I
103D CONGRESS
1ST SESSION
H. R. 3129
To allow interstate banking through acquisitions of existing banks, and for
other purposes.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 23, 1993
Mrs. MALONEY introduced the following bill; which was referred to the
Committee on Banking, Finance and Urban Affairs
A BILL
To allow interstate banking through acquisitions of existing
banks, 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 ‘‘Interstate Bank Con-
solidation Act of 1993’’.
SEC. 2. CONVERSION OF BANKS TO BRANCHES.
(a) IN GENERAL.—Section 3 of the Bank Holding
Company Act of 1956 (12 U.S.C. 1842) is amended by
adding at the end the following new subsection:
‘‘(h) INTERSTATE COMBINATIONS.—
‘‘(1) IN GENERAL.—
‘‘(A) COMBINATIONS
AUTHORIZED.—Sub-
ject to paragraphs (6) and (7), on or after June
1, 1995, a bank holding company having sub-
sidiary banks located in more than 1 State may
combine 2 or more of such banks into a single,
resulting bank by means of a merger, consolida-
tion, or other transaction.
‘‘(B) SURRENDER
OF
CHARTER
AFTER
COMBINATION.—On the date on which a com-
bination authorized by this paragraph becomes
effective, the charters of the banks (other than
that of the resulting bank) that have been com-
bined in accordance with subparagraph (A) into
the resulting bank shall be surrendered to the
regulatory authority that issued the charters.
‘‘(C) EFFECT OF STATE PROHIBITION OF
COMBINATIONS.—If, during the period begin-
ning on June 1, 1995, and ending on the expi-
ration of 3 years after the date of enactment of
the Interstate Bank Consolidation Act of 1993,
a combination authorized by subparagraph (A)
is completed in a host State that elects to pro-
hibit interstate combinations under paragraph
(6), the host State may require such branch to
be promptly converted back into a bank as the
bank existed prior to such combination.
‘‘(D) NO COMBINATIONS WITHIN STATE IN
CONTRAVENTION OF STATE LAW.—This para-
graph shall not be construed as authorizing the
merger, consolidation, or other combination of 2
or more banks which are located within a State
if the law of such State prohibits such combina-
tion of banks located within such State.
‘‘(2) APPLICABILITY.—A combination under
paragraph (1) may only be carried out through a
merger, consolidation, or other transaction that is
undertaken—
‘‘(A) by a bank holding company that is
adequately capitalized; or
‘‘(B) subject to all other provisions of this
subsection, by a bank holding company that is
critically undercapitalized if—
‘‘(i) the transaction is approved as
part of a capital restoration plan required
under section 38 of the Federal Deposit
Insurance Act;
‘‘(ii) such plan contains not less than
1 element in addition to the transaction;
and
‘‘(iii) the transaction will result in a
demonstrable and material improvement in
the financial condition of the bank holding
company.
‘‘(3) ACTIVITIES OF THE RESULTING BANK.—
‘‘(A) ADDITIONAL BRANCHES.—Following
any combination under paragraph (1), the re-
sulting bank may establish, acquire, and oper-
ate additional branches at any location where
the resulting bank or a combined bank could
have established or acquired and operated a
branch under the applicable Federal or State
law if the bank had not been a party to such
combination.
‘‘(B) INTRASTATE BRANCHING.—Except as
expressly provided in this subsection, no provi-
sion of this subsection shall be construed as
amending, repealing, or superseding, either ex-
pressly or by implication, any Federal or State
law relating to the establishment, acquisition, or
operation of intrastate branches by national or
State banks.
‘‘(C) CONDITIONS.—Before granting ap-
proval to an application for a combination
under paragraph (1), the appropriate Federal
banking agency shall consider each bank’s rat-
ing under the Community Reinvestment Act of
1977 and the views of the appropriate State
bank regulatory authorities regarding each
bank’s compliance with applicable State com-
munity reinvestment laws.
‘‘(D) IMPOSITION
OF
SHARES
TAX
BY
HOST STATES.—In order to assure that an out-
of-State bank contributes a fair share to a host
State’s revenues, if any branch of an out-of-
State bank established pursuant to paragraph
(1) or subparagraph (A) of this paragraph con-
tinues in operation, a proportionate amount of
the value of the shares of the out-of-State bank
may be subject to any bank shares tax levied or
imposed by any host State or any political sub-
division of such State based upon an allocation
of net income, capital or net worth, and other
factors employed in computing such value pur-
suant to an allocation method adopted by the
host State’s taxing authorities, if such method
does not unconstitutionally discriminate against
out-of-State banks or bank holding companies.
‘‘(4) ACTIVITIES OF BRANCHES.—A State bank
that establishes any branch in a host State in ac-
cordance with paragraph (1) or (3)(A) may not con-
duct any activity at such branch that is not per-
mitted for banks chartered by the host State.
‘‘(5) APPLICABLE LAW.—
‘‘(A) IN GENERAL.—
‘‘(i) NATIONAL
BANK
BRANCHES.—
Any branch of a national bank that is es-
tablished as the result of a combination in
accordance with paragraph (1) or para-
graph (3)(A) shall be subject to the laws of
the host State with respect to intrastate
branching, consumer protection, fair lend-
ing, and community reinvestment as if the
branch were a branch of a national bank
the main office of which is in that State.
‘‘(ii) STATE
BANK
BRANCHES.—Any
branch of a State bank that is established
as the result of a combination in accord-
ance with paragraph (1) or paragraph
(3)(A) shall be subject to the laws of the
host State with respect to intrastate
branching, consumer protection, fair lend-
ing, and community reinvestment as if the
branch were a branch of a bank which is
chartered under the laws of such State and
has offices only in such State.
‘‘(B) FILING REQUIREMENT.—
‘‘(i) IN GENERAL.—A host State may
require any out-of-State bank that wishes
to establish a branch within the host State
as a result of a combination authorized by
paragraph (1) to comply with filing re-
quirements that—
‘‘(I) are not discriminatory in na-
ture; and
‘‘(II) are similar in their effect to
those that are imposed on an out-of-
State corporation which is not en-
gaged in the business of banking and
seeks to engage in business in the
host State.
‘‘(ii) FAILURE TO COMPLY.—The host
State may preclude any bank referred to in
clause (i) from establishing or operating a
branch within the host State as the result
of a combination authorized by paragraph
(1) if that bank or its branch materially
fails to comply with the filing requirements
established by the host State.
‘‘(6) STATE
ELECTION
TO
PROHIBIT
INTER-
STATE
COMBINATIONS.—Paragraph (1) shall not
apply to a bank which is located in a State that has
enacted, during the period beginning on January 1,
1990, and ending 3 years after the date of enact-
ment of the Interstate Bank Consolidation Act of
1993, a law that—
‘‘(A) applies equally to all national banks
and State banks; and
‘‘(B) expressly prohibits interstate branch-
ing or the interstate combinations otherwise au-
thorized under paragraph (1) with respect to
banks located in such State.
‘‘(7) STATE ELECTION TO PERMIT INTERSTATE
COMBINATIONS.—
‘‘(A) COMBINATIONS
PRIOR
TO
JUNE
1,
1995.—
‘‘(i) IN
GENERAL.—A combination
under paragraph (1) may be undertaken
before June 1, 1995, if each of the States
in which the banks that are to be combined
into a single, resulting bank are located ei-
ther has in effect on the date of enactment
of this subsection or enacts prior to June
1, 1995, a law expressly permitting inter-
state combinations by national and State
banks.
‘‘(ii) ADDITIONAL CONDITIONS.—Sub-
ject to clause (iii), a State described in
clause (i) may impose other conditions on
a branch of a resulting bank located in
that State if—
‘‘(I) the conditions do not dis-
criminate or have the effect of dis-
criminating against out-of-State banks
or bank holding companies; and
‘‘(II) the imposition of the condi-
tions is not preempted by Federal law
regarding the same subject.
‘‘(iii) CONDITIONS
NOT
APPLICABLE
TO COMBINATIONS AFTER MAY 31, 1995.—
No condition otherwise permitted under
clause (ii) may be imposed by any State on
a branch of a bank resulting from a merg-
er, consolidation, or other transaction au-
thorized under paragraph (1) which is con-
summated after May 31, 1995.
‘‘(B) COMBINATIONS
AFTER
JUNE
1,
1993.—A State that originally elected to pro-
hibit interstate combinations as described in
paragraph (6) may elect at any later time to
permit 
interstate 
combinations 
authorized
under paragraph (1) if such State enacts a law
expressly permitting interstate combinations by
all national and State banks.
‘‘(8) LIMITATIONS.—No provision of paragraph
(1) shall be construed as affecting the applicability
of any Federal or State antitrust law that does not
discriminate against, and does not have the effect of
discriminating against, out-of-State banks or bank
holding companies.
‘‘(9) RESERVATION
OF
CERTAIN
RIGHTS
TO
STATES.—No provision of this subsection shall be
construed as limiting in any way the right of a State
to—
‘‘(A) determine the authority of State
banks chartered by that State to establish and
maintain branches; or
‘‘(B) supervise, regulate, and examine
State banks chartered by that State.
‘‘(10) DEFINITIONS.—For purposes of this sub-
section—
‘‘(A) 
ADEQUATELY
CAPITALIZED.—The
term ‘adequately capitalized’ has the meaning
given to such term by section 38 of the Federal
Deposit Insurance Act.
‘‘(B) APPROPRIATE
FEDERAL
BANKING
AGENCY.—The term ‘appropriate Federal bank-
ing agency’ has the meaning given to such term
in section 3 of the Federal Deposit Insurance
Act.
‘‘(C) COMBINED BANK.—The term ‘com-
bined bank’ means any bank participating in a
combination under paragraph (1), other than a
resulting bank.
‘‘(D) CRITICALLY
UNDERCAPITALIZED.—
The term ‘critically undercapitalized’ has the
meaning given to such term in section 38 of the
Federal Deposit Insurance Act.
‘‘(E) HOST STATE.—The term ‘host State’
means the State in which a bank establishes or
maintains a branch other than—
‘‘(i) in the case of a State bank, the
State under the laws of which the bank is
chartered; and
‘‘(ii) in the case of a national bank,
the State in which the bank has its main
office and is engaging in the business of
banking.
‘‘(F) 
INSURED
DEPOSITORY
INSTITU-
TION.—The term ‘insured depository institu-
tion’ has the meaning given to such term in sec-
tion 3 of the Federal Deposit Insurance Act.
‘‘(G) OUT-OF-STATE
BANK.—The term
‘out-of State bank’, when used in connection
with a reference to a State, means—
‘‘(i) in the case of a State bank, a
bank that is not chartered under the laws
of such State; and
‘‘(ii) in the case of a national bank, a
bank which does not have its main office in
such State.
‘‘(H) RESULTING
BANK.—The term ‘re-
sulting bank’ means a banking subsidiary of a
bank holding company that has resulted from a
transaction under paragraph (1) involving the
combination of 2 or more subsidiary banks of
the bank holding company located in 2 or more
States.
‘‘(I) STATE BANK.—The term ‘State bank’
has the meaning given to such term in section
3(a) of the Federal Deposit Insurance Act.
‘‘(11) RULE FOR DETERMINING DOMICILE OF A
BANK.—For purposes of this subsection, a bank
shall be deemed to be located—
‘‘(A) in the case of a State bank, in the
State in which the bank is chartered; and
‘‘(B) in the case of a national bank, the
State in which the bank’s main office is lo-
cated.’’.
(b) TAXATION.—
(1) 
STATE
FRANCHISE
OR
OTHER
NON-
PROPERTY TAXES.—The amendments made by this
section shall not be construed as, in any way, affect-
ing, limiting, impairing, or precluding the right of
any State or political subdivision of a State to im-
pose a nondiscriminatory franchise tax or other non-
property tax instead of a franchise tax as provided
by section 3124 of title 31, United States Code.
(2) STATE METHODS OF TAXATION.—No provi-
sion of this section shall be construed as—
(A) prohibiting or restricting any State or
political subdivision of a State from applying
any tax or method of taxation to a State bank
or a national bank or any branch of any such
bank when such tax or tax method is otherwise
permitted by or permissible under either the
Constitution of the United States or any other
Federal law; or
(B) allowing any State or political subdivi-
sion of a State to apply any tax or method of
taxation to a State bank or national bank or
branch thereof when such tax or tax method is
otherwise prohibited or restricted by either the
Constitution of the United States or any other
Federal law.
(c) CONFORMING AMENDMENT TO THE NATIONAL
BANK ACT.—Section 5155(c) of the Revised Statutes (12
U.S.C. 36(c)) is amended in the first sentence by striking
‘‘A national banking association’’ and inserting ‘‘Except
as provided in section 3(h) of the Bank Holding Company
Act of 1956, a national banking association’’.
SEC. 3. AMENDMENTS TO FEDERAL DEPOSIT INSURANCE
ACT AND THE ACT ENTITLED ‘‘AN ACT TO
PROVIDE FOR THE CONSOLIDATION OF NA-
TIONAL BANKING ASSOCIATIONS’’.
(a) FEDERAL DEPOSIT INSURANCE ACT AMEND-
MENTS.—Section 18(d) of the Federal Deposit Insurance
Act (12 U.S.C. 1828(d)) is amended—
(1) in the first sentence of paragraph (1), by
striking ‘‘No State’’ and inserting ‘‘Except as pro-
vided in section 3(h) of the Bank Holding Company
Act of 1956, no State’’;
(2) by adding at the end the following new
paragraphs:
‘‘(3) COORDINATION OF EXAMINATION AUTHOR-
ITY.—
‘‘(A) IN GENERAL.—The State bank super-
visor of a host State may examine a branch of
an out-of-State State bank that resulted from a
combination under section 3(h) of the Bank
Holding Company Act of 1956 of such bank
with a bank in the host State for the purpose
of determining compliance with host State laws
regarding banking, taxation, community rein-
vestment, fair lending, consumer protection,
and permissible activities and to ensure that the
activities of the branch—
‘‘(i) are conducted in a manner that is
consistent with sound banking principles;
and
‘‘(ii) do not constitute a serious risk
to the safety and sound operation of the
branch.
‘‘(B) ENFORCEMENT.—If the State bank
supervisor of a host State determines that there
has been a violation of the law of the host State
concerning the activities being conducted by the
branch of a State bank or that such branch is
being operated in a manner not consistent with
sound banking principles or in an unsafe and
unsound manner, the State bank supervisor
may undertake such enforcement actions and
proceedings as would be permitted under the
law of the host State if the branch in question
were a State bank chartered by such State.
‘‘(C) 
COOPERATIVE
AGREEMENT.—The
State bank supervisors of 2 or more States may
enter into cooperative agreements to facilitate
State regulatory supervision of State banks, in-
cluding cooperative agreements relating to the
coordination of examinations and joint partici-
pation in examinations.
‘‘(D) FEDERAL
REGULATORY
AUTHOR-
ITY.—
‘‘(i) INTERSTATE
AGREEMENTS.—No
provision of this subsection shall be con-
strued as limiting in any way the authority
of the appropriate Federal banking agency
to examine any bank or branch of a bank
for which the agency is the appropriate
Federal banking agency.
‘‘(ii) REVIEW OF INTERSTATE AGREE-
MENTS.—If the appropriate Federal bank-
ing agency determines that the States have
failed to reach an agreement under sub-
paragraph (C), or that such an agreement
fails to adequately protect the Federal De-
posit Insurance Fund, the appropriate
Federal banking agency shall not defer to
State examinations of the out-of-State
branches.
‘‘(4) DEFINITIONS.—For purposes of this sub-
section—
‘‘(A) HOST STATE.—The term ‘host State’
means the State in which a State bank estab-
lishes or maintains a branch other than the
State under the laws of which the bank is char-
tered.
‘‘(B) OUT-OF-STATE
BANK.—The term
‘out-of State bank’, when used in connection
with a reference to a State, means—
‘‘(i) in the case of a State bank, a
bank that is not chartered under the laws
of such State; and
‘‘(ii) in the case of a national bank, a
bank which does not have its main office in
such State.’’.
(b) NATIONAL BANKING ASSOCIATIONS.—The Act
entitled ‘‘An Act To provide for the consolidation of na-
tional banking associations’’ and approved November 7,
1918 (12 U.S.C. 215 et seq.) is amended—
(1) in the 1st sentence of subsection (a) of the
1st section, by inserting ‘‘, or in any State in which
a bank involved in an interstate acquisition or inter-
state combination authorized by section 3(h) of the
Bank Holding Company Act of 1956 is located,’’
after ‘‘located in the same State’’;
(2) by inserting before the period at the end of
subsection (d) of the 1st section ‘‘, except that the
applicability of State law to an interstate acquisition
or interstate combination undertaken in accordance
with section 3(h) of the Bank Holding Company Act
of 1956 shall be determined in accordance with the
provisions of such sections’’;
(3) in the 1st sentence of section 2(a), by in-
serting ‘‘or in any State in which a bank involved in
an interstate combination authorized by section 3(h)
of the Bank Holding Company Act of 1956 is lo-
cated,’’ after ‘‘located within the same State,’’;
(4) in the 6th sentence of section 2(d), by in-
serting before the period ‘‘, except that the applica-
bility of State law to the transaction undertaken
pursuant to section 3(h) of the Bank Holding Com-
pany Act of 1956 shall be determined in accordance
with the provisions of such section 3(h)’’; and
(5) in paragraph (4) of section 3, by inserting
‘‘or within any State in which a bank involved in an
interstate combination authorized by section 3(h) of
the Bank Holding Company Act of 1956 is located,’’
after ‘‘within the same State,’’.
SEC. 4. COMMUNITY REINVESTMENT ACT EVALUATION OF
BANKS WITH INTERSTATE BRANCHES.
(a) IN GENERAL.—Section 807 of the Community
Reinvestment Act of 1977 (12 U.S.C. 2906) is amended
by adding at the end the following subsections:
‘‘(d) 
INSTITUTIONS
WITH
INTERSTATE
BRANCHES.—
‘‘(1) STATE-BY-STATE
EVALUATION.—In the
case of a regulated financial institution that main-
tains domestic branches in 2 or more States, the ap-
propriate Federal financial supervisory agency shall
prepare—
‘‘(A) a written evaluation of the entire in-
stitution’s record of performance under this
title in accordance with the requirements of
subsections (a), (b), and (c); and
‘‘(B) for each State in which the institu-
tion maintains 1 or more domestic branches, a
separate written evaluation of the institution’s
record of performance within such State under
this title, in accordance with the requirements
of subsections (a), (b), and (c).
‘‘(2) MULTISTATE METROPOLITAN AREAS.—
‘‘(A) IN GENERAL.—In the case of a regu-
lated financial institution that maintains do-
mestic branches in 2 or more States within a
multistate metropolitan area, the appropriate
Federal financial supervisory agency may pre-
pare a separate written evaluation of the insti-
tution’s record of performance within such met-
ropolitan area under this title, in accordance
with the requirements of subsections (a), (b),
and (c).
‘‘(B) ADJUSTMENT OF SCOPE OF EVALUA-
TION.—If an appropriate Federal financial in-
stitution supervisory agency prepares a written
evaluation pursuant to subparagraph (A), the
scope of the written evaluation required under
paragraph (1)(B) shall be adjusted accordingly.
‘‘(3) CONTENT
OF
STATE
LEVEL
EVALUA-
TION.—A written evaluation prepared pursuant to
paragraph (1)(B) of this subsection shall—
‘‘(A) present the information required by
subparagraphs (A) and (B) of subsection (b)(1)
of this section separately for each metropolitan
area in which the institution maintains 1 or
more domestic branch offices and separately for
the remainder of the nonmetropolitan area of
the State if the institution maintains 1 or more
domestic branch offices in such area; and
‘‘(B) describe how the Federal financial
supervisory agency has performed the examina-
tion of the institution, including a list of the in-
dividual branches examined.
‘‘(4) DEFINITIONS.—For purposes of this sec-
tion:
‘‘(A) DOMESTIC BRANCH.—The term ‘do-
mestic branch’ means any branch office or
other facility of a regulated financial institution
which accepts deposits in any State.
‘‘(B) METROPOLITAN
AREA.—The term
‘metropolitan area’ means—
‘‘(i) any primary metropolitan statis-
tical area, metropolitan statistical area, or
consolidated metropolitan statistical area
as defined by the Director of the Office of
Management and Budget, with a popu-
lation of 250,000 or more; and
‘‘(ii) any other area identified by the
appropriate Federal financial supervisory
agency.
‘‘(C) STATE.—The term ‘State’ has the
meaning given to such term in section 3(a) of
the Federal Deposit Insurance Act.’’.
(b) SEPARATE PRESENTATION.—Section 807(b) of
the Community Reinvestment Act of 1977 (12 U.S.C.
2906(b)(1)) is amended by adding at the end the following
new paragraph:
‘‘(3) BREAKDOWN BY METROPOLITAN AREAS.—
The information required to be included in the pub-
lic section of the written evaluation pursuant to sub-
paragraphs (A) and (B) of paragraph (1) shall be
presented separately for each metropolitan area in
which an insured depository institution maintains 1
or more domestic branch offices.’’.
SEC. 5. STATE TAX COMPLIANCE.
Section 5240 of the Revised Statutes is amended by
inserting after subparagraph (B) (12 U.S.C. 484) follow-