I
104TH CONGRESS
1ST SESSION
H. R. 290
To institute management reforms and eliminate conflicts-of-interest on boards
of directors of depository institutions and depository holding companies,
and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 4, 1995
Mr. KANJORSKI introduced the following bill; which was referred to the
Committee on Banking and Financial Services
A BILL
To institute management reforms and eliminate conflicts-
of-interest on boards of directors of depository institu-
tions and depository holding companies, and for other
purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This act may be cited as the ‘‘Management and Con-
flict of Interest Reform Amendments of 1995’’.
SEC. 2. DEFINITIONS.
(a) Section 202 of the Depository Institution Man-
agement Interlocks Act (12 U.S.C. 3201) is amended—
(1) by amending paragraph (1) to read as fol-
lows:
‘‘(1) the term ‘depository institution’ means a
commercial bank, a foreign bank, a savings bank, a
trust company, a savings association, a building and
loan association, a homestead association, a coopera-
tive bank, an industrial bank, or a credit union;’’;
(2) in paragraph (5), by striking ‘‘and’’;
(3) in paragraph (6), by striking the period and
inserting ‘‘; and’’; and
(4) by adding at the end the following:
‘‘(7) the term ‘outside counsel’ means any indi-
vidual who is not a full time employee of the deposi-
tory institution or depository holding company and
who receives compensation, either directly or
through a law firm, partnership, or corporation, for
legal services or advice rendered to the depository in-
stitution or depository holding company or any of its
subsidiaries, affiliates, or holding companies;
‘‘(8) the term ‘outside accountant’ means any
individual who is not a full time employee of the de-
pository institution or depository holding company
and who receives compensation, either directly or
through an accounting firm, partnership, or corpora-
tion, for accounting services or advice rendered to
the depository institution or any of its subsidiaries,
affiliates, or holding companies;
‘‘(9) the term ‘outside director’ means an indi-
vidual who is a member of the board of directors
who is not an employee or officer with management
functions of either the depository institution or de-
pository holding company, or any of its subsidiaries,
affiliates, or holding companies; and
‘‘(10) the term ‘control’ has the meaning given
to such term in section 2 of the Bank Holding Com-
pany Act of 1956 for bank holding companies and
section 10(a)(2) of the Home Owners’ Loan Act for
savings and loan holding companies.’’.
(b) Section 207(2) of the Depository Institution Man-
agement Interlocks Act (12 U.S.C. 3206(2)) is amended
to read as follows:
‘‘(2) the Board of Governors of the Federal Re-
serve System with respect to State banks which are
members of the Federal Reserve System, foreign
banks, and bank holding companies,’’.
SEC. 3. DUAL SERVICE OF OUTSIDE COUNSEL AND AC-
COUNTANTS ON BOARD OF DIRECTORS PRO-
HIBITED.
The Depository Institution Management Interlocks
Act (12 U.S.C. 3201 et seq.) is amended by adding at
the end the following new section:
‘‘SEC. 211. DUAL SERVICE OF OUTSIDE COUNSEL AND AC-
COUNTANTS ON BOARD OF DIRECTORS PRO-
HIBITED.
‘‘No individual who is an outside counsel or outside
accountant of a depository institution or a depository hold-
ing company may serve as a member of board of directors
of that depository institution or depository holding com-
pany or any of its subsidiaries, affiliates, or holding com-
panies.’’.
SEC. 4. OWNERSHIP DISCLOSURES TO BOARD OF DIREC-
TORS.
The Depository Institution Management Interlocks
Act (12 U.S.C. 3201 et seq.) (as amended by this act)
is amended by adding at the end the following new section:
‘‘SEC. 212. OWNERSHIP DISCLOSURES TO BOARD OF DIREC-
TORS.
‘‘Not less than once each calendar year each deposi-
tory institution and depository holding company shall pro-
vide to each member of its board of directors, and to each
member of the board of directors of any depository institu-
SEC. 6. BOARD OF DIRECTORS CONTROL BY OUTSIDE DI-
RECTORS.
The Depository Institution Management Interlocks
Act (12 U.S.C. 3201 et seq.) (as amended by this act)
is amended by adding at the end the following new section:
‘‘SEC. 214. BOARD OF DIRECTORS CONTROL BY OUTSIDE DI-
RECTORS.
‘‘A majority of the voting members of the board of
directors of each depository institution and each deposi-
tory holding company shall be outside directors.’’.
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