Garn-St. Germain Depository Institutions Act of 1982
PL 97-320 (H.R.6267), enacted 10/15/1982

PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1469 
Public Law 97-320 
97th Congress 
An Act 
To revitalize the housing industry by strengthening the financial stability of home 
mortgage lending institutions and ensuring the availability of home mortgage 
loans. 
Be it enacted by the Senate and House of Representatives of the 
United States of 
America in Congress assembled, 
SHORT TITLE 
SECTION 1. This Act may be cited as the "Garn-St Germain 
Depository Institutions Act of 1982". 
TITLE I—DEPOSIT INSURANCE FLEXIBILITY 
SHORT TITLE 
SEC. 101. This title may be cited as the "Deposit Insurance Flexi-
bility Act". 
PART A—FEDERAL DEPOSIT INSURANCE CORPORATION AMENDMENTS 
Oct. 15, 1982 
[H.R. 6267] 
Garn-St 
Germain 
Depository 
Institutions Act 
of 1982. 
12 u s e 226 note. 
Deposit 
Insurance 
Flexibility Act. 
12 u s e 1811 
note. 
ASSISTANCE TO INSURED BANKS 
SEC. 111. Section 13(c) of the Federal Deposit Insurance Act (12 
U.S.C. 1823(c)) is amended to read as follows: 
"(cKD The Corporation is authorized, in its sole discretion and 
upon such terms and conditions as the Board of Directors may 
prescribe, to make loans to, to make deposits in, to purchase the 
assets or securities of, to assume the liabilities of, or to make 
contributions to, any insured bank— 
"(A) if such action is taken to prevent the closing of such 
insured bank; 
"(B) if, with respect to a closed insured bank, such action is 
taken to restore such closed insured bank to normal operation; 
or 
"(C) if, when severe financial conditions exist which threaten 
the stability of a significant number of insured banks or of 
insured banks possessing significant financial resources, such 
action is taken in order to lessen the risk to the Corporation 
posed by such insured bank under such threat of instability. 
"(2XA) In order to facilitate a merger or consolidation of an 
insured bank described in subparagraph (B) with an insured institu-
tion or the sale of assets of such insured bank and the assumption of 
such insured bank's liabilities by an insured institution, or the 
acquisition of the stock of such insured bank, the Corporation is 
authorized, in its sole discretion and upon such terms and conditions 
as the Board of Directors may prescribe— 
"(i) to purchase any such assets or assume any such liabilities; 
96 STAT. 1470 
PUBLIC LAW 97-320—OCT. 15, 1982 
"(ii) to make loans or contributions to, or deposits in, or 
purchase the securities of, such insured institution or the com-
pany which controls or will acquire control of such insured 
institution; 
"(iii) to guarantee such insured institution or the company 
which controls or will acquire control of such insured institu-
tion against loss by reason of such insured institution's merging 
or consolidating with or assuming the liabilities and purchasing 
the assets of such insured bank or by reason of such company 
acquiring control of such insured bank; or 
"(iv) to take any combination of the actions referred to in 
subparagraphs (i) through (iii). 
"(B) For the purpose of subparagraph (A), the insured bank must 
be an insured bank— 
"(i) which is closed; 
"(ii) which, in the judgment of the Board of Directors, is in 
danger of closing; or 
"(iii) which, when severe financial conditions exist which 
threaten the stability of a significant number of insured banks 
or of insured banks possessing significant financial resources, is 
determined by the Corporation, in its sole discretion, to require 
assistance under subparagraph (A) in order to lessen the risk to 
the Corporation posed by such insured bank under such threat 
of instability. 
"(3) The Corporation may provide any person acquiring control of, 
merging with, consolidating with or acquiring the assets of an 
12 use 1823. 
insured bank under section 13(f) of this Act with such financial 
assistance as it could provide an insured institution under this 
subsection. 
"(4)(A) No assistance shall be provided under this subsection in an 
amount in excess of that amount which the Corporation determines 
to be reasonably necessary to save the cost of liquidating, including 
paying the insured accounts of, such insured bank, except that such 
restriction shall not apply in any case in which the Corporation 
determines that the continued operation of such insured bank is 
essential to provide adequate banking services in its community. 
"(B) The Corporation may not use its authority under this subsec-
tion to purchase the voting or common stock of an insured bank. 
Nothing in the preceding sentence shall be construed to limit the 
ability of the Corporation to enter into and enforce covenants and 
agreements that it determines to be necessary to protect its finan-
cial interest. 
"(5)(A) During any period in which an insured bank has received 
assistance under this subsection and such assistance is still out-
standing, such insured bank may defer the payment of any State or 
local tax which is determined on the basis of the deposits held by 
such insured bank or of the interest paid on such deposits. 
"(B) When such insured bank no longer has any outstanding 
assistance, such insured bank shall pay all taxes which were 
deferred under subparagraph (A). Such payments shall be made in 
accordance with a payment plan established by the Corporation, 
after consultation with the applicable State and local taxing 
authorities. 
"(6) Any assistance provided under this subsection may be in 
subordination to the rights of depositors and other creditors. 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1471 
"(7) In its annual report to the Congress, the Corporation shall 
report the total amount it has saved, or estimates it has saved, by 
exercising the authority provided in this subsection. 
"(8) For purposes of this subsection, the term 'insured institution' 
means an insured bank as defined in section 3 of this Act or an 
insured institution as defined in section 401 of the National Housing 
Act". 
Report to 
Congress. 
"Insured 
institution." 
FEDERAL 
DEPOSIT 
INSURANCE 
CORPORATION; 
INSURED 
FEDERAL 
SAVINGS 
BANKS 
SEC. 112. Section 5 of the Home Owners' Loan Act of 1933 (12 
U.S.C. 1464) is amended by adding at the end thereof the following: 
"(o)(l) Notwithstanding any other provision of this section, the 
Board, subject to the provisions of this subsection, may authorize, 
under the rules and regulations of the Board, the conversion of a 
State-chartered savings bank insured by the Federal Deposit Insur-
ance Corporation into a Federal savings bank, if such conversion is 
not in contravention of State law, and provide for the organization, 
incorporation, operation, and regulation of such institution. 
"(2)(A) The Federal Deposit Insurance Corporation shall insure 
the deposit accounts of any Federal savings bank chartered pursu-
ant to this subsection, until such time as the accounts of such 
institution are insured by the Federal Savings and Loan Insurance 
Corporation. 
"(B) The Board shall provide the Federal Deposit Insurance 
Corporation with notification of any application under this Act for 
conversion to a Federal charter by an institution insured by the 
Corporation, shall consult with the Corporation before disposing of 
the application, and shall provide said Corporation with notification 
of the Board's determination with respect to such application. 
"(C) The Federal Deposit Insurance Corporation shall have the 
power to make special examinations of any Federal savings bank it 
insures and for which the Board of Directors of the Federal Deposit 
Insurance Corporation determines an examination is necessary to 
determine the condition of the bank for insurance purposes. 
"(D) Except with the prior written approval of the Federal Deposit 
Insurance Corporation, no Federal savings bank insured by the 
Federal Deposit Insurance Corporation shall— 
"(i) merge or consolidate with any bank, association, or insti-
tution that is not insured by the Federal Deposit Insurance 
Corporation; 
"(ii) assume liability to pay any deposits made in, or similar 
liabilities of, any bank, association, or institution that is not 
insured by the Federal Deposit Insurance Corporation; or 
"(iii) transfer assets to any bank, association, or institution 
that is not insured by the Federal Deposit Insurance Corpora-
tion in consideration of the assumption of liabilities for any 
portion of the deposits made in such bank. 
"(E) In granting any approval required by paragraph (D) of this 
subsection, the Board of Directors of the Federal Deposit Insurance 
Corporation shall consider the financial and managerial resources 
and the future prospects of the existing and proposed institutions. 
"(F) Notwithstanding section 402(j) of the National Housing Act, 
any provision of the constitution or laws of any State, or para-
graph (1) of this subsection, if the Federal Deposit Insurance Corpo-
ration determines conversion into a Federal stock savings bank or 
12 u s e 1725. 
96 STAT. 1472 
PUBLIC LAW 97-320—OCT. 15, 1982 
the chartering of a Federal stock savings bank is necessary to 
prevent the closing of a savings bank it insures or to reopen a closed 
savings bank it insured, or if the Federal Deposit Insurance Corpora-
tion determines, with the concurrence of the Board, that severe 
financial conditions exist that threaten the stability of a savings 
bank insured by such Corporation and that such a conversion or 
charter is likely to improve the financial condition of such savings 
bank, the Federal Deposit Insurance Corporation shall provide to 
the Board a certificate of such determination, the reasons therefor 
in conformance with the requirements of this Act, and the bank, 
without further action by the Board, shall be converted or chartered 
by the Board, pursuant to the rules and regulations thereof, from 
the time the Federal Deposit Insurance Corporation issues such 
certificate. 
"(G) A bank may be converted under subparagraph (F) only where 
the board of trustees of the bank— 
"(i) has specified in writing that the bank is in danger of 
closing or is closed, or that severe financial conditions exist that 
threaten the stability of the bank and a conversion is likely to 
improve the financial condition of the bank; and 
"(ii) has requested in writing that the Corporation use the 
authority of subparagraph (F). 
"(H)(i) Before making a determination under subparagraph (F), 
the Corporation shall consult the State bank supervisor of the State 
in which the bank in danger of closing is chartered. The State bank 
supervisor shall be given a reasonable opportunity, and in no event 
less than forty-eight hours, to object to the use of the provisions of 
subparagraph (F). 
"(ii) If the State supervisor objects during such period, the Corpo-
ration may use the authority of subparagraph (F) only by a unani-
mous vote of the Board of Directors. The Board of Directors shall 
provide to the State supervisor, as soon as practicable, a written 
certification of its determination. 
"(3) A Federal savings bank chartered under this subsection shall 
have the same authority with respect to investments, operations, 
and activities, and shall be subject to the same restrictions, includ-
ing those applicable to branching and discrimination, as would 
apply to it if it were chartered as a Federal savings bank under any 
other provision of this Act. 
12 use 1881 
"(4) For purposes of the Bank Protection Act of 1968, the Home 
290i'^^^ 320i' 
Mortgage Disclosure Act, the Community Reinvestment Act, the 
note *35oi note. 
Depository Institution Management Interlocks Act, the Depository 
15 use 1601 
Institutions Deregulation Act of 1980, the Truth in Lending Act, the 
note, 1691 note, 
Equal Credit Opportunity Act, the Fair Debt Collection Practices 
1692 note, 1693 
Act, the Electronic Fund Transfer Act, and section 12(i) of the 
note, 78/. 
Securities Exchange Act of 1934, a Federal savings bank the deposits 
of which are insured by the Federal Deposit Insurance Corporation 
shall be regarded as an institution the accounts of which are insured 
by the Federal Savings and Loan Insurance Corporation. 
"(5) Notwithstanding any limitation contained in the National 
Housing Act, the Federal Savings and Loan Insurance Corporation, 
in its sole discretion, and on such terms and conditions as it shall 
determine, may provide the Federal Deposit Insurance Corporation 
with financial assistance or guarantees in connection with a trans-
action subject to paragraph (2)(D) or section 18(c) of the Federal 
12 use 1828. 
Deposit Insurance Act". 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1473 
CX)NFORMING AMENDMENTS TO THE FEDERAL DEPOSIT INSURANCE ACT 
SEC. 113. (a) Section 3(q) of the Federal Deposit Insurance Act (12 
U.S.C. 1813(q)) is amended— 
(1) in paragraph (2) thereof, by striking out "and" at the end 
thereof; 
(2) in paragraph (3) thereof, by striking out the period at the 
end thereof and inserting in lieu thereof "; and"; and 
(3) by adding at the end thereof the following: 
"(4) the Federal Home Loan Bank Board in the case of an 
insured Federal savings bank.". 
(b) Section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813) 
"insured 
is amended by adding at the end thereof the following: 
SfinSVank" 
"(t) The term 'insured Federal savings bank' means a Federal 
savings bank chartered pursuant to section 5(o) of the Home 
Owners' Loan Act of 1933 and insured by the Corporation.". 
Ante, p. I47i. 
(c) Section 4 of the Federal Deposit Insurance Act (12 U.S.C. 1814) 
is amended by inserting at the end thereof the following: 
"(c) Every Federal savings bank which is chartered pursuant to 
section 5(o) of the Home Owners' Loan Act of 1933, and which is 
engaged in the business of receiving deposits other than trust funds, 
shall be an insured bank from the time it is authorized to commence 
business, until such time as its accounts are insured by the Federal 
Savings and Loan Insurance Corporation.". 
(d) Section 7(aX2) of the Federal Deposit Insurance Act (12 U.S.C. 
1817(aX2)) is amended by inserting "(A)" after "(2)" and by inserting 
at the end thereof the following: 
"(B) The Corporation shall have access to reports of examina-
tion made by, and reports of condition made to, the Federal 
Home Loan Bank Board or any Federal Home Loan Bank, 
respecting any insured Federal savings bank, and the Corpora-
tion shall have access to all revisions of reports of condition 
made to either such agency. Such agency shall promptly advise 
the Corporation of any revisions or changes in respect to deposit 
liabilities made or required to be made in any report of 
condition.". 
(e) The first sentence of section 7(a)(3) of the Federal Deposit 
Insurance Act (12 U.S.C. 1817(a)(3)) is amended to read as follows: 
"Each insured State nonmember bank (except a District bank) and 
each foreign bank having an insured branch (other than a Federal 
branch) shall make to the Corporation, each insured national bank, 
each foreign bank having an insured branch which is a Federal 
branch, and each insured District bank shall make to the Comptrol-
ler of the Currency, each insured State member bank shall make to 
the Federal Reserve bank of which it is a member, and each insured 
Federal savings bank shall make to the Federal Home Loan Bank 
Board, four reports of condition annually upon dates which shall be 
selected by the Chairman of the Board of Directors, the Comptroller 
of the Currency, the Chairman of the Board of Governors of the 
Federal Reserve System, and the Chairman of the Federal Home 
Loan Bank Board.". 
(f) Section 7(a)(6) of the Federal Deposit Insurance Act (12 U.S.C. 
1817(a)(6)) is amended by inserting ", the Federal Home Loan Bank 
Board," after "Comptroller of the Currency". 
(g) Section 8(a) of the Federal Deposit Insurance Act (12 U.S.C. 
1818(a)) is amended— 
96 STAT. 1474 
PUBLIC LAW 97-320—OCT. 15, 1982 
(1) in the second sentence thereof, by inserting after "district 
bank," the following: "to the Federal Home Loan Bank Board in 
the case of an insured Federal savings bank,"; and 
(2) in the third sentence thereof, by inserting after "national 
bank," the following: "or the Federal Home Loan Bank Board in 
the case of an insured Federal savings bank,". 
(h) Section 8(o) of the Federal Deposit Insurance Act (12 U.S.C. 
1818(o)) is amended by inserting at the end thereof the following: 
"Whenever the insured status of an insured Federal savings bank 
shall be terminated by action of the Board of Directors, the Federal 
Home Loan Bank Board shall appoint a receiver for the bank, which 
shall be the Corporation.". 
(i) Section 10(b) of the Federal Deposit Insurance Act (12 U.S.C. 
18200t>)) is amended in the second sentence thereof by inserting after 
"or District bank," the following: "or any insured Federal savings 
bank,". 
(j) Section 11(c) of the Federal Deposit Insurance Act (12 U.S.C. 
1821(c)) is amended by inserting at the end thereof the following: 
"Notwithstanding any other provision of law, whenever the Federal 
Home Loan Bank Board shall appoint a receiver, other than a 
conservator, of any insured Federal savings bank hereafter closed, it 
shall appoint the Corporation receiver for such closed insured 
Federal savings bank.". 
(k) Section 11(g) of the Federal Deposit Insurance Act (12 U.S.C. 
1821(g)) is amended in the first sentence by inserting after "District 
bank," the following: "or closed insured Federal savings bank,". 
(1) Section 12(a) of the Federal Deposit Insurance Act (12 U.S.C. 
1822(a)) is amended by inserting after "foreign bank," the following: 
"insured Federal savings bank,". 
(m) Section 13 of the Federal Deposit Insurance Act (12 U.S.C. 
1823) is amended— 
(1) by redesignating subsections (f) and (g) as subsections (g) 
and (h), respectively; and 
(2) in subsection (e)— 
(A) by inserting "(e)" before "No agreement"; and 
(B) by striking out the first paragraph of such subsection, 
(n) Section 18(c) of the Federal Deposit Insurance Act (12 U.S.C. 
1828(c)) is amended by inserting at the end thereof the following: 
"(12) The provisions of this subsection shall not apply to any 
merger transaction involving an insured Federal savings bank 
unless the resulting institution will be an insured bank other than 
an insured Federal savings bank.". 
(o) Section 18(j) of the Federal Deposit Insurance Act (12 U.S.C. 
1828(j)) is amended by adding at the end thereof the following: 
"(4) The provisions of this subsection shall not apply to an insured 
Federal savings bank.". 
(p) Section 26 of the Federal Deposit Insurance Act (12 U.S.C. 
1831c) is amended— 
(1) by inserting "(a)" after "Sec. 26."; 
(2) in subsection (a), as so redesignated under paragraph (1), 
by adding at the end thereof the following: "The provisions of 
this subsection shall apply only to mergers, consolidations, or 
conversions consummated and effective prior to the effective 
date of the Depository Institutions Amendments of 1982 or 
mergers, consolidations, or conversions for which applications 
have been received at a regional Federal Home Loan Bank prior 
to such effective date."; and 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1475 
(3) by adding at the end thereof the following: 
"(b) No transaction involving a change of deposit insurance agen-
cies from the Corporation to the Federal Savings and Loan Insur-
ance Corporation shall be deemed a termination of insured status 
under section 8(a) of this Act.". 
12 USC1818. 
(q) Section 7(j)(16) of the Federal Deposit Insurance Act (12 U.S.C. 
1817(j)(16)) is amended by adding at the end thereof the following: 
"This subsection shall not apply to an insured Federal savings 
bank.". 
CONFORMING AMENDMENTS TO THE HOME OWNERS* LOAN ACT OF 1933 
SEC. 114. (a) Section 2(d) of the Home Owners' Loan Act of 1933 (12 
"Association." 
U.S.C. 1462(d)) is amended to read as follows: 
"(d) The term 'association' means a Federal savings and loan 
association or a Federal savings bank chartered by the Board under 
section 5 of this Act and any reference in any other law to a Federal 
12 USC 1464. 
savings and loan association shall be deemed to be also a reference 
to such Federal savings banks, unless the context indicates 
otherwise.". 
(b) Section 5(d)(6) of the Home Owners' Loan Act of 1933 (12 U.S.C. 
1464(d)(6)) is amended— 
(1) in paragraph (B), by inserting after "Federal Savings and 
Loan Insurance Corporation" the following: "or the Federal 
Deposit Insurance Corporation"; 
(2) in the second sentence of subparagraph (D), by inserting 
after "shall appoint" the following: ", except as hereafter 
provided,"; and 
(3) by inserting at the end of subparagraph (D): "In the case of 
a Federal savings bank chartered pursuant to subsection (o) and 
insured by the Federal Deposit Insurance Corporation, the 
Board shall appoint only the Federal Deposit Insurance Corpo-
ration as receiver for the association and the Federal Deposit 
Insurance Corporation shall have the same powers as receiver 
as those powers granted by this paragraph to the Federal 
Savings and Loan Insurance Corporation as receiver of other 
(c) Section 5(d)(ll) of the Home Owners' Loan Act of 1933 (12 
U.S.C. 1464(d)(ll)) is amended by striking out "with other" and 
inserting in lieu thereof "with associations or with any". 
CONFORMING AMENDMENTS TO THE NATIONAL HOUSING ACT 
SEC. 115. (a) Section 403(a) of the National Housing Act (12 U.S.C. 
1726(a)) is amended to read as follows: 
"(a)(1) It shall be the duty of the Corporation to insure the 
accounts of all Federal savings and loan associations, and all Fed-
eral savings banks, except for Federal savings banks the deposits of 
which are insured by the Federal Deposit Insurance Corporation. 
"(2) The Corporation may insure the accounts of building and 
loan, savings and loan, and homestead associations and cooperative 
banks organized and operated according to the laws of the State, 
District, territory, or possession in which they are chartered or 
organized, and of savings banks chartered pursuant to section 5(o) of 
the Home Owners' Loan Act of 1933.". 
Ante, p. 1471. 
(b) Subparagraphs (A) and (B) of section 408(a)(1) of the National 
Housing Act (12 U.S.C. 1730a(a)(l)) are amended to read as follows: 
96 STAT. 1476 
PUBLIC LAW 97-320—OCT. 15, 1982 
"Insured 
institution. 
"Uninsured 
institution." 
"(A) 'insured institution' means a Federal savings and loan 
association, a Federal savings bank, a building and loan, savings 
and loan or homestead association or a cooperative bank, the 
accounts of which are insured by the Federal Savings and Loan 
Insurance Corporation, and shall include a Federal savings 
bank the deposits of which are insured by the Federal Deposit 
Insurance Corporation; 
"(B) 'uninsured institution' means any association or bank 
referred to in subparagraph (A), the accounts of which are not 
insured by the Federal Savings and Loan Insurance Corpora-
tion, except for a Federal savings bank the deposits of which are 
insured by the Federal Deposit Insurance Corporation;". 
(c) Section 407(m) of the National Housing Act (12 U.S.C. 1730(m)) 
is amended by adding at the end thereof the following: 
"(4) The Federal Home Loan Bank Board, or its designated repre-
sentative, shall have the same power with respect to a Federal 
association, or affiliate thereof, the deposits of which are insured by 
the Federal Deposit Insurance Corporation as it or the Corporation 
has under paragraphs (1) and (2) of this subsection with respect to 
insured institutions, or their affiliates.". 
(d) Section 407(1)(6) of the National Housing Act (12 U.S.C. 
1730(1X6)) is amended by adding at the end thereof the following: 
"For the purpose of this subsection, the term 'insured institution' 
shall include a Federal savings bank the deposits of which are 
insured by the Federal Deposit Insurance Corporation.", 
(e) Section 407(q)(13) of the National Housing Act (12 U.S.C. 
1730(q)(13)) is amended by inserting "(A)" after "(13)" and by adding 
at the end thereof the following: 
"(B) For the purposes of this subsection, the term 'insured institu-
tion' shall include a Federal savings bank the deposits of which are 
insured by the Federal Deposit Insurance Corporation.". 
EXTRAORDINARY ACQUISITIONS 
SEC. 116. Section 13 of the Federal Deposit Insurance Act (12 
U.S.C. 1823) is amended by inserting after subsection (e) the 
following: 
"(f)(1) Nothing contained in paragraphs (2) or (3) shall be con-
strued to limit the Corporation's powers in subsection (c) to assist a 
transaction under paragraphs (2) or (3). 
"(2)(A) Whenever an insured bank with total assets of $500,000,000 
or more (as determined from its most recent report of condition) is 
closed, the Corporation, as receiver, may, in its discretion and upon 
such terms and conditions as the Corporation may determine, 
arrange the sale of assets of the closed bank and the assumption of 
the liabilities of the closed bank, including the sale of such assets to 
and the assumption of such liabilities by an insured depository 
institution located in the State where the closed bank was chartered 
but established by an out-of-State bank or holding company. Where 
otherwise lawfully required, a transaction under this subsection 
must be approved by the primary Federal or State supervisor of all 
parties thereto. 
"(B)(i) Before making a determination to take any action under 
subparagraph (A), the Corporation shall consult the State bank 
supervisor of the State in which the closed insured bank was 
chartered. 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1477 
"(ii) The State bank supervisor shall be given a reasonable oppor-
tunity, and in no event less than forty-eight hours, to object to the 
use of the provisions of this paragraph. Such notice may be provided 
by the Corporation prior to its appointment as receiver, but in 
anticipation of an impending appointment. 
"(iii) If the State supervisor objects during such period, the Corpo-
ration may use the authority of this paragraph only by a unanimous 
vote of the Board of Directors. The Board of Directors shall provide 
to the State supervisor, as soon as practicable, a written certification 
of its determination. 
"(3)(A)(i) Whenever the Corporation has determined, in its discre-
tion, that an insured bank organized in mutual form with total 
assets of $500,000,000 or more (as determined from its most recent 
report of condition) is in danger of closing, the insured bank may 
merge with or its assets may be purchased by and its liabilities 
assumed by another institution, including an insured depository 
institution located in the State where the insured bank is chartered 
but established by an out-of-State bank or holding company. 
"(ii) Where otherwise lawfully required, a transaction under this 
subsection must be approved by the primary Federal or State super-
visor of all parties thereto. 
"(B) The Corporation may make a determination under paragraph 
(A) only where the board of trustees of the insured bank and the 
appropriate Federal or State chartering authority have specified in 
writing that the bank is in danger of closing and have requested in 
writing that the Corporation assist a merger or a purchase. 
"(C)(i) Before making a determination under subparagraph (A), 
the Corporation shall consult the State bank supervisor of the State 
in which the bank in danger of closing is chartered. 
"(ii) The State bank supervisor shall be given a reasonable oppor-
tunity, and in no event less than forty-eight hours, to object to the 
use of the provisions of this paragraph. 
"(iii) If the State supervisor objects during such period, the Corpo-
ration may use the authority of this paragraph only by a unanimous 
vote of the Board of Directors. The Board of Directors shall provide 
to the State supervisor, as soon as practicable, a written certification 
of its determination. 
"(4)(i) Notwithstanding section 3(d) of the Bank Holding Company 
Act of 1956 or any other provision of law. State or Federal, or the 12 USC1842. 
constitution of any State, an institution that merges with or 
acquires an insured bank under paragraph (2) or (3) is authorized to 
be and shall be operated as a subsidiary of an out-of-State bank or 
bank holding company, except that an out-of-State bank may oper-
ate the resulting institution as a subsidiary only if such ownership is 
otherwise specifically authorized. 
"(ii) Any subsidiary created by operation of this subsection may 
retain and operate any existing branch or branches of the institu-
tion merged with or acquired under paragraph (2) or (3), but other-
wise shall be subject to the conditions upon which a national bank 
may establish and operate branches in the State in which such 
insured institution is located. 
"(iii) No insured institution acquired under this subsection shall 
after it is acquired move its principal office or any branch office 
which it would be prohibited from moving if the institution were a 
national bank. 
"(5) In determining whether to arrange a sale of assets and 
assumption of liabilities or to permit an acquisition or a merger 
96 STAT. 1478 
PUBLIC LAW 97-320—OCT. 15, 1982 
under the authority of paragraph (2) or (3), the Corporation may 
solicit such offers or proposals as are practicable from any prospec-
tive purchasers or merger partners it determines, in its sole discre-
tion, are both qualified and capable of acquiring the assets and 
liabilities of the closed bank or the bank in danger of closing. 
"(6)(A) If, after receiving offers, the offer presenting the lowest 
expense to the Corporation, that is in a form and with conditions 
acceptable to the Corporation (hereinafter referred to as the 'lowest 
acceptable offer'), is from an offeror that is not an existing in-State 
bank of the same type as the bank that has closed or is in danger of 
closing (or, where the closed bank is an insured bank other than a 
mutual savings bank, the lowest acceptable offer is not from an 
in-State bank holding company), the Corporation shall permit each 
offeror who made an offer the estimated cost of which to the 
Corporation was within 15 per centum or $15,000,000, whichever is 
less, of the initial lowest acceptable offer to submit a new offer. 
"(B) In considering authorizations under this subsection, the Cor-
poration shall give consideration to the need to minimize the cost of 
financial assistance and to the maintenance of specialized deposi-
tory institutions. The Corporation shall authorize transactions 
under this subsection considering the following priorities: 
"(i) First, between depository institutions of the same t3T)e 
within the same State; 
"(ii) Second, between depository institutions of the same type 
In different States; 
"(iii) Third, between depository institutions of different tjrpes 
in the same State; and 
"(iv) Fourth, between depository institutions of different types 
in different States. 
"(C) In considering offers from different States, the Corporation 
shall give a priority to offers from adjoining States. 
"(D) In determining the cost of offers and reoffers, the Corpora-
tion's calculations and estimations shall be determinative. The Cor-
poration may set reasonable time limits on offers and reoffers. 
"(7) No sale may be made under the provisions of paragraph (2) or 
(3)-
"(A) which would result in a monopoly, or which would be in 
furtherance of any combination or conspiracy to monopolize or 
to attempt to monopolize the business of banking in any part of 
the United States; or 
"(B) whose effect in any section of the country may be sub-
stantially to lessen competition, or to tend to create a monopoly, 
or which in any other manner would be in restraint of trade, 
unless the Corporation finds that the anticompetitive effects of 
the proposed transactions are clearly outweighed in the public 
interest by the probable effect of the transaction in meeting the 
convenience and needs of the community to be served. 
Definitions. 
"(8) As used in this subsection— 
"(A) the term 'receiver' means the Corporation when it has 
been appointed the receiver of a closed insured bank; 
"(B) the term 'insured depository institution' means an 
insured bank or an association or savings bank insured by the 
Federal Savings and Loan Insurance Corporation; and 
"(C) the term 'in-State depository institution or in-State hold-
ing company' means an existing insured depository institution 
currently operating in the State in which the closed bank or the 
bank in danger of closing is chartered or a company that is 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1479 
operating an insured depository institution subsidiary in the 
State in which the closed bank or the bank in danger of closing 
is chartered.". 
ASSESSMENTS 
SEC. 117. The third sentence of section 7(d)(1) of the Federal 
Deposit Insurance Act (12 U.S.C. 1817(d)(1)) is amended— 
(1) by striking out "and" before "(3) the insurance losses"; and 
(2) by inserting before the period at the end thereof the 
following: "; and (4) any lending costs for the calendar year, 
which costs shall be equal to the amount by which the amount 
of interest earned, if any, from each loan made by the Corpora-
tion under section 13 of this Act after January 1, 1982, is less 12 USC 1823. 
than the amount which the Corporation would have earned in 
interest for the calendar year if interest had been paid on such 
loan during such calendar year at a rate equal to the average 
current value of funds to the United States Treasury for such 
calendar year". 
WAIVER OF NOTICE REQUIREMENTS 
SEC. 118. (a) Section 4(c)(8) of the Bank Holding Company Act of 
1956 (12 U.S.C. 1843(c)(8)) is amended by striking out the semicolon 
at the end thereof and inserting in lieu thereof the following: ". 
Notwithstanding any other provision of this Act, if the Board finds 
that an emergency exists which requires the Board to act immedi-
ately on any application under this subsection involving a thrift 
institution, and the primary Federal regulator of such institution 
concurs in such finding, the Board may dispense with the notice and 
hearing requirement of this subsection and the Board may approve 
or deny any such application without notice or hearing;". 
(b) Section 2(i) of the Bank Holding Company Act of 1956 (12 
U.S.C. 1841(i)) is amended by— 
(1) striking out "or" before "(3)"; and 
(2) by inserting before the period at the end thereof the 
following: "or (4) a Federal savings bank". 
(c) The first sentence of section 3(d) of the Bank Holding Company 
Act of 1956 (12 U.S.C. 1842(d)) is amended by inserting after "no 
application" the following: "(except an application filed as a result 
of a transaction authorized under section 13(f) of the Federal Deposit 
Insurance Act)". 
Ante, p. 1476. 
PART B—FEDERAL HOME LOAN BANK BOARD AMENDMENTS 
FEDERAL STOCK SAVINGS INSTITUTIONS 
SEC. 121. Section 5 of the Home Owners' Loan Act of 1933 (12 
U.S.C. 1464), as amended by section 112, is amended by adding at the 
end thereof the following: 
"(p)(l) Notwithstanding any other provision of Federal law or the 
laws or constitution of any State, and consistent with the purposes 
of this Act, the Board may authorize (or in the case of a Federal 
association, require) the conversion of a mutual savings and loan 
association or Federal mutual savings bank that is insured by the 
Federal Savings and Loan Insurance Corporation into a Federal 
stock savings and loan association or Federal stock savings bank, or 
96 STAT. 1480 
PUBLIC LAW 97-320—OCT. 15, 1982 
charter a Federal stock savings and loan association or Federal 
stock savings bank to acquire the assets of, or merge with such a 
mutual institution under the rules and regulations of the Board. 
"(2) Authorizations under this subsection may be made only to 
assist an institution in receivership, or if the Board has determined 
that severe financial conditions exist which threaten the stability of 
an institution and that such authorization is likely to improve the 
financial condition of the institution, or when the Federal Savings 
and Loan Insurance Corporation has contracted to provide assist-
ance to such institution under section 406 of the National Housing 
12 use 1729. 
Act. 
"(3) A Federal savings bank chartered under this subsection shall 
have the same authority with respect to investments, operations and 
activities, and shall be subject to the same restrictions, including 
those applicable to branching and discrimination, as would apply to 
it if it were chartered as a Federal savings bank under any other 
provisions of this Act, and may engage in any investment, activity, 
or operation that the institution it acquired was engaged in if that 
institution was a Federal savings bank, or would have been author-
ized to engage in had that institution converted to a Federal 
charter.". 
ASSISTANCE TO THRIFT INSTITUTIONS 
SEC. 122. (a) Section 406(f) of the National Housing Act (12 U.S.C. 
1729(f)) is amended to read as follows: 
"(f)(1) The Corporation is authorized, in its sole discretion and 
upon such terms and conditions as the Corporation may prescribe, to 
make loans to, to make deposits in, to purchase the assets or 
securities of, to assume the liabilities of, or to make contributions to, 
any insured institution— 
"(A) if such action is taken to prevent the default of such 
insured institution; 
"(B) if, with respect to an insured institution in default, such 
action is taken to restore such insured institution in default to 
normal operation; or 
"(C) if, when severe financial conditions exist which threaten 
the stability of a significant number of insured institutions or of 
insured institutions possessing significant resources, such action 
is taken in order to lessen the risk to the Corporation posed by 
such insured institution under such threat of instability. 
"(2)(A) In order to facilitate a merger or consolidation of an 
insured institution described in subparagraph (B) with another 
insured institution or the sale of assets of such insured institution 
and the assumption of such insured institution's liabilities by an-
other insured institution, the Corporation is authorized, in its sole 
discretion and upon such terms and conditions as the (Ilorporation 
may prescribe— 
"(i) to purchase any such assets or assume any such liabilities; 
"(ii) to make loans or contributions to, or deposits in, or 
purchase the securities of, such other insured institution 
(which, for the purposes of this subparagraph, shall include a 
Federal savings bank insured by the Federal Deposit Insurance 
Corporation); 
"(iii) to guarantee such other insured institution (which, for 
the purposes of this subparagraph, shall include a Federal 
savings bank insured by the Federal Deposit Insurance Corpora-
tion) against loss by reason of such other insured institution's 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1481 
merging or consolidating with or assuming the liabilities and 
purchasing the assets of such insured institution; or 
"(iv) to take any combination of the actions referred to in 
clauses (i) through (iii). 
"(B) An insured institution described in this subparagraph— 
"(i) is an insured institution which is in default; 
"(ii) is an insured institution which, in the judgment of the 
Corporation is in danger of default; or 
"(iii) is an insured institution which, when severe financial 
conditions exist which threaten the stability of a significant 
number of insured institutions, or of insured institutions pos-
sessing significant financial resources, is determined by the 
Corporation, in its sole discretion, to require assistance under 
subparagraph (A) in order to lessen the risk to the Corporation 
posed by such insured institution under such threat of 
instability. 
"(3) The Corporation may provide any person acquiring control of, 
merging with, consolidating with or acquiring the assets of an 
insured institution under section 408(m) of this Act with such Post, p. 1483. 
financial assistance as it could provide an insured institution under 
this subsection. 
"(4) (A) No assistance shall be provided under paragraph (1), (2), or 
(3) of this subsection in an amount in excess of that amount which 
the Corporation determines to be reasonably necessary to save the 
cost of liquidating (including paying the insured accounts of) such 
insured institution, except that such restriction shall not apply in 
any case in which the Corporation determines that the continued 
operation of such insured institution is essential to provide adequate 
savings or home financing services in its community. 
"(B) The Corporation may not use its authority under this subsec-
tion to purchase the voting or common stock of an insured institu-
tion. Nothing in the preceding sentence shall be construed to limit 
the ability of the Corporation to enter into and enforce covenants 
and agreements that it determines to be necessary to protect its 
(b) Section 406(b) of the National Housing Act (12 U.S.C. 1729(b)) 
is amended to read as follows: 
"Ob)(l) In the event that a Federal association is in default, the 
Corporation shall be appointed as conservator or receiver and as 
such— 
"(A) is authorized— 
"(i) to take over the assets of and operate such 
association; 
"(ii) to take such action as may be necessary to put it in a 
sound solvent condition; 
"(iii) to merge it with another insured institution; 
"(iv) to organize a new Federal association to take over its 
assets; 
"(v) to proceed to liquidate its assets in an orderly 
manner; or 
"(vi) to make such other disposition of the matter as it 
deems appropriate; 
whichever it deems to be in the best interest of the association, 
its savers, and the Corporation; and 
"(B) shall pay all valid credit obligations of the association. 
96 STAT. 1482 
PUBLIC LAW 97-320—OCT. 15, 1982 
"(2) The corporation shall pay insurance as provided in section 
405. The surrender and transfer to the Corporation of an insured 
account in any such association which is in default shall subrogate 
the Corporation with respect to such insured account, but shall not 
affect any right which the insured member may have in the unin-
sured portion of his account or any right which he may have to 
participate in the distribution of the net proceeds remaining from 
the disposition of the assets of such association. 
"Federal 
"(3) As used in this section, the term 'Federal association' means a 
association." 
Federal savings and loan association or a Federal savings bank.". 
(c) Section 406(c) of the National Housing Act (12 U.S.C. 1729(c)) is 
amended by striking out "savings and loan" wherever it appears. 
(d) Section 406(c)(1) of the National Housing Act (12 U.S.C. 
1729(c)(1)) is amended by inserting "(A)" after "(c)(1)" and by adding 
at the end thereof the following: 
"(B)(i)(I) Notwithstanding any provision of the constitution or 
laws of any State, or of this section, in the event the Federal 
Home Loan Bank Board determines that any of the grounds 
specified in section 5(d)(6)(A) (i), (ii), or (iii) of the Home Owners' 
12 use 1464. 
Loan Act of 1933 exist with respect to an insured institution, 
other than a Federal association, the Board shall have exclusive 
power and jurisdiction to appoint the Corporation as sole con-
servator or receiver of such institution. 
"(II) In such cases the corporation shall have the same powers 
and duties with respect to insured institutions as are conferred 
upon it under subsection (b) of this section with respect to 
Federal associations. 
"(ii)(I) The authority conferred by this subparagraph shall not 
be exercised without the written approval of the State official 
having jurisdiction over the State-chartered insured institution 
that the grounds specified for such exercise exist. 
"(II) If such approval has not been received by the Board 
within 90 days of receipt of notice by the State that the Board 
has determined such grounds exist, and the Board has re-
sponded in writing to the State's written reasons, if any, for 
withholding approval, then the Board may proceed without 
State approval only by a unanimous vote of the Board. The 
corporation may also proceed without State approval if the 
Corporation has been appointed conservator, receiver, or other 
legal custodian pursusint to State law under subparagraph (A).". 
(e) The first sentence of section 406(c)(2) of the National Housing 
Act (12 U.S.C. 1729(c)(2)) is amended by inserting "conservator or 
after "sole". 
(f) Section 406(c)(3) of the National Housing Act (12 U.S.C. 
1729(c)(3)) is amended— 
(1) by inserting "conservator or" before "receiver" wherever 
it appears therein; 
(2) by striking out "paragraph (2)" and inserting in lieu 
thereof "paragraphs (1) or (2)'; and 
(3) by striking out the second sentence. 
(g) Section 406(d) of the National Housing Act (12 U.S.C. 1729(d)) is 
amended to read as follows: 
"(d) In connection with the liquidation of insured institutions, the 
Corporation shall have power to carry on the business of and to 
collect all obligations to the insured institutions, to settle, compro-
mise, or release claims in favor of or against the insured institu-
tions, and to do all other things that may be necessary in connection 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1483 
therewith, subject only to the regulation of the Federal Home Loan 
Bank Board, or, in cases where the Corporation has been appointed 
conservator, receiver, or legal custodian solely by a public authority 
having jurisdiction over the matter other than said Board, subject 
only to the regulation of such public authority.". 
EMERGENCY THRIFT ACQUISITIONS 
SEC. 123. (a) Section 408 of the National Housing Act (12 U.S.C. 
1730a) is amended by adding at the end thereof the following: 
"(m)(l)(A)(i) Notwithstanding any provision of the laws or consti-
tution of any State or any provision of Federal law, except as 
provided in subsections (eX2) and (1) of this section, and in clause (iii) 
of this subparagraph, the Corporation, upon its determination that 
severe financial conditions exist which threaten the stability of a 
significant number of insured institutions, or of insured institutions 
possessing significant financial resources, may authorize, in its dis-
cretion and where it determines such authorization would lessen the 
risk to the Corporation, an insured institution that is eligible for 
assistance pursuant to section 406(f) of this Act to merge or consoli- Post, p. 1489. 
date with, or to transfer its assets and liabilities to, any other 
insured institution or any insured bank (as such term 'insured bank' 
is defined in section 3(h) of the Federal Deposit Insurance Act), may 12 USC1813. 
authorize any other insured institution to acquire control of said 
insured institution, or may authorize any company to acquire con-
trol of said insured institution or to acquire the assets or assume the 
liabilities thereof. 
"(ii) Mergers, consolidations, transfers, and acquisitions under this 
subsection shall be on such terms as the Corporation shall provide. 
"(iii) Where otherwise required by law, transactions under this 
subsection must be approved by the primary Federal supervisor of 
the party thereto that is not an insured institution. 
"(B)(i) Before making a determination to take any action under 
subparagraph (A), the Corporation shall consult the State official 
having jurisdiction of the acquired institution. 
"(ii) The State official shall be given a reasonable opportunity, and 
in no event less than forty-eight hours, to object to the use of the 
provisions of this paragraph. Such notice may be provided by the 
Corporation prior to its appointment as receiver, but in anticipation 
of an impending appointment. 
"(iii) If the State official objects during such period, the Corpora-
tion may use the authority of this paragraph only by a unanimous 
vote of the Board of Directors. The Board of Directors shall provide 
to the State official, as soon as practicable, a written certification of 
its determination. 
"(2) In considering authorizations under this subsection, the Cor-
poration may solicit such offers or proposals as are practicable from 
any prospective purchasers or merger partners it determines, in its 
sole discretion, are both qualified and capable of acquiring the assets 
and liabilities of the insured institution. 
"(3)(A) If, after receiving offers, the offer presenting the lowest 
expense to the Corporation, that is in a form and with conditions 
acceptable to the Corporation (hereinafter referred to as the 'lowest 
acceptable offer'), is from an institution that is not an existing in-
State insured institution or an in-State savings and loan holding 
company, the Corporation shall permit each offeror who made an 
offer the estimated cost of which to the Corporation was within 15 
96 STAT. 1484 
PUBLIC LAW 97-320—OCT. 15, 1982 
per centum or $15,000,000, whichever is less, of the initial lowest 
acceptable offer to submit a new offer. 
"(B) In considering authorizations under this subsection, the Cor-
poration shall give consideration to the need to minimize the cost of 
financial assistance and to the maintenance of specialized deposi-
tory institutions. The Corporation shall authorize transactions 
under this subsection considering the following priorities: 
"(i) First, between depository institutions of the same type 
within the same State; 
"(ii) Second, between depository institutions of the same type 
in different States; 
"(iii) Third, between depository institutions of different types 
in the same State; and 
"(iv) Fourth, between depository institutions of different types 
in different States. 
"(C) In the case of a minority-controlled institution, the Corpora-
tion shall seek an offer from other minority-controlled institutions 
before proceeding with the sequence set forth in the preceding 
subparagraph. 
"(D) In considering offers from different States, the Corporation 
shall give a priority to offers from adjoining States. 
"(E) In determining the cost of offers and reoffers under this 
subsection, the Corporation's calculations and estimations shall be 
determinative. The Corporation may set reasonable time limits on 
offers and reoffers. 
Definitions. 
"(4) For purposes of this subsection— 
"(A) the term 'insured depository institution* means an 
insured institution or a bank insured by the Federal Deposit 
Insurance Corporation; and 
"(B) the term 'in-State depository institution or in-State 
depository institution holding company' means an existing 
insured depository institution currently operating in the State 
in which the closed institution is chartered or a company that is 
operating an insured depository institution subsidiary in the 
State in which the closed institution is chartered. 
"(5)(A) Where a merger, consolidation, transfer, or acquisition 
under this subsection involves an insured institution eligible for 
assistance and a bank or bank holding company, an insured institu-
tion may retain and operate any existing branch or branches or any 
other existing facilities but otherwise shall be subject to the condi-
tions upon which a national bank may establish and operate 
branches in the State in which such insured institution is located. 
"(B) No such insured institution shall move its principal office or 
any branch office after it is acquired which it would be prohibited 
from moving if it were a national bank. 
"(CXi) Notwithstanding the foregoing, if such an insured institu-
tion does not have its home office in the State of the bank holding 
company bank subsidiary, and if such institution does not qualify as 
a domestic building and loan association under section 7701(aX19) of 
26 use 7701. 
the Internal Revenue Code of 1954, or does not meet the asset 
composition test imposed by subparagraph (C) of that section on 
institutions seeking so to qualify, then such insured institution shall 
be subject to the conditions upon which a bank may retain, operate, 
and establish branches in the State in which the insured institution 
is located. 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1485 
"(ii) The Corporation, for good cause shown, may allow insured 
institutions up to two years to comply with the requirements of 
(b) Section 408(e)(2) of the National Housing Act (12 U.S.C. 
1730a(e)(2)) is amended— 
(1) in the first sentence, by inserting after "subsection" the 
following: ", or any transaction under subsection (m) of this 
section,'; and 
(2) in the third sentence, by inserting after "acquisition," the 
following: "except a transaction under subsection (m) of this 
section,'. 
ASSISTANCE TO FEDERAL HOME LOAN BANKS MEMBERS 
SEC. 124. Section 16 of the Federal Home Loan Bank Act (12 
U.S.C. 1436) is amended bv inserting "(a)" after "SEC. 16." and by 
adding at the end thereof the following: 
"(b) Notwithstanding subsection (a) or any other provision of this 
Act, if the Board determines that severe financial conditions exist 
threatening the stability of member institutions, the Board may 
suspend temporarily the requirements of subsection (a) that a por-
tion of net earnings be set aside semiannually by each Federal 
Home Loan Bank to a reserve account and permit each Federal 
Home Loan Bank to declare and pay dividends out of undivided 
profits.". 
BORROWING AUTHORITY 
SEC. 125. (a) The first sentence of section 402(d) of the National 
Housing Act (12 U.S.C. 1725(d)) is amended by inserting before the 
period at the end thereof the following: ", except that interest on 
loans from the Federal Home Loan Banks shall be not less than 
their current marginal cost of funds, taking into account the maturi-
ties involved, and loans from the Federal Home Loan Banks shall be 
adequately secured, as determined by the Board". 
(b) The first sentence of section 402(i) of the National Housing Act 
(12 U.S.C. 1725(i)) is amended— 
(1) by striking out "any other source" and inserting in lieu 
thereof "any source other than the Federal Home Loan 
Banks"; and 
(2) by inserting "from the Treasury" after "Provided, That 
Prich SllCil lo3.Tl 
(c) Section 11 of the Federal Home Loan Bank Act (12 U.S.C. 1431) 
is amended by adding at the end thereof the following: 
"(k) The Federal Home Loan Banks are hereby authorized, as 
directed by the Board, to make loans to the Federal Savings and 
Loan Insurance Corporation. All such loans shall be made in accord-
ance with the provisions of section 402(d) of the National Housing 
Act". 
INSURANCE FUND RESERVES 
SEC. 126. Section 404 of the National Housing Act (12 U.S.C. 1727) 
is amended by redesignating subsection (h) as subsection (i) and by 
inserting after subsection (g) the following: 
"(h) Notwithstanding any other provision of this section, the 
Corporation, upon its determination that extraordinary financial 
96 STAT. 1486 
PUBLIC LAW 97-320—OCT. 15, 1982 
conditions exist increasing the risk to the Corporation, may termi-
nate distribution of shares of the secondary reserve and utilize said 
reserve on the same basis as the primary reserve. If otherwise 
authorized, the Corporation may resume such distribution upon its 
determination that said conditions no longer exist.". 
FEDERAL HOME LOAN BANK ACT 
SEC. 127. Section 17(a) of the Federal Home Loan Bank Act (12 
U.S.C. 1437(a)) is amended by inserting after the first sentence the 
following: "Notwithstanding any other provision of law, the Board 
may from time to time make such provision as it deems appropriate 
authorizing the performance by any officer, employee, agent, or 
administrative unit thereof of any function of the Board (including 
any function of the Federal Savings and Loan Insurance Corpora-
tion), except with regard to promulgation of rules and regulations in 
accordance with the Administrative Procedure Act, and adjudica-
tions subject to such Act.". 
CONTINUATION OF INSURANCE 
SEC. 128. Section 405(a) of the National Housing Act (12 U.S.C. 
1728(a)) is amended by adding after the first sentence the following: 
"Whenever the liabilities of an insured institution for accounts shall 
have been assumed by another insured institution or institutions, 
whether by way of merger, consolidation, or other statutory assump-
tion, or pursuant to contract, all accounts so assumed shall have 
separate insurance which shall terminate at the end of six months 
from the date such assumption takes effect or, in the case of any 
certificate account, the earliest maturity date after the six-month 
period.". 
PART C—CREDIT UNIONS 
CREDIT U N I O N MERGERS 
SEC. 131. Section 205 of the Federal Credit Union Act (12 U.S.C. 
1785) is amended by adding at the end thereof the following: 
"(h) Notwithstanding any other provision of law, the Board may 
authorize a merger or consolidation of an insured credit union 
which is insolvent or is in danger of insolvency with any other 
insured credit union or may authorize an insured credit union to > 
purchase any of the assets of, or assume any of the liabilities of, any 
other insured credit union which is insolvent or in danger of insol-
vency if the Board is satisfied that— 
"(1) an emergency requiring expeditious action exists with 
respect to such other insured credit union; 
"(2) other alternatives are not reasonably available; and 
"(3) the public interest would best be served by approval of 
such merger, consolidation, purchase, or assumption. 
"(i)(l) Notwithstanding any other provision of this Act or of State 
law, the Board may authorize an institution whose deposits or 
accounts are insured by the Federal Deposit Insurance Corporation 
or the Federal Savings and Loan Insurance Corporation to purchase 
any of the assets of or assume any of the liabilities of an insured 
credit union which is insolvent or in danger of insolvency, except 
that prior to exercising this authority the Board must attempt to 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1487 
effect the merger or consolidation of an insured credit union which 
is insolvent or in danger of insolvency with another insured credit 
union, as provided in subsection (h). 
"(2) For purposes of the authority contained in paragraph (1), 
insured accounts of the credit union may upon consummation of the 
purchase and assumption be converted to insured deposits or other 
comparable accounts in the acquiring institution, and the Board and 
the National Credit Union Share Insurance Fund shall be absolved 
of any liability to the credit union's members with respect to those 
accounts.". 
BOARD'S AUTHORITY AS CONSERVATOR 
SEC. 132. (a) Section 206 of the Federal Credit Union Act (12 U.S.C. 
1786) is amended— 
(1) by redesignating subsections (h) through (o) as subsections 
(i) through (p), respectively; and 
(2) by inserting after subsection (g) the following new 
subsection: 
"(h)(1) The Board may, ex parte without notice, appoint itself as 
conservator and immediately take possession and control of the 
business and assets of any insured credit union in any case in 
which— 
"(A) the Board determines that such action is necessary to 
conserve the assets of any insured credit union or to protect the 
Fund or the interests of the members of such insured credit 
union; or 
"(B) an insured credit union, by a resolution of its board of 
directors, consents to such an action by the Board. 
"(2)(A) In the case of a State-chartered insured credit union, the 
authority conferred by paragraph (1) shall not be exercised without 
the written approval of the State official having jurisdiction over the 
State-chartered credit union that the grounds specified for such 
exercise exist. 
"(B) If such approval has not been received by the Board within 
ninety days of receipt of notice by the State that the Board has 
determined such grounds exist, and the Board has responded in 
writing to the State's written reasons, if any, for withholding ap-
proval, then the Board may proceed without State approval only by 
a unanimous vote of the Board. 
"(3) Not later than ten days after the date on which the Board 
takes possession and control of the business and assets of an insured 
credit union pursuant to paragraph (1), such insured credit union 
may apply to the United States district court for the judicial district 
in which the principal office of such insured credit union is located 
or the United States District Court for the District of Columbia, for 
an order requiring the Board to show cause why it should not be 
enjoined from continuing such possession and control. 
'(4) Except as provided in paragraph (3), in the case of a Federal 
credit union, the Board may maintain possession and control of the 
business and assets of such credit union and may operate such credit 
union until such time— 
"(A) as the Board shall permit such credit union to continue 
business subject to such terms and conditions as may be 
imposed by the Board; or 
"(B) as such credit union is liquidated in accordance with the 
provisions of section 207. 
12 USC 1787. 
96 STAT. 1488 
PUBLIC LAW 97-320—OCT. 15, 1982 
"(5) Except as provided in paragraph (3), in the case of an insured 
State-chartered credit union, the Board may maintain possession 
and control of the business and assets of such credit union and may 
operate such credit union until such time— 
"(A) as the Board shall permit such credit union to continue 
business, subject to such terms and conditions as may be 
imposed by the Board; 
"(B) as the Board shall permit the transfer of possession and 
control of such credit union to any commission, board, or 
authority which has supervisory authority over such credit 
union and which is authorized by State law to operate such 
credit union; or 
"(C) as such credit union is liquidated in accordance with the 
12 use 1787. 
provisions of section 207. 
"(6) The Board may appoint such agents as it considers necessary 
in order to assist the Board in carrying out its duties as a conserva-
tor under this subsection. 
"(7) All expenses incurred by the Board in exercising its authority 
under this subsection with respect to any credit union shall be paid 
out of the assets of such credit union. 
"(8) The authority granted by this subsection is in addition to all 
other authority granted to the Board under this Act.". 
(b) Section 206(b)(2) of the Federal Credit Union Act (12 U.S.C. 
1786(b)(2)) is amended by striking out "subsection (i)" and inserting 
in lieu thereof "subsection (j)". 
(c) Section 206g)(l) of such Act (12 U.S.C. 1786(j)(l)), as so redesig-
nated by subsection (a), is amended— 
(1) in the first sentence, by striking out "subsection (h)(3)" and 
inserting in lieu thereof "subsection (i)(3)"; and 
(2) in the fourth sentence, by striking out "subsection (i)" and 
inserting in lieu thereof "subsection (j)". 
(d) The first sentence of section 206(j)(2) of such Act (12 U.S.C. 
1786(j)(2)), as redesignated by subsection (a), is amended by striking 
out "subsection (h)(1)" and inserting in lieu thereof "subsection 
(i)(l)". 
(e) The first sentence of section 206(1) of such Act (12 U.S.C. 
1786(1)), as redesignated by subsection (a), is amended by striking 
out "(h)" and inserting in lieu thereof "(i)". 
(f) Section 206(m) of such Act (12 U.S.C. 1786(m)), as redesignated 
by subsection (a), is amended— 
(1) by striking out "subsection (i)" and inserting in lieu 
thereof "subsection (j)"; and 
(2) by striking out "subsection (h)" and inserting in lieu 
thereof "subsection (i)". 
(g) The section heading for section 206 of the Federal Credit Union 
Act (12 U.S.C. 1786) is amended by inserting "; TAKING POSSESSION OF 
BUSINESS AND ASSETs" after "COMMITTEE MEMBERS". 
PART D—SUNSET PROVISION 
SUNSET OF CERTAIN PROVISIONS 
12 use 1464 
SEC. 141. (a) Effective upon the expiration of three years after the 
"°^^- 
date of enactment of this Act— 
Ante, p. 1469. 
(1) section 13(c)(5) of the Federal Deposit Insurance Act, as 
added by section 111 of this Act, shall be repealed; 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1489 
(2) subparagraphs (F) and (G) of section 5(oX2) of the Home 
Owners* Loan Act of 1933, as added by section 112 of this Act, 
shall be repealed; 
(3) the provision of law amended by section 116 of this Act 
shall be amended to read as it would without such amendment; 
(4) the provisions of law amended by subsections (a) and (c) of 
section 118 shall be amended to read as they would without 
such amendments; 
(5) the provision of law amended by section 121 of this Act 
shall be amended to read as it would without such amendment; 
(6) the provisions of law amended by subsections (d) through 
(g) of section 122 of this Act shall be amended to read as they 
would without such amendments; 
(7) the provisions of law amended by section 123 of this Act 
shall be amended to read as they would without such 
amendments; and 
(8) the provisions of law amended by sections 131 and 132 
shall be amended to read as they would without such amend-
ments. 
(b) The rei)eal or termination by subsection (a) of any amendment 
made by this Act shall have no effect on any action taken or 
authorized while such amendment was in effect. 
Ante, p. 1471. 
12 u s e 1823. 
12 u s e 1843, 
1842. 
12 u s e 1464. 
12 u s e 1729. 
12 u s e 1730a. 
12 u s e 1785, 
1786. 
12 u s e 1464 
note. 
TITLE II—NET WORTH CERTIFICATES 
SHORT TITLE 
Net Worth 
eertificate Act. 
SEC. 201. This title may be cited as the "Net Worth Certificate 1
2 use I8II 
Act". 
"''^^• 
INSURED INSTITUTIONS 
SEC. 202. (a) Section 406(f) of the National Housing Act (12 U.S.C. 
1729(f)), as amended by section 122 of this Act, is amended by adding 
at the end thereof the following: 
"(5XAXi) Notwithstanding any other provision of State or Federal 
law, and without limitation on any authority provided elsewhere in 
this Act or the Home Owners' Loan Act of 1933, the Corporation, in 1
2 use 1461. 
its sole discretion and on such terms and conditions as it may 
prescribe, is authorized to increase or maintain the capital of a 
qualified institution by making periodic purchases of capital instru-
ments to be known as net worth certificates, as defined by the 
Corporation, for such form of consideration as the Corporation may 
determine, from such qualified institution, and may authorize such 
institution to issue such net worth certificates, pursuant to this 
paragraph. 
"(ii) Dividends on any certificate so purchased shall be at a rate 
equivalent to the rate of interest paid on any promissory note used 
to purchase the certificate. 
"(iii) In making a determination under this paragraph, the State 
supervisor of the State in which a State chartered institution which 
is the subject of the eligibility determination is located shall be 
consulted. 
"(iv) With respect to certificates held by it, the claim of the 
Corporation shall have a priority over any claim arising out of an 
equity interest in the insitution in the event of a liquidation or 
reorganization, subject to the prior payment of all accounts, certifi-
cates of deposit, and debt obligations other than debt obligations 
96 STAT. 1490 
PUBLIC LAW 97-320—OCT. 15, 1982 
subordinated to the claims of general creditors which were outstand-
ing when any certificates were purchased, and over any right of 
equity holders to participate in future earnings. 
"Qualified 
"(B) For the purposes of this paragraph, the term 'qualified 
institution." 
institution' means an institution the deposits of which are insured 
under this title or insured or guaranteed under State law which, as 
determined by the Corporation— 
"(i) has net worth equal to or less than 3 per centum of its 
assets; 
"(ii) has incurred losses during the two previous quarters; 
"(iii) has not incurred such losses as a result of transactions 
involving speculation in futures or forward contracts, of man-
agement action designed solely for the purpose of qualifying for 
assistance, or of excessive operating expenses; 
"(iv) agrees to comply with all the terms and conditions 
established by the Corporation for receiving assistance pursuant 
to this paragraph, including those relating to reporting, compli-
ance with laws, rules and regulations, execution and implemen-
tation of resolutions and agreements to merge or reorganize, 
submission and adoption of plans of operation, restrictions on 
operations, repayment of assistance received, and consent to 
supervisory action; 
"(v) will have a net worth of not less than one-half of one per 
centum of assets after any purchase of its net worth certificates 
by the Corporation, as determined by the Corporation in accord-
ance with the methods for calculating net worth pursuant to 
this paragraph; and 
"(vi) has investments in residential mortgages or securities 
backed by such mortgages aggregating at least 20 per centum of 
its loans. 
"(C)(i) The Corporation may not condition the purchase of certifi-
cates under this paragraph on the agreement of the institution's 
board to allow such institution to be merged with or acquired by 
another company if the Corporation finds that such institution will 
have positive net worth for a period of at least six months after such 
certificates are purchased. 
"(ii) The Corporation may not condition the purchase of certifi-
cates under this paragraph on the agreement of the institution's 
board to make specified management personnel changes if the 
Corporation finds that if such institution will have positive net 
worth for a period of at least nine months after such certificates are 
purchased. 
"(D) In any case where the staff of the Corporation finds for the 
purpose of subparagraph (C) that the length of time during which 
the institution will have positive net worth after a purchase of 
certificates is less than six months or nine months, as the case may 
be, the institution may submit to the staff its plans and projections. 
If the staff does not change its position after considering such plans 
and projections, the institution may submit such plans and projec-
tions to the Board and the institution shall be entitled to an appeal 
to, and a review of the staffs findings by, the Board. 
"(E) The Corporation may initially purchase net worth certificates 
as follows: 
"(i) With respect to a qualified institution having net worth 
greater than 2 per centum and less than or equal to 3 per 
centum, the Corporation may purchase net worth certificates in 
any period from such institution in an amount equal to 50 per 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1491 
centum of its operating losses (not occasioned by mismanage-
ment or speculation in futures or forward contracts), as deter-
mined by the Corporation. 
"(ii) With respect to a qualified institution having net worth 
greater than 1 per centum and less than or equal to 2 per 
centum, the Corporation may purchase net worth certificates in 
any period from such institution in an amount equal to 60 per 
centum of its operating losses (not occasioned by mismanage-
ment or speculation in futures or forward contracts), as deter-
mined by the Corporation. 
"(iii) With respect to a qualified institution having net worth 
less than or equal to 1 per centum, the Corporation may pur-
chase net worth certificates in any period from such institution 
in an amount equal to 70 per centum of its operating losses (not 
occasioned by mismanagement or speculation in futures or 
forward contracts), as determined by the Corporation. 
"(F) In the exercise of its authority under this paragraph, the 
Corporation may at any time, in its sole discretion, establish criteria 
which, with respect to ranges of net worth, calculation of losses, and 
percentage of losses to be met by purchases of net worth certificates, 
differ from those set forth in subparagraph (E), except that the 
Corporation shall in no period purchase net worth certificates from 
a qualified institution in an amount equal to more than 100 per 
centum of such institution's operating losses incurred for the imme-
diately preceding period. 
"(G) No assistance may be provided to a qualified institution 
pursuant to this paragraph if the Corporation determines that 
providing such assistance would be costlier than liquidating (includ-
ing paying the insured accounts of) such institution or dealing with 
it in accordance with paragraph (1) or (2) of this subsection. 
"(H) The provisions of the constitution or the laws, civil or crimi-
nal, of any State, express or implied, limiting the authority of a 
qualified institution (i) to take part in programs under this para-
graph, (ii) to issue and otherwise deal in net worth certificates issued 
pursuant to this paragraph, or (iii) to continue operations, including 
the receipt of deposits and the payment or crediting of interest or 
dividends to depositors, because of the level of such institution's net 
worth, surplus fund, or guaranty fund, shall not apply to any 
qualified institution which the Corporation has approved for the 
purpose of taking part in programs under this paragraph, continu-
ing operations, or paying interest or dividends. 
"(I) During any period when a qualified institution has outstand-
ing net worth certificates issued in accordance with this paragraph, 
such institution shall not be liable for any State or local tax which is 
determined on the basis of the deposits held by such institution or 
the interest paid on such deposits. 
"(J) Notwithstanding any other Federal or State law, net worth 
certificates purchased by the Corporation under this paragraph 
shall be deemed to be net worth for statutory and regulatory 
purposes. 
"(K) The Corporation may not use its authority under this para-
graph to purchase the voting or common stock of a qualified institu-
tion. Nothing in this subparagraph shall be construed to limit the 
ability of the Corporation to enter into and enforce covenants and 
agreements that it determines to be necessary to protect its finan-
cial interests. 
97-200 O-84-pt. 2 
5 : QL3 
96 STAT. 1492 
PUBLIC LAW 97-320—OCT. 15, 1982 
"(L) The Corporation may provide assistance to a qualified institu-
tion which is not an insured institution only if the State fund which 
insures or guarantees the deposits of such qualified institution 
enters into an agreement with the Corporation which provides 
that— 
"(i) the State fund will indemnify the Corporation for any 
losses which the Corporation may incur as a result of providing 
assistance under this paragraph to such qualified institution; 
and 
"(ii) during any period when such qualified institution has 
outstanding capital instruments issued in accordance with this 
paragraph, the State insurance fund maintains a level of assess-
ments on its members which results in costs to its members 
which are at least equivalent to the premium assessments paid 
to the Corporation by insured institutions during such period. 
"(M) During any period in which a qualified institution which has 
a stock form of ownership has outstanding certificates under this 
paragraph, such qualified insured institution may not pay dividends 
to its sn3.rpriol(iGrs 
(b) Section 5(b)(5) of the Home Owners' Loan Act of 1933 (12 U.S.C. 
1464(b)(5)) is amended— 
(1) by striking out subparagraph (B) and inserting in lieu 
thereof the following: 
"(B) Net worth certificates issued by an association pursuant to 
section 406(f) of the National Housing Act shall constitute part of 
the general reserves and net worth of the association, in accordance 
with the rules and regulations of the Board."; and 
(2) by adding at the end thereof a new subparagraph (C) as 
follows: 
"(C) The Board shall provide in its rules and regulations for 
charging losses to mutual capital certificates, net worth certificates 
Ante, p. 1480. 
issued pursuant to section 406(f) of the National Housing Act, 
reserves, and other net worth accounts.". 
(c) Section 403(b) of the National Housing Act (12 U.S.C. 1726(b)) is 
amended— 
(1) in the fourth-to-last sentence by inserting after "items," 
the following: "including net worth certificates issued pursuant 
to section 406(f) of this Act,"; and 
(2) in the second-to-last sentence by striking out "the mutual 
capital certificate" and inserting in lieu thereof "mutual capital 
certificates, net worth certificates issued pursuant to section 
406(f) of this Act,". 
(d) Section 403(b) of the National Housing Act (12 U.S.C. 1726(b)) is 
amended by striking out "will provide adequate reserves satisfac-
tory to the Corporation" and all that follows through the end of the 
sentence immediately preceding the fourth sentence from the end of 
such subsection, and inserting in lieu thereof the following: "and 
will provide adequate reserves in a form satisfactory to the Corpora-
tion, to be established in accordance with regulations made by the 
Corporation.". 
INSURED BANKS 
SEC. 203. Section 13 of the Federal Deposit Insurance Act (12 
U.S.C. 1823), as amended by section 113 of this Act is amended by 
adding at the end thereof the following: 
"(i)(l)(A) Notwithstanding any other provision of State or Federal 
law, and without limitation on any authority provided elsewhere in 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1493 
this Act, the Corporation, in its sole discretion and on such terms 
and conditions as it may prescribe, is authorized to increase or 
maintain the capital of a qualified institution by making periodic 
purchases of capital instruments to be known as net worth certifi-
cates, as defined by the Corporation, for such form of consideration 
as the Corporation may determine, from such institution, and may 
authorize such institution to issue net worth certificates, pursuant 
to this subsection. 
"(B) Dividends on any certificate so purchased shall be at a rate 
equivalent to the rate of interest paid on any promissory note used 
to purchase the certificate. 
"(C) In making a determination under this subsection, the corpo-
ration shall consult the State supervisor of the State in which a 
State chartered bank which is the subject of the eligibility determi-
nation is located, and in the case of a State member bank or a 
national bank, the Corporation shall consult the Board of Governors 
of the Federal Reserve System or the Comptroller of the Currency, 
respectively. 
"(D) With respect to certificates held by it, the claim of the 
Corporation shall have a priority over any claim arising out of an 
equity interest in the institution in the event of a liquidation or 
reorganization, subject to the prior payment of all accounts, certifi-
cates of deposit, and debt obligations other than debt obligations 
subordinated to the claims of general creditors which were outstand-
ing when any certificates were purchased, and over any right of 
equity holders to participate in future earnings. 
"(2) For the purposes of this subsection, the term 'qualified institu- 
"Qualified 
tion' means an institution the deposits of which are insured under 
institution." 
this title or insured or guaranteed under State law which, as 
determined by the Corporation— 
"(A) has net worth equal to or less than 3 per centum of its 
assets; 
"(B) has incurred losses during the two previous quarters; 
"(C) has not incurred such losses as a result of transactions 
involving speculation in futures or forward contracts, of man-
agement action designed solely for the purpose of qualifying for 
assistance, or of excessive operating expenses; 
"(D) agrees to comply with all the terms and conditions 
established by the Corporation for receiving assistance pursuant 
to this paragraph, including those relating to reporting, compli-
ance with laws, rules and regulations, execution and implemen-
tation of resolutions and agreements to merge or reorganize, 
submission and adoption of plans of operation, restrictions on 
operations, repayment of assistance received, and consent to 
supervisory action; 
"(E) will have a net worth of not less than one-half of one per 
centum of assets after any purchase of its net worth certificates 
by the Corporation, as determined by the Corporation in accord-
ance with the methods for calculating net worth pursuant to 
this paragraph; and 
"(F) has investments in residential mortgages or securities 
backed by such mortgages aggregating at least 20 per centum of 
its loans. 
"(3) (A) The Corporation may not condition the purchase of certifi-
cates under this paragraph on the agreement of the institution's 
board to allow such institution to be merged with or acquired by 
another company if the Corporation finds that such institution will 
96 STAT. 1494 
PUBLIC LAW 97-320—OCT. 15, 1982 
have positive net worth for a period of at least six months after such 
certificates are purchased. 
"(B) The Corporation may not condition the purchase of certifi-
cates under this paragraph on the agreement of the institution's 
board to make specified management personnel changes if the 
Corporation finds that such institution will have positive net worth 
for a period of at least nine months after such certificates are 
purchased. 
"(4) In any case where the staff of the Corporation finds for the 
purpose of paragraph (3) that the length of time during which the 
institution will have positive net worth after a purchase of certifi-
cates is less than six months or nine months, as the case may be, the 
institution may submit to the staff its plans and projections. If the 
staff does not change its position after considering such plans and 
projections, the institution may submit such plans and projections to 
the Board and the institution shall be entitled to an appeal to, and a 
review of the staffs findings by, the Board. 
"(5) The Corporation may initially purchase net worth certificates 
as follows: 
"(A) With respect to a qualified institution having net worth 
greater than 2 per centum and less than or equal to 3 per 
centum, the Corporation may purchase net worth certificates in 
any period from such institution in an amount equal to 50 per 
centum of its operating losses (not occasioned by mismanage-
ment or speculation in futures or forward contracts), as deter-
mined by the Corporation. 
"(B) With respect to a qualified institution having net worth 
greater than 1 per centum and less than or equal to 2 per 
centum, the Corporation may purchase net worth certificates in 
any period from such institution in an amount equal to 60 per 
centum of its operating losses (not occasioned by mismanage-
ment or speculation in futures or forward contracts), as deter-
mined by the Corporation. 
"(C) With respect to a qualified institution having net worth 
greater than zero and less than or equal to 1 per centum, the 
Corporation may purchase net worth certificates in any period 
from such institution in an amount equal to 70 per centum of its 
operating losses (not occasioned by mismanagement or specula-
tion in futures or forward contracts), as determined by the 
Corporation. 
"(6) In the exercise of its authority under this subsection, the 
Corporation may at any time, in its sole discretion, establish criteria 
which, with respect to ranges of net worth, calculation of losses, and 
percentage of losses to be met by purchases of net worth certificates, 
differ from those set forth in paragraph (5), except that the Corpora-
tion shall in no period purchase net worth certificates from a 
qualified institution in an amount equal to more than 100 per 
centum of such institution's operating losses incurred for the imme-
diately preceding period. 
"(7) No assistance may be provided to a qualified institution 
pursuant to this subsection if the Corporation determines that 
providing such assistance would be costlier than liquidating (includ-
ing paying the insured accounts of) such institution or dealing with 
it in accordance with subsection (c) or (d) of this subsection. 
"(8) The provisions of the constitution or the laws, civil or crimi-
nal, of any State, express or implied, limiting the authority of a 
qualified institution (A) to take part in programs under this subsec-
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1495 
tion, (B) to issue and otherwise deal in net worth certificates issued 
pursuant to this paragraph, or (C) to continue operations, including 
the receipt of deposits and the payment or crediting of interest or 
dividends to depositors, because of the level of such institution's net 
worth, surplus fund, or guaranty fund, shall not apply to any 
qualified institution which the Corporation has approved for the 
purpose of taking part in programs under this subsection, continu-
ing operations, or paying interest or dividends. 
"(9) During any period when a qualified institution has outstand-
ing net worth certificates issued in accordance with this subsection, 
such institution shall not be liable for any State or local tax which is 
determined on the basis of the deposits held by such institution or 
the interest paid on such deposits. 
"(10) Notwithstanding any other Federal or State law, net worth 
certificates purchased by the Corporation under this subsection 
shall be deemed to be net worth for statutory and regulatory 
purposes. 
"(11) The Corporation may not use its authority under this subsec-
tion to purchase the voting or common stock of a qualified institu-
tion. Nothing in this paragraph shall be construed to limit the 
ability of the Corporation to enter into and enforce covenants and 
agreements that it determines to be necessary to protect its finan-
cial interests. 
"(12) The Corporation may provide assistance to a qualified insti-
tution which is not an insured institution only if the State fund 
which insures or guarantees tho deposits of such qualified institu-
tion enters into an agreement with the Corporation which provides 
that— 
"(A) the State fund will indemnify the Corporation for any 
losses which the Corporation may incur as a result of providing 
assistance under this subsection to such qualified institution; 
and 
"(B) during any period when such qualified institution has 
outstanding capital instruments issued in accordance with this 
subsection, the State insurance fund maintains a level of assess-
ments on its members which results in costs to its members 
which are at least equivalent to the premium assessments paid 
to the Corporation by insured institutions during such period. 
"(13) During any period in which a qualified institution which has 
a stock form of ownership has outstanding certificates under this 
subsection, such qualified insured institution may not pay dividends 
to its shareholders.". 
REPORTS TO CONGRESS 
SEC. 204. The Federal Home Loan Bank Board and the Board of 12 use I823 
Directors of the Federal Deposit Insurance Corporation shall each "ote. 
transmit an annual report to each House of the Congress specifying 
the types and amounts of net worth certificates purchased from each 
depository institution and the conditions imposed on each such 
depository institution. 
GENERAL ACCOUNTING OFFICE AUDIT 
SEC. 205. The Comptroller General of the United States shall 12 use 1823 
conduct on a semiannual basis an audit of the net worth certificate "°^^' 
programs of the Federal Deposit Insurance Corporation and the 
96 STAT. 1496 
PUBLIC LAW 97-320—OCT. 15, 1982 
Report to 
Congress. 
Federal Home Loan Bank Board. A report on each such audit shall 
be transmitted to each House of the Congress. 
Ante, p. 1489. 
12 u s e 1729, 
1823. 
Ante, p. 1492. 
Thrift 
Institutions 
Restructuring 
Act. 
12 u s e 1461 
note. 
REPEAL 
SEC. 206. Upon the expiration of three years after the date of 
enactment of this Act, section 406(f)(5) of the National Housing Act 
and section 13(i) of the Federal Deposit Insurance Act are repealed. 
TITLE III—THRIFT INSTITUTIONS RESTRUCTURING 
SHORT TITLE 
SEC. 301. This title may be cited as the "Thrift Institutions 
Restructuring Act". 
PART A—FORM OF CHARTER; DEMAND ACCOUNTS 
CHARTERING AND PURPOSE 
SEC. 311. Section 5(a) of the Home Owners' Loan Act of 1933 (12 
U.S.C. 1464(a)) is amended to read as follows: 
"SEC. 5. (a) In order to provide thrift institutions for the deposit or 
investment of funds and for the extension of credit for homes and 
other goods and services, the Board is authorized, under such rules 
and regulations as it may prescribe, to provide for the organization, 
incorporation, examination, operation, and regulation of associ-
ations to be known as Federal savings and loan associations, or 
Federal savings banks, and to issue charters therefor, giving pri-
mary consideration to the best practices of thrift institutions in the 
United States. The lending and investment authorities are conferred 
by this section to provide such institutions the flexibility necessary 
to maintain their role of providing credit for housing,". 
DEMAND ACCOUNTS AND CAPITAL STOCK 
SEC. 312. Paragraphs (1) and (2) of section 5(b) of the Home 
Owners' Loan Act of 1933 (12 U.S.C. 1464(b)) are amended to read as 
follows: 
"(1)(A) An association may raise capital in the form of such 
savings deposits, shares, or other accounts, for fixed, minimum, or 
indefinite periods of time (all of which are referred to in this section 
as savings accounts), or in the form of such demand accounts of 
those persons or organizations that have a business, corporate, 
commercial, or agricultural loan relationship with the association as 
are authorized by its charter or by regulations of the Board, and 
may issue such passbooks, time certificates of deposit, or other 
evidence of accounts as are so authorized. 
"(B) An association may also accept demand accounts from a 
commercial, corporate, business, or agricultural entity for the sole 
purpose of effectuating payments thereto by a nonbusiness cus-
tomer. An association may not pay interest on a demand account. All 
savings accounts and demand accounts shall have the same priority 
upon liquidation. Holders of accounts and obligors of an association 
shall, to such extent as may be provided by its charter or by 
regulations of the Board, be members of the association, and shall 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1497 
have such voting rights and such other rights as are thereby 
provided. 
"(C) Except as may be otherwise authorized by an association's 
charter or regulation of the Board in the case of savings accounts for 
fixed or minimum terms of not less than fourteen days, the payment 
of any savings account shall be subject to the right of the association 
to require such advance notice, not less than fourteen days, as shall 
be provided for by the charter of the association or the regulations of 
the Board. 
"(D) The payment of withdrawals from accounts in the event an 
association does not pay all withdrawals in full (subject to the right 
of the association, where applicable, to require notice) shall be 
subject to such rules and procedures as may be prescribed by the 
association's charter or by regulation of the Board, but any associ-
ation which, except as authorized in writing by the Board, fails to 
make full payment of any withdrawal when due shall be deemed to 
be in an unsafe or unsound condition to transact business within the 
meaning of subsection (d) of this section. 
"(E) Accounts may be subject to check or to withdrawal or trans-
fer on negotiable or transferable or other order or authorization to 
the association, as the Board may by regulation provide. 
"(F) Notwithstanding any limitation of this section, associations 
may establish remote service units for the purpose of crediting 
savings or demand accounts, debiting such accounts, crediting pay-
ments on loans, and the disposition of related financial transactions, 
as provided in regulations prescribed by the Board. 
"(2) To such extent as the Board may authorize by regulation or 
advice in writing, an association may borrow, may give security, 
may be surety as defined by the Board and may issue such notes, 
bonds, debentures, or other obligations, or other securities, including 
capital stock, as the Board may so authorize.". 
CONVERSIONS TO FEDERAL CHARTERS 
SEC. 313. Section 5(i) of the Home Owners' Loan Act of 1933 (12 
U.S.C. 1464(i)) is amended to read as follows: 
"(iXD Any institution which is, or is eligible to become, a member 
of a Federal home loan bank may convert itself into a Federal 
savings and loan association or Federal savings bank under this Act 
(and in so doing may change directly from the mutual form to the 
stock form, or from the stock form to the mutual form), but such 
conversion shall be subject to such rules and regulations as the 
Board shall prescribe, and thereafter the converted association shall 
be entitled to all the benefits of this section and shall be subject to 
examination and regulation to the same extent as other associations 
incorporated pursuant to this Act. 
"(2) Subject to the rules and regulations of the Board, any Federal 
association may convert itself from the mutual form to the stock 
form of organization, or from the stock form to the mutual form, and 
any Federal association may change its designation from a Federal 
savings and loan association to a Federal savings bank, or the 
reverse. 
"(3XA) Any Federal association may convert itself into a savings 
and loan or savings bank type of institution organized pursuant to 
the laws of the State, district, commonwealth, or territory (herein-
after referred to in this section as the 'State') in which the principal 
office of such Federal association is located if— 
96 STAT. 1498 
PUBLIC LAW 97-320—OCT. 15, 1982 
"(i) the State permits the conversion of any savings and loan 
or savings bank type of institution of such State into a Federal 
association; 
"(ii) such conversion of a Federal association into such a State 
institution is determined upon the vote in favor of such conver-
sion cast in person or by proxy at a special meeting of members 
or stockholders called to consider such action, specified by the 
law of the State in which the home office of the Federal 
association is located, as required by such law for a State-
chartered institution to convert itself into a Federal association, 
but in no event upon a vote of less than 51 per centum of all the 
votes cast at such meeting, and upon compliance with other 
requirements reciprocally equivalent to the requirements of 
such State law for the conversion of a State-chartered institu-
tion into a Federal association; 
"(iii) notice of the meeting to vote on conversion shall be given 
as herein provided and no other notice thereof shall be neces-
sary; the notice shall expressly state that such meeting is called 
to vote thereon, as well as the time and place thereof, and such 
notice shall be mailed, postage prepaid, at least thirty and not 
more than sixty days prior to the date of the meeting, to each 
member or stockholder of record of the Federal association at 
his last address as shown on the books of the Federal association 
and to the General Counsel of the Federal Home Loan Bank 
Board, Washington, District of Columbia; 
"(iv) in the event of dissolution of a mutual association after 
conversion, the members or shareholders of the association will 
share on a mutual basis in the assets of the association in exact 
proportion to their relative share or account credits; 
"(v) in the event of dissolution of a stock association after 
conversion, the stockholders will share on a equitable basis in 
the assets of the association; and 
"(vi) such conversion shall be effective upon the date that all 
the provisions of this Act shall have been fully complied with 
and upon the issuance of a new charter by the State wherein 
the association is located. 
"(B)(i) The act of conversion constitutes consent by the institution 
to be bound by all the requirements that the Federal Savings and 
Loan Insurance Corporation may legally impose under section 403 of 
12 use 1726. 
the National Housing Act. 
"(ii) The association shall upon conversion and thereafter be 
authorized to issue securities in any form currently approved at the 
time of issue by the Federal Savings and Loan Insurance Corpora-
tion for issuance by similar insured institutions in such State, 
"(iii) If the insurance of accounts is terminated in connection with 
such conversion, the notice and other action shall be taken as 
provided by law and regulations for the termination of insurance of 
accounts. 
"(4) Any aggrieved person may obtain review of a final action of 
the Board or the Federal Savings and Loan Insurance Corporation 
which approves, with or without conditions, or disapproves a plan of 
conversion from the mutual to the stock form, only by complying 
with the provisions of subsection (k) of section 408 of the National 
12 use 1730a. 
Housing Act within the time limit and in the manner therein 
prescribed, which provisions shall apply in all respects as if such 
final action were an order the review of which is therein provided 
for, except that such time limit shall commence upon publication of 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1499 
notice of such final action in the Federal Register or upon the giving 
of such general notice of final action as is required by or approved 
under regulations of the Corporation, whichever is later. 
"(5)(A) To the extent authorized by the Board— 
"(i) any Federal savings bank chartered as such prior to the 
enactment of this paragraph may continue to make any invest-
ment or engage in any activity not otherwise authorized under 
this section, to the degree it was permitted to do so as a Federal 
savings bank prior to such enactment; and 
"(ii) any Federal savings bank formerly organized as a mutual 
savings bank under State law may continue to make any invest-
ment or engage in any activity not otherwise authorized under 
this section, to the degree it was authorized to do so as a mutual 
savings bank under State law. 
"(B) The authority conferred by this paragraph may be utilized by 
any Federal association that acquires, by merger or consolidation, a 
Federal savings bank enjoying grandfathered rights hereunder.". 
CONVERSION FROM STATE MUTUAL TO STATE STOCK 
SEC. 314. Section 402(j) of the National Housing Act (12 U.S.C. 
1725(j)) is amended— 
(1) by amending paragraph (1) to read as follows: 
"(1) Except as provided in section 5 of the Home Owners' Loan Act 
of 1933, no insured institution may convert from the mutual to the 
stock form except in accordance with the rules and regulations of 
the Corporation."; and 
(2) by striking out paragraphs (2), (3), (5), and (6) and redes-
ignating paragraph (4) as paragraph (2). 
PART B—INVESTMENTS 
OVERDRAFTS 
SEC. 321. Section 5(c)(1)(A) of the Home Owners' Loan Act of 1933 
(12 U.S.C. 1464(c)(1)(A)) is amended to read as follows: 
"(A) ACCOUNT LOANS.—Loans on the security of its savings 
accounts 
and 
loans 
specifically 
related 
to 
transaction 
accounts.". 
REAL ESTATE LOANS 
SEC. 322. Section 5(c)(1)(B) of the Home Owners' Loan Act of 1933 
(12 U.S.C. 1464(c)(1)(B)) is amended to read as follows: 
"(B) REAL PROPERTY LOANS.—Loans on the security of liens 
upon residential or nonresidential real property, except that the 
loans and investments of an association on nonresidential real 
property may not exceed 40 per centum of its assets.". 
TIME DEPOSITS 
SEC. 323. Section 5(c)(1)(G) of the Home Owners' Loan Act of 1933 
(12 U.S.C. 1464(c)(1)(G)) is amended to read as follows: 
"(G) DEPOSITS.—Investments in the time deposits, certificates, 
or accounts of any bank the deposits of which are insured by the 
Federal Deposit Insurance Corporation, or in the savings 
accounts, certificates, or other accounts of any institution the 
96 STAT. 1500 
PUBLIC LAW 97-320—OCT. 15, 1982 
accounts of which are insured by the Federal Savings and Loan 
Insurance Corporation.". 
GOVERNMENT SECURITIES 
SEC. 324. Section 5(c)(1)(H) of the Home Owners' Loan Act of 1933 
(12 U.S.C. 1464(cXl)(H)) is amended to read as follows: 
"(H) STATE SECURITIES.—Investments in obligations of, or 
issued by, any State or political subdivision thereof (including 
any agency, corporation, or instrumentality of a State or politi-
cal subdivision), except that an association may not invest more 
than 10 per centum of its capital and surplus in obligations of 
any one issuer, exclusive of investments in general obligations 
of any issuer.". 
COMMERCIAL AND OTHER LOANS 
SEC. 325. Section 5(c)(1) of the Home Owners' Loan Act of 1933 (12 
U.S.C. 1464(cXl)) is amended by adding at the end thereof the 
following: 
"(R) COMMERCIAL AND OTHER LOANS.—Secured or unsecured 
loans for commercial, corporate, business, or agricultural pur-
poses. No association may make loans to one borrower under 
the authority provided by this subparagraph in excess of the 
amount a national bank having an identical total capital and 
surplus could lend such borrower. The aggregate amount of 
loans under this paragraph shall not exceed 5 per centum of the 
assets of a savings and loan association (7 y% per centum of the 
assets of a savings bank) prior to January 1, 1984, or 10 per 
centum of the assets of a savings and loan association or savings 
bank thereafter.". 
EUMINATION OF DIFFERENTIAL 
12 use 461 
SEC. 326. (a) Section 102 of Public Law 94-200 is repealed. 
12 use 3503 
^\^) 
Interest rate differentials for all categories of deposits or 
note. 
accounts between (i) any bank (other than a savings bank) the 
deposits of which are insured by the Federal Deposit Insurance 
Corporation, and (ii) any savings and loan, building and loan, or 
homestead association (including cooperative banks) the deposits or 
accounts of which are insured by the Federal Savings and Loan 
Insurance Corporation or any mutual savings bank as defined in 
section 3(0 of the Federal Deposit Insurance Act (12 U.S.C. 1813(j)), 
shall be phased out on or before January 1,1984. 
(2) Any differential which is being phased out pursuant to a 
schedule established by regulations prescribed by the Depository 
Institutions Deregulation Committee prior to the aate of enactment 
of this Act shall be phased out as soon as practicable, but in no event 
later than such schedule provides. 
(3) Notwithstanding any other provision of law, no differential for 
any category of deposits or accounts shall be established or main-
tained on or after January 1,1984. 
(c) No interest rate differential may be established or maintained 
in the case of the deposit account authorized pursuant to section 
Post, p. 1501. 
204(c) of the Depository Institutions Deregulation Act of 1980. 
(d) In the case of the elimination or reduction of any interest rate 
differential under subsection (b) with respect to any category of 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1501 
deposits or accounts between (1) any bank (other than a savings 
bank) the deposits of which are insured by the Federal Deposit 
Insurance Corporation and (2) any savings and loan, building and 
loan, or homestead association (including cooperative banks) the 
deposits or accounts of which are insured by the Federal Savings 
and Loan Insurance Corporation or any mutual savings bank as 
defined in section 3(f) of the Federal Deposit Insurance Act, the 12 use 1813. 
maximum rate of interest which shall be established for such 
category of deposits for banks (other than savings banks) the depos-
its of which are insured by the Federal Deposit Insurance Corpora-
tion shall be equal to the highest rate of interest which savings and 
loan associations the deposits or accounts of which are insured by 
the Federal Savings and Loan Insurance Corporation were permit-
ted to pay on such category of deposits immediately prior to the 
elimination or reduction of such interest rate differential. 
MONEY MARKET DEPOSIT ACCOUNT 
SEC. 327. Section 204 of the Depository Institutions Deregulation 
Act of 1980 (12 U.S.C. 3503) is amended by adding at the end thereof 
the following: 
"(c)(1) The Committee shall issue a regulation authorizing a new 
deposit account, effective not later than 60 days after the date of 
enactment of this subsection. Such account shall be directly equiva-
lent to and competitive with money market mutual funds registered 
with the Securities and Exchange Commission under the Invest-
ment Company Act of 1940. 
15 usc 80a-5i. 
"(2) No limitation on the meiximum rate or rates of interest 
payable on deposit accounts shall apply to the account authorized by 
this subsection. 
"(3) For purposes of section 19(b) of the Federal Reserve Act, i2USC46i. 
accounts established pursuant to this subsection which are not 
'transaction accounts' as defined by the reserve requirement regula-
tions of the Board of Governors of the Federal Reserve System as 
those regulations existed on August 1, 1982, shall not be subject to 
transaction account reserves, even though no minimum maturity is 
required, and even though up to three preauthorized or automatic 
transfers and three transfers to third parties are permitted 
monthly.". 
HOUSING AND LAND DEVELOPMENT LOANS 
SEC. 328. Section 5(cXl)(0) of the Home Owners' Loan Act of 1933 
(12 U.S.C. 1464(c)(l)(0)) is amended to read as follows: 
"(O) HOUSING AND LAND AND URBAN DEVELOPMENT INSURED OR 
GUARANTEED INVESTMENTS.—Loans (i) secured by mortgages as 
to which the association has the benefit of insurance under title 
X of the National Housing Act or of a commitment or agree- 12 use I749aa. 
ment for such insurance, or (ii) as to which the association has 
the benefit of any guarantee under title IV of the Housing and 
Urban Development Act of 1968 or under part B of the National 42 use 390i. 
Urban Policy and New Community Development Act of 1970 or 42 use 4511. 
under section 802 of the Housing and Community Development 
Act of 1974, or of a commitment or agreement therefor.". 42 use 1440,12 
u s e 371, 1464. 
96 STAT. 1502 
PUBLIC LAW 97-320—OCT. 15, 1982 
CONSUMER LOANS 
SEC. 329. Section 5(c)(2)(B) of the Home Owners' Loan Act of 1933 
(12 U.S.C. 1464(c)(2)(B)) is amended— 
(1) by inserting ", including loans reasonably incident to the 
provision of such credit," after "household purposes"; and 
(2) by inserting before the period at the end thereof the 
following: ", except that loans of an association under this 
subparagraph may not exceed 30 per centum of the assets of the 
association". 
ADDITIONAL INVESTMENT AUTHORITIES 
SEC. 330. Section 5(c) of the Home Owners' Loan Act of 1933 (12 
U.S.C. 1464(c)) is amended— 
(1) in paragraph (2), by striking out "20 per centum" and 
inserting in lieu thereof "the following percentages"; 
(2) by redesignating paragraph (6) as paragraph (5); 
(3) by striking out paragraph (2)(A) and inserting in lieu 
thereof the following: 
"(A) INVESTMENTS IN PERSONALTY.—Investments in tangi-
ble personal property, including, without limitation, vehi-
cles, manufactured homes, machinery, equipment, or furni-
ture, for rental or sale, but such investment may not exceed 
10 per centum of the assets of the association."; 
(4) in paragraph (3)— 
(A) by striking out subparagraph (D); and 
(B) by amending subparagraph (A) to read as follows: 
"(A) EDUCATION LOANS.—Loans made for the payment of 
educational expenses."; and 
(5) in paragraph (4)— 
(A) by amending subparagraph (C) to read as follows: 
"(C) FOREIGN ASSISTANCE INVESTMENTS.—Investments in 
housing project loans having the benefit of any guaranty 
22 use 2181. 
under section 221 of the Foreign Assistance Act of 1961 or 
loans having the benefit of any guarantee under section 224 
22 use 2183 note. 
of such Act, or any commitment or agreement with respect 
to such loans made pursuant to either of such sections and 
in the share capital and capital reserve of the Inter-Ameri-
can Savings and Loan Bank. This authority extends to the 
acquisition, holding and disposition of loans having the 
22 use 2181, 
benefit of any guaranty under section 221 or 222 of such Act 
^^^^- 
as hereafter amended or extended, or of any commitment or 
agreement for any such guaranty. Investments under this 
subparagraph shall not exceed, in the case of any associ-
ation, 1 per centum of the assets of such association."; and 
(B) by amending subparagraph (D) to read as follows: 
"(D) SMALL BUSINESS INVESTMENT COMPANIES.—An associ-
ation may invest in stock, obligations, or other securities of 
any small business investment company formed pursuant 
to section 301(d) of the Small Business Investment Act of 
15 use 681. 
1958, for the purpose of aiding members of the Federal 
Home Loan Bank System, but no association may make any 
investment under this subparagraph if its aggregate out-
standing investment under this subparagraph would exceed 
1 per centum of the assets of such association.". 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1503 
TYING ARRANGEMENTS 
SEC. 331. Section 5 of the Home Owners' Loan Act of 1933 (12 
U.S.C. 1464), as amended by sections 112 and 121, is amended by 
adding at the end thereof the following: 
"(qXl) An association shall not in any manner extend credit, lease, 
or sell property of any kind, or furnish any service, or fix or vary the 
consideration for any of the foregoing, on the condition or 
requirement— 
"(A) that the customer shall obtain additional credit, prop-
erty, or service from such association, or from any service 
corporation or affiliate of such association, other than a loan, 
discount, deposit, or trust service; 
"(B) that the customer provide additional credit, property, or 
service to such association, or to any service corporation or 
affiliate of such association, other than those related to and 
usually provided in connection with a similar loan, discount, 
deposit, or trust service; and 
"(C) that the customer shall not obtain some other credit, 
property, or service from a competitor of such association, or 
from a competitor of any service corporation or affiliate of such 
association, other than a condition or requirement that such 
association shall reasonably impose in connection with credit 
transactions to assure the soundness of credit. 
"(2)(A) Any person may sue for and have injunctive relief, in any 
court of the United States having jurisdiction over the parties, 
against threatened loss or damage by reason of a violation of 
paragraph (1), under the same conditions and principles as injunc-
tive relief against threatened conduct that will cause loss or damage 
is granted by courts of equity and under the rules governing such 
proceedings. 
"(B) Upon the execution of proper bond against damages for an 
injunction improvidently granted and a showing that the danger of 
irreparable loss or damage is immediate, a preliminary injunction 
may issue. 
"(3) any person who is injured in his business or property by 
reason of anything forbidden in paragraph (1) may sue therefor in 
any district court of the United States in which the defendant 
resides or is found or has an agent, without regard to the amount in 
controversy, or may sue therefor in any other court of competent 
jurisdiction, and shall be entitled to recover three times the amount 
of the damages sustained by him, and the cost of suit, including a 
reasonable attorney's fee. Any such suit shall be brought within four 
years from the date of the occurrence of the violation. 
"(4) Nothing contained in this subsection shall be construed as 
affecting in any manner the right of the United States or any other 
party to bring an action under any other law of the United States or 
of any State, including any right which may exist in addition to 
specific statutory authority, challenging the legality of any act or 
practice which may be proscribed by this subsection. No regulation 
or order issued by the Board under this subsection shall in any 
manner constitute a defense to such action. 
"(5) For purposes of this subsection— 
"(A) the term 'affiliate' of an association means any individual 
or company (including any corporation, partnership, trust, 
joint-stock company, or similar organization) which controls, is 
Ante, pp. 
1479. 
1471, 
"Affiliate. 
96 STAT. 1504 
PUBLIC LAW 97-320—OCT. 15, 1982 
controlled by, or is under common control with such association; 
and 
"Loan." 
"(B) the term 'loan' includes obligations and extensions or 
advances of credit.". 
LIQUIDITY INVESTMENTS 
SEC. 332. Section 5A(b)(l)(B) of the Federal Home Loan Bank Act 
(12 U.S.C. 1425a(b)(l)(B)) is amended by striking out "and commer-
cial banks" and inserting in lieu thereof the following: ", institu-
tions which are, or are eligible to become, members thereof, and 
commercial banks". 
REGULATORY JURISDICTION 
SEC. 333. Section 2(c) of the Bank Holding Company Act of 1956 
(12 U.S.C. 1841(c)) is amended by inserting after "Islands" the 
following: ", except an institution the accounts of which are insured 
by the Federal Savings and Loan Insurance Corporation or an 
institution chartered by the Federal Home Loan Bank Board,". 
BRANCHING 
SEC. 334. Section 5 of the Home Owners' Loan Act of 1933 (12 
Ante, p. 1503. 
U.S.C. 1464), as amended by sections 112, 121, and 331, is amended 
by adding at the end thereof the following: 
"(rXD No association may establish, retain, or operate a branch 
outside the State in which the association has its home office, unless 
the association qualifies as a domestic building and loan association 
26 use 7701. 
under section 7701(aX19) of the Internal Revenue Code of 1954 or 
meets the asset composition test imposed by subparagraph (c) of that 
section on institutions seeking so to qualify. No out-of-State branch 
so established shall be retained or operated unless the total assets of 
the association attributable to all branches of the association in that 
State would qualify the branches as a whole, were they otherwise 
eligible, for treatment as a domestic building and loan association 
under said section 7701(aX19). 
"(2) The limitations of paragraph (1) shall not apply i
f
— 
"(A) the branch results from a transaction authorized under 
Ante, p. 1483. 
section 408(m) of the National Housing Act; 
"(B) the branch was authorized for the association prior to the 
enactment of the Depository Institutions Amendments of 1982; 
"(C) the law of the State in which the branch is or is to be 
located would permit establishment of the branch were the 
association an institution of the savings and loan or savings 
bank type chartered by the State in which its home office is 
located; or 
"(D) the branch was operated lawfully as a branch under 
State law prior to the association's conversion to a Federal 
charter. 
"(3) The Board, for good cause shown, may allow associations up to 
two years to comply with the requirements of this subsection.". 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1505 
HOLDING COMPANY ACTIVITIES 
SEC. 335. Section 408 of the National Housing Act (12 U.S.C. 
1730a), as amended by section 123, is amended by adding at the end 
^^*«. P-1483. 
thereof the following: 
"(n) A savings and loan holding company, or any subsidiary 
thereof which is not an insured institution, whose subsidiary in-
sured institution fails to qualify as a domestic building and loan 
association under section 7701(a)(19) of the Internal Revenue Code of 
1954, may not commence, or continue for more than three years 
26USC7701. 
after such failure, any business activity other than those specified 
for multiple savings and loan holding companies and their subsidiar-
ies under subsection (c)(2) of this section.". 
PART C—PREEMPTION OF DUE ON SALE PROHIBITIONS 
DUE-ON SALE CLAUSES 
SEC. 341. (a) For the purpose of this section— 
Definitions. 
(1) the term "due-on-sale clause" means a contract provision 
^^ USC i70lj-3. 
which authorizes a lender, at its option, to declare due and 
payable sums secured by the lender's security instrument if all 
or any part of the property, or an interest therein, securing the 
real property loan is sold or transferred without the lender's 
prior written consent; 
(2) the term "lender" means a person or government agency 
making a real property loan or any assignee or transferee, in 
whole or in part, of such a person or agency; 
(3) the term "real property loan" means a loan, mortgage, 
advance, or credit sale secured by a lien on real property, the 
stock allocated to a dwelling unit in a cooperative housing 
corporation, or a residential manufactured home, whether real 
or personal property; and 
(4) the term "residential manufactured home" means a manu-
factured home as defined in section 603(6) of the National 
Manufactured Home Construction and Safety Standards Act of 
1974 which is used as a residence; and 
42 USC 5402. 
(5) the term "State" means any State of the United States, the 
District of Columbia, the Commonwealth of Puerto Rico, the 
Virgin Islands, Guam, the Northern Mariana Islands, American 
Samoa, and the Trust Territory of the Pacific Islands. 
(b)(1) Notwithstanding any provision of the constitution or laws 
(including the judicial decisions) of any State to the contrary, a 
lender may, subject to subsection (c), enter into or enforce a contract 
containing a due-on-sale clause with respect to a real property loan. 
(2) Except as otherwise provided in subsection (d), the exercise by 
the lender of its option pursuant to such a clause shall be exclu-
sively governed by the terms of the loan contract, and all rights and 
remedies of the lender and the borrower shall be fixed and governed 
by the contract. 
(3) In the exercise of its option under a due-on-sale clause, a lender 
is encouraged to permit an assumption of a real property loan at the 
existing contract rate or at a rate which is at or below the average 
between the contract and market rates, and nothing in this section 
shall be interpreted to prohibit any such assumption. 
(c)(1) In the case of a contract involving a real property loan which 
was made or assumed, including a transfer of the liened property 
96 STAT. 1506 
PUBLIC LAW 97-320—OCT. 15, 1982 
subject to the real property loan, during the period beginning on the 
date a State adopted a constitutional provision or statute prohibit-
ing the exercise of due-on-sale clauses, or the date on which the 
highest court of such State has rendered a decision (or if the highest 
court has not so decided, the date on which the next highest 
appellate court has rendered a decision resulting in a final judgment 
if such decision applies State-wide) prohibiting such exercise, and 
ending on the date of enactment of this section, the provisions of 
subsection (b) shall apply only in the case of a transfer which occurs 
on or after the expiration of 3 years after the date of enactment of 
this Act, except that— 
(A) a State, by a State law enacted by the State legislature 
prior to the close of such 3-year period, with respect to real 
property loans originated in the State by lenders other than 
national banks, Federal savings and loan associations. Federal 
savings banks, and Federal credit unions, may otherwise regu-
late such contracts, in which case subsection (h) shall apply only 
if such State law so provides; and 
(B) the Comptroller of the Currency with respect to real 
property loans originated by national banks or the National 
Credit Union Administration Board with respect to real prop-
erty loans originated by Federal credit unions may, by regula-
tion prescribed prior to the close of such period, otherwise 
regulate such contracts, in which case subsection (b) shall apply 
only if such regulation so provides. 
(2XA) For any contract to which subsection (b) does not apply 
pursuant to this subsection, a lender may require any successor or 
transferee of the borrower to meet customary credit standards 
applied to loans secured by similar property, and the lender may 
declare the loan due and payable pursuant to the terms of the 
contract upon transfer to any successor or transferee of the bor-
rower who fails to meet such customary credit standards. 
(B) A lender may not exercise its option pursuant to a due-on-sale 
clause in the case of a transfer of a real property loan which is 
subject to this subsection where the transfer occurred prior to the 
date of enactment of this Act, 
(C) This subsection does not apply to a loan which was originated 
by a Federal savings and loan association or Federal savings bank. 
(d) A lender may not exercise its option pursuant to a due-on-sale 
clause upon— 
(1) the creation of a lien or other encumbrance subordinate to 
the lender's security instrument which does not relate to a 
transfer of rights of occupancy in the property; 
(2) the creation of a purchase money security interest for 
household appliances; 
(3) a transfer by devise, descent, or operation of law on the 
death of a joint tenant or tenant by the entirety; 
(4) the granting of a leasehold interest of three years or less 
not containing an option to purchase; 
(5) a transfer to a relative resulting from the death of a 
borrower; 
(6) a transfer where the spouse or children of the borrower 
become an owner of the property; 
(7) a transfer resulting from a decree of a dissolution of 
marriage, legal separation agreement, or from an incidental 
property settlement agreement, by which the spouse of the 
borrower becomes an owner of the property; 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1507 
(8) a transfer into an inter vivos trust in which the borrower 
is and remains a beneficiary and which does not relate to a 
transfer of rights of occupancy in the property; or 
(9) any other transfer or disposition described in regulations 
prescribed by the Federal Home Loan Bank Board. 
(e)(1) The Federal Home Loan Bank Board, in consultation with 
the Comptroller of the Currency and the National Credit Union 
Administration Board, is authorized to issue rules and regulations 
and to publish interpretations governing the implementation of this 
section. 
(2) Notwithstanding the provisions of subsection (d), the rules and 
regulations prescribed under this section may permit a lender to 
exercise its option pursuant to a due-on-sale clause with respect to a 
real property loan and any related agreement pursuant to which a 
borrower obtains the right to receive future income. 
(f) The Federal Home Loan Mortgage Corporation (hereinafter 
referred to as the "Corporation") shall not, prior to July 1, 1983, 
implement the change in its policy announced on July 2, 1982, with 
respect to enforcement of due-on-sale clauses in real property loans 
which are owned in whole or in part by the Corporation. 
(g) Federal Home Loan Bank Board regulations restricting the use 
of a balloon payment shall not apply to a loan, mortgage, advance, 
or credit sale to which this section applies. 
PART D—MISCELLANEOUS 
ATTORNEYS FEES 
SEC. 351. The last sentence of section 5(d)(8)(A) of the Home 
Owners' Loan Act of 1933 (12 U.S.C. 1464(dX8)(A)) is amended by 
inserting ", which prevails," after "party". 
SECURITY FOR ADVANCES 
SEC. 352. Section 10 of the Federal Loan Bank Act (12 U.S.C. 1430) 
is amended— 
(1) by amending subsection (a) to read as follows: 
"(a) Each Federal Home Loan Bank is authorized to make secured 
advances to its members upon such security as the Board may 
prescribe."; 
(2) by striking out the first two sentences of subsection Ot)); and 
(3) by striking out the word "twelve" wherever it appears in 
subsection (c) and inserting in lieu thereof the word "twenty". 
DELETION OF OBSOLETE REQUIREMENT 
SEC. 353. Section 6(cX2) of the Federal Home Loan Bank Act (12 
U.S.C. 1426(c)(2)) is amended to read as follows: 
"(2) Notwithstanding any other provision of this subsection, no 
action shall be taken by any bank with respect to any member 
pursuant to any of the foregoing provisions of this subsection if the 
effect of such action would be to cause the aggregate outstanding 
advances, within the meaning of the last sentence of subsection (c) of 
section 10 of this Act or within the meaning of regulations of the 12 USC 1230. 
Board defining such term for the purposes of this sentence, made by 
such bank to such member to exceed twenty times the amounts paid 
96 STAT. 1508 
PUBLIC LAW 97-320—OCT. 15, 1982 
in by such member for outstanding capital stock held by such 
member.". 
COMPENSATION OF ADVISORY COMMITTEE MEMBERS 
SEC. 354. Section 8a of the Federal Home Loan Bank Act (12 
U.S.C. 1428a) is amended by striking out the fifth sentence and 
inserting in lieu thereof the following: "Subject to the provisions of 
5 use app. 
section 7 of the Federal Advisory Committee Act, all members and 
alternates of the Council may be compensated and shall be entitled 
to reimbursement from the Board for traveling expenses incurred in 
attendance at meetings of such Council.". 
WITHDRAWAL FROM MEMBERSHIP 
SEC. 355. (a) Section 6(i) of the Federal Home Loan Bank Act (12 
U.S.C. 1426(i)) is amended by inserting before the period at the end 
of the second sentence the following: ", except that in the case of a 
voluntary withdrawal, such liquidation shall be deemed a prepay-
ment of any such indebtedness, and shall be subject to any penalties 
applicable to such prepayment". 
(b) Section 6 of the Federal Home Loan Bank Act (12 U.S.C. 1426) 
is amended by adding at the end thereof the following: 
"(m) Notwithstanding any other provision of this Act, an institu-
tion which withdraws from membership may acquire membership in 
any Federal Home Loan Bank only after the expiration of a period 
of five years thereafter, except where such withdrawal is a conse-
quence of a transfer of membership on a non-interrupted basis 
between Banks.". 
TITLE IV—PROVISIONS RELATING TO NATIONAL AND 
MEMBER BANKS 
PART A—GENERAL PROVISIONS 
LENDING UMITS 
SEC. 401. (a) Section 5200 of the Revised Statutes (12 U.S.C. 84) is 
amended to read as follows: 
"SEC. 5200. (aXD The total loans and extensions of credit by a 
national banking association to a person outstanding at one time 
and not fully secured, as determined in a manner consistent with 
paragraph (2) of this subsection, by collateral having a market value 
at least equal to the amount of the loan or extension of credit shall 
not exceed 15 per centum of the unimpaired capital and unimpaired 
surplus of the association. 
"(2) The total loans and extensions of credit by a national banking 
association to a person outstanding at one time and fully secured by 
readily marketable collateral having a market value, as determined 
by reliable and continuously available price quotations, at least 
equal to the amount of the funds outstanding shall not exceed 10 per 
centum of the unimpaired capital and unimpaired surplus of the 
association. This limitation shall be separate from and in addition to 
the limitation contained in paragraph (1) of this subsection. 
"(h) For the purposes of this section— 
"Loans and 
"(1) the term 'loans and extensions of credit' shall include all 
extensions of 
direct or indirect advances of funds to a person made on the 
credit. 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1509 
basis of any obligation of that person to repay the funds or 
repayable from specific property pledged by or on behalf of the 
person and to the extent specified by the Comptroller of the 
Currency, such term shall also include any liability of a 
national banking association to advance funds to or on behalf of 
a person pursuant to a contractual commitment; and 
"(2) the term 'person' shall include an individual, sole propri- 
"Person." 
etorship, partnership, joint venture, association, trust, estate, 
business trust, corporation, sovereign government or agency, 
instrumentality, or political subdivision thereof, or any similar 
entity or organization. 
"(c) The limitations contained in subsection (a) shall be subject to 
the following exceptions: 
"(1) Loans or extensions of credit arising from the discount of 
commercial or business paper evidencing an obligation to the 
person negotiating it with recourse shall not be subject to any 
limitation based on capital and surplus. 
"(2) The purchase of bankers' acceptances of the kind 
described in section 13 of the Federal Reserve Act and issued by 12 use 82, 342-
other banks shall not be subject to any limitation based on ^^'^' ^'^'^^' ^'^2. 
capital and surplus. 
"(3) Loans and extensions of credit secured by bills of lading, 
warehouse receipts, or similar documents transferring or secur-
ing title to readily marketable staples shall be subject to a 
limitation of 35 per centum of capital and surplus in addition to 
the general limitations if the market value of the staples secur-
ing each additional loan or extension of credit at all times 
equals or exceeds 115 per centum of the outstanding amount of 
such loan or extension of credit. The staples shall be fully 
covered by insurance whenever it is customary to insure such 
staples. 
"(4) Loans or extensions of credit secured by bonds, notes, 
certificates of indebtedness, or Treasury bills of the United 
States or by other such obligations fully guaranteed as to 
principal and interest by the United States shall not be subject 
to any limitation based on capital and surplus. 
"(5) Loans or extensions of credit to or secured by uncondi-
tional takeout commitments or guarantees of any department, 
agency, bureau, board, commission, or establishment of the 
United States or any corporation wholly owned directly or 
indirectly by the United States shall not be subject to any 
limitation based on capital and surplus. 
"(6) Loans or extensions of credit secured by a segregated 
deposit account in the lending bank shall not be subject to any 
limitation based on capital and surplus. 
"(7) Loans or extensions of credit to any financial institution 
or to any receiver, conservator, superintendent of banks, or 
other agent in charge of the business and property of such 
financial institution, when such loans or extensions of credit are 
approved by the Comptroller of the Currency, shall not be 
subject to any limitation based on capital and surplus. 
"(8)(A) Loans and extensions of credit arising from the dis-
count of negotiable or nonnegotiable installment consumer 
paper which carries a full recourse endorsement or uncondi-
tional guarantee by the person transferring the paper shall be 
subject under this section to a maximum limitation equal to 25 
96 STAT. 1510 
PUBLIC LAW 97-320—OCT. 15, 1982 
per centum of such capital and surplus, notwithstanding the 
collateral requirements set forth in subsection (a)(2). 
"(B) If the bank's files or the knowledge of its officers of the 
financial condition of each maker of such consumer paper is 
reasonably adequate, and an officer of the bank designated for 
that purpose by the board of directors of the bank certifies in 
writing that the bank is relying primarily upon the responsi-
bility of each maker for payment of such loans or extensions of 
credit and not upon any full or partial recourse endorsement or 
guarantee by the transferor, the limitations of this section as to 
the loans or extensions of credit of each such maker shall be the 
sole applicable loan limitations. 
"(9)(A) Loans and extensions of credit secured by shipping 
documents or instruments transferring or securing title cover-
ing livestock or giving a lien on livestock when the market 
value of the livestock securing the obligation is not at any time 
less than 115 per centum of the face amount of the note covered, 
shall be subject under this section, notwithstanding the collat-
eral requirements set forth in subsection (a)(2), to a maximum 
limitation equal to 25 per centum of such capital and surplus. 
"(B) Loans and extensions of credit which arise from the 
discount by dealers in dairy cattle of paper given in payment for 
dairy cattle, which paper carries a full recourse endorsement or 
unconditional guarantee of the seller, and which are secured by 
the cattle being sold, shall be subject under this section, not-
withstanding the collateral requirements set forth in subsection 
(a)(2), to a limitation of 25 per centum of such capital and 
surplus. 
"(10) Loans or extensions of credit to the Student Loan Mar-
keting Association shall not be subject to any limitation based 
on capital and surplus. 
"(d)(1) The Comptroller of the Currency may prescribe rules and 
regulations to administer and carry out the purposes of this section, 
including rules or regulations to define or further define terms used 
in this section and to establish limits or requirements other than 
those specified in this section for particular classes or categories of 
loans or extensions of credit. 
"(2) The Comptroller of the Currency also shall have authority to 
determine when a loan putatively made to a person shall for pur-
poses of this section be attributed to another person.". 
12 use 84 note. 
(b) This section shall take effect upon the expiration of one 
hundred and eighty days after the date of its enactment. 
BORROWING LIMITS 
Repeal. 
SEC. 402. Section 5202 of the Revised Statutes (12 U.S.C. 82) is 
repealed. 
REAL ESTATE LOANS 
SEC. 403. (a) Section 24 of the Federal Reserve Act (12 U.S.C. 371) 
is amended to read as follows: 
"REAL ESTATE LOANS 
"SEC. 24. (a) Any national banking association may make, 
arrange, purchase or sell loans or extensions of credit secured by 
liens on interests in real estate, subject to such terms, conditions, 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1511 
and limitations as may be prescribed by the Comptroller of the 
Currency by order, rule, or regulation. 
"(b) Notes representing loans made under this section to finance 
the construction of residential or farm buildings and having maturi-
ties not to exceed nine months shall be eligible for discount as 
commercial paper within the terms of the second paragraph of 
section 13 of the Federal Reserve Act if accompanied by a valid and 12 USC 82, 
binding agreement to advance the full amount of the loan upon the o4Y~^oIk 
completion of the building entered into by an individual, partner- 
^' 
ship, association, or corporation acceptable to the discounting 
bank.". 
(b) The Act of September 7, 1916 (12 U.S.C. 92; 39 Stat. 753) is 
amended— 
(1) by striking out "; and may also act as the broker or agent 
for others in making or procuring loans on real estate located 
within one hundred miles of the place in which said bank may 
be located, receiving for such services a reasonable fee or com-
mission"; and 
(2) by striking out "guarantee either the principal or interest 
of any such loans or". 
(c) This section shall take effect upon the expiration of one 
12USC371 
hundred and eighty days after the date of its enactment. 
"^^^• 
BANKERS' BANKS 
SEC. 404. (a) Section 5169 of the Revised Statutes (12 U.S.C. 27) is 
amended— 
(1) by inserting "(a)" before "If,"; and 
(2) by adding at the end thereof the following: 
"(b)(1) The Comptroller of the Currency may also issue a certifi-
cate of authority to commence the business of banking pursuant to 
this section to a national banking association which is owned exclu-
sively (except to the extent directors' qualifying shares are required 
by law) by other depository institutions and is organized to engage 
exclusively in providing services for other depository institutions 
and their officers, directors, and employees. 
"(2) Any national banking association chartered pursuant to para-
graph (1) shall be subject to such rules, regulations, and orders as 
the Comptroller deems appropriate, and, except as otherwise specifi-
cally provided in such rules, regulations, or orders, shall be vested 
with or subject to the same rights, privileges, duties, restrictions, 
penalties, liabilities, conditions, and limitations that would apply 
under the national banking laws to a national bank.". 
(b) The paragraph numbered "Seventh" of section 5136 of the 
Revised Statutes (12 U.S.C. 24) is amended by striking out ''Provided 
further. That," and all that follows through the end thereof and by 
inserting in lieu thereof the following: "Provided further, 
That 
notwithstanding any other provision of this paragraph, the associ-
ation may purchase for its own account shares of stock of a bank 
insured by the Federal Deposit Insurance Corporation or a holding 
company which owns or controls such an insured bank if the stock of 
such bank or company is owned exclusively (except to the extent 
directors' qualifying shares are required by law) by depository insti-
tutions and such bank or company and all subsidiaries thereof are 
engaged exclusively in providing services for other depository insti-
tutions and their officers, directors, and employees, but in no event 
shall the total amount of such stock held by the association in any 
96 STAT. 1512 
PUBLIC LAW 97-320—OCT. 15, 1982 
bank or holding company exceed at any time 10 per centum of its 
capital stock and paid in and unimpaired surplus and in no event 
shall the purchase of such stock result in an association's acquiring 
more than 5 per centum of any class of voting securities of such 
bank or company.". 
(c) Section 8(b) of the Federal Deposit Insurance Act (12 U.S.C. 
1818(b)) is amended by adding at the end thereof the following: 
"(5) This section shall apply, in the same manner as it applies to 
any insured bank for which the appropriate Federal banking agency 
is the Comptroller of the Currency, to any national banking associ-
ation chartered by the Comptroller of the Currency, including an 
uninsured association.". 
(d)(1) Section 2(c) of the Bank Holding Company Act of 1956 (12 
U.S.C. 1841(c)) is amended by adding at the end thereof the follow-
ing: "The term 'bank' also includes a State chartered bank or a 
national banking association which is owned exclusively (except to 
the extent directors' qualifying shares are required by law) by other 
depository institutions or by a bank holding company which is 
owned exclusively by other depository institutions and is organized 
to engage exclusively in providing services for other depository 
institutions and their officers, directors, and employees.". 
12 use 1842. 
(2) Section 3(e) of such Act is amended by adding at the end 
thereof the following: "This subsection does not apply to a bank 
described in the last sentence of section 2(c).". 
NAME OR HEADQUARTERS CHANGE 
SEC. 405. (a) Section 2 of the Act of May 1, 1886 (24 Stat. 18; 12 
U.S.C. 30) is amended to read as follows: 
"SEC. 2. (a) Any national banking association, upon written notice 
to the Comptroller of the Currency, may change its name, except 
that such new name shall include the word "National". 
"(b) Any national banking association, upon written notice to the 
Comptroller of the Currency, may change the location of its main 
office to any authorized branch location within the limits of the city, 
town, or village in which it is situated, or, with a vote of sharehold-
ers owning two-thirds of the stock of such association and upon 
receipt of a certificate of approval from the Comptroller of the 
Currency, to any other location within or outside the limits of the 
city, town, or village in which it is located, but not more than thirty 
miles beyond such limits.". 
(b) The first proviso of section 5134 of the Revised Statutes (12 
U.S.C. 22) is amended by placing a period after the word "national" 
and striking the remainder of that sentence. 
VENUE PROVISIONS 
SEC. 406. Section 5198 of the Revised Statutes (12 U.S.C. 94) is 
amended to read as follows: 
"SEC. 5198. Any action or proceeding against a national banking 
association for which the Federal Deposit Insurance Corporation has 
been appointed receiver, or against the Federal Deposit Insurance 
Corporation as receiver of such association, shall be brought in the 
district or territorial court of the United States held within the 
district in which that association's principal place of business is 
located, or, in the event any State, county, or municipal court has 
jurisdiction over such an action or proceeding, in such court in the 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1513 
county or city in which that association's principal place of business 
is located.". 
LEGAL HOUDAYS 
SEC. 407. The last sentence of section 403)(1) of the Act of March 9, 
1933 (48 Stat. 2; 12 U.S.C. 95(b)(1)) is amended to read as follows: "In 
the event that a State official authorized by law designates any day 
as a legal holiday for ceremonial or emergency reasons, for the State 
or any part thereof, that same day shall be a legal holiday for all 
national banking associations or their offices located in that State or 
the part so affected. A national banking association or its affected 
offices may close or remain open on such a State-designated holiday 
unless the Comptroller of the Currency by written order directs 
otherwise.". 
UNCLAIMED PROPERTY 
SEC. 408. Title VII of the Depository Institutions Deregulation and 
Monetary Control Act of 1980 is amended by adding after 
section 723 the following: 
"PART C—DISPOSITION OF UNCLAIMED PROPERTY RECOVERED FROM 
CLOSED NATIONAL BANKS 
"PURPOSE 
"SEC. 731. The purpose of this part is to dispose of unclaimed 
12 use 216. 
property in the possession, custody, or control of the Comptroller of 
the Currency by— 
"(1) providing final notice of the availability of unclaimed 
property from closed nationed banks and closed banks in the 
District of Columbia; 
"(2) barring rights of claimants to obtain such property from 
the Comptroller after a reasonable period of time following such 
notice; and 
"(3) authorizing the Comptroller to dispose of such property 
for which no claims have been filed and validated under this 
part. 
"DEFINITIONS 
"SEC. 732. For purposes of this part— 
12 use 2i6a. 
"(1) the term 'Comptroller' means the Comptroller of the 
Currency; 
"(2) the term 'unclaimed property' means any articles, items, 
assets, other property, or the proceeds thereof from safe deposit 
boxes or other safekeeping arrangements with closed national 
banks or closed banks in the District of Columbia, which are in 
the possession, custody, or control of the Comptroller in its 
capacity as successor to receivers of those banks; and 
'(3) the term 'claimant' means any person or entity, including 
a State under applicable statutory law, asserting a demon-
strable legal interest in title to, or custody or possession of, 
unclaimed property. 
"DISPOSITION OF UNCLAIMED PROPERTY 
"SEC. 733. (a)(1) Within twelve months following the date of the Publication in 
enactment of this part, the Comptroller shall publish formal notice federal 
12 u s e 216b. 
96 STAT. 1514 
PUBLIC LAW 97-320—OCT. 15, 1982 
in the Federal Register that all claims to rights of any claimant to 
obtain title to, or custody or possession of, any unclaimed property 
in the possession, custody, or control of the Comptroller must be 
filed within twelve months following the last date of publication of 
such formal notice in the Federal Register or shall thereafter be 
barred. 
"(2) Such notice shall contain the names of last known owners, if 
any, names and locations of affected closed banks, and a general 
description of the types of unclaimed property held by the Comptrol-
ler. The Comptroller may provide additional notice in local commu-
nities as it deems appropriate. 
"(3)(A) The Comptroller shall not disclose, by publication, inspec-
tion or otherwise, information relating to the ownership or descrip-
tion of any specific unclaimed property prior to publication of 
formal notice under this section. 
"(B) Thereafter, the Comptroller shall disclose descriptive infor-
mation of specific unclaimed property only to a claimant thereof. 
The Comptroller may recoup expenses associated with any publica-
tion or other provision of notice from any sale of property author-
ized by this part. Reasonable opportunity for inspection of specific 
property by a claimant thereof shall be provided in Washington, 
District of Columbia. 
"(b)(1) The Comptroller shall deliver such property to any claim-
ant or his or her legally authorized representative upon receiving 
proof deemed adequate by the Comptroller that such claimant is 
entitled to the property, but only if the claimant files for the 
property within twelve months following the last date formal notice 
is published in the Federal Register. 
"(2)(A) The Comptroller shall have authority to determine the 
validity of all claims filed. The Comptroller may recoup expenses 
associated with the handling and processing of claims from any sale 
of property authorized by this part. 
"(B) All expenses associated with the delivery of any property 
shall be borne by the claimant. The Comptroller shall not be respon-
sible for any loss in connection with the handling, storage, or 
delivery of any property to the claimant. The Comptroller may 
require the claimant to purchase insurance to cover the risk of any 
loss. 
"(c)(1) If, after twelve months from the date formal notice is 
published in the Federal Register, any such property remains in the 
possession, custody, or control of the Comptroller for which no valid 
claim has been filed, all rights, title, and interest in such property 
shall immediately be vested in the United States. 
"(2) The Comptroller shall thereupon, in his discretion, sell, use, 
destroy, or otherwise dispose of any such unclaimed property. Such 
disposition may include donations to the Smithsonian Institution for 
addition to the national collection. 
"(3) The proceeds of any sale authorized by this section, after 
recoupment by the Comptroller of any expenses incurred hereunder, 
shall be covered into the Treasury as miscellaneous receipts. 
"(d) The United States, the Comptroller, or any officer, employee, 
or agent thereof shall not be subject to personal or legal liability for 
any determination as to the validity of any claim or claims filed 
under this part or for any delivery, sale, destruction, or other 
disposition of unclaimed property. 
"(e)(1) A court action to determine legal ownership, entitlement, 
or right to possession may be filed in any State or Federal court of 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1515 
competent jurisdiction other than against the United States, the 
Comptroller, or any officer, agent, or employee thereof. 
"(2) Such actions shall be determined de novo without regard to 
any agency determination or any disposition or delivery by the 
Comptroller of any particular property to any person. 
"(3) The United States, the Comptroller, or any officer, employee, 
or agent thereof shall neither be a party to any such judicial 
proceeding nor be bound by any decision, decree, or order resulting 
therefrom. 
"(f)(1) The United States Claims Court shall have exclusive juris-
diction to hear and determine any suit brought against the United 
States, the Comptroller, or any officer, employee, or agent thereof 
with regard to any determination of a claim or the disposition of any 
unclaimed property. 
"(2) The United States Claims Court may set aside actions of the 
Comptroller only if such actions are found to be arbitrary, capri-
cious, an abuse of discretion, or otherwise not in accordance with 
law. 
"(3) All claims for which the United States Claims Court has 
jurisdiction under this subsection shall be barred unless suit is filed 
within two years from the date of expiration of the twelve-month 
notice period provided by this part. 
"(4) For purposes of section 1491 of title 28, United States Code, 
any Claim against the Comptroller, the United States, or any officer, 
employee, or agent thereof shall be considered a claim against the 
United States. 
"RULEMAKING AUTHORITY 
"SEC. 734. The Comptroller may issue rules and regulations neces- 12 USC 2l6c. 
sary or appropriate to carry out this part. 
"SEVERABILITY 
"SEC. 735. If any provision of this part or the application of such 
i2USC2l6d. 
provision to any person or circumstance is held invalid, the remain-
der of this part and the application of such provision to other 
persons or circumstances shall not be affected thereby.". 
AMENDMENTS TO DEREGULATION ACT 
SEC. 409. Sections 721 and 722 of the Depository Institutions 
Deregulation and Monetary Control Act of 1980 (12 U.S.C. 191 note) 
are amended by striking out the phrase "closed on or before Janu-
ary 22, 1934" each place it appears and inserting in lieu thereof 
"which have been closed and for which the Comptroller has 
appointed a receiver other than the Federal Deposit Insurance 
Corporation". 
BANKING AFFILIATES 
SEC. 410. (a) This section may be cited as the "Banking Affiliates 
Banking 
Act of 1982". 
Affiliates Act oi" 
(b) Section 23A of the Federal Reserve Act (12 U.S.C. 371c) is }1^USC226 
amended to read as follows: 
note. 
"SEC. 23A. (a) RESTRICTIONS ON TRANSACTIONS WITH AFFILIATES.— 
"(1) A member bank and its subsidiaries may engage in a 
covered transaction with an affiliate only if— 
96 STAT. 1516 
PUBLIC LAW 97-320—OCT. 15, 1982 
"(A) in the case of any affiliate, the aggregate amount of 
covered transactions of the member bank and its subsidiar-
ies will not exceed 10 per centum of the capital stock and 
surplus of the member bank; and 
"(B) in the case of all affiliates, the aggregate amount of 
covered transactions of the member bank and its subsidiar-
ies will not exceed 20 per centum of the capital stock and 
surplus of the member bank. 
"(2) For the purpose of this section, any transaction by a 
member bank with any person shall be deemed to be a transac-
tion with an affiliate to the extent that the proceeds of the 
transaction are used for the benefit of, or transferred to, that 
affiliate. 
"(3) A member bank and its subsidiaries may not purchase a 
low-quality asset from an affiliate unless the bank or such 
subsidiary, pursuant to an independent credit evaluation, com-
mitted itself to purchase such asset prior to the time such asset 
was acquired by the affiliate. 
"(4) Any covered transactions and any transactions exempt 
under subsection (d) between a member bank and an affiliate 
shall be on terms and conditions that are consistent with safe 
and sound banking practices. 
"(h) DEFINITIONS.—For the purpose of this section— 
"(1) the term 'affiliate' with respect to a member bank 
means— 
"(A) any company that controls the member bank and 
any other company that is controlled by the company that 
controls the member bank; 
"(B) a bank subsidiary of the member bank; 
"(C) any company— 
"(i) that is controlled directly or indirectly, by a trust 
or otherwise, by or for the benefit of shareholders who 
beneficially or otherwise control, directly or indirectly, 
by trust or otherwise, the member bank or any com-
pany that controls the member bank; or 
"(ii) in which a majority of its directors or trustees 
constitute a majority of the persons holding any such 
office with the member bank or any company that 
controls the member bank; 
"(D)(i) any company, including a real estate investment 
trust, that is sponsored and advised on a contractual basis 
by the member bank or any subsidiary or affiliate of the 
member bank; or 
"(ii) any investment company with respect to which a 
member bank or any affiliate thereof is an investment 
advisor as defined in section 2(a)(20) of the Investment 
15 use 80a-2. 
Company Act of 1940; and 
"(E) any company that the Board determines by regula-
tion or order to have a relationship with the member bank 
or any subsidiary or affiliate of the member bank, such that 
covered transactions by the member bank or its subsidiary 
with that company may be affected by the relationship to 
the detriment of the member bank or its subsidiary; and 
"(2) the following shall not be considered to be an affiliate: 
"(A) any company, other than a bank, that is a subsidiary 
of a member bank, unless a determination is made under 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1517 
paragraph (1)(E) not to exclude such subsidiary company 
from the definition of affiliate; 
"(B) any company engaged solely in holding the premises 
of the member bank; 
"(C) any company engaged solely in conducting a safe 
deposit business; 
"(D) any company engaged solely in holding obligations of 
the United States or its agencies or obligations fully guar-
anteed by the United States or its agencies as to principal 
and interest; and 
"(E) any company where control results from the exercise 
of rights arising out of a bona fide debt previously con-
tracted, but only for the period of time specifically author-
ized under applicable State or Federal law or regulation or, 
in the absence of such law or regulation, for a period of two 
years from the date of the exercise of such rights or the 
effective date of this Act, whichever date is later, subject, 
upon application, to authorization by the Board for good 
cause shown of extensions of time for not more than one 
year at a time, but such extensions in the aggregate shall 
not exceed three years; 
"(3)(A) a company or shareholder shall be deemed to have 
control over another company if— 
"(i) such company or shareholder, directly or indirectly, 
or acting through one or more other persons owns, controls, 
or has power to vote 25 per centum or more of any class of 
voting securities of the other company; 
"(ii) such company or shareholder controls in any manner 
the election of a majority of the directors or trustees of the 
other company; or 
"(iii) the Board determines, after notice and opportunity 
for hearing, that such company or shareholder, directly or 
indirectly, exercises a controlling influence over the man-
agement or policies of the other company; and 
"(B) notwithstanding any other provision of this section, no 
company shall be deemed to own or control another company by 
virtue of its ownership or control of shares in a fiduciary 
capacity, except as provided in paragraph (1)(C) of this subsec-
tion or if the company owning or controlling such shares is a 
business trust; 
"(4) the term 'subsidiary' with respect to a specified company 
means a company that is controlled by such specified company; 
"(5) the term 'bank' includes a State bank, national bank, 
banking association, and trust company; 
"(6) the term 'company' means a corporation, partnership, 
business trust, association, or similar organization and, unless 
specifically excluded, the term 'company' includes a 'member 
bank' and a 'bank'; 
"(7) the term 'covered transaction' means with respect to an 
affiliate of a member bank—-
"(A) a loan or extension of credit to the affiliate; 
"(B) a purchase of or an investment in securities issued 
by the affiliate; 
"(C) a purchase of assets, including assets subject to an 
agreement to repurchase, from the affiliate, except such 
purchase of real and personal property as may be specifi-
cally exempted by the Board by order or regulation; 
96 STAT. 1518 
PUBLIC LAW 97-320—OCT. 15, 1982 
"(D) the acceptance of securities issued by the affiliate as 
collateral security for a loan or extension of credit to any 
person or company; or 
"(E) the issuance of a guarantee, acceptance, or letter of 
credit, including an endorsement or standby letter of credit, 
on behalf of an affiliate; 
"(8) the term 'aggregate amount of covered transactions' 
means the amount of the covered transactions about to be 
engaged in added to the current amount of all outstanding 
covered transactions; 
"(9) the term 'securities' means stocks, bonds, debentures, 
notes, or other similar obligations; and 
"(10) the term 'low-quality asset' means an asset that falls in 
any one or more of the following categories: 
"(A) an asset classified as 'substandard', 'doubtful', or 
'loss' or treated as 'other loans especially mentioned' in the 
most recent report of examination or inspection of an affili-
ate prepared by either a Federal or State supervisory 
agency; 
"(B) an asset in a nonaccrual status; 
"(C) an asset on which principal or interest payments are 
more than thirty days past due; or 
"(D) an asset whose terms have been renegotiated or 
compromised due to the deteriorating financial condition of 
the obligor. 
"(c) COLLATERAL FOR CERTAIN TRANSACTIONS WITH AFFILIATES.— 
"(1) Each loan or extension of credit to, or guarantee, accept-
ance, or letter of credit issued on behalf of, an affiliate by a 
member bank or its subsidiary shall be secured at the time of 
the transaction by collateral having a market value equal to— 
"(A) 100 per centum of the amount of such loan or 
extension of credit, guarantee, acceptance, or letter - of 
credit, if the collateral is composed of— 
"(i) obligations of the United States or its agencies; 
"(ii) obligations fully guaranteed by the United 
States or its agencies as to principal and interest; 
"(iii) notes, drafts, bills of exchange or bankers' 
acceptances that are eligible for rediscount or purchase 
by a Federal Reserve Bank; or 
"(iv) a segregated, earmarked deposit account with 
the member bank; 
"(B) 110 per centum of the amount of such loan or 
extension of credit, guarantee, acceptance, or letter of 
credit if the collateral is composed of obligations of any 
State or political subdivision of any State; 
"(C) 120 per centum of the amount of such loan or 
extension of credit, guarantee, acceptance, or letter of 
credit if the collateral is composed of other debt instru-
ments, including receivables; or 
"(D) 130 per centum of the amount of such loan or 
extension of credit, guarantee, acceptance, or letter of 
credit if the collateral is composed of stock, leases, or other 
real or personal property. 
"(2) Any such collateral that is subsequently retired or amor-
tized shall be replaced by additional eligible collateral where 
needed to keep the percentage of the collateral value relative to 
the amount of the outstanding loan or extension of credit, 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1519 
guarantee, acceptance, or letter of credit equal to the minimum 
percentage required at the inception of the transaction. 
"(3) A low-quality asset shall not be acceptable as collateral 
for a loan or extension of credit to, or guarantee, acceptance, or 
letter of credit issued on behalf of, an affiliate. 
"(4) The securities issued by an affiliate of the member bank 
shall not be acceptable as collateral for a loan or extension of 
credit to, or guarantee, acceptance, or letter of credit issued on 
behalf of, that affiliate or any other affiliate of the member 
bank. 
"(5) The collateral requirements of this paragraph shall not 
be applicable to an acceptance that is already fully secured 
either by attached documents or by other property having an 
ascertainable market value that is involved in the transaction. 
"(d) EXEMPTIONS.—The provisions of this section, except para-
graph (a)(4), shall not be applicable to— 
"(1) any transaction, except for the purchase of a low-quality 
asset which is prohibited, with a bank— 
"(A) which controls 80 per centum or more of the voting 
shares of the member bank; 
"(B) in which the member bank controls 80 per centum or 
more of the voting shares; or 
"(C) in which 80 per centum or more of the voting shares 
are controlled by the company that controls 80 per centum 
or more of the voting shares of the member bank; 
"(2) making deposits in an affiliated bank or affiliated foreign 
bank in the ordinary course of correspondent business, subject 
to any restrictions that the Board may prescribe by regulation 
or order; 
"(3) giving immediate credit to an affiliate for uncollected 
items received in the ordinary course of business; 
"(4) making a loan or extension of credit to, or issuing a 
guarantee, acceptance, or letter of credit on behalf of, an affili-
ate that is fully secured by— 
"(A) obligations of the United States or its agencies; 
"(B) obligations fully guaranteed by the United States or 
its agencies as to principal and interest; or 
"(C) a segregated, earmarked deposit account with the 
member bank; 
"(5) purchasing securities issued by any company of the kinds 
described in section 4(c)(1) of the Bank Holding Company Act of 
1956; 
12 use 1843. 
"(6) purchasing assets having a readily identifiable and pub-
licly available market quotation and purchased at that market 
quotation or purchasing loans on a non-recourse basis from 
affiliated banks; and 
"(7) purchasing from an affiliate a loan or extension of credit 
that was originated by the member bank and sold to the affili-
ate subject to a repurchase agreement or with recourse. 
"(e) RULEMAKING AND ADDITIONAL EXEMPTIONS.— 
"(1) The Board may issue such further regulations and orders, 
including definitions consistent with this section, as may be 
necessary to administer and carry out the purposes of this 
section and to prevent evasions thereof. 
"(2) The Board may, at its discretion, by regulation or order 
exempt transactions or relationships from the requirements of 
12 u s e 371c. 
96 STAT. 1520 
PUBLIC LAW 97-320—OCT. 15, 1982 
this section if it finds such exemptions to be in the public 
interest and consistent with the purposes of this section.". 
12 use 371c 
(c) Section 23A of the Federal Reserve Act, as amended by this 
^^te,^^ 071 „ 
section, shall apply to any transaction entered into after the date of 
enactment of this Act, except for transactions which are the subject 
of a binding written contract or commitment entered into on or 
before July 28, 1982, and except that any renewal of a participation 
in a loan outstanding on July 28, 1982, to a company that becomes 
an affiliate as a result of the enactment of this Act, or any participa-
tion in a loan to such an affiliate emanating from the renewal of a 
binding written contract or commitment outstanding on July 28, 
1982, shall not be subject to the collateral requirements of this Act. 
(d) Section 18(j) of the Federal Deposit Insurance Act (12 U.S.C. 
1828(j)) is amended by striking out ", within the meaning of section 2 
12 use 221a. 
of the Banking Act of 1933, and". 
(e) Section 22(h)(6)(C) of the Federal Reserve Act (12 U.S.C. 375b-
(6)(C)) is repealed and subparagraphs (D) through (G) of such section 
are redesignated as subparagraphs (C) through (F), respectively. 
(f) Section 106(b)(2)(E) of the Bank Holding Company Amendments 
of 1970 (12 U.S.C. 1972(2)(E)) is amended by striking out "the same 
meaning given it in section 23A of the Federal Reserve Act" and 
inserting in lieu thereof "the meaning prescribed by the Board 
pursuant to section 22(h) of the Federal Reserve Act (12 U.S.C. 
375b),". 
(g) Section 10(d) of the Federal Deposit Insurance Act (12 U.S.C. 
1820(d)) is amended by inserting "as in section 2(b) of the Banking 
Act of 1933 (12 U.S.C. 221a(b)) and" after "shall have the same 
meaning". 
EXEMPTION FROM RESERVE REQUIREMENTS 
SEC. 411. (a) Section 19(b) of the Federal Reserve Act (12 U.S.C. 
461(b)) is amended by adding at the end thereof the following: 
"(11) ADDITIONAL EXEMPTIONS.—(A)(i) Notwithstanding the 
reserve requirement ratios established under paragraphs (2) 
and (5) of this subsection, a reserve ratio of zero per centum 
shall apply to any combination of reservable liabilities, which 
do not exceed $2,000,000 (as adjusted under subparagraph (B)), 
of each depository institution. 
"(ii) Each depository institution may designate, in accordance 
with such rules and regulations as the Board shall prescribe, 
the types and amounts of reservable liabilities to which the 
reserve ratio of zero per centum shall apply, except that trans-
action accounts which are designated to be subject to a reserve 
ratio of zero per centum shall be accounts which would other-
wise be subject to a reserve ratio of 3 per centum under para-
graph (2). 
"(iii) The Board shall minimize the reporting necessary to 
determine whether depository institutions have total reservable 
liabilities of less than $2,000,000 (as adjusted under subpara-
graph (B)). Consistent with the Board's responsibility to monitor 
and control monetary and credit aggregates, depository institu-
tions which have reserve requirements under this subsection 
equal to zero per centum shall be subject to less overall report-
ing requirements than depository institutions which have a 
reserve requirement under this subsection that exceeds zero per 
centum. 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1521 
"(B)(i) Beginning in 1982, not later than December 31 of each 
year, the Board shall issue a regulation increasing for the next 
succeeding calendar year the dollar amount specified in subpar-
agraph (A), as previously adjusted under this subparagraph, by 
an amount obtained by multiplying such dollar amount by 80 
per centum of the percentage increase in the total reservable 
liabilities of all depository institutions. 
"(ii) The increase in total reservable liabilities shall be deter-
mined by subtracting the amount of total reservable liabilities 
on June 30 of the preceding calendar year from the amount of 
total reservable liabilities on June 30 of the calendar year 
involved. In the case of any such twelve-month period in which 
there has been a decrease in the total reservable liabilities of all 
depository institutions, no adjustment 
shall be made. A 
decrease in total reservable liabilities shall be determined by 
subtracting the amount of total reservable liabilities on June 30 
of the calendar year involved from the amount of total reserv-
able liabilities on June 30 of the previous calendar year.". 
(b) Section 19(b)(4)(A)(iv) of the Federal Reserve Act (12 U.S.C. 
461(b)(4)(A){iv)) is amended by inserting "except as provided in 
paragraph (11)," after "requirement is imposed,". 
(c) Section 19(b)(1) of the Federal Reserve Act (12 U.S.C. 461(b)(1)) 
is amended by redesignating subparagraph (E) as subparagraph (F) 
and by inserting after subparagraph (D) the following: 
"(E) The term 'reservable liabilities' means transaction ac-
counts, nonpersonal time deposits, and all net balances, loans, 
assets, and obligations which are, or may be, subject to reserve 
requirements under paragraph (5).". 
Regulations. 
"Reservable 
liabilities." 
VISITORIAL POWERS 
SEC. 412. Section 5240 of the Revised Statutes (12 U.S.C. 484) is 
amended to read as follows: 
"SEC. 5240. (a) No national bank shall be subject to any visitorial 
powers except as authorized by Federal law, vested in the courts of 
justice or such as shall be, or have been exercised or directed by 
Congress or by either House thereof or by any committee of Con-
gress or of either House duly authorized. 
"(b) Notwithstanding subsection (a), lawfully authorized State 
auditors and examiners may, at reasonable times and upon reason-
able notice to a bank, review its records solely to ensure compliance 
with applicable State unclaimed property or escheat laws upon 
reasonable cause to believe that the bank has failed to comply with 
such laws.". 
REAL ESTATE HOLDING PERIOD 
SEC. 413. Section 5137 of the Revised Statutes (12 U.S.C. 29) is 
amended by striking out the last paragraph thereof and inserting in 
lieu thereof the following: 
"Notwithstanding the five-year holding limitation of this section 
or any other provision of this title, any national banking association 
which on the date of enactment of this paragraph held, directly or 
indirectly, real estate, including any subsurface rights or interests 
therein, that since December 31, 1979, had not been valued on the 
books of such association for more than a nominal amount, may 
continue to hold such real estate, rights, or interests for such longer 
period of time as would be permitted a State chartered bank by the 
96 STAT. 1522 
PUBLIC LAW 97-320—OCT. 15, 1982 
law of the State in which the association is located if the aggregate 
amount of earnings from such real estate, rights, or interests is 
separately disclosed in the annual financial statements of the 
association.". 
PART B—FINANCIAL INSTITUTIONS REGULATORY ACT AMENDMENTS 
LOAN LIMITS 
SEC. 421. (a) Section 22(g) of the Federal Reserve Act (12 U.S.C. 
375a) is amended by striking out "not exceeding $60,000" in para-
graph (2), and by striking out ", not exceeding the aggregate 
amount of $20,000 outstanding at any one time," in paragraph (3). 
(b) Paragraph (4) of section 22(g) of the Federal Reserve Act (12 
U.S.C. 375a(4)) is amended by striking "not exceeding the aggregate 
amount of $10,000 outstanding at any one time" and inserting in 
lieu thereof "in an amount prescribed in a regulation of the member 
bank's appropriate Federal banking agency". 
APPROVAL OF CERTAIN LOANS 
SEC. 422. Paragraph (2) of section 22(h) of the Federal Reserve Act 
(12 U.S.C. 375b(2)) is amended by striking out "$25,000" and insert-
ing in lieu thereof "an amount prescribed in a regulation of the 
appropriate Federal banking agency". 
EXCLUSION OF FOREIGN BANKS 
SEC. 423. Section 18(j)(2) of the Federal Deposit Insurance Act (12 
U.S.C. 1828(j)(2)) is amended by adding at the end thereof the 
following: "The provisions of this subsection shall not apply to any 
foreign bank, as defined in section 1(b)(7) of the International Bank-
ing Act of 1978 (12 U.S.C. 3101(7)), having an insured branch in the 
United States, but shall apply to the insured branch.". 
CIVIL MONEY PENALTIES 
SEC. 424. (a) Section 19(1)(1) of the Federal Reserve Act (12 U.S.C. 
505(1)); section 5(d)(8)(B)(i) of the Home Owners' Loan Act of 1933 (12 
U.S.C. 1464(d)(8)(B)(i)); section 8(b)(1) of the Bank Holding Company 
Act of 1956 (12 U.S.C. 1847(b)(1)); and section 206(j)(2)(A) of the 
Federal Credit Union Act (12 U.S.C. 1786(j)(2)(A)) are amended by 
inserting before the period at the end of the first sentence thereof 
the following: ": Provided, That the Board may, in its discretion, 
compromise, modify, or remit any civil money penalty which is 
subject to imposition or has been imposed under authority of this 
subsection". 
(b) Section 407(k)(3)(A) of the National Housing Act (12 U.S.C. 
1730(k)(3)(A)); section 408(j)(4)(A) of the National Housing Act (12 
U.S.C. 1730a(j)(4)(A)); and section. 18(j)(3)(A) of the Federal Deposit 
Insurance Act (12 U.S.C. 1828(j)(3)(A)) are amended by inserting 
before the period at the end of the first sentence thereof the 
following: ": Provided, That the Corporation may, in its discretion, 
compromise, modify, or remit any civil money penalty which is 
subject to imposition or has been imposed under authority of this 
subsection". 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1523 
(c) Section 29(a) of the Federal Reserve Act (12 U.S.C. 504(a)); 
section 8(i)(2)(i) of the Federal Deposit Insurance Act (12 U.S.C. 
1818(i)(2)(i)); and section 106(b)(2)(F)(i) of the Bank Holding Company 
Act Amendments of 1970 (12 U.S.C. 1972(2)(F)(i)) are amended by 
inserting before the period at the end of the first sentence thereof 
the following: ": Provided, That the agency having authority to 
impose a civil money penalty may, in its discretion, compromise, 
modify, or remit any civil money penalty which is subject to imposi-
tion or has been imposed under such authority". 
(d) Each of the following provisions is amended by striking the 
term "shall" and inserting in lieu thereof the term "may": 
(1) The second sentence of section 29(a) of the Federal Reserve 
Act (12 U.S.C. 504(a)); 
(2) The second sentence of section 19(1)(1) of the Federal 
Reserve Act (12 U.S.C. 505(1)); 
(3) The second sentence of section 52390t))(l) of the Revised 
Statutes (12 U.S.C. 93(bXl)); 
(4) The second sentence of section 8(b)(1) of the Bank Holding 
Company Act of 1956 (12 U.S.C. 1847(b)(1)); 
(5) The second sentence of section 408(j)(4)(A) of the National 
Housing Act (12 U.S.C. 1730a(jX4XA)); 
(6) The second sentence of section 8(iX2Xi) of the Federal 
Deposit Insurance Act (12 U.S.C. 1818(iX2Xi)); 
(7) The second sentence of section 407(kX3XA) of the National 
Housing Act (12 U.S.C. 1730(kX3XA)); 
(8) The second sentence of section 5(dX8XBXi) of the Home 
Owners' Loan Act of 1933 (12 U.S.C. 1464(dX8XBXi)); 
(9) The second sentence of section 206(jX2XA) of the Federal 
Credit Union Act (12 U.S.C. 1786(jX2XA)); 
(10) The second sentence of section 180'X3XA) of the Federal 
Deposit Insurance Act (12 U.S.C. 1828(jX3XA)); and 
(11) The second sentence of section 106(bX2XFXi) of the Bank 
Holding Company Act Amendments of 1970 (12 U.S.C. 
1972(2XFXi)). 
(e) Sections 29(d) and 19(1X4) of the Federal Reserve Act (12 U.S.C. 
504(d) and 505(4)), 18(jX3XD) and 8(iX2Xiv) of the Federal Deposit 
Insurance Act (12 U.S.C. 1828(jX3XD) and 1818(iX2Xiv)), 407(kX3XD) 
of the National Housing Act (12 U.S.C. 1730(kX3XD)), 5(dX8XBXiv) of 
the Home Owners' Loan Act of 1933 (12 U.S.C. 1464(dX8XBXiv)), 
206(jX2)(D) of the Federal Credit Union Act (12 U.S.C. 1786(jX2XD)), 
and 106(bX2XFXiv) of the Bank Holding Company Act Amendments 
of 1970 (12 U.S.C. 1972(2XFXiv)) are amended by striking out "ten 
days from the date" in each section and inserting in lieu thereof 
"twenty days from the service". 
if) Section 5239(bXl) of the Revised Statutes (12 U.S.C. 93(h)(1)) is 
amended by striking out the word "chapter" and inserting in lieu 
thereof "title". 
(g) Section 5239(bXl) of the Revised Statutes (12 U.S.C. 93(bXl)) is 
amended by inserting before ", or any regulation issued pursuant 
thereto," the following: "or any of the provisions of the first section 
of the Act of September 28, 1962 (76 Stat. 688; 12 U.S.C. 92a)". 
TECHNICAL AMENDMENTS 
SEC. 425. (a) Section 407(hXl) of the National Housing Act (12 
U.S.C. 1730(hXl)) is amended— 
97-200 0-84-pt. 2 
6 : QL3 
96 STAT. 1524 
PUBLIC LAW 97-320—OCT. 15, 1982 
(1) by striking out "persons" in the first sentence and insert-
ing in lieu thereof "person"; and 
(2) by striking out "(3)" in the last sentence and inserting in 
lieu thereof "(2)". 
(b) The first sentence of section 8(b)(3) of the Federal Deposit 
Insurance Act (12 U.S.C. 1818(b)(3)) is amended by striking out 
"25A" and inserting in lieu thereof "25(a)". 
(c) Section 8(b) of the Federal Deposit Insurance Act (12 U.S.C. 
1818(b)) is amended by adding at the end thereof the following: 
"(4) This subsection and subsections (c), (d), (h), (i), (k), (1), (m), and 
(n) of this section shall apply to any foreign bank or company to 
which subsection (a) of section 8 of the International Banking Act of 
12 use 3106. 
1978 applies and to any subsidiary (other than a bank) of any such 
foreign bank or company in the same manner as they apply to a 
bank holding company and any subsidiary thereof (other than a 
bank) under subparagraph (3) of this subsection. For the purposes of 
this paragraph, the term 'subsidiary' shall have the meaning as-
signed to it in section 2 of the Bank Holding Company Act of 1956.". 
(d) Section 205(2) of the Depository Institution Management Inter-
locks Act (12 U.S.C. 3204(2)) is amended by striking "25A" and 
inserting in lieu thereof "25(a)". 
MANAGEMENT INTERLOCKS 
SEC. 426. The Depository Institution Management Interlocks Act 
is amended by adding at the end thereof the following new section: 
12 use 3208. 
"SEC. 210. (a) For the purpose of the exercise by the Attorney 
General of his enforcement functions under section 207(6) of this 
title, all of the functions and powers of the Attorney General under 
15 use 12. 
the Clayton Act are available to the Attorney General, irrespective 
of any jurisdictional tests in the Clayton Act, including the power to 
take enforcement actions in the same manner as if the violation had 
been a violation of the Clayton Act. 
"(b) All of the functions and powers of the Attorney General or 
the Assistant Attorney General in charge of the Antitrust Division 
of the Department of Justice are available to the Attorney General 
or to such Assistant Attorney General to investigate possible viola-
tions under section 207(6) of the title in the same manner as if such 
possible violations were possible violations of the Clayton Act.". 
REMOVAL AUTHORITY 
SEC. 427. (a) Section 5(d) of the Home Owners' Loan Act of 1933 (12 
U.S.C. 1464(d)) is amended— 
(1) by redesignating paragraphs (4) (C) through (E) as paragraphs 
(4) (D) through (F), respectively, and by inserting after paragraph 
(4)(B) the following new paragraph: 
"(C) Whenever, in the opinion of the Board, any director or officer 
of an association has committed a violation of the Depository Insti-
tution Management Interlocks Act (12 U.S.C. 3201 et seq.), the Board 
may serve upon such director or officer a written notice of its 
intention to remove him from office or to prohibit his further 
participation in any manner in the conduct of the affairs of the 
association."; 
(2) by striking out "(A) or (B)" each place it appears in 
paragraphs (4)(D) and (4)(F), as redesignated, and inserting in 
lieu thereof "(A), (B), or (C)"; 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1525 
(3) by striking out "(E)" in the second sentence of paragraph 
(4)(D), as redesignated, and inserting in lieu thereof '(F)"; 
(4) by striking out "(C)" in paragraph (F), as redesignated, and 
inserting in lieu thereof "(D)"; 
(5) by striking out, in paragraph (5)(A), "or (C)" and inserting 
in lieu thereof "(C), or (D)"; and 
(6) by striking out, in paragraph (12)(A), "(4)(C), (4)(D)" and 
inserting in lieu thereof "(4)(D), (4)(E)". 
(b)(1) Section 407(g) of the National Housing Act (12 U.S.C. 1730(g)) 
is amended— 
(A) by redesignating paragraphs (3) through (5) as paragraphs 
(4) through (6), respectively, and by inserting after paragraph (2) 
the following new paragraph: 
"(3) Whenever, in the opinion of the Corporation, any director or 
officer of an insured institution has committed a violation of the 
Depository Institution Management Interlocks Act, the Corporation 
12 USC 3201 
may serve upon such director or officer a written notice of its 
"^*^-
intention to remove him from office or to prohibit his further 
participation in any manner in the conduct of the affairs of the 
institution."; 
(B) by striking out "or (2)" each place it appears in para-
graphs (4) and (6), as redesignated, and inserting in lieu thereof 
", (2) or (3)"; 
(C) by striking out "(5)" in paragraph (4), as redesignated, and 
inserting in lieu thereof "(6)"; and 
(D) by striking out "(3)" in paragraph (6), as redesignated, and 
inserting in lieu thereof "(4)". 
(2) Section 407(h)(1) of the National Housing Act (12 U.S.C. 
1730(h)(1)) is amended by striking out "or (3)" in the fourth sentence 
and inserting in lieu thereof "(3) or (4)". 
(3) Section 407(p)(l) of the National Housing Act (12 U.S.C. 
1730(p)(l)) is amended by striking out "(g)(3), (g)(4)," and inserting in 
lieu thereof "(g)(4), (g)(5),". 
(c)(1) Section 206(g) of the Federal Credit Union Act (12 U.S.C. 
1786(g)) is amended— 
(A) by redesignating paragraphs (3) through (5) as paragraphs 
(4) through (6), respectively, and by inserting after paragraph (2) 
the following new paragraph: 
"(3) Whenever, in the opinion of the Board, any director, officer, 
or committee member of an insured credit union has committed any 
violation of the Depository Institution Management Interlocks Act, 
the Board may serve upon such director, officer, or committee 
member a written notice of its intention to remove him from 
office."; 
(B) by striking out "or (2)" each place it appears in para-
graphs (4) or (6), as redesignated, and inserting in lieu thereof ", 
(2), or (3)"; 
(C) by striking out "(5)" in paragraph (4), as redesignated, and 
inserting in lieu thereof "(6)"; and 
(D) by striking out "(3)" in paragraph (6), as redesignated, and 
inserting in lieu thereof "(4)". 
(2) Section 206(k) of the Federal Credit Union Act (12 U.S.C. 
1786(k)) is amended by striking out "(3), (g)(4)" and inserting in lieu 
thereof "(4), (g)(5)". 
(d) (1) Section 8(e) of the Federal Deposit Insurance Act (12 U.S.C. 
1818(e)) is amended— 
96 STAT. 1526 
PUBLIC LAW 97-320—OCT. 15, 1982 
12 u s e 3201 
note. 
(A) by redesignating paragraphs (3) through (5) as paragraphs 
(4) through (6), respectively, and by inserting after paragraph (2) 
the following new paragraph: 
"(3) Whenever, in the opinion of the appropriate Federal banking 
agency, any director or officer of an insured bank has committed 
any violation of the Depository Institution Management Interlocks 
Act, the agency may serve upon such director or officer a written 
notice of its intention to remove him from office."; and 
(B) by striking out "or (2)" each place it appears in paragraph 
(4), as redesignated, and inserting in lieu thereof ", (2), or (3)". 
(2) Section 8(f) of the Federal Deposit Insurance Act (12 U.S.C. 
1818(f)) is amended by striking out "(e)(5) or (e)(7)" and "(e)(1), (e)(3), 
or (e)(7)" and inserting in lieu thereof "(e)(4)" and "(e)(1), (e)(2), or 
(e)(3)" respectively. 
(3) Section 8(g)(1) of the Federal Deposit Insurance Act (12 U.S.C. 
1818(g)(1)) is amended by striking out "or (3)" in the penultimate 
sentence and inserting in lieu thereof ", (3), or (4)". 
(4) Section 8(j) of the Federal Deposit Insurance Act (12 U.S.C. 
1818(j)) is amended by striking out "(e)(3), (e)(4)" and inserting in 
lieu thereof "(e)(4), (e)(5)". 
Rules and 
regulations. 
Definitions. 
CORRESPONDENT ACCOUNTS 
SEC. 428. (a) Section 106(b)(2) of the Bank Holding Company Act 
Amendments of 1970 (12 U.S.C. 1972(2)) is amended— 
(1) by inserting in subparagraph (A) after the phrase "such 
other bank" the phrase "or to any related interest of such 
person"; 
(2) by inserting in subparagraph (B) after the phrase "desiring 
to open the account" the phrase "or to any related interest of 
such person"; 
(3) by inserting in subparagraph (C) after the phrase "such 
other bank" the phrase "or to any related interest of such 
person"; and 
(4) by inserting in subparagraph (D) after the phrase "another 
bank" the phrase "or to any related interest of such person". 
(b) Section 106(b)(2)(G) of the Bank Holding Company Act Amend-
ments of 1970 (12 U.S.C. 1972(2)(G)) is amended— 
(1) by striking out subparagraph (ii) and inserting in lieu 
thereof the following: 
"(ii) The appropriate Federal banking agencies are authorized 
to issue rules and regulations, including definitions of terms, to 
require the reporting and public disclosure of information by 
any bank or executive officer or principal shareholder thereof 
concerning any extension of credit by a correspondent bank to 
the reporting bank's executive officers or principal share-
holders, or the related interests of such persons."; and 
(2) by striking out subparagraph (iii). 
(c) Section 106(b)(2) of the Bank Holding Company Act Amend-
ments of 1970 (12 U.S.C. 1972(2)) is amended by adding at the end 
thereof the following: 
"(H) For the purpose of this paragraph— 
"(i) the term 'bank' includes a mutual savings bank; 
"(ii) the term 'related interests of such persons' includes 
any company controlled by such executive officer, director, 
or person, or any political or campaign committee the funds 
or services of which will benefit such executive officer. 
note. 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1527 
director, or person or which is controlled by such executive 
officer, director, or person; and 
"(iii) the terms 'control of a company' and 'company' have 
the same meaning as under section 22(h) of the Federal 
Reserve Act (12 U.S.C. 375b).". 
DISCLOSURE OF MATERIAL FACTS 
SEC. 429. Section 7(k) of the Federal Deposit Insurance Act (12 
U.S.C. 1817(k)) is amended to read as follows: 
"(k) The appropriate Federal banking agencies are authorized to 
issue rules and regulations, including definitions of terms, to require 
the reporting and public disclosure of information by a bank or any 
executive officer or principal shareholder thereof concerning exten-
sions of credit by the bank to any of its executive officers or 
principal shareholders, or the related interests of such persons.". 
EFFECTIVE DATE OF REPORTING PROVISIONS 
SEC. 430. The provision of law amended by section 4280t)) and 1
2 use I817 
section 429 shall remain in effect until the regulations referred to in 
such amendments become effective. 
TECHNICAL AMENDMENT 
SEC. 431. Section 10060>X2) of the Federal Financial Institutions 
Examination Council Act of 1978 (12 U.S.C. 3305(bX2)) is amended by 
striking out "unaccepted" and inserting in lieu 
thereof 
"unacceptable". 
RIGHT TO FINANCIAL PRIVACY ACT AMENDMENTS 
SEC. 432. (a) Section 1112 of the Right to Financial Privacy Act of 
1978 (12 U.S.C. 3412) is amended by adding at the end thereof the 
following new subsection: 
"(e) Notwithstanding section 1101(6) or any other provision of this 
title, the exchange of financial records or other information with 
respect to a financial institution among and between the five 
member supervisory agencies of the Federal Financial Institutions 
Examination Council is permitted.". 
(b) Section 1114(bX2) of the Right to Financial Privacy Act of 1978 
(12 U.S.C. 3414(bX2)) is amended by striking out "of following the 
term "institution". 
MISCELLANEOUS AMENDMENTS 
SEC. 433. (a) Section 8(q) of the Federal Deposit Insurance Act (12 
U.S.C. 1818(q)) is amended by placing a period after the phrase "six-
month period" in the first sentence and striking the remainder of 
(b) Section 4(aX2) of the Bank Holding Company Act of 1956 (18 
U.S.C. 1843(aX2)) is amended by striking out "December 31,1982" in 
the last paragraph and inserting in lieu thereof "December 31, 
1984". 
96 STAT. 1528 
PUBLIC LAW 97-320—OCT. 15, 1982 
TITLE V-AMENDMENTS TO THE FEDERAL CREDIT UNION 
ACT 
CUSTODIAL ACCOUNTS 
SEC. 501. Section 101(5) of the Federal Credit Union Act (12 U.S.C. 
1752(5)) is amended by inserting ", and such terms mean custodial 
accounts established for loans sold in whole or in part pursuant to 
section 107(13)" after "section 207 of this Act". 
AUDIT OF NATIONAL CREDIT UNION AMINISTRATION 
SEC. 502. Section 102(0 of the Federal Credit Union Act (12 U.S.C. 
1752a(f)) is amended by striking out "on a calendar year basis". 
ORGANIZATIONAL PROCESS 
SEC. 503. Section 103 of the Federal Credit Union Act (12 U.S.C. 
1753) is amended by striking out "subscribe" and inserting in lieu 
thereof "each subscribe either individually or collectively". 
PAR VALUE OF SHARES 
SEC. 504. Section 103(4) of the Federal Credit Union Act (12 U.S.C. 
1753(4)) is amended by inserting "initial" before "par value" and by 
striking out ", which shall be $5 each". 
INVESTMENT OF FEES 
SEC. 505. Section 105 of the Federal Credit Union Act (12 U.S.C. 
1755) is amended by adding at the end thereof the following new 
subsection: 
"(e)(1) Upon request of the Board, the Secretary of the Treasury 
shall invest and reinvest such portions of the annual operating fees 
deposited under subsection (d) as the Board determines are not 
needed for current operations. 
"(2) Such investments may be made only in interest bearing 
securities of the United States with maturities requested by the 
Board bearing interest at rates determined by the Secretary of the 
Treasury, taking into consideration current market yields on out-
standing marketable obligations of the United States of comparable 
maturities. 
"(3) All income derived from such investments and reinvestments 
shall be deposited to the account of the Administration described in 
subsection (d).". 
TECHNICAL AMENDMENT 
SEC. 506. Section 107(5)(A) of the Federal Credit Union Act (12 
U.S.C. 1757(5)) is amended by striking out the period at the end of 
clause (ix) and inserting in lieu thereof a semicolon and by adding at 
the end thereof the following: 
"(x) loans must be approved by the credit committee 
or a loan officer, but no loan may be made to any 
member if, upon the making of that loan, the member 
would be indebted to the Federal credit union upon 
loans made to him in an aggregate amount which 
would exceed 10 per centum of the credit union's unim-
paired capital and surplus.". 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1529 
REAL ESTATE LENDING; MAXIMUM MATURITY 
SEC. 507. Section 107(5XAXi) of the Federal Credit Union Act (12 
U.S.C. 1757(5XA)(i)) is amended by inserting "or such other limits as 
shall be set by the National Credit Union Association Board" after 
"not exceeding thirty years.". 
REAL ESTATE LENDING; MEDIAN PRICE RULE 
SEC. 508. Section 107(5XAXi) of the Federal Credit Union Act (12 
U.S.C, 1757(5XAXi)) is amended by striking out "the sales price of 
which is not more than 150 per centum of the median sales price of 
residential real property situated in the geographical area (as deter-
mined by the board of directors) in which the property is located,". 
REAL ESTATE LENDING; REFINANCING 
SEC. 509. Section 107(5XAXi) of the Federal Credit Union Act (12 
U.S.C. 1757(5XAXi)) is amended by striking out "which is made to 
finance the acquisition of and inserting in lieu thereof "on" and by 
striking out "for" the first time it appears £md inserting in lieu 
therof "that is or will be". 
REAL ESTATE LENDING; SECOND MORTGAGES 
SEC. 510. Section 107(5XAXii) of the Federal Credit Union Act (12 
U.S.C. 1757(5XAXii)) is amended to read as follows: 
"(ii) a loan to finance the purchase of a mobile home, 
which shall be secured by a first lein on such mobile 
home, to be used by the credit union member as his 
residence, or a second mortgage loan secured by a 
residential dwelling which is the residence of a credit 
union member shall have a maturity not to exceed 
fifteen years unless such loan is insured or guaranteed 
as provided in subparagraph (iii);". 
TERMS OF GUARANTEED LOANS 
SEC. 511. Section 107(5XAXiii) of the Federal Credit Union Act (12 
U.S.C. 1757(5XAXiii)) is amended to read as follows: 
"(iii) a loan secured by the insurance or guarantee of, 
or with advance commitment to purchase the loan by, 
the Federal Government, a State government, or any 
agency of either may be made for the maturity and 
under the terms and conditions specified in the law 
under which such insurance, guarantee, or commit-
ment is provided;". 
LOANS TO DIRECTORS OR COMMITTEE MEMBERS 
SEC. 512. Sections 107(5XA) (iv) and (v) of the Federal Credit Union 
Act (12 U.S.C. 1757(5XA) (iv) and (v)) are amended by striking out 
"$5,000" and inserting in lieu thereof "$10,000". 
REAL ESTATE LENDING; PARTIAL PAYMENTS 
SEC. 513. Section 107(5XA)(viii) of the Federal Credit Union Act (12 
U.S.C. 1757(5XAXviii)) is amended by inserting before the semicolon 
96 STAT. 1530 
PUBLIC LAW 97-320—OCT. 15, 1982 
at the end thereof the following: ", except that on a first or second 
mortgage loan a Federal credit union may require that any partial 
prepayments (I) be made on the date monthly installments are due, 
and (II) be in the amount of that part of one or more monthly 
installments which would be applicable to principal". 
INVESTMENT IN STATE AND LOCAL GOVERNMENT OBUGATIONS 
SEC. 514. Section 107(7) of the Federal Credit Union Act (12 U.S.C. 
1757(7)) is amended by adding at the end thereof the following: "(L) 
investments in obligations of, or issued by, any State or political 
subdivision thereof (including any agency, corporation, or instru-
mentality of a State or political subdivision), except that no credit 
union may invest more than 10 per centum of its unimpaired capital 
and surplus in the obligations of any one issuer (exclusive of general 
obligations of the issuer); and". 
USE OP SPACE AND FACILITIES 
SEC. 515. Section 124 of the Federal Credit Union Act (12 U.S.C. 
1770) is amended by adding at the end thereof the following: "For 
the purpose of this section, the term 'services' includes, but is not 
limited to, the providing of lighting, heating, cooling, electricity, 
office furniture, office machines and equipment, telephone service 
(including installation lines and equipment and other expenses 
associated with telephone service), and security systems (including 
installation and other expenses associated with security systems). 
Where there is an agreement for the pa3mient of costs associated 
with the provision of space or services, nothing in title 31, United 
States Code, or any other provision of law, shall be construed to 
prohibit or restrict payment by reimbursement to the miscellaneous 
receipts or other appropriate account of the Treasury.". 
INVESTMENT IN SECONDARY MARKET INSTRUMENTS 
SEC. 516. Section 107(7)(E) of the Federal Credit Union Act (12 
U.S.C. 1757(7)(E)) is amended by inserting after the last semicolon 
the following: "or in obligations, participations, securities, or other 
instruments of, or issued by, or fully guaranteed as to principal and 
interest by any other agency of the United States and a Federal 
credit union may issue and sell securities which are guaranteed 
1
2 use 1721. 
pursuant to section 306(g) of the National Housing Act;". 
DEPOSITS IN OUT-OF-STATE INSURED STATE BANKS 
SEC. 517. Section 107(8) of the Federal Credit Union Act (12 U.S.C. 
1757(8)) is amended by inserting after "in which the Federal credit 
union does business," the following: "or in banks or institutions the 
accounts of which are insured by the Federal Deposit Insur-
ance Corporation or the Federal Savings and Loan Insurance 
Corporation,". 
MONEY TRANSFER SERVICES 
SEC. 518. Section 107(12) of the Federal Credit Union Act (12 
U.S.C. 1757(12)) is amended— 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1531 
(1) by striking out "and money orders" and inserting in lieu 
thereof ", money orders, and other similar money transfer 
instruments"; and 
(2) by striking out all after "for a fee" and inserting in lieu 
thereof a semicolon. 
ANNUAL MEETINGS 
SEC. 519. Section 110 of the Federal Credit Union Act (12 U.S.C. 
1760) is amended to read as follows: 
"MEMBERS' MEETINGS 
"SEC. 110. The fiscal year of all Federal credit unions shall end 
December 31. The annual meeting of each Federal credit union shall 
be held at such place as its bylaws shall prescribe. Special meetings 
may be held in the manner indicated in the bylaws. No member 
shall be entitled to vote by proxy, but a member other than a 
natural person may vote through an agent designated for the pur-
pose. Irrespective of the number of shares held, no member shall 
have more than one vote.". 
TECHNICAL WORDING CHANGES IN MANAGEMENT AUTHORITY 
SEC. 520. Section 111 of the Federal Credit Union Act (12 U.S.C. 
1761) is amended to read as follows: 
"MANAGEMENT 
"SEC. 111. (a) The management of a Federal credit union shall be 
by a board of directors, a supervisory committee, and where the 
bylaws so provide, a credit committee. The board shall consist of an 
odd number of directors, at least five in number, to be elected 
annually by and from the members as the bylaws provide. Any 
vacancy occurring on the board shall be filled until the next annual 
election by appointment by the remainder of the directors. 
"(b) The supervisory committee shall be appointed by the board of 
directors and shall consist of not less than three members nor more 
than five members, one of whom may be a director other than the 
compensated officer of the board. A record of the names and 
addresses of the executive officers, members of the supervisory 
committee, credit committee, and loan officers, shall be filed 
with the Administration within ten days after their election or 
appointment. 
"(c) No member of the board or of any other committee shall, as 
such, be compensated, except that reasonable health, accident, simi-
lar insurance protection, and the reimbursement of reasonable 
expenses incurred in the execution of the duties of the position shall 
not be considered compensation.". 
ELIMINATION OF SPECIFIC REFERENCE TO THE TITLES OF THE OFFICERS 
OF THE BOARD 
SEC. 521. Section 112 of the Federal Credit Union Act (12 U.S.C. 
1761(a)) is amended to read as follows: 
12 USC I76ia. 
96 STAT. 1532 
PUBLIC LAW 97-320—OCT. 15, 1982 
"OFFICERS OF THE BOARD 
"SEC. 112. At their first meeting after the annual meeting of the 
members, the directors shall elect from their number the board 
officers specified in the bylaws. Only one board officer may be 
compensated as an officer of the board and the bylaws shall specify 
such position as well as the specific duties of each of the board 
officers. The board shall elect from their number a financial officer 
who shall give bond with good and sufficient surety, in an amount 
and character to be determined by the board of directors in compli-
ance with regulations prescribed from time to time by the Board 
conditioned upon the faithful performance of the officer's trust.". 
CLARIFICATION OF BOARD OF DIRECTOR'S DUTIES 
SEC. 522. Section 113 of the Federal Credit Union Act (12 U.S.C. 
1761b) is amended to read as follows: 
"BOARD OF DIRECTORS; MEETINGS; POWERS AND DUTIES; EXECUTIVE 
COMMITTEE; MEMBERSHIP OFFICERS; MEMBERSHIP APPLICATIONS 
"SEC. 113. The board of directors shall meet at least once a month 
and shall have the general directions and control of the affairs of 
the Federal credit union. Minutes of all meetings shall be kept. 
Among other things, the board of directors shall— 
"(1) act upon applications for membership or appoint mem-
bership officers from among the members of the board of direc-
tors, other than the board member paid as an officer, the 
financial board officer, any assistant to the paid officer of the 
board or to the financial officer, or any loan officer; 
"(2) require any officer or employee having custody of or 
handling funds to give bond with good and sufficient surety in 
an amount and character in compliance with regulations of the 
Board, and authorize the payment of the premium or premiums 
therefor from the funds of the Federal credit unions; 
"(3) fill vacancies on the board of directors until successors 
elected at the next annual meeting have qualified; 
"(4) if the bylaws provide for an elected credit committee, fill 
vacancies on the credit committee until successors elected at the 
next annual meeting have qualified; 
"(5) appoint the members of the supervisory committee and, if 
the bylaws so provide, appoint the members of the credit 
committee; 
"(6) have charge of investments including the right to desig-
nate an investment committee of not less than two to act on its 
behalf; 
"(7) determine the maximum number of shares, share certifi-
cates, and share draft accounts, and the classes of shares, share 
certificates, and share draft accounts; 
"(8) subject to any limitations of this subchapter, determine 
the interest rates on loans, the security, and the maximum 
amount which may be loaned and provided in lines of credit; 
"(9) authorize interest refunds to members of record at the 
close of business on the last day of any dividend period from 
income earned and received in proportion to the interest paid 
them during that dividend period; 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1533 
"(10) if the bylaws so provide, appoint one or more loan 
officers and delegate to these officers the power to approve or 
disapprove loans, lines of credit, or advances from lines of 
credit; 
"(11) establish the par value of the share; 
"(12) subject to the limitations of this title and the bylaws of 
the credit union, provide for the hiring and compensation of 
officers and employees; 
"(13) if the bylaws so provide, appoint an executive committee 
of not less than three directors to act on its behalf and any other 
committees to which it can delegate specific functions; 
"(14) prescribe conditions and limitations for any committee 
which it appoints; 
"(15) review at each monthly meeting a list of approved or 
pending applications for membership received since the previ-
ous monthly meetings together with such other related informa-
tion as it or the bylaws require; 
"(16) provide for the furnishing of the written reasons for any 
denial of a membership application to the applicant upon the 
written request of the applicant; 
"(17) in the absence of a credit committee, and upon the 
written request of a member, review a loan application denied 
by a loan officer; 
"(18) declare the dividend rate to be paid on shares, share 
certificates, and share draft accounts pursuant to the terms and 
conditions of section 117; 
Post, p. 1534. 
"(19) establish and maintain a system of internal controls 
consistent with the regulations of the Board; 
"(20) establish lending policies; and 
"(21) do all other things that are necessary and proper to 
carry out all the purposes and powers of the Federal credit 
union, subject to regulations issued by the Board.". 
OPTIONAL CREDIT COMMITTEE 
SEC. 523. Section 114 of the Federal Credit Union Act (12 U.S.C. 
1761c) is amended to read as follows: 
"CREDIT COMMITTEE 
"SEC. 114. (a) If the bylaws provide for a credit committee, then 
pursuant to the provisions of the bylaws, the board of directors may 
appoint or the members may elect a credit committee which shall 
consist of an odd number of members of the credit union, but which 
shall not include more than one loan officer. The method used shall 
be set forth in the bylaws. The credit committee shall hold such 
meetings as the business of the Federal credit union may require, 
not less frequently than once a month, to consider applications for 
loans or lines of credit. Reasonable notice of such meetings shall be 
given to all members of the committee. Except for those loans or 
lines of credit required to be approved by the board of directors in 
section 107(5) of this Act, approval of an application shall be by 
^^*e, pp. 1528, 
majority of the committee who are present at the meeting at which 
^^^^• 
it is considered provided that a majority of the full committee is 
present. The credit committee may appoint and delegate to loan 
officers the authority to approve applications. 
96 STAT. 1534 
PUBLIC LAW 97-320—OCT. 15, 1982 
"(b) If the bylaws provide for a credit committee, all applications 
not approved by the loan officer shall be reviewed by the credit 
committee, and the approval of a majority of the members who are 
present at the meeting when such review is undertaken shall be 
required to reverse the loan officer's decision provided a majority of 
the full committee is present. If there is not a credit committee, a 
member shall have the right upon written request of review by the 
board of directors of a loan application which has been denied. No 
individual shall have authority to disburse funds of the Federal 
credit union with respect to any loan or line of credit for which the 
application has been approved by him in his capacity as a loan 
officer.". 
REQUIREMENT THAT CREDIT UNION PAY ON ALL DOLLARS AFTER 
PURCHASE OF FULL SHARE 
SEC. 524. Section 117 of the Federal Credit Union Act (12 U.S.C. 
1763) is amended to read as follows: 
"DIVIDENDS 
"SEC. 117. At such intervals as the board of directors may author-
ize, and after provision for required reserves, the board of directors 
may declare, pursuant to such regulations as may be issued by the 
Board, a dividend to be paid at different rates on different types of 
shares, at different rates and maturity dates in the case of share 
certificates, and at different rates on different types of share draft 
accounts. Dividends credited may be accrued on various types of 
shares, share certificates, and share draft accounts as authorized by 
the board of directors. If the par value of a share exceeds $5, 
dividends shall be paid on all funds in the regular share account 
once a full share has been purchased.". 
NONPARTICIPATION 
SEC. 525. Section 118 of the Federal Credit Union Act (12 U.S.C. 
1764) is amended to read as follows: 
"EXPULSION A N D WITHDRAWAL 
"SEC. 118. (a) Subject to subsection (b) of this section, a member 
may be expelled by a two-thirds vote of the members of a Federal 
credit union present at a special meeting called for the purpose, but 
only after opportunity has been given him to be heard. 
"(b) The board of directors of a Federal credit union may, by 
majority vote of a quorum of directors, adopt a policy with respect to 
expulsion from membership based on nonparticipation by a member 
in the affairs of the credit union. In establishing its policy, the board 
should consider a member's failure to vote in annual credit union 
elections or failure to purchase shares from, obtain a loan from, or 
lend to the Federal credit union. If such a policy is adopted, written 
notice of the policy as adopted and the effective date of such policy 
shall be mailed to each member of the credit union at the member's 
current address appearing on the records of the credit union not less 
than thirty days prior to the effective date of such policy. In 
addition, each new member shall be provided written notice of any 
such policy prior to or upon applying for membership. 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1535 
"(c) Withdrawal or expulsion of a member pursuant to either 
subsection (a) or (b) of this section shall not operate to relieve him 
from liability to the Federal credit union. The amount to be paid a 
withdrawing or expelled member by a Federal credit union shall be 
determined and paid in a manner specified in the bylaws.". 
NATIONAL CREDIT UNION ADMINISTRATION BOARD'S REGULATORY 
AUTHORITY 
SEC. 526. Section 120(a) of the Federal Credit Union Act (12 U.S.C. 
1766(a)) is amended by adding at the end thereof the following: "Any 
central credit union chartered by the Board shall be subject to such 
rules, regulations, and orders as the Board deems appropriate and, 
except as otherwise specifically provided in such rules, regulations, 
or orders, shall be vested with or subject to the same rights, privi-
leges, duties, restrictions, penalties, liabilities, conditions, and limi-
tations that would apply to all Federal credit unions under this 
Act.". 
C H A R T E R CONVERSION 
SEC. 527. Section 125(a)(1) of the Federal Credit Union Act (12 
U.S.C. 1771(a)(1)) is amended by striking out the last sentence and 
inserting in lieu thereof the following: "Approval of the proposition 
for conversion shall be by the affirmative vote of a majority of the 
members of the credit union who vote on the proposal. The written 
notice of the proposition shall in boldface type state that the issue 
will be decided by a majority of the members who vote.". 
ELIMINATION OF DISCRIMINATORY INSURANCE PREMIUM ASSESSMENT 
FOR DEPOSITS OF STATE CHARTERED CREDIT UNIONS 
SEC. 528. Section 202(h)(8) of the Federal Credit Union Act (12 "Members 
U.S.C. 1782(h)(8)) is amended to read as follows: 
accounts." 
"(3) the term 'members accounts' when applied to the pre-
mium charge for insurance of accounts shall not include 
amounts received from other credit unions, the accounts of 
which are federally insured or insured or guaranteed by a fund 
established under State law or regulation for this purpose, in 
excess of the insured account limit set forth in section 
207(c)(1);". 
12 use 1787. 
E L I M I N A T I O N O F PARTIAL INSURANCE PREMIUMS AND REBATES 
SEC. 529. Section 202(c) of the Federal Credit Union Act (12 U.S.C. 
1782(c)) is amended by striking out paragraphs (3) and (6) and by 
redesignating paragraphs (4) and (5) as paragraphs (3) and (4), 
respectively. 
AUTHORIZATION FOR FUND TO BORROW FROM CLF 
SEC. 530. Section 203 of the Federal Credit Union Act (12 U.S.C. 
1783) is amended by adding at the end thereof the following: 
"(f) In addition to the authority to borrow from the Secretary of 
the Treasury provided in subsection (d), if in the judgment of the 
Board, a loan to the fund is required at any time for carrying out the 
purposes of this title, the fund is authorized to borrow from the 
National Credit Union Administration Central Liquidity Facility.". 
96 STAT. 1536 
PUBLIC LAW 97-320—OCT. 15, 1982 
CENTRAL LIQUIDITY FACILITY LENDING AND INVESTMENT AUTHORITY 
SEC. 531. Section 307(a) of the Federal Credit Union Act (12 U.S.C. 
1795f(a)) is amended— 
(1) by striking out "and" at the end of paragraph (15); 
(2) by striking out the period at the end of paragraph (16) and 
inserting in lieu thereof a semicolon; and 
(3) by adding at the end thereof the following: 
"(17) exercise such incidental powers as shall be necessary or 
requisite to enable it to carry out effectively the purposes for 
which the facility is incorporated; and 
"(18) advance funds to the National Credit Union Share 
Insurance Fund under such terms and conditions as may be 
established by the Board.", 
CENTRAL LIQUIDITY FACILITY AS AGENT OF FEDERAL RESERVE SYSTEM 
SEC. 532. Title III of the Federal Credit Union Act (12 U.S.C. 1795 
through 17951) is amended by adding at the end thereof the 
following: 
" A G E N T O F T H E FEDERAL RESERVE SYSTEM 
12 use 1795J. 
"SEC. 311. The facility is authorized to act upon the request of the 
Board of Governors of the Federal Reserve System as an agent of the 
Federal Reserve System in matters pertaining to credit unions 
under such terms and conditions as may be established by the Board 
of Governors of the Federal Reserve System.". 
STUDY O F DIRECTORS' COMPENSATION 
SEC. 533. The national Credit Union Administration Board shall 
conduct a study to determine the feasibility and desirability of 
permitting Federal credit unions to compensate members of their 
boards of directors. A report containing the results of such study 
shall be transmitted to the Congress not later than 6 months after 
the date of enactment of this Act. 
TITLE VI—PROPERTY, CASUALTY, LIFE INSURANCE 
ACTIVITIES OF BANK HOLDING COMPANIES 
A M E N D M E N T TO T H E B A N K H O L D I N G COMPANY ACT OF 
1956 
SEC. 601. Section 4(c)(8) of the Bank Holding Company Act of 1956 
(12 U.S.C. 1843(c)(8)) is amended by striking out the period at the end 
of the first sentence and inserting in lieu thereof the following: ", 
but for purposes of this subsection it is not closely related to banking 
or managing or controlling banks for a bank holding company to 
provide insurance as a principal, agent, or broker except (A) where 
the insurance is limited to assuring repayment of the outstanding 
balance due on a specific extension of credit by a bank holding 
company or its subsidiary in the event of the death, disability, or 
involuntary unemployment of the debtor; (B) in the case of a finance 
company which is a subsidiary of a bank holding company, where 
the insurance is also limited to assuring repayment of the outstand-
ing balance on an extension of credit in the event of loss or damage 
to any property used as collateral on such extention of credit and, 
during the period beginning on the date of the enactment of this 
PUBLIC LAW 97-320-OCT. 15, 1982 
96 STAT. 1537 
subparagraph and ending on December 31, 1982, such extension of 
credit is not more than $10,000 ($25,000 in the case of an extension 
of credit which is made to finance the purchase of a residential 
manufactured home and which is secured by such residential manu-
factured home) and for any given year after 1982, such extension of 
credit is not more than an amount equal to $10,000 ($25,000 in the 
case of an extension of credit which is made to finance the purchase 
of a residential manufactured home and which is secured by such 
residential manufactured 
home) increased by the percentage 
increase in the Consumer Price Index for Urban Wage Earners and 
Clerical Workers published monthly by the Bureau of Labor Statis-
tics for the period beginning on January 1, 1982, and ending on 
December 31 of the year preceding the year in which such extension 
of credit is made; (C) any insurance agency activity in a place that (i) 
has a population not exceeding five thousand (as shown by the last 
preceding decennial census), or (ii) the bank holding company, after 
notice and opportunity for a hearing, demonstrates has inadequate 
insurance agency facilities; (D) any insurance agency activity which 
was engaged in by the bank holding company or any of its subsidiar-
ies on May 1, 1982, or which the Board approved for such company 
or any of its subsidiaries on or before May 1, 1982, including (i) sales 
of insurance at new locations of the same bank holding company or 
the same subsidiary or subsidiaries with respect to which insurance 
was sold on May 1, 1982, or approved to be sold on or before May 1, 
1982, if such new locations are confined to the State in which the 
principal place of business of the bank holding company is located, 
any State or States immediately adjacent to such State, and any 
State or States in which insurance activities were conducted by the 
bank holding company or any of its subsidiaries on May 1, 1982, or 
were approved to be conducted by the bank holding company or any 
of its subsidiaries on or before May 1, 1982, and (ii) sales of insur-
ance coverages which may become available after May 1, 1982, so 
long as those coverages insure against the same types of risks as, or 
are otherwise functionally equivalent to, coverages sold on May 1, 
1982, or approved to be sold on or before May 1, 1982 (for purposes of 
this subparagraph, activities engaged in or approved by the Board 
on May 1, 1982, shall include activities carried on subsequent to that 
date as the result of an application to engage in such activities 
pending on May 1, 1982, and approved subsequent to that date or of 
the acquisition by such company pursuant to a binding written 
contract entered into on or before May 1, 1982, of another company 
engaged in such activities at the time of the acquisition); (E) any 
insurance activity where the activity is limited solely to supervising 
on behalf of insurance underwriters the activities of retail insurance 
agents who sell (i) fidelity insurance and property and casualty 
insurance on the real and personal property used in the operations 
of the bank holding company or any of its subsidiaries, and (ii) group 
insurance that protects the employees of the bank holding company 
or any of its subsidiaries; (F) any insurance agency activity engaged 
in by a bank holding company, or any of its subsidiaries, which bank 
holding company has total assets of $50,000,000 or less; or (G) where 
the activity is performed, or shares of the company involved are 
owned, directly or indirectly, by a bank holding company which is 
registered with the Board of Governors of the Federal Reserve 
System and which, prior to January 1, 1971, was engaged, directly or 
indirectly, in insurance agency activities as a consequence of 
approval by the Board prior to January 1, 1971: Provided, however, 
96 STAT. 1538 
PUBLIC LAW 97-320—OCT. 15, 1982 
That such bank holding company and its subsidiaries may not 
engage in the sale of life insurance or annuities except as provided 
in subparagraph (A), (B), or (C).". 
TITLE VII—MISCELLANEOUS 
AMENDMENT TO THE TRUTH IN LENDING ACT 
SEC. 701. (a) Section 104 of the Truth in Lending Act (15 U.S.C. 
15 use 1603. 
1601) is amended by adding at the end thereof the following: 
"(6) Loans made, insured, or guaranteed pursuant to a program 
authorized by title IV of the Higher Education Act of 1965 (20 U.S.C. 
1070 et seq.).^'. 
20 use 1099. 
(b) Loans made, insured, or guaranteed pursuant to a program 
authorized by title IV of the Higher Education Act of 1965 (20 U.S.C. 
1070 et seq.) shall not be subject to any disclosure requirements of 
any State law. 
15 use 1603 
(c) The amendment made by subsection (a) and subsection O
b
) shall 
"^^^- 
be effective both with respect to loans made prior to and after the 
date of enactment of this Act. 
DEFINITION OF CREDITOR 
SEC. 702. (a) Section 103(f) of the Truth in Lending Act (15 U.S.C. 
1602(f)) is amended to read as follows: 
"(f) The term 'creditor' refers only to a person who both (1) 
regularly extends, whether in connection with loans, sales of 
property or services, or otherwise, consumer credit which is payable 
by agreement in more than four installments or for which the 
payment of a finance charge is or may be required, and (2) is the 
person to whom the debt arising from the consumer credit transac-
tion is initially payable on the face of the evidence of indebtedness 
or, if there is no such evidence of indebtedness, by agreement. 
Notwithstanding the preceding sentence, in the case of an open-end 
credit plan involving a credit card, the card issuer and any person 
who honors the credit card and offers a discount which is a finance 
charge are creditors. For the purpose of the requirements imposed 
15 use 1666 
under chapter 4 and sections 127(aX5), 127(aX6), 127(aX7), 127a)Xl), 
etseq., 1637. 
127(bX2), 127(bX3), 127(bX8), and 127(bX10) of chapter 2 of this title, 
the term 'creditor' shall also include card issuers whether or not the 
amount due is payable by agreement in more than four installments 
or the payment of a finance charge is or may be required, and the 
Board shall, by regulation, apply these requirements to such card 
issuers, to the extent appropriate, even though the requirements are 
by their terms applicable only to creditors offering open-end credit 
plans.". 
15 use 1602 
(b) The amendment made by subsection (a) shall take effect on the 
""*^- 
effective date of title VI of the Depository Institutions Deregulation 
and Monetary Control Act of 1980. 
INDUSTRIAL BANKS EUGIBIUTY FOR FDIC INSURANCE 
SEC. 703. (a) Section 3(a) of the Federal Deposit Insurance Act (12 
U.S.C. 1813(a)) is amended by inserting "industrial bank or similar 
financial institution which the Board of Directors finds to be operat-
ing substantially in the same manner as an industrial bank," before 
"or other banking institution". 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1539 
(b) Section 3(1)(1) of such Act (12 U.S.C. 1813(1X1)) is amended by 
inserting "thrift certificate, investment certificate, certificate of 
indebtedness, or other similar name," before "or a check or draft 
drawn against a deposit account". 
(c) Section 5(a) of such Act (12 U.S.C. 1815(a)) is amended by 
adding at the end thereof the following: "Before approving the 
application of any industrial bank or similar financial institution, 
the Board of Directors shall determine that it is chartered and 
operating under laws providing for examination, supervision, and 
liquidation substantially comparable to those applicable to banks 
operating in the same State.". 
(d) Section 109(b)(2) of title 11, United States Code, is amended by 
striking out "or" before "credit union", and by inserting ", or 
industrial bank or similar institution which is an insured bank as 
defined in section 3(h) of the Federal Deposit Insurance Act (12 
U.S.C. 1813(h))" after "credit union". 
APPLICABILITY OF THE INTERNATIONAL BANKING ACT OF 1978 
SEC. 704. Section 8(c) of the International Banking Act of 1978 (12 
U.S.C. 3106(c)) is amended by inserting in the first sentence immedi-
ately after the words "on the date of enactment of this Act" the 
following: "or on the date of the establishment of a branch in a State 
an application for which was filed on or before July 26, 1978". 
SECURITIES ACTIVITIES UNDER THE INTERNATIONAL BANKING ACT OF 
1978 
SEC. 705. (a) The last sentence of section 8(c) of the International 
Banking Act of 1978 (12 U.S.C. 3106(c)) is amended by striking out 
all after "company, and" and inserting in lieu thereof the following: 
"the term 'domestically-controlled affiliate covered in 1978' shall 
mean an affiliate organized under the laws of the United States or 
any State thereof if (i) no foreign bank or group of foreign banks 
acting in concert owns or controls, directly or indirectly, 45 per 
centum or more of its voting shares, and (ii) no more than 20 per 
centum of the number of directors as established from time to time 
to constitute the whole board of directors and 20 per centum of the 
executive officers of such affiliate are persons affiliated with any 
such foreign bank. For the purpose of the preceding sentence, the 
term 'persons affiliated with any such foreign bank' shall mean (A) 
any person who is or was an employee, officer, agent, or director of 
such foreign bank or who otherwise has or had such a relationship 
with such foreign bank that would lead such person to represent the 
interests of such foreign bank, and (B) in the case of any director of 
such domestically controlled affiliate covered in 1978, any person in 
favor of whose election as a director votes were cast by less than 
two-thirds of all shares voting in connection with such election other 
than shares owned or controlled, directly or indirectly, by any such 
foreign bank.". 
(b) The second sentence of section 8(c) of such Act is amended to 
read as follows: "Notwithstanding subsection (a) of this section, a 
foreign bank or company referred to in this subsection may retain 
ownership or control of any voting shares (or, where necessary to 
prevent dilution of its voting interest, acquire additional voting 
shares) of any domestically-controlled affiliate covered in 1978 
which since July 26, 1978, has engaged in the business of underwrit-
96 STAT. 1540 
PUBLIC LAW 97-320—OCT. 15, 1982 
ing, distributing, or otherwise buying or selling stocks, bonds, and 
other securities in the United States, notwithstanding that such 
affiliate acquired after July 26, 1978, an interest in, or any or all of 
the assets of, a going concern, or commences to engage in any new 
activity or activities.". 
NOW ACCOUNTS FOR PUBLIC FUNDS 
SEC. 706. (a) Section 2(a)(2) of Public Law 93-100 (12 U.S.C. 
1832(a)(2)) is amended by inserting before the period at the end 
thereof the following: ", and with respect to deposits of public funds 
by an officer, employee, or agent of the United States, any State, 
county, municipality, or political subdivision thereof, the District of 
Columbia, the Commonwealth of Puerto Rico, American Samoa, 
Guam, any territory or possession of the United States, or any 
political subdivision thereof. 
(b) Section 205(f)(2) of the Federal Credit Union Act (12 U.S.C. 
1785(f)(2)) is amended by inserting before the period at the end 
thereof the following: ", and with respect to deposits of public funds 
by an officer, employee, or agent of the United States, any State, 
county, municipality, or political subdivision thereof, the District of 
Columbia, the Commonwealth of Puerto Rico, American Samoa, 
Guam, any territory or possession of the United States, or any 
political subdivision thereof. 
FEDERAL NATIONAL MORTGAGE ASSOCIATION 
SEC. 707. (a) Section 303(a) of the Federal National Mortgage 
12 use 1718. 
Association Charter Act is amended— 
(1) by inserting after the first sentence the following: "The 
corporation may have preferred stock on such terms and condi-
tions as the board of directors shall prescribe."; and 
(2) by striking out "common" in the last sentence thereof. 
12 use 1719. 
(b) Section 304(e) of such Act is amended by striking out the fourth 
sentence. 
RESERVE REQUIREMENT PHASE-IN 
SEC. 708. Section 19(b)(8)(D) of the Federal Reserve Act (12 U.S.C. 
461(b)(8)(D)) is amended— 
(1) by striking out clause (i) and inserting in lieu thereof the 
following: 
"(i) Any bank which was a member bank on July 1, 1979, and 
which withdrew from membership in the Federal Reserve 
System during the period beginning July 1, 1979, and ending on 
March 31, 1980, shall maintain reserves during the first twelve-
month period beginning on the date of enactment of this clause 
in amounts equal to one-half of those otherwise required by this 
subsection, during the second such twelve-month period in 
amounts equal to two-thirds of those otherwise required, and 
during the third such twelve-month period in amounts equal to 
five-sixths of those otherwise required." 
(2) in clause (ii) by striking the words "on or". 
BANK SERVICE CORPORATIONS 
SEC. 709. The Bank Service Corporation Act (12 U.S.C. 1861 et 
seq.) is amended to read as follows: 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1541 
"SHORT TITLE AND DEFINITIONS 
"SECTION 1. (a) This Act may be cited as the 'Bank Service 
12USC1861. 
Corporation Act'. 
"(b) For the purpose of this Act— 
"(1) the term 'appropriate Federal banking agency' shall have 
the meaning provided in section 3(q) of the Federal Deposit 
Insurance Act (12 U.S.C. 1813(q)); 
"(2) the term 'bank service corporation' means a corporation 
organized to perform services authorized by this Act, all of the 
capital stock of which is owned by one or more insured banks; 
"(3) the term 'Board' means the Board of Governors of the 
Federal Reserve System; 
"(4) the term 'depository institution' means an insured bank, 
or another financial institution subject to examination by the 
Federal Home Loan Bank Board or the National Credit Union 
Administration Board; 
"(5) the term 'insured bank' shall have the meaning provided 
in section 3(h) of the Federal Deposit Insurance Act (12 U.S.C. 
1813(h)); 
"(6) the term 'invest' includes any advance of funds to a bank 
service corporation, whether by the purchase of stock, the 
making of a loan, or otherwise, except a payment for rent 
earned, goods sold and delivered, or services rendered prior to 
the making of such payment; and 
"(7) the term 'principal investor' means the insured bank that 
has the largest dollar amount invested in the capital stock of a 
bank service corporation. In any case where two or more 
insured banks have equal dollar amounts invested in a bank 
service corporation, the corporation shall, prior to commencing 
operations, select one of the insured banks as its principal 
investor and shall notify the bank's appropriate Federal bank-
ing agency of that choice within 5 business days of its selection. 
"AMOUNT OF INVESTMENT IN BANK SERVICE CORPORATION 
"SEC. 2. Notwithstanding any limitation or prohibition otherwise 12 use 1862. 
imposed by any provision of law exclusively relating to banks, an 
insured bank may invest not more than 10 per centum of paid-in 
and unimpaired capital and unimpaired surplus in a bank service 
corporation. No insured bank shall invest more than 5 per centum 
of its total assets in bank service corporations. 
"PERMISSIBLE BANK SERVICE CORPORATION ACTIVITIES FOR DEPOSITORY 
INSTITUTIONS 
"SEC. 3. Without regard to the provisions of sections 4 and 5 of this 12 USC1863. 
Act, an insured bank may invest in a bank service corporation that 
performs, and a bank service corporation may perform, the follow-
ing services only for depository institutions: check and deposit sort-
ing and posting, computation and posting of interest and other 
credits and charges, preparation and mailing of checks, statements, 
notices, and similar items, or any other clerical, bookkeeping, 
accounting, statistical, or similar functions performed for a deposi-
tory institution. 
96 STAT. 1542 
PUBLIC LAW 97-320—OCT. 15, 1982 
"PERMISSIBLE BANK SERVICE CORPORATION ACTIVITIES FOR OTHER 
PERSONS 
12 use 1864. 
"SEC. 4. (a) A bank service corporation may provide to any person 
any service authorized by this section, except that a bank service 
corporation shall not take deposits. 
"(b) Except with the prior approval of the Board under section 5(b) 
of this Act in accordance with subsection (f) of this section— 
"(Da bank service corporation shall not perform the services 
authorized by this section in any State other than that State in 
which its shareholders are located; and 
"(2) all insured bank shareholders of a bank service corpora-
tion shall be located in the same State. 
"(c) A bank service corporation in which a State bank is a 
shareholder shall perform only those services that such State bank 
shareholder is authorized to perform under the law of the State in 
which such State bank operates and shall perform such services 
only at locations in the State in which such State bank shareholder 
could be authorized to perform such services. 
"(d) A bank service corporation in which a national bank is a 
shareholder shall perform only those services that such national 
bank shareholder is authorized to perform under this Act and shall 
perform such services only at locations in the State at which such 
national bank shareholder could be authorized to perform such 
services. 
"(e) A bank service corporation that has both national bank and 
State bank shareholders shall perform only those services that may 
lawfully be performed by both its national bank shareholder or 
shareholders under this Act and its State bank shareholder or 
shareholders under the law of the State in which such State bank or 
banks operate and shall perform such services only at locations in 
the State at which both its State bank and national bank sharehold-
ers could be authorized to perform such services. 
"(f) Notwithstanding the other provisions of this section or any 
other provision of law, other than the provisions of Federal and 
State branching law regulating the geographic location of banks to 
the extent that those laws are applicable to an activity authorized 
by this subsection, a bank service corporation may perform at any 
geographic location any service, other than deposit taking, that the 
Board has determined, by regulation, to be permissible for a bank 
holding company under section 4(c)(8) of the Bank Holding Company 
12 u s e 1843. 
Act. 
" P R I O R APPROVAL FOR INVESTMENTS IN BANK SERVICE CORPORATIONS 
12 use 1865. 
"SEC. 5. (a) No insured bank shall invest in the capital stock of a 
bank service corporation that performs any service under authority 
of subsection (c), (d), or (e) of section 4 of this Act without the prior 
approval of the bank's appropriate Federal banking agency. 
"(b) No insured bank shall invest in the capital stock of a bank 
service corporation that performs any service under authority of 
section 4(f) of this Act and no bank service corporation shall perform 
any activity under section 4(f) of this Act without the prior approval 
of the Board. 
"(c) In determining whether to approve or deny any application 
for prior approval under this section, the Board or the appropriate 
Federal banking agency, as the case may be, is authorized to consid-
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1543 
er the financial and managerial resources and future prospects of 
the bank or banks and bank service corporation involved, including 
the financial capability of the bank to make a proposed investment 
under this Act, and possible adverse effects such as undue concen-
tration of resources, unfair or decreased competition, conflicts of 
interest, or unsafe or unsound banking practices. 
"(d) In the event the Board or the appropriate Federal banking 
agency, as the case may be, fails to act on any application under this 
section within ninety days of the submission of a complete applica-
tion to the agency, the application shall be deemed approved. 
"SERVICES TO NONSTOCKHOLDERS 
"SEC. 6. No bank service corporation shall unreasonably discrimi- 12 USC1866. 
nate in the provision of any services authorized under this Act to 
any depository institution that does not own stock in the service 
corporation on the basis of the fact that the nonstockholding institu-
tion is in competition with an institution that owns stock in the 
bank service corporation, except that— 
"(1) it shall not be considered unreasonable discrimination for 
a bank service corporation to provide services to a nonstockhold-
ing institution only at a price that fully reflects all of the costs 
of offering those services, including the cost of capital and a 
reasonable return thereon; and 
"(2) a bank service corporation may refuse to provide services 
to a nonstockholding institution if comparable services are 
available from another source at competitive overall costs, or if 
the providing of services would be beyond the practical capacity 
of the service corporation. 
"REGULATION AND EXAMINATION OF BANK SERVICE CORPORATIONS 
"SEC. 7. (a) A bank service corporation shall be subject to examina- 12 use 1867. 
tion and regulation by the appropriate Federal banking agency of its 
principal investor to the same extent as its principal investor. The 
appropriate Federal banking agency of the principal shareholder of 
such a bank service corporation may authorize any other Federal 
banking agency that supervises any other shareholder of the bank 
service corporation to make such an examination. 
"(b) A bank service corporation shall be subject to the provisions 
of the Financial Institutions Supervisory Act of 1966 (12 U.S.C. 12 use 1464 
1818(b) et seq.) as if the bank service corporation were an insured 
bank. For this purpose, the appropriate Federal banking agency 
shall be the appropriate Federal banking agency of the principal 
investor of the bank service corporation. 
"(c) Notwithstanding subsection (a) of this section, whenever a 
bank that is regularly examined by an appropriate Federal banking 
agency, or any subsidiary or affiliate of such a bank that is subject 
to examination by that agency, causes to be performed for itself, by 
contract or otherwise, any services authorized under this Act, 
whether on or off its premises— 
"(1) such performance shall be subject to regulation and 
examination by such agency to the same extent as if such 
services were being performed by the bank itself on its own 
premises, and 
"(2) the bank shall notify such agency of the existence of the 
service relationship within thirty days after the making of such 
note. 
96 STAT. 1544 
PUBLIC LAW 97-320—OCT. 15, 1982 
Regulations and 
orders. 
service contract or the performance of the service, whichever 
occurs first. 
"(d) The Board and the appropriate Federal banking agencies are 
authorized to issue such regulations and orders as may be necessary 
to enable them to administer and to carry out the purposes of this 
Act and to prevent evasions thereof.". 
NEIGHBORHOOD REINVESTMENT CORPORATION 
SEC. 710. (a) Section 604 of the Neighborhood Reinvestment Corpo-
42 use 8103. 
ration Act (Public Law 95-557) is amended— 
(1) by redesignating subsections (f), (g), and (h) as subsections 
(g), (h), and (i), respectively, and by inserting after subsection (e) 
the following: 
"(DA director who is necessarily absent from a meeting of the 
board, or of a committee of the board, may participate in such 
meeting through a duly designated representative who is serving, 
pursuant to appointment by the President of the United States, by 
and with the advice and consent of the Senate, in the same depart-
ment, agency, corporation, or instrumentality as the absent director, 
or in the case of the Comptroller of the Currency, through a duly 
designated Deputy Comptroller."; and 
(2) by inserting in section 604(g), as redesignated, after "mem-
bers" a comma and the words "or their representatives as 
provided in subsection (f),". 
42 use 8105. 
(b) Section 606(c)(3) of such Act is amended by inserting "funds," 
after "provide". 
M A R R I N E R S. ECCLES F E D E R A L RESERVE BOARD BUILDING 
Designation. 
SEC. 711. The building at 20th and Constitution Avenue, North-
west, in Washington, District of Columbia (commonly known as the 
Federal Reserve Board Main Building) shall hereafter be known and 
designated as the "Marriner S. Eccles Federal Reserve Board Build-
ing". Any reference in a law, map, regulation, document, record, or 
other paper of the United States to that building shall be held to be 
a reference to the "Marriner S. Eccles Federal Reserve Board 
Building". 
INSURANCE STUDY 
SEC. 712. (a) The Federal Deposit Insurance Corporation, the 
Federal Savings and Loan Insurance Corporation, and the National 
Credit Union Administration Board shall each conduct a study o
f
— 
(1) the current system of deposit insurance and its impact on 
the structure and operations of depository institutions; 
(2) the feasibility of providing depositors the option to pur-
chase additional deposit insurance covering deposits in excess of 
the general limit provided by law and the capabilities of the 
private insurance system, either directly or through reinsur-
ance, to provide risk coverage in excess of the general statutory 
limit; 
(3) the feasibility of basing deposit insurance premiums on the 
risk posed by either the insured institution or the category or 
size of the depository institution rather than the present flat 
rate system; 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1545 
(4) the impact of expanding coverage of insured deposits upon 
the operations of the insurance funds, including the possibility 
of increased or undue risk to the funds; 
(5) the feasibility of revising the deposit insurance system to 
provide even greater protection for smaller depositors while 
fostering a greater degree of discipline with respect to large 
depositors; 
(6) the adequacy of existing public disclosure regarding the 
condition and business practices of insured depository institu-
tions, and providing an assessment of changes which may be 
needed to assure adequate public disclosure; 
(7) the feasibility of consolidating the three separate insur-
ance funds; and 
(8) other related issues. 
(b) A report containing the results of each of the studies carried 
out under subsection (a) shall be transmitted to the Committee on 
Banking, Finance and Urban Affairs of the House of Representatives 
and to the Committee on Banking, Housing, and Urban Affairs of the 
Senate not later than six months after the date of enactment of this 
Act. 
TITLE VIII—ALTERNATIVE MORTGAGE TRANSACTIONS 
^J^T"^^'^^ 
Mortgage 
Transaction 
SHORT TITLE 
Parity Act of 
1982. 
SEC. 801. This title may be cited as the "Alternative Mortgage 
12 use 380i 
Transaction Parity Act of 1982". 
note. 
FINDINGS AND PURPOSE 
SEC. 802. (a) The Congress hereby finds that— 
12 use 3801. 
(1) increasingly volatile and dynamic changes in interest rates 
have seriously impared the ability of housing creditors to pro-
vide consumers with fixed-term, fixed-rate credit secured by 
interests in real property, cooperative housing, manufactured 
homes, and other dwellings; 
(2) alternative mortgage transactions are essential to the 
provision of an adequate supply of credit secured by residential 
property necessary to meet the demand expected during the 
1980's; and 
(3) the Comptroller of the Currency, the National Credit 
Union Administration, and the Federal Home Loan Bank Board 
have recognized the importance of alternative mortgage trans-
actions and have adopted regulations authorizing federally 
chartered depository institutions to engage in alternative mort-
gage financing. 
(b) It is the purpose of this title to eliminate the discriminatory 
impact that those regulations have upon nonfederally chartered 
housing creditors and provide them with parity with federally char-
tered institutions by authorizing all housing creditors to make, 
purchase, and enforce alternative mortgage transactions so long as 
the transactions are in conformity with the regulations issued by 
the Federal agencies. 
DEFINITIONS 
SEC. 803. As used in this title— 
12 use 3802. 
96 STAT. 1546 
PUBLIC LAW 97-320—OCT. 15, 1982 
(1) the term "alternative mortgage transaction" means a loan 
or credit sale secured by an interest in residential real property, 
a dwelling, all stock allocated to a dwelling unit in a residential 
cooperative housing corporation, or a residential manufactured 
home (as that term is defined in section 603(6) of the National 
Manufactured Home Construction and Safety Standards Act of 
42 use 5402. 
1974)— 
(A) in which the interest rate or finance charge may be 
adjusted or renegotiated; 
(B) involving a fixed-rate, but which implicitly permits 
rate adjustments by having the debt mature at the end of 
an interval shorter than the term of the amortization 
schedule; or 
(C) involving any similar type of rate, method of deter-
mining return, term, repayment, or other variation not 
common to traditional fixed-rate, fixed-term transactions, 
including without limitation, transactions that involve the 
sharing of equity or appreciation; 
described and defined by applicable regulation; and 
(2) the term "housing creditor" means— 
(A) a depository institution, as defined in section 501(a) (2) 
of the Depository Institutions Deregulation and Monetary 
12 use i735f-7 
Control Act of 1980; 
"°^^- 
(B) a lender approved by the Secretary of Housing and 
Urban Development for participation in any mortgage in-
12 use 1701. 
surance program under the National Housing Act; 
(C) any person who regularly makes loans, credit sales, or 
advances secured by interests in properties referred to in 
paragraph (1); or 
(D) any transferee of any of them. 
A person is not a "housing creditor" with respect to a specific 
alternative mortgage transaction if, except for this title, in 
order to enter into that transaction, the person would be 
required to comply with licensing requirements imposed under 
State law, unless such person is licensed under applicable State 
law and such person remains, or becomes, subject to the appli-
cable regulatory requirements and enforcement mechanisms 
provided by State law. 
ALTERNATIVE MORTGAGE AUTHORITY 
12 use 3803. 
SEC. 804. (a) In order to prevent discrimination against State-
chartered depository institutions, and other nonfederally chartered 
housing creditors, with respect to making, purchasing, and enforc-
ing alternative mortgage transactions, housing creditors may make, 
purchase, and enforce alternative mortgage transactions, except 
that this section shall apply— 
(1) with respect to banks, only to transactions made in accord-
ance with regulations governing alternative mortgage transac-
tions as issued by the Comptroller of the Currency for national 
banks, to the extent that such regulations are authorized by 
rulemaking authority granted to the Comptroller of the Cur-
rency with regard to national banks under laws other than this 
section; 
(2) with respect to credit unions, only to transactions made in 
accordance with regulations governing alternative mortgage 
PUBLIC LAW 97-320—OCT. 15, 1982 
96 STAT. 1547 
transactions as issued by the National Credit Union Adminis-
tration Board for Federal credit unions, to the extent that such 
regulations are authorized by rulemaking authority granted to 
the National Credit Union Administration with regard to Fed-
eral credit unions under laws other than this section; and 
(3) with respect to all other housing creditors, including with-
out limitation, savings and loan associations, mutual savings 
banks, and savings banks, only to transactions made in accord-
ance with regulations governing alternative mortgage transac-
tions as issued by the Federal Home Loan Bank Board for 
federally chartered savings and loan associations, to the extent 
that such regulations are authorized by rulemaking authority 
granted to the Federal Home Loan Bank Board with regard to 
federally chartered savings and loan associations under laws 
other than this section. 
(b) For the purpose of determining the applicability of this section, 
an alternative mortgage transaction shall be deemed to be made in 
accordance with the applicable regulation notwithstanding the 
housing creditor's failure to comply with the regulation, i
f
— 
(1) the transaction is in substantial compliance with the 
regulation; and 
(2) within sixty days of discovering any error, the housing 
creditor corrects such error, including making appropriate 
adjustments, if any, to the account. 
(c) An alternative mortgage transaction may be made by a hous-
ing creditor in accordance with this section, notwithstanding any 
State constitution, law, or regulation. 
APPLICABILITY 
SEC. 805. (a) The provisions of section 804 shall not apply to any 12 USC 3804. 
alternative mortgage transaction in any State made on or after the 
effective date (if such effective date occurs on or after the effective 
date of this title and prior to a date three years after the effective 
date of this title) of a State law or a certification that the voters of 
such State have voted in favor of any provision, constitutional or 
otherwise, which states explicitly and by its terms that such State 
does not want the preemption provided in section 804 to apply with 
respect to alternative mortgage transactions subject to the laws of 
such State, except that section 804 shall continue to apply to— 
(1) any alternative mortgage transaction undertaken on or 
after such date pursuant to an agreement to undertake such 
alternative mortgage transaction which was entered into on or 
after the effective date of this title and prior to such later date 
(the "preemption period"); and 
(2) any renewal, extension, refinancing, or other modification 
of an alternative mortgage transaction that was entered into 
during the preemption period. 
(b) An alternative mortgage transaction shall be deemed to have 
been undertaken during the preemption period to which this section 
applies if it— 
(1) is funded or extended in whole or in part during the 
preemption period, regardless of whether pursuant to a commit-
ment or other agreement therefor made prior to that period; or 
(2) is a renewal, extension, refinancing, or other modification 
of an alternative mortgage transaction entered into before the 
preemption period and such renewal, extension, or other modifi-
96 STAT. 1548 
PUBLIC LAW 97-320—OCT. 15, 1982 
cation is made during such period with the written consent of 
any person obligated to repay such credit. 
RELATION TO OTHER LAW 
12 use 3805. 
SEC. 806. Section 501(c)(1) of the Depository Institutions Deregu-
12 use i735f-7 
lation and Monetary Control Act of 1980 shall not apply to transac-
note. 
tions which are subject to this title. 
EFFECTIVE DATE 
12 use 3801 
SEC. 807. (a) This title shall be effective upon enactment. 
"^^^" 
(b) Within sixty days of the enactment of this title, the Comptrol-
ler of the Currency, the National Credit Union Administration, and 
the Federal Home Loan Bank Board shall identify, describe, and 
publish those portions or provisions of their respective regulations 
that are inappropriate for (and thus inapplicable to), or that need to 
be conformed for the use of, the nonfederally chartered housing 
creditors to which their respective regulations apply, including 
without limitation, making necessary changes in terminology to 
conform the regulatory and disclosure provisions to those more 
typically associated with various types of transactions including 
credit sales. 
Approved October 15, 1982. 
LEGISLATIVE HISTORY—H.R. 6267 (S. 2879): 
HOUSE REPORTS: No. 97-550 (Comm. on Banking, Finance and Urban Affairs) 
and No. 97-899 (Comm. of Conference). 
SENATE REPORTS: No. 97-536 accompanying S. 2879 (Comm. on Banking, Housing, 
and Urban Affairs) and No. 97-641 (Comm. of Conference). 
CONGRESSIONAL RECORD, Vol. 128 (1982): 
May 20, considered and passed House. 
Sept. 24, S. 2879 considered and passed Senate; H.R. 6267, amended, passed in 
lieu. 
Sept. 30, Senate agreed to conference report. 
Oct. 1, House agreed to conference report. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 18, No. 41 (1982): 
Oct. 15, Presidential statement.