federal agency in the same 
State. 
Sec. 109. Business organization flexibility for national banks. 
Sec. 110. Clarification of the main place of business of a national bank. 
Sec. 111. Capital equivalency deposits for Federal branches and agencies of for-
eign banks. 
TITLE II—SAVINGS ASSOCIATION PROVISIONS 
Sec. 201. Parity for savings associations under the Securities Exchange Act of 
1934 and the Investment Advisers Act of 1940. 
Sec. 202. Investments by Federal savings associations authorized to promote 
the public welfare. 
Sec. 203. Mergers and consolidations of Federal savings associations with non-
depository institution affiliates. 
Sec. 204. Repeal of statutory dividend notice requirement for savings associa-
tion subsidiaries of savings and loan holding companies. 
Sec. 205. Modernizing statutory authority for trust ownership of savings asso-
ciations. 
Sec. 206. Repeal of overlapping rules governing purchased mortgage servicing 
rights. 
Sec. 207. Restatement of authority for Federal savings associations to invest in 
small business investment companies. 
Sec. 208. Removal of limitation on investments in auto loans. 
Sec. 209. Selling and offering of deposit products. 
Sec. 210. Funeral- and cemetery-related fiduciary services. 
Sec. 211. Repeal of qualified thrift lender requirement with respect to out-of-
state branches. 
Sec. 212. Small business and other commercial loans. 
Sec. 213. Clarifying citizenship of Federal savings associations for Federal 
court jurisdiction. 
Sec. 214. Increase in limits on commercial real estate loans. 
Sec. 215. Repeal of one limit on loans to one borrower. 
Sec. 216. Savings association credit card banks. 
Sec. 217. Interstate acquisitions by S&L holding companies. 
TITLE III—CREDIT UNION PROVISIONS 
Sec. 301. Privately insured credit unions authorized to become members of a 
Federal home loan bank. 
Sec. 302. Leases of land on Federal facilities for credit unions. 
Sec. 303. Investments in securities by Federal credit unions. 
Sec. 304. Increase in general 12-year limitation of term of Federal credit union 
loans to 15 years. 
Sec. 305. Increase in 1 percent investment limit in credit union service organi-
zations. 
Sec. 306. Member business loan exclusion for loans to nonprofit religious orga-
nizations. 
Sec. 307. Check cashing and money transfer services offered within the field of 
membership.
Sec. 308. Voluntary mergers involving multiple common-bond credit unions. 
Sec. 309. Conversions involving common-bond credit unions. 
Sec. 310. Credit union governance. 
Sec. 311. Providing the National Credit Union Administration with greater 
flexibility in responding to market conditions. 
Sec. 312. Exemption from pre-merger notification requirement of the Clayton 
Act. 
Sec. 313. Treatment of credit unions as depository institutions under securities 
laws. 
Sec. 314. Clarification of definition of net worth under certain circumstances 
for purposes of prompt corrective action. 
Sec. 315. Amendments relating to nonfederally insured credit unions. 
TITLE IV—DEPOSITORY INSTITUTION PROVISIONS 
Sec. 401. Easing restrictions on interstate branching and mergers. 
Sec. 402. Statute of limitations for judicial review of appointment of a receiver 
for depository institutions. 
Sec. 403. Reporting requirements relating to insider lending. 
Sec. 404. Amendment to provide an inflation adjustment for the small deposi-
tory institution exception under the Depository Institution 
Management Interlocks Act. 
Sec. 405. Enhancing the safety and soundness of insured depository institu-
tions. 
Sec. 406. Investments by insured savings associations in bank service compa-
nies authorized. 
Sec. 407. Cross guarantee authority. 
Sec. 408. Golden parachute authority and nonbank holding companies. 
Sec. 409. Amendments relating to change in bank control. 
Sec. 410. Community reinvestment credit for ESOPS and EWOCS. 
TITLE V—DEPOSITORY INSTITUTION AFFILIATES PROVISIONS 
Sec. 501. Clarification of cross marketing provision. 
Sec. 502. Amendment to provide the Federal Reserve Board with discretion 
concerning the imputation of control of shares of a company 
by trustees. 
Sec. 503. Eliminating geographic limits on thrift service companies. 
Sec. 504. Clarification of scope of applicable rate provision. 
Sec. 505. Savings associations acting as agents for affiliated depository institu-
tions. 
TITLE VI—BANKING AGENCY PROVISIONS 
Sec. 601. Waiver of examination schedule in order to allocate examiner re-
sources. 
Sec. 602. Interagency data sharing. 
Sec. 603. Penalty for unauthorized participation by convicted individual. 
Sec. 604. Amendment permitting the destruction of old records of a depository 
institution by the FDIC after the appointment of the FDIC as 
receiver. 
Sec. 605. Modernization of recordkeeping requirement. 
Sec. 606. Streamlining reports of condition. 
Sec. 607. Expansion of eligibility for 18-month examination schedule for com-
munity banks. 
Sec. 608. Short form reports of condition for certain community banks.
Sec. 609. Clarification of extent of suspension, removal, and prohibition author-
ity of Federal banking agencies in cases of certain crimes by 
institution-affiliated parties. 
Sec. 610. Streamlining depository institution merger application requirements. 
Sec. 611. Inclusion of Director of the Office of Thrift Supervision in list of 
banking agencies regarding insurance customer protection reg-
ulations. 
Sec. 612. Protection of confidential information received by Federal banking 
regulators from foreign banking supervisors. 
Sec. 613. Prohibition on participation by convicted individual. 
Sec. 614. Clarification that notice after separation from service may be made 
by an order. 
Sec. 615. Enforcement against misrepresentations regarding FDIC deposit in-
surance coverage. 
Sec. 616. Changes required to small bank holding company policy statement on 
assessment of financial and managerial factors. 
Sec. 617. Exception to annual privacy notice requirement under the Gramm-
Leach-Bliley Act. 
Sec. 618. Biennial reports on the status of agency employment of minorities 
and women. 
Sec. 619. Coordination of State examination authority. 
Sec. 620. Nonwaiver of privileges. 
Sec. 621. Right to Financial Privacy Act of 1978 amendment. 
TITLE VII—‘‘BSA’’ COMPLIANCE BURDEN REDUCTION 
Sec. 701. Reform of the currency transaction report exemption system. 
Sec. 702. Reduction in inconsistencies in monetary transaction recordkeeping 
and reporting enforcement and examination requirements. 
Sec. 703. Additional reforms relating to monetary transaction and record-
keeping requirements applicable to financial institutions. 
Sec. 704. Study by Comptroller General. 
Sec. 705. Feasibility study required. 
TITLE VIII—CLERICAL AND TECHNICAL AMENDMENTS 
Sec. 801. Clerical amendments to the Home Owners’ Loan Act. 
Sec. 802. Technical corrections to the Federal Credit Union Act. 
Sec. 803. Other technical corrections. 
Sec. 804. Repeal of obsolete provisions of the Bank Holding Company Act of 
1956.
TITLE I—NATIONAL BANK 
PROVISIONS 
SEC. 101. NATIONAL BANK DIRECTORS. 
Section 5146 of the Revised Statutes of the United 
States (12 U.S.C. 72) is amended—
(1) by striking ‘‘SEC. 5146. Every director 
must during’’ and inserting the following:
‘‘SEC. 5146. REQUIREMENTS FOR BANK DIRECTORS. 
‘‘(a) RESIDENCY REQUIREMENTS.—Every director of 
a national bank shall, during’’; 
(2) by striking ‘‘total number of directors. 
Every director must own in his or her own right’’ 
and inserting ‘‘total number of directors. 
‘‘(b) INVESTMENT REQUIREMENT.—
‘‘(1) IN
GENERAL.—Every director of a na-
tional bank shall own, in his or her own right,’’; and 
(3) by adding at the end the following new 
paragraph: 
‘‘(2) EXCEPTION FOR SUBORDINATED DEBT IN 
CERTAIN
CASES.—In lieu of the requirements of 
paragraph (1) relating to the ownership of capital 
stock in the national bank, the Comptroller of the 
Currency may, by regulation or order, permit an in-
dividual to serve as a director of a national bank 
that has elected, or notifies the Comptroller of the 
bank’s intention to elect, to operate as a S corpora-
tion pursuant to section 1362(a) of the Internal 
Revenue Code of 1986, if that individual holds debt 
of at least $1,000 issued by the national bank that 
is subordinated to the interests of depositors and 
other general creditors of the national bank.’’.