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(A) IN GENERAL.—A foreign bank that op-
erates a branch, agency or commercial lending
company in the United States, and any com-
pany that owns or controls such a foreign bank,
shall be eligible for the treatment afforded
under paragraph (1) and section 122(m) only if
the home country of such foreign bank or com-
pany accords to the United States banks the
same competitive opportunities in banking as
such country accords to domestic banks of such
country.
(B) COORDINATION
WITH
NAFTA.—Sub-
paragraph (A) shall not apply in derogation of
any obligation under the North American Free
Trade Agreement.
(C) HOME COUNTRY DEFINED.—For pur-
poses of subparagraph (A), the term ‘‘home
country’’ means, with respect to any foreign
bank or company referred to in subparagraph
(A), the country under the laws of which the
foreign bank or company is organized.
(4) INTERPRETIVE AUTHORITY.—The National
Financial Services Committee shall issue regulations
describing the method for calculating compliance
with the standard described in paragraphs (1) and
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(2), taking into account such factors as revenues
and assets, including assets under management.
(5) IMPLEMENTATION
AND
AUTHORITY.—The
appropriate Federal banking agency of the lead de-
pository institution of a financial services holding
company shall implement and enforce the regula-
tions prescribed pursuant to paragraph (4) with re-
spect to such holding company.
(m) FINANCIAL SERVICES INSTITUTION.—The term
‘‘financial services institution’’ means—
(1) A depository institution;
(2) A broker or dealer (as defined in section 3
of the Securities Exchange Act of 1934);
(3) A futures commission merchant (as defined
in section 1(a)(12) of the Commodity Exchange
Act);
(4) An investment company (as defined in sec-
tion 3 of the Investment Company Act of 1940);
(5) An investment adviser (as defined in section
202(a)(11) of the Investment Act of 1940);
(6) An insurance company organized or licensed
under the law of any State, including a company
that only incurs liabilities under annuity contracts,
the income on which is tax deferred under Section
72 of the Internal Revenue Code of 1986;
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(7) A trust company organized under the laws
of the United States or the laws of any State; or
(8) A national market funded lending institu-
tion organized pursuant to section 5158 of the Re-
vised Statutes of the United States, as added by sec-
tion 601 of the Depository Institution Affiliation and
Thrift Charter Conversion Act;
(9) Any other type of company that is ‘‘engaged
in the business of providing financial services’’, as
determined by the National Financial Services Com-
mittee by rule, regulation, or order.
(n) FINANCIAL ACTIVITIES.—The term ‘‘financial ac-
tivities’’ means any of the following—
(1) receiving money subject to a deposit or
other repayment obligation;
(2) lending, exchanging, transferring or safe-
guarding money or other financial assets;
(3) providing any device or other instrumental-
ity for the transfer of money or other financial as-
sets;
(4) insuring, guaranteeing or indemnifying
against loss, harm, damage, illness, disability or
death;
(5) providing financial, investment or economic
advisory or information services, including advising
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an investment company (as defined in section 3 of
the Investment Company Act of 1940);
(6) directly or indirectly acquiring or control-
ling, whether as principal, on behalf of 1 or more en-
tities (including entities, other than a depository in-
stitution or subsidiary of a depository institution,
that the financial services holding company con-
trols), or otherwise, shares, assets, or ownership in-
terests (including without limitation debt or equity
securities, partnership interests, trust certificates, or
other instruments representing ownership) of a com-
pany or other entity, whether or not constituting
control of such company or entity, engaged in any
activity if—
(A) the shares, assets, or ownership inter-
ests are not acquired or held by a depository in-
stitution or a subsidiary of a depository institu-
tion;
(B) such shares, assets, or ownership in-
terests are acquired and held as part of a bona
fide underwriting, investment banking, or insur-
ance company investment activity, which in-
cludes investment activities engaged in for the
purpose of appreciation and ultimate resale or
other disposition of the investment, and such
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shares, assets, or ownership interest are held
for such a period of time as will permit the sale
or disposition thereof on a reasonable basis con-
sistent with the nature of such activities; and
(C) during the period such shares, assets,
or ownership interests are held, the financial
services holding company does not actively man-
age or operate the company or entity except in-
sofar as necessary to achieve the objectives of
subparagraph (B);
(7) arranging, effecting or facilitating financial
transactions for the account of third parties;
(8) underwriting, dealing in or making a mar-
ket in securities;
(9) engaging in any activity that is permissible
for a bank holding company pursuant to section
4(c)(8) of the Bank Holding Company Act of 1956
by rule, order or regulation;
(10) engaging in any activity (in the United
States) that is—
(A) permissible for a bank holding com-
pany to engage in outside the United States,
and
(B) considered a financial activity or bank-
ing or financial operation, pursuant to section
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4(c)(13) of the Bank Holding Company Act of
1956 or any rule, order, or regulation issued
thereunder;
(11) owning shares of any company that would
be permissible for a bank holding company to own
pursuant to sections 4(c)(6) and 4(c)(7) of the Bank
Holding Company Act of 1956;
(12) engaging in the functional equivalent of
any of the foregoing; or
(13) engaging in any activity that the National
Financial Services Committee determines by rule,
order, or regulation to be financial in nature or inci-
dental to such financial activities, taking into ac-
count—
(A) 
changes 
or 
reasonably 
expected
changes in the marketplace in which financial
services holding company compete;
(B) 
changes 
or 
reasonably 
expected
changes in the technology by which financial
services are delivered; or
(C) whether such activity is necessary or
appropriate to—
(i) allow a financial services holding
company and its affiliates to compete effec-
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tively against any company seeking to pro-
vide financial services in the United States;
(ii) use any available or emerging
technological means to provide financial
services; or
(iii) offer customers any available or
emerging technological means for using fi-
nancial services.
(o) APPROPRIATE FEDERAL BANKING AGENCY.—
The term ‘‘appropriate Federal banking agency’’ has the
same meaning as in section 3 of the Federal Deposit In-
surance Act.
(p) STATE.—The term ‘‘State’’ has the same mean-
ing as in section 3 of the Federal Deposit Insurance Act.
(q) CAPITAL TERMS.—
(1) IN GENERAL.—The terms ‘‘adequately cap-
italized’’ and ‘‘well capitalized’’ have the same mean-
ings as in—
(A) section 38(b)(1) of the Federal Deposit
Insurance Act with respect to an insured depos-
itory institution;
(B) section 9B(c)(2)(B) of the Federal Re-
serve Act with respect to a State member
wholesale financial institution; and
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(C) section 5136(B)(e) of the Revised
Statutes of the United States with respect to a
national wholesale financial institution.
(2) FOREIGN BANK CAPITAL.—With respect to
a branch, agency, or commercial lending company
operated in the United States by a foreign bank, the
terms ‘‘adequately capitalized’’ and ‘‘well capital-
ized’’ shall be defined and established by the Na-
tional Financial Services Committee for purposes of
this Act, provided that such capital standards—
(A) are comparable to the capital stand-
ards that apply to other depository institutions
for purposes of this Act; and
(B) give due regard to the principle of na-
tional treatment and equality of competitive op-
portunity.
(r) SECURITIES AFFILIATE.—The term ‘‘securities
affiliate’’ means a company that—
(1) is an affiliate of a financial services holding
company, other than a depository institution; and
(2) underwrites or deals in any security; and
(3) is (or is required to be) registered under the
Securities Exchange Act of 1934 as a broker or
dealer,
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but does not include a company that underwrites or deals
exclusively in securities that are expressly authorized by
section 5136 of the Revised Statutes of the United States
as permissible for a national bank to underwrite or deal
in.
SEC. 103. CHANGES IN CONTROL OF DEPOSITORY INSTITU-
TIONS.
No financial services holding company acting directly
or indirectly, or through or in concert with one or more
other persons, all acquire control of a depository institu-
tion, bank holding company, or financial services holding
company not controlled by such company on the date it
became a financial services holding company, if such ac-
quisition and control occurs through a purchase, assign-
ment, transfer, pledge, or other deposition of voting stock
of such depository institution, bank holding company, or
financial services holding company, unless the financial
services holding company has complied with the require-
ments of section 7(j) of the Federal Deposit Insurance
Act. Any failure to comply with the preceding require-
ments shall subject the relevant financial services holding
company to the penalties and other procedures provided
in sections 109 through 112, in addition to otherwise ap-
plicable penalties.
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SEC. 104. AFFILIATE TRANSACTIONS.
(a) APPLICABILITY OF SECTIONS 23A AND 23B OF
THE FEDERAL RESERVE ACT.—
(1) IN GENERAL.—The provisions of sections
23A and 23B of the Federal Reserve Act shall be
applicable to every depository institution controlled
by a financial services holding company in the same
manner and to the same extent as if such depository
institution were a member bank; and for this pur-
pose, any company which would be an affiliate of a
depository institution for purposes of such sections
23A and 23B if such depository institution were a
member bank shall be deemed to be an affiliate of
such depository institution.
(2) APPLICABILITY TO FOREIGN BANKS.—A de-
pository institution that is a branch, agency or com-
mercial lending company operated in the United
States by a foreign bank that is a financial services
holding company shall be deemed to satisfy the re-
quirements of paragraph (1) if all of the trans-
actions between the depository institution and any of
the following companies affiliated with the deposi-
tory institution comply with the provisions of Sec-
tions 23A and 23B of the Federal Reserve Act in
the same manner and to the same extent as if the
foreign bank were a member bank—
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(A) a securities affiliate; and
(B) any company that is neither a finan-
cial services institution nor primarily engaged
in financial activities, other than, with respect
to a foreign bank that qualifies as ‘‘predomi-
nantly a financial company’’ under section
102(l)(2) rather than section 102(l)(1), an affil-
iate that is held and operated in compliance
with the standards of sections 2(h)(2) and
2(h)(4) of the Bank Holding Company Act of
1956 that would apply if the foreign bank were
subject to that Act.
(b) ADDITIONAL LIMITATIONS ON AFFILIATE TRANS-
ACTIONS.—
(1) IN
GENERAL.—The appropriate Federal
banking agency may, upon a finding of probable
harm that cannot adequately be prevented by less
burdensome rules and regulations, adopt such rules
and regulations, consistent with the purposes of this
Act, as may be necessary in order to prevent a de-
pository institution that is controlled or operated by
a financial services holding company from engaging
in unsafe or unsound practices that involve the fi-
nancial services holding company or any of its affili-
ates including, without limitation, unsafe or unsound
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practices that involve covered transactions, as de-
fined in section 23A of the Federal Reserve Act, and
any transactions described in section 23B(a)(2) of
the Federal Reserve Act.
(2) REGULATORY ACTIVITY.—Any rule or regu-
lation adopted pursuant to paragraph (1) shall be
adopted in accordance with section 553 of title 5,
United States Code, except that the appropriate
Federal banking agency shall give interested persons
an opportunity for oral presentations of data, views,
and arguments, in addition to written submissions.
(3) APPLICATION TO PRIOR APPROVED TRANS-
ACTIONS.—Any transaction that was approved by an
appropriate Federal banking agency before the date
of enactment of this Act shall be exempt from any
rules or regulations adopted pursuant to paragraph
(1).
(c) EXCEPTIONS.—With the concurrence of the Na-
tional Financial Services Committee, the appropriate Fed-
eral banking agency may, by rule, regulation or order, ex-
empt any depository institution that is controlled by a fi-
nancial services holding company or class of such institu-
tions, or any transaction or class of transactions (includ-
ing transactions with affiliates that are neither located nor
doing business in the United States) from any require-
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ment under subsection (b)(1) or section 23A or 23B of
the Federal Reserve Act, notwithstanding the provisions
of any other law, rule, regulation or order, if the appro-
priate Federal banking agency deems such an exemption
to be reasonable and not inconsistent with the purposes
of this Act and in the public interest.
(d) SAFEGUARDS RELATING TO NONFINANCIAL AF-
FILIATES.—
(1) IN GENERAL.—Except as permitted pursu-
ant to regulations issued by the National Financial
Services Committee, no depository institution con-
trolled by a financial services holding company shall
directly or indirectly extend credit, or issue or enter
into a standby letter of credit, indemnity, guarantee,
insurance, or other similar facility to or for the ben-
efit of any affiliate that is neither a financial serv-
ices institution nor primarily engaged in financial
activities.
(2) 
EXECPTION
FOR
CERTAIN
FOREIGN
BANKS.—A depository institution that is a branch,
agency, or commercial lending company operated or
controlled by a foreign bank that—
(A) is a financial services holding com-
pany; and
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(B) qualifies as ‘‘predominantly a financial
company’’ under section 102(l)(2) rather than
section 102(l)(1);
shall not be subject to the limitation described in
paragraph (1) with respect to transactions with af-
filiates that, with respect to that foreign bank, are
held and operated in compliance with the standard
for investment under section 2(h)(2) of the Bank
Holding Company Act of 1956 that would apply if
that foreign bank were subject to that Act.
(e) PRIMARILY ENGAGED
IN FINANCIAL ACTIVI-
TIES.—For purposes of subsections (a)(2)(B) and (d)(1),
the term ‘‘primarily engaged in financial activities’’ shall
be defined by regulation by the National Financial Serv-
ices Committee.
SEC. 105. CAPITAL REQUIREMENTS.
(a) 
WELL-CAPITALIZED
DEPOSITORY
INSTITU-
TIONS.—Each depository institution that is controlled by
a financial services holding company shall be well capital-
ized.
(b) ACTIONS BY APPROPRIATE FEDERAL BANKING
AGENCY.—In the event of a finding by the appropriate
Federal banking agency that a depository institution con-
trolled by a financial services holding company is not well
capitalized, the financial services holding company shall—
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(1) execute an agreement with the appropriate
Federal banking agency within 30 days to return the
depository institution within a reasonable period of
time to being well capitalized; or
(2) divest control of the depository institution
in an orderly manner within 180 days, or such addi-
tional period of time as the appropriate Federal
banking agency may determine is reasonably re-
quired in order to effect such divestiture.
(c) NO HOLDING COMPANY CAPITAL REQUIRE-
MENTS.—An appropriate Federal banking agency may not
impose by regulation, order, agreement, or any other
means, any requirement pertaining to the capital of a fi-
nancial services holding company.
SEC. 106. INTERSTATE ACQUISITIONS OF INSURED BANKS.
(a) INSURED BANKS.—Except as otherwise author-
ized pursuant to section 13(f) of the Federal Deposit In-
surance Act, no financial services holding company may
acquire control of an additional insured bank (as such
term is defined in section 2(c) of the Bank Holding Com-
pany Act of 1956) if the acquisition could not be approved
by the Board of Governors of the Federal Reserve System
under any provision of section 3(d) of the Bank Holding
Company Act of 1956, other than subsection (d)(1)(A),
if such acquisition were made by a bank holding company.
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(b) TREATMENT OF FINANCIAL SERVICES HOLDING
COMPANIES AND SUBSIDIARIES.—For purposes of section
18(r) of the Federal Deposit Insurance Act, a financial
services holding company shall be treated as a bank hold-
ing company, and any depository institution affiliate of a
financial services holding company shall be treated as a
bank subsidiary.
SEC. 107. DIFFERENTIAL TREATMENT PROHIBITION; LAWS
INCONSISTENT WITH THIS ACT.
(a) IN GENERAL.—Notwithstanding any other Fed-
eral law, no State, and no Federal or State regulatory
agency, including the appropriate Federal banking agency,
may act by law, rule, regulation, order, or otherwise if the
effect of such action would be to differentiate depository
institutions controlled by financial services holding compa-
nies from any other depository institutions in a manner
adverse to depository institutions controlled by financial
services holding companies, or to differentiate financial
services holding companies or their affiliates from bank
holding companies and their affiliates in a manner adverse
to financial services holding companies or their affiliates,
except to the extent that the appropriate Federal banking
agency may act to implement this Act.
(b) APPLICATION OF STATE LAWS.—
(1) FINDINGS.—The Congress finds that:
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(A) Certain State laws and regulations
have the purpose or effect of preventing deposi-
tory institutions from being or becoming affili-
ated with, companies or persons engaged in
nonbanking activities.
(B) Such laws restrain legitimate competi-
tion in interstate commerce and deny consum-
ers freedom of choice in selecting financial serv-
ices.
(C) Such restrictions also threaten the
long-term safety and soundness of depository
institutions by denying them access to capital.
(D) Given the preponderant Federal inter-
est in ensuring competition in national markets
for financial services and in ensuring the safety
and soundness of depository institutions, it is
necessary to preempt such anticompetitive State
laws and regulations to the extent necessary to
permit the formation and efficient operation of
financial services holding companies.
(E) There is, however, a legitimate and
traditional State interest in ensuring that State
depository institutions and other State-char-
tered or licensed companies are operated in a
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safe and sound manner to serve the interests of
the public and consumers.
(F) The preemption provided in paragraph
(2) is not intended to preempt State laws that
concern the regulation, supervision, and exam-
ination of State chartered or licensed entities,
and that are not inconsistent with the purposes
of this Act.
(2) PREEMPTIONS.—
(A) CROSS-MARKETING.—Any provision of
Federal or State law, rule, regulation, or order
that is expressly or impliedly inconsistent with
the provisions and purposes of this Act is here-
by preempted, including, without limitation,
State banking, savings and loan, insurance, real
estate, securities, finance company, retail, or
other laws which have the purpose or effect
of—
(i) preventing or impeding depository
institutions or affiliates, agents, principals,
brokers, directors, officers, employees, or
other representatives of such institutions
or affiliates thereof, as a result of the
types of nonbanking activities engaged in
directly or indirectly by such company or
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any affiliate thereof or by any agent, prin-
cipal, solicitor, broker, director, officer,
employee, or other representative of such
company or affiliate thereof, form being
owned or controlled by or from being affili-
ated in any way with a financial services
holding company or any affiliate thereof;
or
(ii) preventing or impeding depository
institutions or affiliates, agents, principals,
brokers, directors, officers, employees or
other representatives of such institutions
or affiliates thereof from offering or mar-
keting products or services of their affili-
ated financial services holding company or
any affiliate thereof or from having their
products or services offered or marketed by
their affiliated financial services holding
company or any affiliate thereof, or by any
agent, principal, broker, director, officer,
employee, or other representative of such
company or affiliate thereof.
(B) INFORMATION SHARING.—
(i) IN
GENERAL.—Notwithstanding
any other provision of law, any depository
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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
direct that such information not be com-
municated among such persons.
(ii) DEFINITION.—For purposes of
this subsection, the term ‘‘information’’
means any and all data, records, or other
information and material obtained 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 who applies for,
maintains, or has maintained an account
or credit relationship with or applied for,
purchased or obtained other products or
services from any depository institution or
any affiliate or subsidiary of any deposi-
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tory institution, regardless of the source or
manner in which the information is ob-
tained or furnished.
(c) LAWS AFFECTING COURT ACTIONS.—
(1) IN GENERAL.—No State or State regulatory
agency may act by law, rule, regulation, or order if
the effect of such action would be to impede or pre-
vent a depository institution that is located in an-
other State from qualifying to maintain or defend in
court any action which could be maintained or de-
fended under similar circumstances by a company
that is located in such other State and that is not
a depository institution, if the depository institution
does not establish or operate in that State a domes-
tic branch.
(2) EXCEPTION.—Where the maintenance or
defense of a court action referred to in paragraph
(1) by a company that is located in such other State
and that is not a depository institution is subject to
certain conditions, the maintenance or defense of
such an action by a depository institution located in
such other State may be subject to those same con-
ditions, if such conditions are applied in a non-
discriminatory manner to fulfill legitimate State ob-
jectives and do not have the effect, directly or indi-
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rectly, of denying depository institutions located in
other States the opportunity to maintain or defend
such actions.
(d) OTHER RESTRICTIONS.—Except for licensing,
marketing, compensation, employment, or other require-
ments applied in a nondiscriminatory manner to fulfill le-
gitimate State regulatory objectives which are not incon-
sistent with the purposes of this Act, no State may,
through legislative, administrative, executive, or judicial
action, impede or prevent a financial services holding com-
pany or affiliate thereof from utilizing or compensating
any agent (including an affiliated depository institution
acting in accordance with section 18(r) of the Federal De-
posit Insurance Act), solicitor, broker, employee, or other
person located in that State and representing in any lawful
capacity any depository institution or any such financial
services holding company or such affiliate thereof, pro-
vided that if any such person is being utilized or com-
pensated for the performance of activities on behalf of a
depository institution, such activities do not result in the
establishment or operation by the depository institution of
a domestic branch at any location other than the main
or branch offices of such depository institution.
(e) DEFINITIONS.—As used in subsections (b)
through (d) only—
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(1) the term ‘‘affiliate’’ means a person that di-
rectly or indirectly controls or is controlled by, or is
under common control with the person specified; and
(2) the term ‘‘control,’’ including the terms
‘‘controlled by’’ and ‘‘under common control with,’’
means the power, directly or indirectly, to direct the
management or policies of a person and shall be pre-
sumed to exist if any person, directly or indirectly,
owns, controls, or holds with power to vote 10 per-
cent or more of the voting securities of any other
person.
SEC. 108. TYING AND INSIDER LENDING PROVISIONS.
(A) IN GENERAL.—A financial services holding com-
pany shall be treated as a bank holding company, and any
depository institution controlled by such financial services
holding company shall be treated as a bank, for purposes
of section 106 of the Bank Holding Company Act Amend-
ments of 1970 and section 22(h) of the Federal Reserve
Act and any regulation prescribed under any such sec-
tions.
(b) ADDITIONAL LIMITATIONS ON TIE-IN ARRANGE-
MENTS.—A financial services holding company and any of
such company’s nonbanking subsidiaries shall be subject
to the same limitations, if any, including any exceptions
thereto, as the Board of Governors of the Federal Reserve
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System may by regulation impose on bank holding compa-
nies and their nonbanking subsidiaries with respect to ex-
tending credit, leasing or selling property of any kind, pro-
viding any service, or fixing or varying the consideration
for any such transaction subject to any condition or re-
quirement that, if imposed by a bank, would constitute
an unlawful tie-in arrangement under section 106 of the
Bank Holding Company Act Amendments of 1970.
(c) REGULATORY AUTHORITY.—For purposes of this
subsection, the appropriate Federal banking agency shall
exercise the authority provided to the Board of Governors
of the Federal Reserve System under section 106 of the
Bank Holding Company Act Amendments of 1970 and
section 22(h) of the Federal Reserve Act.
SEC. 109. REPORTS, EXAMINATION AND ENFORCEMENT.
(a) NOTICE.—
(1) TIMING.—Within 90 days after filing the
notice referred to in section 102(a)(1), each financial
services holding company shall file a separate notice
with the appropriate Federal banking agency for the
lead depository institution of such company.
(2) FORM AND CONTENT.—The notice required
by paragraph (1) shall be on forms prescribed by the
National Financial Services Committee, and shall in-
clude such information under oath or otherwise, with
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respect to the financial condition, ownership, oper-
ation and management of such financial services
company and its subsidiaries, and related matters,
as the Committee may deem necessary or appro-
priate for the appropriate Federal banking agency to
ascertain and monitor the impact that such financial
services holding company and its subsidiaries may
have on the safety and soundness of any depository
institution affiliated with such financial services
holding company or to otherwise carry out the pur-
poses of this Act.
(b) REPORTS.—
(1) IN
GENERAL.—The appropriate Federal
banking agency of the lead depository institution of
a financial services holding company from time to
time may require such holding company and any
subsidiary of such company to submit reports under
oath to keep such agency informed as to—
(A) the company’s or the subsidiary’s ac-
tivities, financial condition, policies, systems for
monitoring and controlling financial and oper-
ational risks, to the extent that the appropriate
Federal banking agency has reason to believe
that such activities, financial condition, policies,
and systems may materially affect the safety
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and soundness of any depository institution
subsidiary of the company;
(B) the company’s or the subsidiary’s
transactions with depository institution subsidi-
aries of the company; and
(C) the extent to which the company or
subsidiary has complied with the provisions of
the Act and regulations prescribed and orders
issued under this Act.
(2) USE OF EXISTING REPORT.—
(A) IN GENERAL.—The appropriate Fed-
eral banking agency described in paragraph (1)
shall, to the fullest extent possible, accept re-
ports in fulfillment of such agency’s reporting
requirements under this paragraph that a fi-
nancial services holding company or any sub-
sidiary of such company has been required to
provide to other Federal and State supervisors
or to appropriate self-regulatory organizations.
(B) AVAILIBILITY.—A financial services
holding company or a subsidiary of such com-
pany shall provide to the appropriate Federal
banking agency described in paragraph (1), at
the request of such agency, a report referred to
in subparagraph (A).
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(3) The National Financial Services Committee
shall prescribe by regulation uniform standards for
the form and content of the reports required by this
subsection.
(4) EXEMPTIONS FROM REPORTING REQUIRE-
MENTS.—
(A) IN GENERAL.—The National Financial
Services Committee may, by regulation or
order, exempt any company or class of compa-
nies, under such terms and conditions and for
such periods as the Committee shall provide in
such regulation or order, from the provisions of
this subsection and any regulations prescribed
under this subsection.
(B) CRITERIA
FOR
CONSIDERATION.—In
granting any exemption under subparagraph
(A), the Committee shall consider, among other
factors—
(i) whether information of the type re-
quired under this subsection is available
from a supervisory agency (as defined in
section 1101(7) of the Right to Financial
Privacy Act of 1978), the Commodity Fu-
tures Trading Commission, or a foreign
regulatory body of a similar type;
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(ii) the primary business of the com-
pany;
(iii) the nature and extent of domestic
or foreign regulation of the company’s ac-
tivities; and
(iv) whether the companies’ activities
could pose a significant risk to the safety
and soundness of any depository institu-
tion subsidiary of the financial services
holding company.
(c) EXAMINATIONS.—
(1) IN GENERAL.—For purposes of this Act,
the appropriate Federal banking agency of the lead
depository institution of a financial services holding
company may examine such holding company, but
only to the extent permitted by this subsection.
(2) STANDARD FOR EXAMINATIONS.—The ap-
propriate Federal banking agency for the lead depos-
itory institution of a financial services holding com-
pany shall not examine such holding company un-
less—
(A) such agency determines, on the basis
of all information available to such agency that
the operations or activities of the financial serv-
ices holding company or any subsidiary of such
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company, or any transaction involving such
company or subsidiary and an affiliated deposi-
tory institution, may pose a material risk to the
safety and soundness of any depository institu-
tion controlled by such holding company; or
(B) such agency is unable to determine
from reports the nature of the operations, fi-
nancial condition, activities, or effectiveness of
the risk management systems of the financial
services holding company or any subsidiary of
such company, or to assess compliance with the
provisions of this Act.
(3) RESTRICTED FOCUS OF EXAMINATIONS.—
The appropriate Federal banking agency of the lead
depository institution of a financial services holding
company shall limit the focus and scope of any ex-
amination permitted by this subsection to the con-
solidated holding company, provided, however, that
such examination shall not extend to any subsidiary
of such holding company (other than a depository
institution subsidiary).
(4) DEFERENCE
TO
OTHER
BANK
EXAMINA-
TIONS.—
(A) IN GENERAL.—For purposes of this
subsection, the appropriate Federal banking
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ing agency of the lead depository institution of such
company—
(A) shall have access to, and may use, the
reports of examination made of—
(i) any registered broker or dealer by
or on behalf of the Securities Exchange
Commission, and
(ii) any other subsidiary that such
agency finds to be comprehensively super-
vised under relevant Federal or State law
by a Federal or State agency or authority;
and
(B) may request any agency that regulates
a subsidiary described in clause (i) to examine
and provide information concerning any aspect
of such subsidiary’s activities that the appro-
priate Federal banking agency deems necessary
or appropriate to carry out the purposes of this
section, and such other agency shall, to the ex-
tent practicable, comply with such request.
(6) CONFIDENTIALITY OF REPORTED INFORMA-
TION.—
(A) IN
GENERAL.—Notwithstanding any
other provision of law, an appropriate Federal
banking agency shall not be compelled to dis-
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close any information required to be reported
under this subsection, or any information sup-
plied to such agency by any domestic or foreign
regulatory agency, that relates to the financial
services holding company or any subsidiary of
such company.
(B) COMPLIANCE WITH REQUESTS FOR IN-
FORMATION.—No provision of this subpara-
graph shall be construed as authorizing an ap-
propriate Federal banking agency to withhold
information from Congress, or preventing such
agency from complying with a request for infor-
mation from any other Federal department or
agency for purposes within the scope of such
department’s or agency’s jurisdiction, or from
complying with an order of a court of com-
petent jurisdiction in an action brought by the
United States or such agency.
(C) COORDINATION WITH OTHER LAW.—
For purposes of section 552 of title 5, United
States Code, this subparagraph shall be consid-
ered to be a statute described in subsection
(b)(3)(B) of such section.
(D) DESIGNATION OF CONFIDENTIAL IN-
FORMATION.—In prescribing regulations to
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carry out the requirements of this subsection,
an appropriate Federal banking agency shall
designate information described in or obtained
pursuant to this paragraph as confidential in-
formation.
(E) COSTS.—The cost of any examination
conducted by an appropriate Federal banking
agency under this section may be assessed
against, and made payable by, such holding
company.
(d) TERMINATION.— The National Financial Serv-
ices Committee may at any time, upon its own motion or
upon application, terminate the status of a company as
a financial services holding company, if it is determined
that such company no longer controls or operates any de-
pository institutions or otherwise fails to qualify as a fi-
nancial services holding company as defined in this Act.
(e) NO EXTENSION OF INSURANCE COVERAGE.—In
no instance shall the benefits of Federal deposit insurance
coverage applicable to an insured depository institution
that is controlled by a financial services holding company
be extended or interpreted to extend to either such finan-
cial services holding company or to any other company
controlled by such financial services holding company that
is not an insured depository institution.
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(f) ENFORCEMENT
OF VIOLATIONS.—Whenever it
appears to the appropriate Federal banking agency of the
lead depository institution of a financial services holding
company that such holding company is violating, has vio-
lated, or is about to violate any provision of this Act or
any regulation prescribed under this Act, such agency
may, in its discretion, apply to the appropriate district
court of the United States or the United States court of
any territory for—
(1) a temporary or permanent injunction or re-
straining order enjoining such financial services
holding company from violating this Act or any reg-
ulation prescribed under this Act; or
(2) such other equitable relief, including divesti-
ture, as may be necessary to prevent such violation.
(g) COURT JURISDICTION.—The district courts of the
United States and the United States court in any territory
shall have jurisdiction and power to issue any injunction
or restraining order or grant any other relief described in
subsection (f). When appropriate, any injunction, order,
or other equitable relief granted under this subparagraph
shall be granted without requiring the posting of any
bond.
(h) NOTICE OF VIOLATIONS.—Whenever it appears
to a Federal or State official or agency with supervisory
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or examination authority over any affiliate of a financial
services holding company that such affiliate or such finan-
cial services holding company is violating, has violated, or
is about to violate any provision of this Act or any regula-
tion prescribed under this Act, such official or agency shall
promptly notify the appropriate Federal banking agency
of the lead depository institution of such holding company
in order that such banking agency, in consultation with
the notifying agency, may determine whether action under
this section is appropriate.
SEC. 110. DIVESTITURE.
(a) IN GENERAL.—In addition to all of its other reg-
ulatory and supervisory powers, if the appropriate Federal
banking agency determines that a depository institution
under its supervision has engaged in a continuing course
of conduct involving its financial services holding company
or any affiliate of such holding company which has had,
or has a significant probability of having, the effect of
causing such depository institution to be in an unsafe or
unsound condition, it may make an initial finding that the
financial services holding company should be required to
terminate its control or operation of the depository institu-
tion. If the appropriate Federal banking agency makes
such an initial finding, it shall within 3 days so notify the
financial services holding company controlling or operating
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the depository institution and the National Financial Serv-
ices Committee. Such notice shall provide a statement for
the basis of the appropriate Federal banking agency’s ac-
tion.
(b) HEARING PROCEDURES.—Not later than 30 days
after receipt of the notice described in subsection (a), the
financial services holding company receiving such notice
may request an agency hearing before the appropriate
Federal banking agency. In such hearing, all issues shall
be determined pursuant to section 554 of title 5, United
States Code. The length of the hearing shall be determined
by the appropriate Federal banking agency, and such
hearing may be before a hearing examiner appointed by
such agency. At the conclusion thereof, the appropriate
Federal banking agency shall issue a final order, on the
basis of the record made at such hearing, affirming or re-
versing the initial finding of the appropriate Federal bank-
ing agency. A company that fails to request an agency
hearing under this paragraph shall be deemed to have con-
sented to the issuance of a final order affirming the initial
finding without the necessity of the hearing provided for
in this paragraph.
(c) TERMINATION OF CONTROL.—If such final order
affirms the initial finding, the financial services holding
company shall, upon completion of the judicial review, if
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any, of the appropriate Federal banking agency’s final
order as provided for in section 113, terminate its control
or operation of the depository institution involved within
1 year or such longer period as the appropriate Federal
banking deems necessary and appropriate to protect the
safety and soundness of the depository institution or pre-
vent financial disruption.
SEC. 111. CRIMINAL PENALTIES.
(a) WILLFUL VIOLATIONS.—Any company or insured
depository institution which knowingly and willfully par-
ticipates in a material violation of any provision of this
Act, or any rule, regulation, or order issued by an appro-
priate Federal banking agency pursuant thereto, shall,
upon conviction, be fined for each violation not more than
the greater of $250,000 or an amount equal to one one
hundreth of 1 percent of the minimum required capital
of the lead depository institution of the financial services
holding company for each day during which the violation
continues, except that in no case shall any such amount
for any violation or related series of violations exceed 1
percent of the minimum required capital of the lead depos-
itory institution.
(b) ENFORCEMENT
AGAINST
INDIVIDUALS.—Any
natural person who knowingly and willfully participates in
a material violation of any provision of this Act or any
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rule, regulation, or order issued pursuant thereto, shall
upon conviction be imprisoned not more than 5 years and
fined for each violation not more than the greater of
$250,000 or double the individual’s annual compensation
at the time the violation occurred.
(c) ENFORCEABILITY AGAINST OFFICERS AND EM-
PLOYEES.—Every officer, director, employee, and agent of
a financial services holding company or depository institu-
tion also shall be subject to the same penalties for false
entries in any book, report, or statement of such company
or depository institution as are applicable to officers, di-
rectors, employees, and agents of member banks for false
entries in any books, reports, or statements of member
banks under section 1005 of title 18, United States Code.
(d) ENFORCEABILITY AGAINST HOLDING COMPA-
NIES.—A financial services holding company and its affili-
ates shall be subject to the provisions of title 18, United
States Code, to the same extent as a registered bank hold-
ing company or any affiliate of such a company.
SEC. 112. CIVIL ENFORCEMENT, CEASE-AND-DESIST OR-
DERS, CIVIL MONEY PENALTIES, REMOVAL,
AND PROHIBITION AUTHORITY.
Subsections (b) through (s) and subsection (u) of sec-
tion 8 of the Federal Deposit Insurance Act shall apply
to any financial services holding company in the same
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manner as they apply to an insured depository institution.
Nothing in subsection (b) or (c) of that section 8 shall
authorize any Federal banking agency, other than the ap-
propriate Federal banking agency, to issue a notice of
charges or cease-and-desist order against a financial serv-
ices holding company.
SEC. 113. JUDICIAL REVIEW.
Any party aggrieved by an appropriate Federal bank-
ing agency’s findings or other actions under this Act may
obtain review by the United States court of appeals of the
circuit wherein such party has its principal place of busi-
ness or the United States Court of Appeals for the District
of Columbia Circuit, by filing a Notice of Appeal in such
court within 30 days from the date of such action, and
simultaneously sending a copy of such notice by registered
or certified mail to the appropriate Federal banking agen-
cy. The appropriate Federal banking agency shall prompt-
ly certify and file in such court the record upon which
such action or finding was based. The actions or findings
of the appropriate Federal banking agency shall be set
aside if not supported by substantial evidence or if found
to violate procedures established by this Act. An initial
finding by the appropriate Federal banking agency under
section 110 shall be subject to judicial review only in the
context of review of a final order under section 110(b).
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SEC. 114. NATIONAL FINANCIAL SERVICES COMMITTEE.
(a) ESTABLISHMENT.—There is established a Na-
tional Financial Services Committee which shall consist
of—
(1) the Secretary of the Treasury;
(2) the Chairman of the Board of Governors of
the Federal Reserve System;
(3) the Chairman of the Board of Directors of
the Federal Deposit Insurance Corporation;
(4) the Comptroller of the Currency; and
(5) the Chairman of the Securities and Ex-
change Commission.
(b) MEMBER AGENCIES.—For purposes of this Act,
the agencies or departments headed by members of the
committee shall be referred to as ‘‘member agencies’’.
(c) CHAIR.—The Chair of the Committee shall be the
Secretary of the Treasury.
(d) COMPENSATION.—Each member of the Commit-
tee shall serve without additional compensation, but shall
be entitled to reasonable expenses incurred in carrying out
the official duties as such a member.
(e) PUBLIC MEETINGS.—The Committee shall hold
public meetings at least annually. All meetings of the
Committee shall be conducted in conformity with the pro-
visions of section 3(a) of the Government in the Sunshine
Act (5 U.S.C. 552b). The Committee may not take any
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action unless such action is approved by a majority vote
of the members of the Committee.
(f) SECRETARIAT.—The Department of the Treasury
shall provide the Secretariat for the Committee and shall
assume any expenses arising from execution of the respon-
sibilities of the Committee, except for expenses incurred
by employees of any Member of the Committee.
(g) ACCESS TO RECORDS.—For the purpose of carry-
ing out this section, the Committee shall have access to
all books, accounts, records, reports, files, memoranda, pa-
pers, things, and property belonging to or in use by any
appropriate Federal banking agency.
(h) FUNCTIONS OF THE COMMITTEE.—
(1) UNIFORM PRINCIPLES AND STANDARDS.—
The Committee shall, insofar as is practicable, es-
tablish uniform principles and standards applicable
to the notices, reports, examinations and supervision
of financial services institutions regulated by the
member agencies, and to the extent permitted by
this Act, financial services holding companies, which
principles and standards shall be applied by the
member agencies.
(2) RECOMMENDATIONS.—The Committee shall
make recommendations for uniformity in other su-
pervisory matters, such as, but not limited to, identi-
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fying financial services institutions and other provid-
ers of financial services in need of special super-
visory attention, the adequacy of supervisory tools
for determining the impact of affiliate operations on
insured depository institutions, and the ability of the
member agencies to discover possible fraud or ques-
tionable practices.
(3) RECOMMENDATIONS
TO
CONGRESS.—The
Committee shall, from time to time, recommend to
the Congress additional measures to strengthen the
separation between insured depository institutions
controlled by depository institutions holding compa-
nies from the activities of any of their affiliates, in-
cluding the imposition of additional restrictions on
interaffiliate transactions and the strict application
of Federal deposit insurance coverage only for the
benefit of depositors of insured depository institu-
tions.
(i) CONSULTATION WITH STATE REGULATORS.—The
Committee shall consult with the appropriate organiza-
tions representing the State regulators of banks, savings
and loan associations, savings banks, securities firms, in-
surance companies, and other providers of financial serv-
ices, and as deemed appropriate, meet with such State reg-
ulators. The Committee, when appropriate, shall invite to
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each public meeting of the Committee representatives of
such organizations.
(j) STUDIES AND RECOMMENDATIONS.—The Com-
mittee may conduct or authorize studies to carry out the
purposes of this Act. On the basis of such studies, the
Committee may make recommendations to the Congress
and member agencies concerning the implementation of
this Act and changes in statutes and regulations necessary
to promote the strength and stability of the Nation’s fi-
nancial system and financial institutions, the competitive-
ness of providers of financial services in domestic and
international markets, and the purposes of this Act. Not
later than 1 year after the date of the enactment of this
Act, the Committee shall report to the Congress on pro-
posals for legislative or regulatory actions that will im-
prove the examination process to permit better oversight
of all insured depository institutions. In particular, the
Committee shall consider whether the number of, or com-
pensation for, examiners employed by the appropriate
Federal regulatory agencies should be increased.
(k) NOTICE PROCEDURES FOR DETERMINING NEW
FINANCIAL SERVICES INSTITUTIONS AND NEW FINAN-
CIAL ACTIVITIES.—
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(1) NOTICE REQUIREMENT.—A financial serv-
ices holding company may request the Committee to
determine that—
(A) an activity not described in section
102(n) (1)–(12) constitutes a financial activity
pursuant to section 102(n)(13); or
(B) a company not described in section
102(m) (1)–(8) is a financial services institu-
tion pursuant to section 102(m)(9),
by providing the Committee with written notice de-
scribing the proposed activity or institution.
(2) CONTENTS OF NOTICE.—The notice submit-
ted to the Committee shall contain such information
as the Committee shall prescribe by regulation or by
specific request in connection with a particular no-
tice.
(3) PROCEDURE FOR COMMITTEE ACTION.—
(a) NOTICE OF DISAPPROVAL.—Any notice
filed under this subsection shall be deemed to
be approved by the Committee unless before the
end of the 60-day period beginning on the date
the Committee receives a complete notice under
subparagraph (1), the Committee issues an
order determining the activity does not con-
stitute a financial activity or the institution is
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tively engaged in such insurance activities during the 2-
year period preceding the date of such acquisition.
SEC. 133. EXISTING CONTRACTS.
Nothing in sections 131 or 132 shall require the
breach of any contract entered into before the date of en-
actment of this Act.
TITLE II—CONFORMING AMENDMENTS TO
OTHER LAWS FOR FINANCIAL SERV-
ICES HOLDING COMPANIES
SEC. 201. EXEMPTION OF FINANCIAL SERVICES HOLDING
COMPANIES FROM THE BANK HOLDING COM-
PANY ACT OF 1956.
Section 2(c)(2) of the Bank Holding Company Act
of 1956 (12 U.S.C. 1841(c)(2)) is amended by adding at
the end the following new subparagraphs:
‘‘(K) An insured bank, as defined in sec-
tion 3 of the Federal Deposit Insurance Act,
that is controlled by a financial services holding
company, as defined in section 102(a) of the
Financial Services Holding Company Act.
‘‘(L) A wholesale financial institution, as
defined in section 102(i) of the Financial Serv-
ices Holding Company Act, that is controlled by
a financial services holding company, as defined
in section 102(a) of such Act.’’.