Depository Institutions Deregulation and Monetary Control Act of 1980
PL 96-221 (H.R.4986), enacted 03/31/1980

94 STAT. 132 
PUBLIC LAW 96-221—MAR. 31, 1980 
Public Law 96-221 
96th Congress 
Mar. 31, 1980 
[H.R. 4986] 
Depository 
Institutions 
Deregulation 
and Monetary 
Control Act of 
1980. 
12 u s e 226 note. 
Monetary 
Control Act of 
1980. 
12 u s e 226 note. 
Reports of assets 
and liabilities. 
12 u s e 461. 
12 u s e 1422. 
An Act 
To facilitate the implementation of monetary policy, to provide for the gradual 
elimination of all limitations on the rates of interest which are payable on deposits 
and accounts, and to authorize interest-bearing transaction accounts, and for other 
purposes. 
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 "Depository Institutions 
Deregulation and Monetary Control Act of 1980". 
TITLE I-MONETARY CONTROL ACT OF 1980 
SHORT TITLE 
SEC. 101. This title may be cited as the "Monetary Control Act of 
1980". 
REPORTING REQUIREMENTS 
SEC. 102. Section 11(a) of the Federal Reserve Act (12 U.S.C. 248(a)) 
is amended— 
(1) by inserting "(1)" after "(a)"; and 
(2) by adding at the end thereof the following new paragraph: 
"(2) To require any depository institution specified in this para-
graph to make, at such intervals as the Board may prescribe, such 
reports of its liabilities and assets as the Board may determine to be 
necessary or desirable to enable the Board to discharge its responsi-
bility to monitor and control monetary and credit aggregates. Such 
reports shall be made (A) directly to the Board in the case of member 
banks and in the case of other depository institutions whose reserve 
requirements under section 19 of this Act exceed zero, and (B) for all 
other reports to the Board through the (i) Federal Deposit Insurance 
Corporation in the case of insured State nonmember banks, savings 
banks, and mutual savings banks, (ii) National Credit Union Admin-
istration Board in the case of insured credit unions, (iii) Federal 
Home Loan Bank Board in the case of any institution insured by the 
Federal Savings and Loan Insurance Corporation or which is a 
member as defined in section 2 of the Federal Home Loan Bank Act, 
and (iv) such State officer or agency as the Board may designate in 
the case of any other type of bank, savings and loan association, or 
credit union. The Board shall endeavor to avoid the imposition of 
unnecessary burdens on reporting institutions and the duplication of 
other reporting requirements. Except as otherwise required by law, 
any data provided to any department, agency, or instrumentality of 
the United States pursuant to other reporting requirements shall be 
made available to the Board. The Board may classify depository 
PUBLIC LAW 96-221—MAR. 31, 1980 
94 STAT. 133 
institutions for the purposes of this paragraph and may impose 
different requirements on each such class.". 
RESERVE REQUIREMENTS 
SEC. 103. Section 19(b) of the Federal Reserve Act (12 U.S.C. 461(b)) 
is amended to read as follows: 
"(b) RESERVE REQUIREMENTS.— 
"(1) DEFINITIONS.—The following definitions and rules apply to 
this subsection, subsection (c), section 11 
A, the first paragraph of Post, p. 140. 
section 13, and the second, thirteenth, and fourteenth para- Post, p. 139. 
graphs of section 16: 
Post, p. 140. 
"(A) The term 'depository institution' means— 
"(i) any insured bank as defined in section 3 of the 
Federal Deposit Insurance Act or any bank which is 12 use 1813. 
eligible to make application to become an insured bank 
under section 5 of such Act; 
12 use 1815. 
"(ii) any mutual savings bank as defined in section 3 of 
the Federal Deposit Insurance Act or any bank which is 
eligible to make application to become an insured bank 
under section 5 of such Act; 
"(iii) any savings bank as defined in section 3 of the 
Federal Deposit Insurance Act or any bank which is 
eligible to make application to become an insured bank 
under section 5 of such Act; 
"(iv) any insured credit union as defined in section 101 
of the Federal Credit Union Act or any credit union 12 use 1752. 
which is eligible to make application to become an 
insured credit union pursuant to section 201 of such Act; 12 use 1781. 
"(v) any member as defined in section 2 of the Federal 
Home Loan Bank Act; 
12 use 1422. 
"(vi) any insured institution as defined in section 401 
of the National Housing Act or any institution which is 12 use 1724. 
eligible to make application to become an insured insti-
tution under section 403 of such Act; and 
12 use 1726. 
"(vii) for the purpose of section 13 and the fourteenth 
Post, p. 139. 
paragraph of section 16, any association or entity which Post, p. 140. 
is wholly owned by or which consists only of institutions 
referred to in clauses (i) through (vi), 
"(B) The term 'bank' means any insured or noninsured 
bank, as defined in section 3 of the Federal Deposit Insur-
ance Act, other than a mutual savings bank or a savings 
12 use 1813. 
bank as defined in such section. 
"(C) The term 'transaction account' means a deposit or 
account on which the depositor or account holder is per-
mitted to make withdrawals by negotiable or transferable 
instrument, payment orders of withdrawal, telephone trans-
fers, or other similar items for the purpose of making 
payments or transfers to third persons or others. Such term 
includes demand deposits, negotiable order of withdrawal 
accounts, savings deposits subject to automatic transfers, 
and share draft accounts. 
"(D) The term 'nonpersonal time deposits' means a trans-
ferable time deposit or account or a time deposit or account 
representing funds deposited to the credit of, or in which any 
beneficial interest is held by, a depositor who is not a natural 
person. 
94 STAT. 134 
PUBLIC LAW 96-221—MAR. 31, 1980 
Transaction 
account, 
determination 
by regulation. 
Regulation. 
Uniform 
application. 
Waiver. 
"(E) In order to prevent evasions of the reserve require-
ments imposed by this subsection, after consultation with 
the Board of Directors of the Federal Deposit Insurance 
Corporation, the Federal Home Loan Bank Board, and the 
National Credit Union Administration Board, the Board of 
Governors of the Federal Reserve System is authorized to 
determine, by regulation or order, that an account or deposit 
is a transaction account if such account or deposit may be 
used to provide funds directly or indirectly for the purpose of 
making payments or transfers to third persons or others. 
"(2) RESERVE REQUIREMENTS.—(A) Each depository institution 
shall maintain reserves against its transaction accounts as the 
Board may prescribe by regulation solely for the purpose of 
implementing monetary policy— 
"(i) in the ratio of 3 per centum for that portion of its total 
transaction accounts of $25,000,000 or less, subject to sub-
paragraph (C); and 
"(ii) in the ratio of 12 per centum, or in such other ratio as 
the Board may prescribe not greater than 14 per centum and 
not less than 8 per centum, for that portion of its total 
transaction accounts in excess of $25,000,000, subject to 
subparagraph (C). 
"(B) Each depository institution shall maintain reserves 
against its nonpersonal time deposits in the ratio of 3 per 
centum, or in such other ratio not greater than 9 per centum and 
not less than zero per centum as the Board may prescribe by 
regulation solely for the purpose of implementing monetary 
policy. 
"(C) Beginning in 1981, not later than December 31 of each 
year the Board shall issue a regulation increasing for the next 
succeeding calendar year the dollar amount which is contained 
in subparagraph (A) or which was last determined pursuant to 
this subparagraph for the purpose of such subparagraph, by an 
amount obtained by multiplying such dollar amount by 80 per 
centum of the percentage increase in the total transaction 
accounts of all depository institutions. The increase in such 
transaction accounts shall be determined by subtracting the 
amount of such accounts on June 30 of the preceding calendar 
year from the amount of such accounts on June 30 of the 
calendar year involved. In the case of any such 12-month period 
in which there has been a decrease in the total transaction 
accounts of all depository institutions, the Board shall issue such 
a regulation decreasing for the next succeeding calendar year 
such dollar amount by an amount obtained by multiplying such 
dollar amount by 80 per centum of the percentage decrease in the 
total transaction accounts of all depository institutions. The 
decrease in such transaction accounts shall be determined by 
subtracting the amount of such accounts on June 30 of the 
calendar year involved from the amount of such accounts on 
June 30 of the previous calendar year. 
"(D) Any reserve requirement imposed under this subsection 
shall be uniformly applied to all transaction accounts at all 
depository institutions. Reserve requirements imposed under 
this subsection shall be uniformly applied to nonpersonal time 
deposits at all depository institutions, except that such require-
ments may vary by the maturity of such deposits. 
"(3) 
WAIVER OF RATIO LIMITS IN EXTRAORDINARY CIRCUM-
STANCES.—Upon a finding by at least 5 members of the Board 
PUBLIC LAW 96-221—MAR. 31, 1980 
94 STAT. 135 
that extraordinary circumstances require such action, the Board, 
after consultation with the appropriate committees of the Con-
gress, may impose, with respect to any liability of depository 
institutions, reserve requirements outside the limitations as to 
ratios and as to types of liabilities otherwise prescribed by 
paragraph (2) for a period not exceeding 180 days, and for further 
periods not exceeding 180 days each by affirmative action by at 
least 5 members of the Board in each instance. The Board shall 
promptly transmit to the Congress a report of any exercise of its 
authority under this paragraph and the reasons for such exercise 
of authority. 
"(4) SUPPLEMENTAL RESERVES.—(A) The Board may, upon the 
affirmative vote of not less than 5 members, impose a supplemen-
tal reserve requirement on every depository institution of not 
more than 4 per centum of its total transaction accounts. Such 
supplemental reserve requirement may be imposed only if— 
"(i) the sole purpose of such requirement is to increase the 
amount of reserves maintained to a level essential for the 
conduct of monetary policy; 
"(ii) such requirement is not imposed for the purpose of 
reducing the cost burdens resulting from the imposition of 
the reserve requirements pursuant to paragraph (2); 
"(iii) such requirement is not imposed for the purpose of 
increasing the amount of balances needed for clearing pur-
poses; and 
"(iv) on the date on which the supplemental reserve 
requirement is imposed, the total amount of reserves re-
quired pursuant to paragraph (2) is not less than the amount 
of reserves that would be required if the initial ratios 
specified in paragraph (2) were in effect. 
"(B) The Board may require the supplemental reserve author-
ized under subparagraph (A) only after consultation with the 
Board of Directors of the Federal Deposit Insurance Corporation, 
the Federal Home Loan Bank Board, and the National Credit 
Union Administration Board. The Board shall promptly trans-
mit to the Congress a report with respect to any exercise of its 
authority to require supplemental reserves under subparagraph 
(A) and such report shall state the basis for the determination to 
exercise such authority. 
"(C) The supplemental reserve authorized under subparagraph 
(A) shall be maintained by the Federal Reserve banks in an 
Earnings Participation Account. Except as provided in subsec-
tion (c)(l)(A)(ii), such Earnings Participation Account shall re-
ceive earnings to be paid by the Federal Reserve banks during 
each calendar quarter at a rate not more than the rate earned on 
the securities portfolio of the Federal Reserve System during the 
previous calendar quarter. The Board may prescribe rules and 
regulations concerning the payment of earnings on Earnings 
Participation Accounts by Federsd Reserve banks under this 
paragraph. 
"(D) If a supplemental reserve under subparagraph (A) has 
been required of depository institutions for a period of one year 
or more, the Board shall review and determine the need for 
continued maintenance of supplemental reserves and shall 
transmit annual reports to the Congress regarding the need, if 
any, for continuing the supplemental reserve. 
"(E) Any supplemental reserve imposed under subparagraph 
(A) shall terminate at the close of the first 90-day period after 
Report to 
Congress. 
Report to 
Congress. 
Earnings 
Participation 
Account. 
Reports to 
Congress. 
Termination. 
94 STAT. 136 
PUBLIC LAW 96-221—MAR. 31, 1980 
12 use 
601-604a. 
Reserves. 
such requirement is imposed during which the average amount 
of reserves required under paragraph (2) are less than the 
amount of reserves which would be required during such period 
if the initial ratios specified in paragraph (2) were in effect. 
"(5) RESERVES RELATED TO FOREIGN OBLIGATIONS OR ASSETS.— 
Foreign branches, subsidiaries, and international banking facili-
ties of nonmember depository institutions shall maintain re-
serves to the same extent required by the Board of foreign 
branches, subsidiaries, and international banking facilities of 
member banks. In addition to any reserves otherwise required to 
be maintained pursuant to this subsection, any depository insti-
tution shall maintain reserves in such ratios as the Board may 
prescribe against— 
"(A) net balances owed by domestic offices of such deposi-
tory institution in the United States to its directly related 
foreign offices and to foreign offices of nonrelated depository 
institutions; 
"(B) loans to United States residents made by overseas 
offices of such depository institution if such depository 
institution has one or more offices in the United States; and 
"(C) assets (including participations) held by foreign offices 
of a depository institution in the United States which were 
acquired from its domestic offices. 
"(6) EXEMPTION FOR CERTAIN DEPOSITS.—The requirements im-
posed under paragraph (2) shall not apply to deposits payable 
only outside the States of the United States and the District of 
Columbia, except that nothing in this subsection limits the 
authority of the Board to impose conditions and requirements on 
member banks under section 25 of this Act or the authority of the 
Board under section 7 of the International Banking Act of 1978 
(12 U.S.C. 3105). 
"(7) DISCOUNT AND BORROWING.—Any depository institution in 
which transaction accounts or nonpersonal time deposits are 
held shall be entitled to the same discount and borrowing 
privileges as member banks. In the administration of discount 
and borrowing privileges, the Board and the Federal Reserve 
banks shall take into consideration the special needs of savings 
and other depository institutions for access to discount and 
borrowing facilities consistent with their long-term asset portfo-
lios and the sensitivity of such institutions to trends in the 
national money markets. 
"(8) TRANSITIONAL ADJUSTMENTS.— 
"(A) Any depository institution required to maintain re-
serves under this subsection which was engaged in business 
on July 1,1979, but was not a member of the Federal Reserve 
System on or after that date, shall maintain reserves against 
its deposits during the first twelve-month period following 
the effective date of this paragraph in amounts equal to one-
eighth of those otherwise required by this subsection, during 
the second such twelve-month period in amounts equal to 
one-fourth of those otherwise required, during the third such 
twelve-month period in amounts equal to three-eighths of 
those otherwise required, during the fourth twelve-month 
period in amounts equal to one-half of those otherwise 
required, and during the fifth twelve-month period in 
amounts equal to five-eighths of those otherwise required, 
during the sixth twelve-month period in amounts equal to 
three-fourths of those otherwise required, and during the 
PUBLIC LAW 96-221—MAR. 31, 1980 
94 STAT. 137 
seventh twelve-month period in amounts equal to seven-
eighths of those otherwise required. This subparagraph does 
not apply to any category of deposits or accounts which are 
first authorized pursuant to Federal law in any State after 
April 1,1980. 
"(B) With respect to any bank which was a member of the 
Federal Reserve System during the entire period beginning 
on July 1, 1979, and ending on the effective date of the 
Monetary Control Act of 1980, the amount of required Ante, p. 132. 
reserves imposed pursuant to this subsection on and after 
the effective date of such Act that exceeds the amount of 
reserves which would have been required of such bank if the 
reserve ratios in effect during the reserve computation 
period immediately preceding such effective date were ap-
plied may, at the discretion of the Board and in accordance 
with such rules and regulations as it may adopt, be reduced 
by 75 per centum during the first year which begins after 
such effective date, 50 per centum during the second year, 
and 25 per centum during the third year. 
"(C)(i) With respect to any bank which is a member of the 
Federal Reserve System on the effective date of the Mone-
tary Control Act of 1980, the amount of reserves which 
would have been required of such bank if the reserve ratios 
in effect during the reserve computation period immediately 
preceding such effective date were applied that exceeds the 
amount of required reserves imposed pursuant to this sub-
section shall, in accordance with such rules and regulations 
as the Board may adopt, be reduced by 25 per centum during 
the first year which begins after such effective date, 50 per 
centum during the second year, and 75 per centum during 
the third year. 
"(ii) If a bank becomes a member bank during the four-
year period beginning on the effective date of the Monetary 
Control Act of 1980, and if the amount of reserves which 
would have been required of such bank, determined as if the 
reserve ratios in effect during the reserve computation 
period immediately preceding such effective date were ap-
plied, and as if such hank had been a member during such 
period, exceeds the amount of reserves required pursuant to 
this subsection, the amount of reserves required to be main-
tained by such bank beginning on the date on which such 
bank becomes a member of the Federal Reserve System shall 
be the amount of reserves which would have been required of 
such bank if it had been a member on the day before such 
effective date, except that the amount of such excess shall, in 
accordance with such rules and regulations as the Board 
may adopt, be reduced by 25 per centum during the first year 
which begins after such effective date, 50 per centum during 
the second year, and 75 per centum during the third year. 
"(DXi) Any bank which was a member bank on July 1, 
1979, and which withdraws from membership in the Federal 
Reserve System during the period beginning on July 1,1979, 
and ending on the day before the date of enactment of the 
Depository Institutions Deregulation and Monetary Control 
Act of 1980, shall maintain reserves beginning on such date of Ante, p. 132. 
enactment in an amount equal to the amount of reserves it 
would have been required to maintain if it had been a 
member bank on such date of enactment. After such date of 
94 STAT. 138 
PUBLIC LAW 96-221—MAR. 31, 1980 
enactment, any such bank shall maintain reserves in the 
same amounts as member banks are required to maintain 
under this subsection, pursuant to subparagraphs (B) and 
(CXi). 
"(ii) Any bank which withdraws from membership in the 
Federal Reserve System on or after the date of enactment of 
the Depository Institutions Deregulation and Monetary Con-
Ante, p. 132. 
trol Act of 1980 shall maintain reserves in the same amount as 
member banks are required to maintain under this subsec-
tion, pursuant to subparagraphs (B) and (C)(i). 
"(E) This subparagraph applies to any depository institu-
tion which was engaged in business on August 1, 1978, as a 
depository institution organized under the laws of a State, 
which was not a member of the Federal Reserve System on 
that date, and the principal office of which was outside the 
continental limits of the United States on that date and has 
remained outside the continental limits of the United States 
ever since. Such a depository institution shall not be re-
quired to maintain reserves against its deposits pursuant to 
this subsection until the first day of the sixth calendar year 
which begins after the effective date of the Monetary Control 
Act of 1980. Such a depository institution shall maintain 
reserves against its deposits during the sixth calendar year 
which begins after such effective date in an amount equal to 
one-eighth of that otherwise required by paragraph (2), 
during the seventh such year in an amount equal to one-
fourth of that otherwise required, during the eighth such 
year in an amount equal to three-eighths of that otherwise 
required, during the ninth such year in an amount equal to 
one-half of that otherwise required, during the tenth such 
year in an amount equal to five-eighths of that otherwise 
required, during the eleventh such year in an amount equal 
to three-fourths of that otherwise required, and during the 
twelfth such year in an amount equal to seven-eighths of 
that otherwise required. 
"(9) EXEMPTION.—This subsection shall not apply with respect 
to any financial institution which— 
"(A) is organized solely to do business with other financial 
institutions; 
"(B) is owned primarily by the financial institutions with 
which it does business; and 
"(C) does not do business with the general public. 
"(10) WAIVERS.—In individual cases, where a Federal supervi-
sory authority waives a liquidity requirement, or waives the 
penalty for failing to satisfy a liquidity requirement, the Board 
shall waive the reserve requirement, or waive the penalty for 
failing to satisfy a reserve requirement, imposed pursuant to this 
subsection for the depository institution involved when re-
quested by the Federal supervisory authority involved.". 
FORM OF RESERVES 
SEC. 104. (a) Section 19(c) of the Federal Reserve Act (12 U.S.C. 461) 
is amended to read as follows: 
"(c)(1) Reserves held by a depository institution to meet the require-
ments imposed pursuant to subsection (b) shall, subject to such rules 
and regulations as the Board shall prescribe, be in the form of— 
PUBLIC LAW 96-221—MAR. 31, 1980 
94 STAT. 139 
"(A) balances maintained for such purposes by such depository Vault cash. 
institution in the Federal Reserve bank of which it is a member 
or at which it maintains an account, except that (i) the Board 
may, by regulation or order, permit depository institutions to 
maintain all or a portion of their required reserves in the form of 
vault cash, except that any portion so permitted shall be identi-
cal for all depository institutions, and (ii) vault cash may be used 
to satisfy any supplemental reserve requirement imposed pursu-
ant to subsection (b)(4), except that all such vault cash shall be 
excluded from any computation of earnings pursuant to subsec-
tion (b)(4)(C); and 
"(B) balances maintained by a depository institution which is 
not a member bank in a depository institution which maintains 
required reserve balances at a Federal Reserve bank, in a 
Federal Home Loan Bank, or in the National Credit Union 
Administration Central Liquidity Facility, if such depository 
institution. Federal Home Loan Bank, or National Credit Union 
Administration Central Liquidity Facility maintains such funds 
in the form of balances in a Federal Reserve bank of which it is a 
member or at which it maintains an account. Balances received 
by a depository institution from a second depository institution 
and used to satisfy the reserve requirement imposed on such 
second depository institution by this section shall not be subject 
to the reserve requirements of this section imposed on such first 
depository institution, and shall not be subject to assessments or 
reserves imposed on such first depository institution pursuant to 
section 7 of the Federal Deposit Insurance Act (12 U.S.C. 1817), 
section 404 of the National Housing Act (12 U.S.C. 1727), or 
section 202 of the Federal Credit Union Act (12 U.S.C. 1782). 
"(2) The balances maintained to meet the reserve requirements of 
subsection (b) by a depository institution in a Federal Reserve bank or 
passed through a Federal Home Loan Bank or the National Credit 
Union Administration Central Liquidity Facility or another deposi-
tory institution to a Federal Reserve bank may be used to satisfy 
liquidity requirements which may be imposed under other provisions 
of Federal or State law.". 
O
t
>
) The first sentence of section 5A(b)(l) of the Federal Home Loan 
Bank Act (12 U.S.C. 1425a(b)) is amended— 
(1) by striking out "and" before "(D)"; and 
(2) by inserting before the period at the end thereof the 
following: "; and (E) balances maintained in a Federal Reserve 
bank or passed through a Federal Home Loan Bank or another 
depository institution to a Federal Reserve bank pursuant to the 
Federal Reserve Act". 
12 USC 226. 
Liquidity 
requirements. 
MISCELLANEOUS AMENDMENTS 
SEC. 105. (a) The first paragraph of section 13 of the Federal 
Reserve Act (12 U.S.C. 342) is amended— 
(1) by inserting "or other depository institutions" after 
"member banks"; 
(2) by inserting "or other items" after "payable upon presenta-
tion" the first and third place it appears therein; 
(3) by inserting "or other items" after "payable upon presenta-
tion within its district"; 
(4) by inserting "or other depository institution" after "non-
member bank or trust company" each place it appears therein; 
94 STAT. 140 
PUBLIC LAW 96-221—MAR. 31, 1980 
(5) by striking out "sufficient to offset the items in transit held 
for its account by the Federal reserve bank" and inserting in lieu 
thereof "in such amount as the Board determines taking into 
account items in transit, services provided by the Federal Re-
serve bank, and other factors as the Board may deem appropri-
ate"; and 
(6) by inserting "or other depository institution" after "prohib-
iting a member or nonmember bank". 
(b)(1) The second paragraph of section 16 of the Federal Reserve Act 
(12 U.S.C. 412) is amended— 
(A) by inserting before the period at the end of the third 
sentence the following: ", or assets that Federal Reserve banks 
QL^^^ 353-359, 
may purchase or hold under section 14 of this Act"; and 
"^^^^ 
(B) by adding at the end thereof the following: "Collateral shall 
not be required for Federal Reserve notes which are held in the 
vaults of Federal Reserve banks.". 
(2) Section 14(b)(1) of the Federal Reserve Act (12 U.S.C. 355), as 
such section is in effect on the effective date of this title and as it will 
be in effect on June 1, 1981, is amended by inserting after "reclama-
tion districts," the following: "and obligations of, or fully guaranteed 
as to principal and interest by, a foreign government or agency 
thereof,". 
(c) The thirteenth paragraph of section 16 of the Federal Reserve 
Act (12 U.S.C. 360) is amended— 
(1) by striking out "member banks" each place it appears 
therein and inserting in lieu thereof "depository institutions"; 
(2) by striking out "member bank" each place it appears 
therein and inserting in lieu thereof "depository institution"; 
and 
(3) by inserting after "checks" each place it appears therein, 
the following: "and other items, including negotiable orders of 
withdrawal and share drafts". 
(d) The fourteenth paragraph of section 16 of the Federal Reserve 
Act (12 U.S.C. 248(o)) is amended by striking out "its member banks" 
and inserting in lieu thereof "depository institutions". 
(e) The first sentence of section 19(e) of the Federal Reserve Act (12 
U.S.C. 463) is amended to read as follows: "No member bank shall 
keep on deposit with any depository institution which is not author-
ized to have access to Federal Reserve advances under section 10(b) of 
12 use 347b. 
this Act a sum in excess of 10 per centum of its own paid-up capital 
and surplus.". 
(f) The last subsection of section 19 of the Federal Reserve Act (12 
U.S.C. 505) is amended by striking out "(j)(l)" and inserting in lieu 
thereof "(1)(1)". 
ABOLITION OF PENALTY RATE 
12 use 347b. 
SEC. 106. Section 10(b) of the Federal Reserve Act (12 U.S.C. 374b) is 
amended by striking out the second sentence of the first paragraph. 
PRICING OF SERVICES 
SEC. 107. The Federal Reserve Act is amended by inserting after 
section 11 the following new section: 
"PRICING OF SERVICES 
12 use 248a. 
"gEC. 11 
A. (a) Not later than the first day of the sixth month after 
Ante, p. 132. 
the date of enactment of the Monetary Control Act of 1980, the Board 
shall publish for public comment a set of pricing principles in 
PUBLIC LAW 96-221—MAR. 31, 1980 
94 STAT. 141 
accordance with this section and a proposed schedule of fees based 
upon those principles for Federal Reserve bank services to depository 
institutions, and not later than the first day of the eighteenth month 
after the date of enactment of the Monetary Control Act of 1980, the 
^"^«' P 132. 
Board shall begin to put into effect a schedule of fees for such services 
which is based on those principles. 
"
O
k
>
) The services which shall be covered by the schedule of fees 
under subsection (a) are— 
"(1) currency and coin services; 
"(2) check clearing and collection services; 
"(3) wire transfer services; 
"(4) automated clearinghouse services; 
"(5) settlement services; 
"(6) securities safekeeping services; 
"(7) Federal Reserve float; and 
"(8) any new services which the Federal Reserve System offers, 
including but not limited to payment services to effectuate the 
electronic transfer of funds. 
"(c) The schedule of fees prescribed pursuant to this section shall be 
based on the following principles: 
"(1) All Federal Reserve bank services covered by the fee 
schedule shall be priced explicitly. 
"(2) All Federal Reserve bank services covered by the fee 
schedule shall be available to nonmember depository institutions 
and such services shall be priced at the same fee schedule 
applicable to member banks, except that nonmembers shall be 
subject to any other terms, including a requirement of balances 
sufficient for clearing purposes, that the Board may determine 
are applicable to member banks. 
"(3) Over the long run, fees shall be established on the basis of 
all direct and indirect costs actually incurred in providing the 
Federal Reserve services priced, including interest on items 
credited prior to actual collection, overhead, and an allocation of 
imputed costs which takes into account the taxes that would 
have been paid and the return on capital that would have been 
provided had the services been furnished by a private business 
firm, except that the pricing principles shall give due regard to 
competitive factors and the provision of an adequate level of such 
services nationwide. 
"(4) Interest on items credited prior to collection shall be 
charged at the current rate applicable in the market for Federal 
funds. 
"(d) The Board shall require reductions in the operating budgets of 
the Federal Reserve banks commensurate with any actual or 
projected decline in the volume of services to be provided by such 
banks. The full amount of any savings so realized shall be paid into 
the United States Treasury.". 
EFFECTIVE DATES 
SEC. 108. This title shall take effect on the first day of the sixth 12 USC 248 note, 
month which begins after the date of the enactment of this title, 
except that the amendments regarding sections 19(b)(7) and 
19(b)(8)(D) of the Federal Reserve Act shall take effect on the date of Ante, p. 133. 
enactment of this title. 
94 STAT. 142 
Depository 
Institutions 
Deregulation 
Act of 1980. 
12 u s e 3501 
note. 
PUBLIC LAW 96-221—MAR. 31, 1980 
TITLE II—DEPOSITORY INSTITUTIONS DEREGULATION 
SHORT TITLE 
SEC. 201. This title may be cited as the "Depository Institutions 
Deregulation Act of 1980". 
12 u s e 3501. 
Depository 
Institutions 
Deregulation 
eommittee. 
12 u s e 3502. 
Members. 
Delegation of 
authorities, 
prohibition. 
FINDINGS AND PURPOSE 
SEC. 202. (a) The Congress hereby finds that— 
(1) limitations on the interest rates which are payable on 
deposits and accounts discourage persons from saving money, 
create inequities for depositors, impede the ability of depository 
institutions to compete for funds, and have not achieved their 
purpose of providing an even flow of funds for home mortgage 
lending; and 
(2) all depositors, and particularly those with modest savings, 
are entitled to receive a market rate of return on their savings as 
soon as it is economically feasible for depository institutions to 
pay such rate. 
(b) It is the purpose of this title to provide for the orderly phase-out 
and the ultimate elimination of the limitations on the maximum 
rates of interest and dividends which may be paid on deposits and 
accounts by depository institutions by extending the authority to 
impose such limitations for 6 years, subject to specific standards 
designed to ensure a phase-out of such limitations to market rates of 
interest. 
ESTABLISHMENT AND AUTHORITY OF COMMITTEE 
SEC. 203. (a) The authorities conferred by section 19(j) of the Federal 
Reserve Act (12 U.S.C. 371b), section 18(g) of the Federal Deposit 
Insurance Act (12 U.S.C. 1828(g)), and section 5B(a) of the Federal 
Home Loan Bank Act (12 U.S.C. 1425b(a)) or by any other provision of 
Federal law, other than section 117 of the Federal Credit Union Act 
(12 U.S.C. 1763), to prescribe rules governing the payment of interest 
and dividends and the establishment of classes of deposits or ac-
counts, including limitations on the maximum rates of interest and 
dividends which may be paid on deposits and accounts, and the 
authority conferred by the provisions of section 102 of Public Law 
94-200 (12 U.S.C. 461 note) are hereby transferred to the Depository 
Institutions Deregulation Committee (hereinafter in this title re-
ferred to as the "Deregulation Committee"). 
QD) The Deregulation Committee shall consist of the Secretary of 
the Treasury, the Chairman of the Board of Governors of the Federal 
Reserve System, the Chairman of the Board of Directors of the 
Federal Deposit Insurance Corporation, the Chairman of the Federal 
Home Loan Bank Board, and the Chairman of the National Credit 
Union Administration Board, who shall be voting members, and the 
Comptroller of the Currency who shall be a nonvoting member of the 
Deregulation Committee. The Deregulation Committee shall hold 
public meetings at least quarterly. All meetings of the Deregulation 
Committee shall be conducted in conformity with the provisions of 
section 552b of title 5, United States Code. The Deregulation Commit-
tee may not take any action unless such action is approved by a 
majority vote of the voting members of the Deregulation Committee. 
(c) The authorities conferred by this title on the Deregulation 
Committee and its members may not be delegated. 
PUBLIC LAW 96-221—MAR. 31, 1980 
94 STAT. 143 
DIRECTIVE TO THE COMMITTEE 
SEC. 204. (a) The Deregulation Committee shall, by regulation. Regulation, 
exercise the authorities transferred by section 203 to provide for the ^^ ^^^ ^^^^ 
orderly phase-out and the ultimate elimination of the limitations on 
the maximum rates of interest and dividends which may be paid on 
deposits and accounts as rapidly as economic conditions warrant. The 
phase-out of such limitations may be achieved by the Deregulation 
Committee by the gradual increase in such limitations applicable to 
all existing categories of accounts, the complete elimination of the 
limitations applicable to particular categories of accounts, the cre-
ation of new categories of accounts not subject to limitations or with 
limitations set at current market rates, any combination of the above 
methods, or any other method. 
(b) The Deregulation Committee shall work toward providing all 
depositors with a market rate of return on their savings with due 
regard for the safety and soundness of depository institutions. Pursu-
ant to the authority granted by this title, the Deregulation Commit-
tee shall increase all limitations on the maximum rates of interest 
and dividends which may be paid on deposits and accounts to market 
rates as soon as feasible, except that the Deregulation Committee 
shall not increase such limitations above market rates during the six-
year period beginning on the date of enactment of this title. 
TARGETS 
SEC. 205. (a) In order to assist the Deregulation Committee in 12 use 3504. 
establishing the limitations on the maximum rates of interest and 
dividends which may be paid on all deposits and accounts at market 
rates as soon as feasible and in order to provide maximum assurance 
that interest rate controls will be phased-out during the 6-year period 
following the date of enactment of this title, the Deregulation 
Committee shall vote, not later than 18 months after such date of 
enactment, on whether to increase the limitations on the maximum 
rates applicable to passbook and similar savings accounts by at least 
one-fourth of one percentage point during such 18-month period, and 
shall vote, not later than the end of each of the third, fourth, fifth, 
and sixth years after such date of enactment, on whether to increase 
the limitations on the maximum rates applicable to all categories of 
deposits and accounts by at least one-half of one percentage point. 
(b) The Deregulation Committee may, consistent with the purposes 
of this title, adjust the limitations on the rates applicable to all 
categories of deposits and accounts to rates which are higher or lower 
than the targets set forth in this section. 
REPORTS 
SEC. 206. Each member of the Deregulation Committee shall 12USC3505. 
separately report to the Congress annually after the date of enact-
ment of this Act regarding the economic viability of depository 
institutions. Each such report shall contain— 
(1) an assessment of whether the removal of any differential 
between the rates payable on deposits and accounts by banks and 
those payable by thrift institutions will adversely affect the 
housing finance market or the viability of the thrift industry; 
(2) recommendations for measures which would encourage 
savings, provide for the equitable treatment of small savers, and 
ensure a steady and adequate flow of funds to thrift institutions 
and the housing market; 
79-194 
O—81—pt. 1 
13 : QL3 
94 STAT. 144 
PUBLIC LAW 96-221—MAR. 31, 1980 
(3) findings concerning disintermediation of savings deposits 
from insured banks and insured thrift institutions to uninsured 
money market innovators paying market rates to savers; and 
(4) recommendations for such legislative and administrative 
actions as the member involved considers necessary to maintain 
the economic viability of depository institutions. 
TERMINATIONS 
Repeals. 
SEC. 207. (a) Section 7 of Public Law 89-597 (12 U.S.C. 461 note) is 
12 use 3506. 
hereby repealed. 
Ob) Effective upon the expiration of 6 years after the date of 
enactment of this Act— 
(1) section 102 of Public Law 94-200 (12 U.S.C. 461 note) is 
hereby repealed; 
(2) the second sentence of section 18(g)(1) of the Federal Deposit 
Insurance Act (12 U.S.C. 1828(g)(1)) is amended by striking out 
"payment and" and by striking out ", including limitations on 
the rates of interest and dividends that may be paid"; 
(3) the third, fifth, and eighth sentences of section 18(g)(1) of the 
Federal Deposit Insurance Act (12 U.S.C. 1828(g)(1)) are hereby 
repealed; 
(4) the first sentence of section 19(j) of the Federal Reserve Act 
(12 U.S.C. 371b) is amended by striking out "payment and" and 
by striking out ", including limitations on the rates of interest 
which may be paid"; 
(5) the second sentence of section 19(j) of the Federal Reserve 
Act (12 U.S.C. 371b) is hereby repealed; 
(6) the third sentence of section 19(j) of the Federal Reserve Act 
(12 U.S.C. 371b) is amended by striking out "No member bank" 
and all that follows through "Provided, That, the" and inserting 
in lieu thereof "The"; 
(7) the first sentence of section 5B(a) of the Federal Home Loan 
Bank Act (12 U.S.C. 1425b(a)) is amended by striking out "pay-
ment and" and by striking out ", including limitations on the 
rates of interest or dividends on deposits, shares, or withdrawa-
ble accounts that may be paid"; 
(8) the second and fourth sentences of section 5B(a) of the 
Federal Home Loan Bank Act (12 U.S.C. 1425b(a)) are hereby 
repealed; 
(9) the third sentence of section 5B(a) of the Federal Home 
Loan Bank Act (12 U.S.C. 1425b(a)) is amended by striking out 
", including specifically the authority" and all that follows 
through "of that authority"; 
(10) section 117 of the Federal Credit Union Act (12 U.S.C. 1763) 
is amended by striking out ", pursuant to such regulations as 
may be issued by the Board,"; 
(11) section 501(a)(2) of the Depository Institutions Deregula-
Post, p. 161. 
tion and Monetary Control Act of 1980 is amended by striking 
out "(A)" and by striking out subparagraph (B); 
(12) section 527 of the Depository Institutions Deregulation 
Post, p. 168. 
and Monetary Control Act of 1980 is amended by striking out 
", except as provided in section 501(a)(2)(B)"; and 
(13) Public Law 93-123 (12 U.S.C. 371b note) is hereby repealed. 
ENFORCEMENT 
12 use 3507. 
SEC. 208. (a) Compliance with the regulations issued by the Deregu-
lation Committee under this title shall be enforced under— 
PUBLIC LAW 96-221—MAR. 31, 1980 
94 STAT. 145 
(1) section 8 of the Federal Deposit Insurance Act (12 U.S.C. 
1818), in the case o
f
— 
(A) national banks, by the Comptroller of the Currency; 
(B) member banks of the Federal Reserve System (other 
than national banl^), by the Board of Governors of the 
Federal Reserve System; 
(C) banks insured by the Federal Deposit Insurance Corpo-
ration (other than members of the Federal Reserve System), 
by the Board of Directors of the Federal Deposit Insurance 
Corporation; and 
(2) section 5(d) of the Home Owners' Loan Act of 1933 (12 U.S.C. 
1464(d)), section 407 of the National Housing Act (12 U.S.C. 1730), 
and section 17 of the Federal Home Loan Bank Act, by the 
Federal Home Loan Bank Board (acting directly or through the 
Federal Savings and Loan Insurance Corporation), in the case of 
any institution subject to any of those provisions. 
(b) For the purpose of the exercise by any agency referred to in 
subsection (a) of its powers under any Act referred to in that 
subsection, a violation of any regulation prescribed under this title 
shall be deemed to be a violation of a regulation prescribed under the 
Act involved. In addition to its powers under any provision of law 
specifically referred to in subsection (a), each of the agencies referred 
to in such subsection may exercise, for the purpose of enforcing 
compliance with any regulation prescribed under this title, any other 
authority conferred on it by law. 
12 u s e 1437. 
TRANSITIONAL PROVISIONS 
SEC. 209. All rules and regulations issued pursuant to any authority 1
2 use 3508. 
transferred by section 203 of this title shall remain in effect until 
repealed, amended, or superseded by a regulation of the Deregulation 
Committee. 
TERMINATION OF AUTHORITY 
SEC. 210. Upon the expiration of six years after the date of the 1
2 use 3509. 
enactment of this Act, all authorities transferred to the Deregulation 
Committee by this title shall cease to be effective and the Deregula-
tion Committee shall cease to exist. 
TITLE III- -CONSUMER CHECKING ACCOUNT EQUITY ACT 
OF 1980 
SHORT TITLE 
SEC. 301. This title may be cited as the "Consumer Checking 
Account Equity Act of 1980^'. 
eonsumer 
ehecking 
Account Equity 
Act of 1980. 
12 u s e 226 note. 
AUTOMATIC TRANSFER ACCOUNTS 
SEC. 302. (a) Section 19(i) of the Federal Reserve Act (12 U.S.C. 371a) 
is amended by adding at the end thereof the following new sentence: 
"Notwithstanding any other provision of this section, a member bank 
may permit withdrawals to be made automatically from a savings 
deposit that consists only of funds in which the entire beneficial 
interest is held by one or more individuals through payment to the 
bank itself or through transfer of credit to a demand deposit or other 
account pursuant to written authorization from the depositor to 
make such payments or transfers in connection with checks or drafts 
94 STAT. 146 
PUBLIC LAW 96-221—MAR. 31, 1980 
drawn upon the bank, pursuant to terms and conditions prescribed by 
the Board.". 
(b) Section 18(g) of the Federal Deposit Insurance Act (12 U.S.C. 
1828(g)) is amended by inserting "(1)" after "(g)" and by adding at the 
end thereof the following new paragraph: 
"(2) Notwithstanding the provisions of paragraph (1), an insured 
nonmember bank may permit withdrawals to be made automatically 
from a savings deposit that consists only of funds in which the entire 
beneficial interest is held by one or more individuals through pay-
ment to the bank itself or through transfer of credit to a demand 
deposit or other account pursuant to written authorization from the 
depositor to make such payments or transfers in connection with 
checks or drafts drawn upon the bank, pursuant to terms and 
conditions prescribed by the Board of Directors.". 
NOW ACCOUNTS 
SEC. 303. Section 2(a) of Public Law 93-100 (12 U.S.C. 1832(a)) is 
amended to read as follows: 
"(a)(1) Notwithstanding any other provision of law but subject to 
paragraph (2), a depository institution is authorized to permit the 
owner of a deposit or account on which interest or dividends are paid 
to make withdrawals by negotiable or transferable instruments for 
the purpose of making transfers to third parties. 
"(2) Paragraph (1) shall apply only with respect to deposits or 
accounts which consist solely of funds in which the entire beneficial 
interest is held by one or more individuals or by an organization 
which is operated primarily for religious, philanthropic, charitable, 
educational, or other similar purposes and which is not operated for 
profit.". 
REMOTE SERVICE UNITS 
SEC. 304. Section 5(b)(1) of the Home Owners' Loan Act of 1933 (12 
U.S.C. 1464(b)(1)) is amended by adding at the end thereof the 
following new sentence: "This section does not prohibit the establish-
ment of remote service units by associations for the purpose of 
crediting savings accounts, debiting such accounts, crediting pay-
ments on loans, and the disposition of related financial transactions, 
as provided in regulations prescribed by the Board.". 
SHARE DRAFTS 
SEC. 305. (a) Section 101(5) of the Federal Credit Union Act (12 
U.S.C. 1752(5)) is amended— 
(1) by striking out "or share certificate" each place it appears 
therein and inserting in lieu thereof ", share certificate, or share 
draft account"; and 
(2) by striking out "or 'share certificate'" and inserting in lieu 
thereof", 'share certificate', or 'share draft'". 
(b) Section 107(6) of the Federal Credit Union Act (12 U.S.C. 1757(6)) 
is amended by striking out "credit unions serving" and all that 
follows through the end thereof and inserting in lieu thereof "credit 
unions serving predominately low-income members (as defined by the 
Board) payments on— 
"(A) shares which may be issued at varying dividend rates; 
"(B) share certificates which may be issued at varying dividend 
rates and maturities; and 
12 use 1785. 
"(C) share draft accounts authorized under section 205(f); 
PUBLIC LAW 96-221—MAR. 31, 1980 
94 STAT. 147 
subject to such terms, rates, and conditions as may be established by 
the board of directors, within limitations prescribed by the Board.'. 
(c) Section 117 of the Federal Credit Union Act (12 U.S.C. 1763) is 
amended— 
(1) in the first sentence— 
(A) by striking out "and" the second place it appears 
therein and inserting in lieu thereof a comma; and 
(B) by inserting ", and at different rates on different types 
of share draft accounts" before the period at the end thereof; 
and 
(2) in the second sentence, by striking out "and share certifi-
cates" and inserting in lieu thereof ", share certificates, and 
sho-TG drsft d.ccoiiTit)s 
(d) Section 205 of the Federal Credit Union Act (12 U.S.C. 1785) is 
amended by adding at the end thereof the following new subsection: 
"(f)(1) Every insured credit union is authorized to maintain, and 
make loans with respect to, share draft accounts in accordance with 
rules and regulations prescribed by the Board. Except as provided in 
paragraph (2), an insured credit union may pay dividends on share 
draft accounts and may permit the owners of such share draft 
accounts to make withdrawals by negotiable or transferable instru-
ments or other orders for the purpose of making transfers to third 
parties. 
"(2) Paragraph (1) shall apply only with respect to share draft 
accounts in which the entire beneficial interest is held by one or more 
individuals or members or by an organization which is operated 
primarily for religious, philanthropic, charitable, educational, or 
other similar purposes and which is not operated for profit.". 
EFFECTIVE DATES 
SEC. 306. The amendments made by sections 302, 304, and 305 of 
this title shall take effect at the close of March 31, 1980, and the 
amendments made by section 303 of this title shall take effect on 
December 31,1980. 
REPEAL OF EXISTING LAW 
SEC. 307. At the close of March 31, 1980, the amendments made by 
sections 101 through 103 of Public Law 96-161 are hereby repealed. 
DEPOSIT INSURANCE 
SEC. 308. (a)(1) The following provisions of the Federal Deposit 
Insurance Act are amended by striking out "$40,000" each place it 
appears therein and inserting in lieu thereof "$100,000": 
(A) The first sentence of section 3(m) (12 U.S.C. 1813(m)). 
(B) The first sentence of section 7(i) (12 U.S.C. 1817(i)). 
(C) The last sentence of section 11(a)(1) (12 U.S.C. 1821(a)(1)). 
(D) The fifth sentence of section ll(i) (12 U.S.C. 1821(i)). 
(2) The amendments made by this subsection are not applicable to 
any claim arising out of the closing of a bank prior to the effective 
date of this section. 
(b)(1) The following provisions of title IV of the National Housing 
Act are amended by striking out "$40,000" each place it appears 
therein and inserting in lieu thereof "$100,000": 
(A) Section 401(b) (12 U.S.C. 1724(b)). 
(B) Section 405(a) (12 U.S.C. 1728(a)). 
(2) The amendments made by this subsection are not applicable to 
any claim arising out of a default, as defined in section 401(d) of the 
12 u s e 371a 
note. 
12 u s e 371a, 
1464, 1752, 1757, 
1828. 
12 u s e 1811 
note. 
Exemption. 
12 u s e 1813 
note. 
12 u s e 1724. 
Exemption. 
12 u s e 1724 
note. 
94 STAT. 148 
PUBLIC LAW 96-221—MAR. 31, 1980 
Exemption. 
12 u s e 1787 
note. 
Effective date. 
12 u s e 1817 
note. 
12 u s e 1757. 
12 u s e 1795d. 
National Housing Act (12 U.S.C. 1724(d)), where the appointment of a 
conservator, receiver, or other legal custodian as set forth in that 
section became effective prior to the effective date of this section. 
(c)(1) The second sentence of section 207(c) of the Federal Credit 
Union Act (12 U.S.C. 1787(c)) is amended by striking out "$40,000" 
and inserting in lieu thereof "$100,000". 
(2) The amendment made by this subsection is not applicable to any 
claim arising out of the closing of a credit union for liquidation on 
account of bankruptcy or insolvency pursuant to section 207 of the 
Federal Credit Union Act (12 U.S.C. 1787) prior to the effective date of 
this section. 
(d) Section 7(d) of the Federal Deposit Insurance Act (12 U.S.C. 
1817(d)) is amended— 
(1) in the first sentence— 
(A) by inserting "(1)" after "(d)"; 
(B) by striking out "December 31, 1961" and inserting in 
lieu thereof "December 31,1980"; and 
(C) by striking out "33 V
a per centum" and inserting in lieu 
thereof "40 per centum"; and 
(2) by adding at the end thereof the following new paragraph: 
"(2) Notwithstanding any other provision of this subsection— 
"(A) whenever the Board of Directors determines that the ratio 
of the Corporation's capital account to the estimated insured 
deposits is less than 1.10 per centum, the Board of Directors shall 
increase the per centum of net assessment income to be trans-
ferred to the Corporation's capital account by such an amount, 
but not to exceed 50 per centum, as it determines will result in 
maintaining that ratio at not less than 1.10 per centum; 
"(B) whenever the Board of Directors determines that the ratio 
of the Corporation's capital account to the estimated insured 
deposits exceeds 1.25 per centum, the Board of Directors may 
reduce the per centum of net assessment income to be trans-
ferred to the Corporation's capital account by such an amount as 
it determines will result in maintaining such ratio at not less 
than 1.25 per centum; and 
"(C) whenever the Board of Directors determines that the ratio 
of the Corporation's capital account to the estimated insured 
deposits exceeds 1.40 per centum, the Board of Directors shall 
reduce the per centum of net assessment income to be trans-
ferred to the Corporation's capital account by such an amount as 
it determines will result in maintaining that ratio at not more 
than 1.40 per centum.". 
(e) The amendments made by this section shall take effect on the 
date of enactment of this Act, 
CREDIT UNION AMENDMENTS 
SEC. 309. (a) The Federal Credit Union Act is amended— 
(1) in section 107(5)(A)(i)— 
(A) by inserting ", including an individual cooperative 
unit," immediately following "dwelling"; and 
(B) by inserting "(except that a loan on an individual 
cooperative unit shall be adequately secured as defined by 
the Board)" after "thirty years"; 
(2) by striking out section 305(b)(3) and inserting in lieu thereof 
the following: 
PUBLIC LAW 96-221—MAR. 31, 1980 
94 STAT. 149 
"(3) shall share in dividend distributions at rates determined 
by the Board. However, rates on the required capital stock shall 
be without preference; and"; 
(3) by striking out ", to the extent or in such amounts as are 
provided in advance in appropriation Acts" in section 307(15); 
and 
(4) in title III, as so redesignated by subsection Ot>)(l), by 
striking out "Administrator" each place it appears and inserting 
in lieu thereof "Board". 
Oo) The Federal Credit Union Act is amended— 
(1) by striking out the heading of subchapter III of such Act and 
inserting in lieu thereof "TITLE III-CENTRAL LIQUIDITY 
FACILITY"; 
(2) in title III, as so redesignated by paragraph (1), by striking 
out "subchapter" each place it appears therein and inserting in 
lieu thereof "title"; and 
(3) in section 307(3), by striking out "subchapters I and II of this 
chapter" and inserting in lieu thereof "titles I and II of this Act". 
12 u s e 1795f. 
12 u s e 
1795b-1795g. 
12 u s e 1751. 
12 u s e 1795. 
12 u s e 1795a, 
1795c, 1795f, 
1795g. 
12 u s e 1795f. 
INTEREST RATES ON CREDIT UNION LOANS 
SEC. 310. Section 107(5)(A)(vi) of the Federal Credit Union Act (12 
U.S.C. 1757(5)(A)(vi)) is amended to read as follows: 
"(vi) the rate of interest may not exceed 15 per centum per 
annum on the unpaid balance inclusive of all finance 
charges, except that the Board may establish— 
"(I) after consultation with the appropriate commit-
tees of the Congress, the Department of Treasury, and 
the Federal financial institution regulatory agencies, an 
interest rate ceiling exceeding such 15 per centum per 
annum rate, for periods not to exceed 18 months, if it 
determines that money market interest rates have risen 
over the preceding six-month period and that prevailing 
interest rate levels threaten the safety and soundness of 
individual credit unions as evidenced by adverse trends 
in liquidity, capital, earnings, and growth; and 
"(II) a higher interest rate ceiling for Agent members 
of the Central Liquidity Facility in carrying out the 
provisions of title III for such periods as the Board may 1
2 use 1795. 
authorize;". 
FEDERAL HOME LOAN BANK SETTLEMENT AND PROCESSING OF DRAFTS 
SEC. 311. Section 11(e) of the Federal Home Loan Bank Act (12 
U.S.C. 1431(e)) is amended— 
(1) by inserting "(1)" after "(e)"; and 
(2) by adding at the end thereof the following new paragraph: 
"(2)(A) The Board may, subject to such rules and regulations, 
including definitions of terms used in this paragraph, as the Board 
shall from time to time prescribe, authorize Federal Home Loan 
Banks to be drawees of, and to engage in, or be agents or intermedi-
aries for, or otherwise participate or assist in, the collection and 
settlement of (including presentment, clearing, and payment of, and 
remitting for), checks, drafts, or any other negotiable or nonnegoti-
able items or instruments of payment drawn on or issued by members 
of any Federal Home Loan Bank or by institutions which are eligible 
to make application to become members pursuant to section 4, and to 1
2 use 1424. 
94 STAT. 150 
PUBLIC LAW 96-221—MAR. 31, 1980 
Ante, p. 140. 
Rules and 
regulations. 
have such incidental powers as the Board shall find necessary for the 
exercise of any such authorization. 
"(B) A Federal Home Loan Bank shall make charges, to be 
determined and regulated by the Board consistent with the principles 
set forth in section llA(c) of the Federal Reserve Act, or utilize the 
services of, or act as agent for, or be a member of, a Federal Reserve 
bank, clearinghouse, or any other public or private financial institu-
tion or other agency, in the exercise of any powers or functions 
pursuant to this paragraph. 
"(C) The Board is authorized, with respect to participation in the 
collection and settlement of any items by Federal Home Loan Banks, 
and with respect to the collection and settlement (including payment 
by the payor institution) of items payable by Federal savings and loan 
associations and Federal mutual savings banks, to prescribe rules 
and regulations regarding the rights, powers, responsibilities, duties, 
and liabilities, including standards relating thereto, of such Banks, 
associations, or banks and other parties to any such items or their 
collection and settlement. In prescribing such rules and regulations, 
the Board may adopt or apply, in whole or in part, general banking 
usage and practices, and, in instances or respects in which they would 
otherwise not be applicable. Federal Reserve regulations and operat-
ing letters, the Uniform Commercial (Dode, and clearinghouse rules.". 
Ante, p. 140. 
Rules and 
regulations. 
CENTRAL LIQUIDITY FACILITY SETTLEMENT AND PROCESSING OF SHARE 
DRAFTS 
SEC. 312. Section 307 of the Federal Credit Union Act (12 U.S.C. 
1795f) is amended— 
(1) by inserting "(a)" after "SEC. 307."; and 
(2) by adding at the end thereof the following: 
"(b)(1) The Board may authorize the Central Liquidity Facility or 
its Agent members, subject to such rules and regulations, including 
definitions of terms used in this subsection, as the Board shall from 
time to time prescribe, to be drawees of, and to engage in, or be agents 
or intermediaries for, or otherwise participate or assist in, the 
collection and settlement of (including presentment, clearing, and 
payment of, and remitting for), checfe, share drafts, or any other 
negotiable or nonnegotiable items or instruments of payment drawn 
on or issued by members of the Central Liquidity Facility, any of its 
Agent members, or any other credit union eligible to become a 
member of the Central Liquidity Facility, and to have such incidental 
powers as the Board shall find necessary for the exercise of any such 
authorization. 
"(2) The Central Liquidity Facility or its Agent members shall 
make charges, to be determined and regulated by the Board consist-
ent with the principles set forth in section llA(c) of the Federal 
Reserve Act, or utilize the services of, or act as agent for, or be a 
member of, a Federal Reserve bank, clearinghouse, or any other 
public or private financial institution or other agency, in the exercise 
of any powers or functions pursuant to this subsection. 
"(3) The Board is authorized, with respect to participation in the 
collection and settlement of any items by the Central Liquidity 
Facility or by its Agent members, and with respect to the collection 
and settlement (including payment by the payor institution) of items 
payable by members of the Central Liquidity Facility or of any of its 
Agent members, to prescribe rules and regulations regarding the 
rights, powers, responsibilities, duties, and liabilities, including 
standards relating thereto, of such entities and other parties to any 
PUBLIC LAW 96-221—MAR. 31, 1980 
94 STAT. 151 
such items or their collection and settlement. In prescribing such 
rules and regulations, the Board may adopt or apply, in whole or in 
part, general banking usage and practices, and, in instances or 
respects in which they would otherwise not be applicable. Federal 
Reserve regulations and operating letters, the Uniform Commercial 
Code, and clearinghouse rules.". 
ALASKA USA FEDERAL CREDIT UNION 
SEC. 313. Any person who is a member of the Alaska USA Federal 
Credit Union prior to any termination date which is contained in 
section 5 of the charter of such credit union and which would 
otherwise apply to such person may continue to be a member of such 
credit union on and after such date until the expiration of two years 
after the date of the enactment of this Act. For purposes of this 
section, the term "member of the Alaska USA Federal Credit Union" 
means any person who has an account at such credit union. 
TITLE IV—POWERS OF THRIFT INSTITUTIONS AND 
MISCELLANEOUS PROVISIONS 
FEDERAL SAVINGS AND LOAN INVESTMENT AUTHORITY 
SEC. 401. Section 5(c) of the Home Owners' Loan Act of 1933 (12 
U.S.C. 1464(c)) is amended to read as follows: 
"(c) An association may to such extent, and subject to such rules 
and regulations as the Board may prescribe from time to time, invest 
in, sell, or otherwise deal with the following loans, or other 
investments: 
"(1) Loans or investments without percentage of assets limita-
tion: Without limitation as a percentage of assets, the following 
are permitted: 
"(A) ACCOUNT LOANS.—Loans on the security of its savings 
accounts and loans specifically related to negotiable order-
of-withdrawal accounts. 
"(B) SINGLE-FAMILY AND MULTI-FAMILY MORTGAGE LOANS.— 
Loans on the security of liens upon residential real property 
in an amount which, when added to the amount unpaid upon 
prior mortgages, liens or encumbrances, if any, upon such 
real estate does not exceed the appraised value thereof, 
except that the amount of any such loan hereafter made 
shall not exceed 66% per centum of the appraised value if 
such real estate is unimproved, 75 per centum of the ap-
praised value if such real estate is improved by offsite 
improvements such as street, water, sewers, or other utili-
ties, 75 per centum of the appraised value if such real estate 
is in the process of being improved by a building or buildings 
to be constructed or in the process of construction, or 90 per 
centum of the appraised value if such real estate is improved 
by a building or buildings. Notwithstanding the above loan-
to-value ratios, the Board may permit a loan-to-value ratio in 
excess of 90 per centum if such real estate is improved by a 
building or buildings and that portion of the unpaid balance 
of such loan which is in excess of an amount equal to 90 per 
centum of such value is guaranteed or insured by a public or 
private mortgage insurer or in the case of any loan for the 
purpose of providing housing for persons of low income, as 
described in regulations of the Board. 
94 STAT. 152 
PUBLIC LAW 96-221—MAR. 31, 1980 
12 use 1454, 
1455. 
12 use 1721. 
12 use 1701. 
38 use 1801 
note. 
38 use 1801 et 
seq. 
12 use 1715Z-5. 
12 use 1425a. 
"(C) 
UNITED STATES GOVERNMENT SECURITIES.—Invest-
ments in obligations of, or fully guaranteed as to principal 
and interest by, the United States. 
"(D) FEDERAL HOME LOAN BANK AND FEDERAL NATIONAL 
MORTGAGE ASSOCIATION SECURITIES.—Investments in 
the 
stock or bonds of a Federal home loan bank or in the stock of 
the Federal National Mortgage Association. 
"(E) FEDERAL HOME LOAN MORTGAGE CORPORATION INSTRU-
MENTS.—Investments in mortgages, obligations, or other 
securities which are or ever have been sold by the Federal 
Home Loan Mortgage Corporation pursuant to section 305 or 
306 of the Federal Home Loan Mortgage Corporation Act. 
"(F) OTHER GOVERNMENT SECURITIES.—Investments in obli-
gations, participations, securities, or other instruments of, or 
issued by, or fully guaranteed as to principal and interest by, 
the Federal National Mortgage Association, the Student 
Loan Marketing Association or the Government National 
Mortgage Association, or any other agency of the United 
States and an association may issue and sell securities which 
are guaranteed pursuant to section 306(g) of the National 
Housing Act. 
"(G) BANK DEPOSITS.—Investments in the time deposits, 
certificates, or accounts of any bank the deposits of which 
are insured by the Federal Deposit Insurance Corporation. 
"(H) STATE SECURITIES.—Investments in general obliga-
tions of any State or any political subdivision thereof. 
"(I) PURCHASE OF INSURED LOANS.—Purchase of loans se-
cured by liens on improved real estate which are insured 
under provisions of the National Housing Act, or insured as 
provided in the Servicemen's Readjustment Act of 1944 or 
chapter 37 of title 38, United States Code. 
"(J) 
HOME 
IMPROVEMENT AND MANUFACTURED 
HOME 
LOANS.—Loans made for the repair, equipping, alteration, or 
improvement of any residential real property, and loans 
made for the purpose of manufactured home 
financing. 
"(K) INSURED LOANS TO FINANCE THE PURCHASE OF FEE 
SIMPLE.—Loans as to which the association has the benefit of 
insurance under section 240 of the National Housing Act, or 
of a commitment or agreement therefor. 
"(L) LOANS TO FINANCIAL INSTITUTIONS, BROKERS, AND DEAL-
ERS.—Loans to financial institutions with respect to which 
the United States or an agency or instrumentality thereof 
has any function of examination or supervision, or to any 
broker or dealer registered with the Securities and Ex-
change Commission, secured by loans, obligations, or invest-
ments in which the association has the statutory authority 
to invest directly. 
"(M) LIQUIDITY INVESTMENTS.—Investments which, at the 
time of making, are assets eligible for inclusion toward the 
satisfaction of any liquidity requirement imposed by the 
Board pursuant to section 5A of the Federal Home Loan 
Bank Act, but only to the extent that the investment is 
permitted to be so included under regulations of the Board or 
is otherwise authorized. 
"(N) INVESTMENT IN THE NATIONAL HOUSING PARTNERSHIP 
CORPORATION, PARTNERSHIPS, AND JOINT VENTURES.—Invest-
ments in shares of stock issued by a corporation authorized 
to be created pursuant to title IX of the Housing and Urban 
PUBLIC LAW 96-221—MAR. 31, 1980 
94 STAT. 153 
Development Act of 1968, and investments in any partner- 42 USC 3931. 
ship, limited partnership, or joint venture formed pursuant 
to section 907(a) or 907(c) of such Act. 
42 USC 3937. 
"(O) HOUSING AND URBAN DEVELOPMENT GUARANTEED IN-
VESTMENTS.—Loans as to which the association has the 
benefit of any guaranty under title IV of the Housing and 
Urban Development Act of 1968, under part B of the Urban 42 USC 3901. 
Growth and New Community Development Act of 1970, or 42 USC 4511. 
under section 802 of the Housing and Community Develop-
ment Act of 1974 as in effect on or after the date of 42 USC 1440,12 
enactment of the Depository Institutions Deregulation and ^^ ^^^' ^'*^^-
Monetary Control Act of 1980, or of a commitment or Ante, p. 132. 
agreement therefor. 
"(P) STATE HOUSING CORPORATION INVESTMENTS.—Invest-
ments in, commitments to invest in, loans to, or commit-
ments to lend to any State housing corporation, provided 
that such obligations or loans are secured directly, or indi-
rectly through an agent or fiduciary, by a first lien on 
improved real estate which is insured under the provisions 
of the National Housing Act and that in the event of default, 12 USC 1701. 
the holder of such obligations or loans would have the right 
directly, or indirectly through an agent or fiduciary, to cause 
to be subject to the satisfaction of such obligations or loans 
the real estate described in the first lien or the insurance 
proceeds under the National Housing Act. 
"(Q) INVESTMENT COMPANIES.—An association may invest 
in, redeem, or hold shares or certificates in any open-end 
management investment company which is registered with 
the Securities and Exchange Commission under the Invest-
ment Company Act of 1940 and the portfolio of which is 15 USC 80a-5l. 
restricted by such management company's investment 
policy, changeable only if authorized by shareholder vote, 
solely to any such investments as an association by law or 
regulation may, without limitation as to percentage of 
assets, invest in, sell, redeem, hold, or otherwise deal with. 
The Board shall prescribe rules and regulations to imple- Rules and 
ment the provisions of this subparagraph. 
regulations. 
"(2) LOANS OR INVESTMENTS LIMITED TO 20 PER CENTUM OF 
ASSETS.—The following loans or investments are permitted, but 
authority conferred in the following subparagraphs is limited to 
not in excess of 20 per centum of the assets of the association for 
each subparagraph: 
"(A) COMMERCIAL REAL ESTATE LOANS.—Loans on security 
of first liens upon other improved real estate. 
"(B) CONSUMER LOANS AND CERTAIN SECURITIES.—An asso-
ciation may make secured or unsecured loans for personal, 
family, or household purposes, and may invest in, sell, or 
hold commercial paper and corporate debt securities, as 
defined and approved by the Board. 
"(3) 
LOANS OR INVESTMENTS LIMITED TO 5 PER CENTUM OF 
ASSETS.—The following loans or investments are permitted, but 
the authority conferred in the following subparagraphs is limited 
to not in excess of 5 per centum of assets of the association for 
each subparagraph: 
"(A) EDUCATION LOANS.—Loans made for the payment of 
expenses of college, university, or vocational education. 
"(B) 
COMMUNITY DEVELOPMENT INVESTMENTS.—Invest-
ments in real property and obligations secured by liens on 
94 STAT. 154 
PUBLIC LAW 96-221—MAR. 31, 1980 
real property located within a geographic area or neighbor-
hood receiving concentrated development assistance by a 
local government under title I of the Housing and Commu-
42 use 5301. 
nity Development Act of 1974, except that no investment 
under this subparagraph in such real property may exceed 
an aggregate investment of 2 per centum of the assets of the 
association. 
"(C) NONCONFORMING LOANS.—Loans upon the security of 
or respecting real property or interests therein used for 
primarily residential or farm purposes that do not comply 
with the limitations of this subsection. 
"(D) CONSTRUCTION LOANS WITHOUT SECURITY.—Invest-
ments not exceeding the greater of (A) the sum of its surplus, 
undivided profits, and reserves or (B) 5 per centum of the 
assets of the association, in loans the principal purpose of 
which is to provide financing with respect to what is or is 
expected to become primarily residential real estate where 
(i) the association relies substantially for repayment on the 
borrower's general credit standing and forecast of income 
without other security, or (ii) the association relies on other 
assurances for repayment, including but not limited to a 
guaranty or similar obligation of a third party. Investments 
under this subsection shall not be included in any percent-
age of assets or other percentage referred to in this 
subsection. 
"(4) OTHER LOANS AND INVESTMENTS.—The following additional 
loans and other investments to the extent authorized below: 
"(A) BUSINESS DEVELOPMENT CREDIT CORPORATIONS.—An 
association whose general reserves, surplus, and undivided 
profits aggregate a sum in excess of 5 per centum of its 
withdrawable accounts is authorized to invest in, lend to, or 
to commit itself to lend to, any business development credit 
corporation incorporated in the State in which the home 
office of the association is located in the same manner and to 
the same extent as savings and loan associations chartered 
by such State are authorized, but the aggregate amount of 
such investments, loans, and commitments of any such 
association shall not exceed one-half of 1 per centum of the 
total outstanding loans of the association or $250,000, which-
ever is less. 
"(B) SERVICE CORPORATIONS.—Investments in the capital 
stock, obligations, or other securities of any corporation 
organized under the laws of the State in which the home 
office of the association is located, if the entire capital stock 
of such corporation is available for purchase only by savings 
and loan associations of such State and by Federal associ-
ations having their home offices in such State, but no 
association may make any investment under this subpara-
graph if its aggregate outstanding investment under this 
subparagraph would exceed 3 per centum of the assets of the 
association, except that not less than one-half of the invest-
ment permitted under this subparagraph which exceeds one 
per centum of assets shall be used primarily for community, 
inner-city, and community development purposes. 
"(C) FOREIGN ASSISTANCE, CERTAIN GUARANTEED LOANS.— 
(i) Loans secured by mortgages as to which the association 
has the benefit of insurance under title X of the National 
PUBLIC LAW 96-221—MAR. 31, 1980 
94 STAT. 155 
Housing Act or of a commitment or agreement for such 12 USC I749aa. 
insurance. 
"(ii) Investments in housing project loans having the 
benefit of any guaranty under section 221 of the Foreign 
Assistance Act of 1961 or loans having the benefit of any 22 USC 2181. 
guaranty under section 224 of such Act, or any commitment '^^ Stat. 432. 
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-American Savings and Loan Bank. This 
authority extends to the acquisition, holding, and disposition 
of loans having the benefit of any guaranty under section 221 
or 222 of such Act, or of any commitment or agreement for 22 usc 2181 
any such guaranty. 
2182. 
"(iii) Investments under clause (i) of this subparagraph 
shall not be included in any percentage of assets or other 
percentage referred to in this subsection. Investments under 
clause (ii) of this subparagraph shall not exceed, in the case 
of any association, 1 per centum of the assets of such 
association. 
"(D) 
STATE AND LOCAL GOVERNMENT OBUGATIONS.—An 
association whose general reserves, surplus, and undivided 
profits aggregate a sum in excess of that amount which is 
determined by the Board for the purpose of the third 
sentence of section 403(b) of the National Housing Act is 12 use 1726. 
authorized to invest in obligations which constitute prudent 
investments, as defined by the Board, of its home State and 
political subdivisions thereof (including any agency, corpora-
tion, or instrumentality) if (i) the proceeds of such obliga-
tions are to be used for rehabilitation, financing, or the 
construction of residential real estate, and (ii) the aggregate 
amount of all investments under this subparagraph shall not 
exceed the amount of the association's general reserves, 
surplus, and undivided profits. 
"(6) DEFINITIONS.—As used in this subsection— 
"(A) the terms 'residential real property' or 'residential 
real estate' mean leaseholds, homes (including condomin-
iums and cooperatives, except that in connection with loans 
on individual cooperative units, such loans shall be ade-
quately secured as defined by the Board), combinations of 
homes and business property, other dwelling units, or combi-
nations of dwelling units including homes and business 
property involving only minor or incidental business use, or 
property to be improved by construction of such structures; 
"(B) the term 'loans' includes obligations and extensions or 
advances of credit; and any reference to a loan or investment 
includes an interest in such a loan or investment; and 
"(C) the term 'State' means any State of the United States, 
the District of Columbia, the Commonwealth of Puerto Rico, 
the Virgin Islands, the Canal Zone, Guam, American Samoa, 
and any territory or possession of the United States.". 
CREDIT CARDS 
SEC. 402. Section 5(b) of the Home Owners' Loan Act of 1933 (12 
U.S.C. 1464(b)) is amended by adding at the end thereof the following Post, p. 159. 
new paragraph: 
"(4) An association is authorized, subject to such regulations as the 
Board may prescribe, to issue credit cards, extend credit in connec-
94 STAT. 156 
PUBLIC LAW 96-221—MAR. 31, 1980 
tion therewith, and otherwise engage in or participate in credit card 
operations.". 
TRUST POWERS 
SEC. 403. 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 new 
subsection: 
"(n)(l) The Board is authorized and empowered to grant by special 
permit to an association applying therefor, when not in contraven-
tion of State or local law, the right to act as trustee, executor, 
administrator, guardian, or in any other fiduciary capacity in which 
State banks, trust companies, or other corporations which come into 
competition with associations are permitted to act under the laws of 
the State in which the association is located. Subject to the rules and 
regulations of the Board, service corporations may invest in State or 
federally-chartered corporations which are located in the State in 
which the home office of the association is located and which are 
engaged in trust activities. 
"(2) Whenever the laws of such State authorize or permit the 
exercise of any or all of the foregoing powers by State banks, trust 
companies, or other corporations which compete with associations, 
the granting to and the exercise of such powers by associations shall 
not be deemed to be in contravention of State or local law within the 
meaning of this section. 
"(3) Associations exercising any or all of the powers enumerated in 
this section shall segregate all assets held in any fiduciary capacity 
from the general assets of the association and shall keep a separate 
set of books and records showing in proper detail all transactions 
engaged in under authority of this section. The State banking 
authority involved may have access to reports of examination made 
by the Board insofar as such reports relate to the trust department of 
such association but nothing in this section shall be construed as 
authorizing such State banking authority to examine the books, 
records, and assets of such associations. 
"(4) No association shall receive in its trust department deposits of 
current funds subject to check or the deposit of checks, drafts, bills of 
exchange, or other items for collection or exchange purposes. Funds 
deposited or held in trust by the association awaiting investment 
shall be carried in a separate account and shall not be used by the 
association in the conduct of its business unless it shall first set aside 
in the trust department United States bonds or other securities 
approved by the Board. 
"(5) In the event of the failure of such association, the owners of 
the funds held in trust for investment shall have a lien on the bonds 
or other securities so set apart in addition to their claim against the 
estate of the association. 
"(6) Whenever the laws of a State require corporations acting in a 
fiduciary capacity to deposit securities with the State authorities for 
the protection of private or court trusts, associations so acting shall 
be required to make similar deposits and securities so deposited shall 
be held for the protection of private or court trusts, as provided by 
the State law. Associations in such cases shall not be required to 
execute the bond usually required of individuals if State corporations 
under similar circumstances are exempt from this requirement. 
Associations shall have power to execute such bond when so required 
by the laws of the State involved. 
PUBLIC LAW 96-221—MAR. 31, 1980 
94 STAT. 157 
"(7) In any case in which the laws of a State require that a 
corporation acting as trustee, executor, administrator, or in any 
capacity specified in this section, shall take an oath or make an 
affidavit, the president, vice president, cashier, or trust officer 
of such association may take the necessary oath or execute the 
necessary affidavit. 
"(8) It shall be unlawful for any association to lend any officer, 
director, or employee any funds held in trust under the powers 
conferred by this section. Any officer, director, or employee making 
such loan, or to whom such loan is made, may be fined not more than 
$5,000, or imprisoned not more than five years, or may be both fined 
and imprisoned, in the discretion of the court. 
"(9) In passing upon applications for permission to exercise the 
powers enumerated in this section, the Board may take into consid-
eration the amount of capital and surplus of the applying associ-
ation, whether or not such capital and surplus is sufficient under the 
circumstances of the case, the needs of the community to be served, 
and any other facts and circumstances that seem to it proper, and 
may grant or refuse the application accordingly, except that no 
permit shall be issued to any association having a capital and 
surplus less than the capital and surplus required by State law of 
State banks, trust companies, and corporations exercising such 
powers. 
"(10)(A) Any association desiring to surrender its right to exercise 
the powers granted under this section, in order to relieve itself of the 
necessity of complying with the requirements of this section, or to 
have returned to it any securities which it may have deposited with 
the State authorities for the protection of private or court trusts, or 
for any other purpose, may file with the Board a certified copy of a 
resolution of its board of directors signifying such desire. 
"(B) Upon receipt of such resolution, the Board, after satisfying 
itself that such association has been relieved in accordance with 
State law of all duties as trustee, executor, administrator, guardian 
or other fiduciary, under court, private or other appointments 
previously accepted under authority of this section, may in its 
discretion, issue to such association a certificate certifying that such 
association is no longer authorized to exercise the powers granted by 
this section. 
"(C) Upon the issuance of such a certificate by the Board, such 
association (i) shall no longer be subject to the provisions of this 
section or the regulations of the Board made pursuant thereto, (ii) 
shall be entitled to have returned to it any securities which it may 
have deposited with the State authorities for the protection of 
private or court trusts, and (iii) shall not exercise thereafter any of 
the powers granted by this section without first applying for and 
obtaining a new permit to exercise such powers pursuant to the 
provisions of this section. 
"(D) The Board is authorized and empowered to promulgate such Regulations, 
regulations as it may deem necessary to enforce compliance with the 
provisions of this subsection and the proper exercise of 
the trust powers 
granted by this subsection. 
"(11)(A) In addition to the authority conferred by other law, if, in 
the opinion of the Board, an association is unlawfully or unsoundly 
exercising, or has unlawfully or unsoundly exercised, or has failed for 
a period of five consecutive years to exercise, the powers granted by 
this section or otherwise fails or has failed to comply with the 
requirements of this subsection, the Board may issue and serve upon 
Revocation 
order. 
94 STAT. 158 
PUBLIC LAW 96-221—MAR. 31, 1980 
the association a notice of intent to revoke the authority of the 
association to exercise the powers granted by this subsection. The 
notice shall contain a statement of the facts constituting the alleged 
unlawful or unsound exercise of powers, or failure to exercise powers, 
or failure to comply, and shall fix a time and place at which a hearing 
will be held to determine whether an order revoking authority to 
exercise such powers should issue against the association. 
Hearing. 
"(g) Such hearing shall be conducted in accordance with the 
provisions of subsection (d)(7), and subject to judicial review as 
therein provided, and shall be fixed for a date not earlier than thirty 
days and not later than sixty days after service of such notice unless 
an earlier or later date is set by the Board at the request of any 
association so served. 
"(C) Unless the association so served shall appear at the hearing by 
a duly authorized representative, it shall be deemed to have con-
sented to the issuance of the revocation order. In the event of such 
consent, or if upon the record made at any such hearing, the Board 
shall find that any allegation specified in the notice of charges has 
been established, the Board may issue and serve upon the association 
an order prohibiting it from accepting any new or additional trust 
accounts and revoking authority to exercise any and all powers 
granted by this subsection, except that such order shall permit the 
association to continue to service all previously accepted trust 
accounts pending their expeditious divestiture or termination. 
Effective date. 
"(D) A revocation order shall become effective not earlier than the 
expiration of thirty days after service of such order upon the 
association so served (except in the case of a revocation order issued 
upon consent, which shall become effective at the time specified 
therein), and shall remain effective and enforceable, except to such 
extent as it is stayed, modified, terminated, or set aside by action of 
the Board or a reviewing court.". 
CONVERSIONS 
SEC. 404. The first sentence of section 5(i) of the Home Owners' 
Loan Act of 1933 (12 U.S.C. 1464(i)) is amended by inserting ", and any 
State stock savings and loan type institution may (if such institution 
existed in stock form for at least the 4 years preceding the date of 
enactment of the Depository Institutions Deregulation and Monetary 
Ante, p. 132. 
Control Act of 1980) convert its charter to a Federal stock charter 
under this Act," after "Federal savings and loan association under 
this Act". 
UQUIDITY REQUIREMENTS 
SEC. 405. Section 5A0t)) of the Federal Home Loan Bank Act (12 
U.S.C. 1425a(b)) is amended to read as follows: 
"(b)(1) Any institution which is a member or which is an insured 
12 use 1724. 
institution as defined in section 401(a) of the National Housing Act 
shall maintain the aggregate amount of its assets of the following 
types at not less than such amount as, in the opinion of the Board, is 
appropriate: 
"(A) cash; 
"(B) to such extent as the Board may approve for the purposes 
of this section, time and savings deposits in Federal Home Loan 
Banks and commercial banks; 
"(C) to such extent as the Board may so approve, such obliga-
tions, including such special obligations, of the United States, a 
State, any territory or possession of the United States, or a 
PUBLIC LAW 96-221—MAR. 31, 1980 
94 STAT. 159 
political subdivision, agency or instrumentality of any one or 
more of the foregoing, and bankers' acceptances, as the Board 
may approve; and 
"(D) to such extent as the Board may so approve, shares or 
certificates of any open-end management investment company 
which is registered with the Securities and Exchange Commis-
sion under the Investment Company Act of 1940 and the portfolio 
of which is restricted by such investment company's investment 
policy, changeable only if authorized by shareholder vote, solely 
to any of the obligations or other investments enumerated in 
subparagraphs (A) through (C). 
"(2) The requirement prescribed by the Board pursuant to this 
subsection (hereinafter in this section referred to as the 'liquidity 
requirement') may not be less than 4 per centum or more than 10 per 
centum of the obligation of the institution on withdrawable accounts 
and borrowings payable on demand or with unexpired maturities of 
one year or less, or in the case of institutions which are insurance 
companies, such other base or bases as the Board may determine to be 
comparable. The Board shall prescribe rules and regulations to 
implement the provisions of this subsection.". 
15 u s e 80a-51. 
Liquidity 
requirement. 
Rules and 
regulations. 
STUDY OF MORTGAGE PORTFOLIOS 
SEC. 406. (a)(1) The President shall convene an interagency task 
force consisting of the Secretary of the Treasury, the Secretary of 
Housing and Urban Development, the Federal Home Loan Bank 
Board, the Board of Governors of the Federal Reserve System, the 
Board of Directors of the Federal Deposit Insurance Corporation, the 
Comptroller of the Currency, and the National Credit Union Admin-
istration Board. The task force shall conduct a study and make 
recommendations regarding— 
(A) the options available to provide balance to the asset-
liability management problems inherent in the thrift portfolio 
structure; 
(B) the options available to increase the ability of thrift 
institutions to pay market rates of interest in period of rapid 
inflation and high interest rates; and 
(C) the options available through the Federal Home Loan Bank 
system and other Federal agencies to assist thrifts in times of 
economic difficulties. 
(2) In carrying out such study, the task force shall solicit the views 
of, and invite participation by, consumer and public interest groups, 
business, labor, and State regulators of depository institutions. 
(b) Not later than three months after the date of enactment of this 
Act, the task force shall transmit to the President and the Congress 
its findings and recommendations for such action as it deems 
appropriate. 
MUTUAL CAPITAL CERTIFICATES 
SEC. 407. (a) Section 5(b) of the Home Owners' Loan Act of 1933 (12 
U.S.C. 1464(b)) is amended by adding at the end thereof the following: 
"(5)(A) In accordance with rules and regulations issued by the 
Board, mutual capital certificates may be issued and sold directly to 
subscribers or through underwriters, and such certificates shall 
constitute part of the general reserve and net worth of the issuing 
association. The Board, in its rules and regulations relating to the 
issuance and sale of mutual capital certificates, shall provide that 
such certificates— 
Interagency task 
force. 
12 u s e 1425a 
note. 
Report to 
President and 
eongress. 
79-194 
O—81—pt. 1 
14 : QL3 
94 STAT. 160 
PUBLIC LAW 96-221—MAR. 31, 1980 
"(i) shall be subordinate to all savings accounts, savings cer-
tificates, and debt obligations; 
"(ii) shall constitute a claim in liquidation on the general 
reserves, surplus, and undivided profits of the association re-
maining after the payment in full of all savings accounts, savings 
certificates, and debt obligations; 
"(iii) shall be entitled to the pa5mient of 
dividends; and 
"(iv) may have a fixed or variable dividend rate. 
"(B) The Board shall provide in its rules and regulations for 
charging losses to the mutual capital certificate, reserves, and other 
net worth accounts.". 
Rules and 
(jj) Section 403(b) of the National Housing Act (12 U.S.C. 172603)), is 
regulations. 
amended by adding at the end thereof the following: "Mutual capital 
certificates, subordinate to the rights of holders of savings accounts, 
savings certificates, and the Corporation, shall be deemed to be 
reserves for the purposes of this subsection in accordance with rules 
and regulations prescribed by the Corporation. The Corporation shall 
provide in its rules and regulations for charging losses to the mutual 
capital certificate, reserves, and other net worth accounts. In the 
event an insured institution fails to maintain the reserves required 
by this title, no payment of dividends on such certificates shall be 
made except with the approval of the Corporation.". 
MUTUAL SAVINGS BANKS 
SEC. 408. (a) Section 5(a) of the Home Owners' Loan Act of 1933 (12 
U.S.C. 1464(a)) is amended— 
(1) by inserting "(1)" after "(a)"; 
(2) in the fourth and fifth sentences by striking out "(1)" and 
"(2)" each place they appear therein and inserting in lieu thereof 
"(A)" and "(B)", respectively; and 
(3) by adding at the end thereof the following new paragraph: 
"(2) A Federal mutual savings bank may make commercial, corpo-
rate, and business loans except that— 
"(A) not more than 5 per centum of the assets of such a bank 
may be so loaned; and 
"(B) such loans may only be made within the State where the 
bank is located or within 75 miles of the bank's home office.". 
O
t
)
) Section 5(a) of the Home Owners' Loan Act of 1933 (12 U.S.C. 
1464(a)) is amended by adding at the end thereof the following new 
paragraph: 
"(3) In addition to the authority conferred by paragraph (1), Federal 
mutual savings bank may accept demand deposits in connection with 
a commercial, corporate, or business loan relationship.". 
INSURANCE RESERVES 
SEC. 409. The third sentence of section 403(b) of the National 
Housing Act (12 U.S.C. 1726(b)) is amended by striking out "5 per 
centum" and inserting in lieu thereof "an amount no greater than 6 
per centum nor less than 3 per centum as determined by the Federal 
Home Loan Bank Board". 
PUBLIC LAW 96-221—MAR. 31, 1980 
TITLE V—STATE USURY LAWS 
PART A—MORTGAGE USURY LAWS 
94 STAT. 161 
MORTGAGES 
SEC. 501. (a)(1) The provisions of the constitution or the laws of any 
State expressly limiting the rate or amount of interest, discount 
points, finance charges, or other charges which may be charged, 
taken, received, or reserved shall not apply to any loan, mortgage, 
credit sale, or advance which is— 
(A) secured by a first lien on residential real property, by a first 
lien on stock in a residential cooperative housing corporation 
where the loan, mortgage, or advance is used to finance the 
acquisition of such stock, or by a first lien on a residential 
manufactured home; 
(B) made after March 31,1980; and 
(C) described in section 527(b) of the National Housing Act (12 
U.S.C. 1735f-5(b)), except that for the purpose of this section— 
(i) the limitation described in section 527(b)(1) of such Act 
that the property must be designed principally for the 
occupancy of from one to four families shall not apply; 
(ii) the requirement contained in section 527(b)(1) of such 
Act that the loan be secured by residential real property 
shall not apply to a loan secured by stock in a residential 
cooperative housing corporation or to a loan or credit sale 
secured by a first lien on a residential manufactured home; 
(iii) the term "federally related mortgage loan" in section 
527(b) of such Act shall include a credit sale which is secured 
by a first lien on a residential manufactured home and 
which otherwise meets the definitional requirements of 
section 527(b) of such Act, as those requirements are modi-
fied by this section; 
(iv) the term "residential loans" in section 527(b)(2)(D) of 
such Act shall also include loans or credit sales secured by a 
first lien on a residential manufactured home; 
(v) the requirement contained in section 527(b)(2)(D) of 
such Act that a creditor make or invest in loans aggregating 
more than $1,000,000 per year shall not apply to a creditor 
selling residential manufactured homes financed by loans or 
credit sales secured by first liens on residential manufac-
tured homes if the creditor has an arrangement to sell such 
loans or credit sales in whole or in part, or if such loans or 
credit sales are sold in whole or in part to a lender, institu-
tion, or creditor described in section 527(b) of such Act or in 
this section or a creditor, as defined in section 103(f) of the 
Truth in Lending Act, as such section was in effect on the 
day preceding the date of enactment of this title, if such 
creditor makes or invests in residential real estate loans or 
loans or credit sales secured by first liens on residential 
manufactured homes aggregating more than $1,000,000 per 
year; and 
(vi) the term "lender" in section 527(b)(2)(A) of such Act 
shall also be deemed to include any lender approved by the 
Secretary of Housing and Urban Development for participa-
tion in any mortgage insurance program under the National 
Housing Act. 
12 use 1735f-7 
note. 
"Federally 
related mortgage 
loan." 
"Residential 
loans." 
15 use 1602. 
"Lender. 
94 STAT. 162 
PUBLIC LAW 96-221—MAR. 31, 1980 
"Depository 
institution." 
Exemption. 
12 u s e 1813. 
Effective date. 
Exemption, 
State action. 
Discount points, 
limitation. 
(2)(A) The provisions of the constitution or law of any State 
expressly limiting the rate or amount of interest which may be 
charged, taken, received, or reserved shall not apply to any deposit or 
account held by, or other obligation of a depository institution. For 
purposes of this paragraph, the term "depository institution" 
means— 
(i) any insured bank as defined in section 3 of the Federal 
Deposit Insurance Act (12 U.S.C. 1813); 
(ii) any mutual savings bank as defined in section 3 of the 
Federal Deposit Insurance Act (12 U.S.C. 1813); 
(iii) any savings bank as defined in section 3 of the Federal 
Deposit Insurance Act (12 U.S.C. 1813); 
(iv) any insured credit union as defined in section 101 of the 
Federal Credit Union Act (12 U.S.C. 1752); 
(v) any member as defined in section 2 of the Federal Home 
Loan Bank Act (12 U.S.C. 1422); and 
(vi) any insured institution as defined in section 408 of the 
National Housing Act (12 U.S.C. 1730a). 
(B) This paragraph shall not apply to any such deposit, account, or 
obligation which is payable only at an office of an insured bank, as 
defined in section 3 of the Federal Deposit Insurance Act, located in 
the Commonwealth of Puerto Rico. 
(b)(1) Except as provided in paragraphs (2) and (3), the provisions of 
subsection (a)(1) shall apply to any loan, mortgage, credit sale, or 
advance made in any State on or after April 1,1980. 
(2) Except as provided in paragraph (3), the provisions of subsection 
(a)(1) shall not apply to any loan, mortgage, credit sale, or advance 
made in any State after the date (on or after April 1,1980, and before 
April 1, 1983) on which such State adopts a law or certifies that the 
voters of such State have voted in favor of any provision, constitu-
tional or otherwise, which states explicitly and by its terms that such 
State does not want the provisions of subsection (a)(1) to apply with 
respect to loans, mortgages, credit sales, and advances made in such 
State. 
(3) In any case in which a State takes an action described in 
paragraph (2), the provisions of subsection (a)(1) shall continue to 
apply to— 
(A) any loan, mortgage, credit sale, or advance which is made 
after the date such action was taken pursuant to a commitment 
therefor which was entered during the period beginning on 
April 1, 1980, and ending on the date on which such State takes 
such action; and 
(B) any loan, mortgage, or advance which is a rollover of a loan, 
mortgage, or advance, as described in regulations of the Federal 
Home Loan Bank Board, which was made or committed to be 
made during the period beginning on April 1,1980, and ending on 
the date on which such State takes any action described in 
paragraph (2). 
(4) At any time after the date of enactment of this Act, any State 
may adopt a provision of law placing limitations on discount points or 
such other charges on any loan, mortgage, credit sale, or advance 
described in subsection (a)(1). 
(c) The provisions of subsection (aXD shall not apply to a loan, 
mortgage, credit sale, or advance which is secured by a first lien on a 
residential manufactured home unless the terms and conditions 
relating to such loan, mortgage, credit sale, or advance comply with 
consumer protection provisions specified in regulations prescribed by 
the Federal Home Loan Bank Board. Such regulations shall— 
PUBLIC LAW 96-221—MAR. 31, 1980 
94 STAT. 163 
(1) include consumer protection provisions with respect to 
balloon payments, prepayment penalties, late charges, and defer-
ral fees; 
(2) require a 30-day notice prior to instituting any action 
leading to repossession or foreclosure (except in the case of 
abandonment or other extreme circumstances); 
(3) require that upon prepayment in full, the debtor shall be 
entitled to a refund of the unearned portion of the precomputed 
finance charge in an amount not less than the amount which 
would be calculated by the actuarial method, except that the 
debtor shall not be entitled to a refund which is less than $1; and 
(4) include such other provisions as the Federal Home Loan 
Bank Board may prescribe after a finding that additional protec-
tions are required. 
(d) The provisions of subsection (c) shall not apply to a loan, 
mortgage, credit sale, or advance secured by a first lien on a 
residential manufactured home until regulations required to be 
issued pursuant to paragraphs (1), (2), and (3) of subsection (c) take 
effect, except that the provisions of subsection (c) shall apply in the 
case of such a loan, mortgage, credit sale, or advance made prior to 
the date on which such regulations take effect if the loan, mortgage, 
credit sale, or advance includes a precomputed finance charge and 
does not provide that, upon prepayment in full, the refund of the 
unearned portion of the precomputed finance charge is in an amount 
not less the amount which would be calculated by the actuarial 
method, except that the debtor shall not be entitled to a refund which 
is less than $1. The Federal Home Loan Bank Board shall issue Regulations, 
regulations pursuant to the provisions of paragraphs (1), (2), and (3) of 
subsection (c) that shall take effect prospectively not less than 30 days 
after publication in the Federal Register and not later than 120 days 
from the date of enactment of this Act. 
(e) For the purpose of this section— 
Definitions. 
(1) a "prepayment" occurs upon— 
(A) the refinancing or consolidation of the indebtedness; 
(B) the actual prepayment of the indebtedness by the 
consumer whether voluntarily or following acceleration of 
the payment obligation by the creditor; or 
(C) the entry of a judgment for the indebtedness in favor of 
the creditor; 
(2) the term "actuarial method" means the method of allocat-
ing payments made on a debt between the outstanding balance of 
the obligation and the precomputed finance charge pursuant to 
which a payment is applied first to the accrued precomputed 
finance charge and any remainder is subtracted from, or any 
deficiency is added to, the outstanding balance of the obligation; 
(3) the term "precomputed finance charge" means interest or a 
time price differential within the meaning of sections 106(a) (1) 
and (2) of the Truth in Lending Act (15 U.S.C. 1605(a) (1) and (2)) 
as computed by an add-on or discount method; and 
(4) the term "residential manufactured home" means a mobile 
home as defined in section 603(6) of the National Mobile Home 
Construction and Safety Standards Act of 1974 which is used as a 42 use 5402. 
residence. 
(f) The Federal Home Loan Bank Board is authorized to issue rules 
and regulations and to publish interpretations governing the imple-
mentation of this section. 
(g) This section takes effect on April 1,1980. 
Rules and 
regulations. 
Effective date. 
94 STAT. 164 
PUBLIC LAW 96-221—MAR. 31, 1980 
PART B—BUSINESS AND AGRICULTURAL LOANS 
BUSINESS AND AGRICULTURAL LOANS 
12 use 86a. 
ggc. 511. (a) If the applicable rate prescribed in this section exceeds 
the rate a person would be permitted to charge in the absence of this 
section, such person may in the case of a business or agricultural loan 
in the amount of $25,000 or more, notwithstanding any State consti-
tution or statute which is hereby preempted for the purposes of this 
section, take, receive, reserve, and charge on any such loan, interest 
at a rate of not more than 5 per centum in excess of the discount rate, 
including any surcharge thereon, on ninety-day commercial paper in 
effect at the Federal Reserve bank in the Federal Reserve district 
where the person is located. 
Q)) If the rate prescribed in subsection (a) exceeds the rate such 
person would be permitted to charge in the absence of this section, 
and such State imposed rate is thereby preempted by the rate 
described in subsection (a), the taking, receiving, reserving, or charg-
ing a greater rate than is allowed by subsection (a), when knowingly 
done, shall be deemed a forfeiture of the entire interest which the 
loan carries with it, or which has been agreed to be paid thereon. If 
such greater rate of interest has been paid, the person who paid it 
may recover, in a civil action commenced in a court of appropriate 
jurisdiction not later than two years after the date of such payment, 
an amount equal to twice the amount of interest paid from the person 
taking, receiving, reserving, or charging such interest. 
EFFECTIVE DATE OF PART B 
12 use 86a note. 
SEQ 512. The provisions of this part shall apply only with respect to 
business or agricultural loans in amounts of $25,000 or more made in 
any State during the period beginning on April 1,1980, and ending on 
the earlier of— 
(1) April 1,1983; or 
(2) the date, on or after April 1, 1980, on which such State 
adopts a law or certifies 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 provisions of this part to apply with respect to loans made in 
such State, 
except that such provisions shall apply to any loan made on or after 
such earlier date pursuant to a commitment to make such loan which 
was entered into on or after April 1, 1980, and prior to such earlier 
date. 
PART C—OTHER LOANS 
INSURED BANKS 
SEC 521. The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) 
is amended by adding at the end thereof the following new section: 
12 use I83id. 
"SEC. 27. (a) In order to prevent discrimination against State-
chartered insured banks, including insured savings banks and in-
sured mutual savings banks, or insured branches of foreign banks 
with respect to interest rates, if the applicable rate prescribed in this 
subsection exceeds the rate such State bank or insured branch of a 
foreign bank would be permitted to charge in the absence of this 
subsection, such State bank or such insured branch of a foreign bank 
may, notwithstanding any State constitution or statute which is 
PUBLIC LAW 96-221—MAR. 31, 1980 
94 STAT. 165 
hereby preempted for the purposes of this section, take, receive, 
reserve, and charge on any loan or discount made, or upon any note, 
bill of exchange, or other evidence of debt, interest at a rate of not 
more than 1 per centum in excess of the discount rate on ninety-day 
commercial paper in effect at the Federal Reserve bank in the 
Federal Reserve district where such State bank or such insured 
branch of a foreign bank is located or at the rate allowed by the laws 
of the State, territory, or district where the bank is located, which-
ever may be greater. 
"(b) If the rate prescribed in subsection (a) exceeds the rate such 
State bank or such insured branch of a foreign bank would be 
permitted to charge in the absence of this section, and such State 
fixed rate is thereby preempted by the rate described in subsection 
(a), the taking, receiving, reserving, or charging a greater rate of 
interest than is allowed by subsection (a), when knowingly done, shall 
be deemed a forfeiture of the entire interest which the note, bill, or 
other evidence of debt carries with it, or which has been agreed to be 
paid thereon. If such greater rate of interest has been paid, the person 
who paid it may recover in a civil action commenced in a court of 
appropriate jurisdiction not later than two years after the date of 
such payment, an amount equal to twice the amount of the interest 
paid from such State bank or such insured branch of a foreign bank 
taking, receiving, reserving, or charging such interest.". 
INSURED SAVINGS AND LOAN ASSOCIATIONS 
SEC. 522. Title IV of the National Housing Act (12 U.S.C. 1724 et 
seq.) is amended by adding at the end thereof the following new 
section: 
"SEC. 414. (a) If the applicable rate prescribed in this section 12 USC I730g. 
exceeds the rate an insured institution would be permitted to charge 
in the absence of this section, such institution may, notwithstanding 
any State constitution or statute which is hereby preempted for the 
purposes of this section, take, receive, reserve, and charge on any 
loan or discount made, or upon any note, bill of exchange, or other 
evidence of debt, interest at a rate of not more than 1 per centum in 
excess of the discount rate on ninety-day commercial paper in effect 
at the Federal Reserve bank in the Federal Reserve district where 
such institution is located or at the rate allowed by the laws of the 
State, territory, or district where such institution is located, which-
ever may be greater. 
"(b) If the rate prescribed in subsection (a) exceeds the rate such 
institution would be permitted to charge in the absence of this 
section, and such State fixed rate is thereby preempted by the rate 
described in subsection (a), the taking, receiving, reserving, or charg-
ing a greater rate of interest than that prescribed by subsection (a), 
when knowingly done, shall be deemed a forfeiture of the entire 
interest which the note, bill, or other evidence of debt carries with it, 
or which has been agreed to be paid thereon. If such greater rate of 
interest has been paid, the person who paid it may recover, in a civil 
action commenced in a court of appropriate jurisdiction not later 
than two years after the date of such payment, an amount equal to 
twice the amount of the interest paid from the institution taking or 
receiving such interest.". 
94 STAT. 166 
PUBLIC LAW 96-221—MAR. 31, 1980 
INSURED 
CREDIT 
UNIONS 
SEC. 523. Section 205 of the Federal Credit Union Act (12 U.S.C. 
Ante, p. 147. 
1785) is amended by adding at the end thereof the following new 
subsection: 
"(g)(1) If the applicable rate prescribed in this subsection exceeds 
the rate an insured credit union would be permitted to charge in the 
absence of this subsection, such credit union may, notwithstanding 
any State constitution or statute which is hereby preempted for the 
purposes of this subsection, take, receive, reserve, and charge on any 
loan, interest at a rate of not more than 1 per centum in excess of the 
discount rate on ninety-day commercial paper in effect at the Federal 
Reserve bank in the Federal Reserve district where such insured 
credit union is located or at the rate allowed by the laws of the State, 
territory, or district where such credit union is located, whichever 
may be greater. 
"(2) If the rate prescribed in paragraph (1) exceeds the rate such 
credit union would be permitted to charge in the absence of this 
subsection, and such State fixed rate is thereby preempted by the rate 
described in paragraph (1), the taking, receiving, reserving, or charg-
ing a greater rate than is allowed by paragraph (1), when knowingly 
done, shall be deemed a forfeiture of the entire interest which the 
loan carries with it, or which has been agreed to be paid thereon. If 
such greater rate of interest has been paid, the person who paid it 
may recover, in a civil action commenced in a court of appropriate 
jurisdiction not later than two years after the date of such payment, 
an amount equal to twice the amount of interest paid from the credit 
union taking or receiving such interest.". 
SMALL BUSINESS INVESTMENT COMPANIES 
SEC. 524. Section 308 of the Small Business Investment Act of 1958 
(15 U.S.C. 687) is amended by adding at the end thereof the following 
new subsection: 
"(i)(l) The purpose of this subsection is to facilitate the orderly and 
necessary flow of long-term loans and equity funds from small 
business investment companies to small business concerns. 
"(2) In the case of a business loan, the small business investment 
company making such loan may charge interest on such loan at a 
rate which does not exceed the lowest of the rates described in 
subparagraphs (A), (B), and (C). 
"(A) The rate described in this subparagraph is the maximum 
rate prescribed by regulation by the Small Business Administra-
tion for loans made by any small business investment company 
(determined without regard to any State rate incorporated by 
such regulation). 
"(B) The rate described in this subparagraph is the maximum 
rate authorized by an applicable State law or constitutional 
provision which is not preempted for purposes of this subsection. 
"(C)(i) The rate described in this subparagraph is the higher of 
the Federal Reserve rate or the maximum rate authorized by 
applicable State law or constitutional provision (determined 
without regard to the preemption of such State law or constitu-
tional provision). 
"Federal 
"(ii) For purposes of clause (i), the term 'Federal Reserve rate' 
Reserve rate. 
means the rate equal to the sum of 1 percentage point plus the 
discount rate on ninety-day commercial paper in effect at the 
Federal Reserve bank in the Federal Reserve district in which 
PUBLIC LAW 96-221—MAR. 31, 1980 
94 STAT. 167 
the principal office of the small business investment company is 
located. 
"(iii) The rate described in this subparagraph shall not apply to 
loans made in a State if there is no maximum rate authorized by 
applicable State law or constitutional provision for such loans or 
there is a maximum rate authorized by an applicable State law 
or constitutional provision which is not preempted for purposes 
of this subsection. 
"(3) A State law or constitutional provision shall be preempted for 
purposes of paragraph (2)(B) with respect to any loan if such loan is 
made before the date, on or after April 1, 1980, on which such State 
adopts a law or certifies 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 
provisions of this subsection to apply with respect to loans made in 
such State, except that such State law or constitutional or other 
provision shall be preempted in the case of a loan made, on or after 
the date on which such law is adopted or such certification is made, 
pursuant to a commitment to make such loan which was entered into 
on or after April 1, 1980, and prior to the date on which such law is 
adopted or such certification is made. 
"(4)(A) If the maximum rate of interest authorized under para-
graph (2) on any loan made by a small business investment company 
exceeds the rate which would be authorized by applicable State law if 
such State law were not preempted for purposes of this subsection, 
the charging of interest at any rate in excess of the rate authorized by 
paragraph (2) shall be deemed a forfeiture of the greater of (i) all 
interest which the loan carries with it, or (ii) all interest which has 
been agreed to be paid thereon. 
"(B) In the case of any loan with respect to which there is a 
forfeiture of interest under subparagraph (A), the person who paid 
the interest may recover from a small business investment company 
making such loan an amount equal to twice the amount of the 
interest paid on such loan. Such interest may be recovered in a civil 
action commenced in a court of appropriate jurisdiction not later 
than two years after the most recent payment of interest.". 
EFFECTIVE DATE 
SEC. 525. The amendments made by sections 521 through 523 of this 12 use I730g 
title shall apply only with respect to loans made in any State during "°*® 
the period beginning on April 1, 1980, and ending on the date, on or 
after April 1,1980, on which such State adopts a law or certifies 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 amendments made by such sections 
to apply with respect to loans made in such State, except that such 
amendments shall apply to a loan made on or after the date such law 
is adopted or such certification is made if such loan is made pursuant 
to a commitment to make such loan which was entered into on or 
after April 1,1980, and prior to the date on which such law is adopted 
or such certification is made. 
SEVERABIUTY 
SEC. 526. If any provision of this Act or the application of such 12 use I730g 
provision to any person or circumstance shall be held invalid, the ^°*^-
remainder of this Act and the application of such provision to any 
94 STAT. 168 
PUBLIC LAW 96-221—MAR. 31, 1980 
person or circumstance other than that as to which it is held invalid 
shall not be affected thereby. 
12 u s e 1730g 
note. 
DEFINITION 
SEC. 527. For purposes of this title, the term "State" includes the 
several States, the Commonwealth of Puerto Rico, the District of 
Columbia, Guam, the Trust Territories of the Pacific Islands, the 
Northern Mariana Islands, and the Virgin Islands, except as provided 
in section 501(a)(2)(B). 
EFFECT ON OTHER LAW 
1
2 use i735f-7 
SEC. 528. In any case in which one or more provisions of, or 
note. 
amendments made by, this title, section 529 of the National Housing 
93 Stat. 1114. 
Act, or any other provision of law, including section 5197 of the 
Revised Statutes (12 U.S.C. 85), apply with respect to the same loan, 
mortgage, credit sale, or advance, such loan, mortgage, credit sale, or 
advance may be made at the highest applicable rate. 
93 Stat. 789. 
12 u s e 85 note. 
93 Stat. 1234. 
12 u s e 85 and 
note, 86a and 
note, 371b-l 
and note, 
1425b, 1730e, 
1735f-7 note, 
1828, 1831a 
and note; 15 
use 687. 
Truth in 
Lending 
Simplification 
and Reform Act. 
15 u s e 1601 
note. 
"ereditor." 
REPEAL OF EXISTING LAW 
SEC. 529. Effective at the close of 
March 31,1980, Public Law 96-104, 
section 105(a)(2) of Public Law 96-161, and the amendments made by 
and the provisions of title II of Public Law 96-161 are hereby 
repealed, except that the provisions of such Public Law, the provi-
sions of such section, the amendments made by such title, and the 
provisions of such title shall continue to apply to any loan made, any 
deposit made, or any obligation issued in any State during any period 
when those provisions or amendments were in effect in such State. 
TITLE VI-TRUTH IN LENDING SIMPLIFICATION 
SHORT TITLE 
SEC. 601. This title may be cited as the "Truth in Lending Simplifi-
cation and Reform Act". 
DEFINITIONS 
SEC. 602. (a) Section 103(f) of the Truth in Lending Act (15 U.S.C. 
1602(f)) is amended— 
(1) by striking out the first sentence and inserting in lieu 
thereof the following: "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 transaction is initially payable on the face of the evidence 
of indebtedness or, if there is no such evidence of indebtedness, 
by agreement. Notwithstanding the previous sentence, a person 
who regularly arranges for the extension of consumer credit, 
which is payable in more than four installments or for which the 
payment of a finance charge is or may be required, from persons 
who are not creditors is a creditor, and 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."; and 
PUBLIC LAW 96-221—MAR. 31, 1980 
94 STAT. 169 
(2) by redesignating the references to sections 127(a)(6), 
127(a)(7), 127(a)(8), 127(b)(9), and 127(b)(ll) in the next succeeding 
sentence as references to sections 127(a)(5), 127(a)(6), 127(a)(7), 
127(b)(8), and 127(b)(10), respectively. 
(b) The first sentence of section 103(g) of the Truth in Lending Act 
(15 U.S.C. 1602(g)) is amended to read as follows: "The term 'credit 
sale' refers to any sale in which the seller is a creditor.". 
EXEMPTED TRANSACTIONS 
SEC. 603. (a) Section 103(h) of the Truth in Lending Act (15 U.S.C. 
1602(h)) is amended by striking out "household, or agricultural" and 
inserting in lieu thereof "or household". 
(b) Section 103 of the Truth in Lending Act (15 U.S.C. 1602) is 
amended by redesignating subsections (s) and (t) as subsections (x) 
and (y), respectively, and by inserting after subsection (r) the follow-
ing new subsections: 
"(s) The term 'agricultural purposes' includes the production, 
harvest, exhibition, marketing, transportation, processing, or manu-
facture of agricultural products by a natural person who cultivates, 
plants, propagates, or nurtures those agricultural products, including 
but not limited to the acquisition of farmland, real property with a 
farm residence, and personal property and services used primarily in 
farming. 
"(t) The term 'agricultural products' includes agricultural, horti-
cultural, viticultural, and dairy products, livestock, wildlife, poultry, 
bees, forest products, fish and shellfish, and any products thereof, 
including processed and manufactured products, and any and all 
products raised or produced on farms and any processed or manufac-
tured products thereof.". 
(c) Section 104 of the Truth in Lending Act (15 U.S.C. 1603) is 
amended— 
(1) by amending paragraph (1) to read as follows: 
"(1) Credit transactions involving extensions of credit pri-
marily for business, commercial, or agricultural purposes, or to 
government or governmental agencies or instrumentalities, or to 
organizations."; 
(2) by amending paragraph (3) to read as follows: 
"(3) Credit transactions, other than those in which a security 
interest is or will be acquired in real property, or in personal 
property used or expected to be used as the principal dwelling of 
the consumer, in which the total amount financed exceeds 
$25,000."; and 
(3) by striking out paragraph (5). 
"Agricultural 
purposes." 
"Agricultural 
products." 
OPEN END CREDIT PLAN 
SEC. 604. Section 103(i) of the Truth in Lending Act (15 U.S.C. 
1602(i)) is amended to read as follows: 
"(i) The term 'open end credit plan* means a plan under which the 
creditor reasonably contemplates repeated transactions, which pre-
scribes the terms of such transactions, and which provides for a 
finance charge which may be computed from time to time on the 
outstanding unpaid balance. A credit plan which is an open end 
credit plan within the meaning of the preceding sentence is an open 
end credit plan even if credit information is verified from time to 
time.". 
94 STAT. 170 
PUBLIC LAW 96-221—MAR. 31, 1980 
15 u s e 1604. 
Publication. 
Notice in 
Federal 
Register. 
Effective date. 
15 u s e 1666 et 
seq., 1667 et seq. 
MODEL FORMS 
SEC. 605. Section 105 of the Truth in Lending Act (15 U.S.C. 1605) is 
amended by inserting "(a)" before "The", and by adding at the end 
thereof the following: 
"Qo) The Board shall publish model disclosure forms and clauses for 
common transactions to facilitate compliance with the disclosure 
requirements of this title and to aid the borrower or lessee in 
understanding the transaction by utilizing readily understandable 
language to simplify the technical nature of the disclosures. In 
devising such forms, the Board shall consider the use by creditors or 
lessors of data processing or similar automated equipment. Nothing 
in this title may be construed to require a creditor or lessor to use any 
such model form or clause prescribed by the Board under this section. 
A creditor or lessor shall be deemed to be in compliance with the 
disclosure provisions of this title with respect to other than numerical 
disclosures if the creditor or lessor (1) uses any appropriate model 
form or clause as published by the Board, or (2) uses any such model 
form or clause and changes it by (A) deleting any information which 
is not required by this title, or (B) rearranging the format, if in 
making such deletion or rearranging the format, the creditor or 
lessor does not affect the substance, clarity, or meaningful sequence 
of the disclosure. 
"(c) Model disclosure forms and clauses shall be adopted by the 
Board after notice duly given in the Federal Register and an opportu-
nity for public comment in accordance with section 553 of title 5, 
United States Code. 
"(d) Any regulation of the Board, or any amendment or interpreta-
tion thereof, requiring any disclosure which differs from the disclo-
sures previously required by this chapter, chapter 4, or chapter 5, or 
by any regulation of 
the Board promulgated thereunder shall have an 
effective date of that October 1 which follows by at least six months 
the date of promulgation, except that the Board may at its discretion 
take interim action by regulation, amendment, or interpretation to 
lengthen the period of time permitted for creditors or lessors to adjust 
their forms to accommodate new requirements or shorten the length 
of time for creditors or lessors to make such adjustments when it 
makes a specific finding that such action is necessary to comply with 
the findings of a court or to prevent unfair or deceptive disclosure 
practices. Notwithstanding the previous sentence, any creditor or 
lessor may comply with any such newly promulgated disclosure 
requirements prior to the effective date of the requirements.". 
COMPONENTS OF FINANCE CHARGE 
SEC. 606. (a) Section 106(a) of the Truth in Lending Act (15 U.S.C. 
1605(a)) is amended by striking out ", including any of the following 
types of charges which are applicable" and inserting in lieu thereof 
the following: ". The finance charge does not include charges of a type 
payable in a comparable cash transaction. Examples of charges 
which are included in the finance charge include any of the following 
types of charges which are applicable". 
(b) Section 106(d) of the Truth in Lending Act (15 U.S.C. 1605(d)) is 
amended by striking out paragraphs (3) and (4). 
ACCURACY OF ANNUAL PERCENTAGE RATE 
SEC 607. (a) Section 107(c) of the Truth in Lending Act (15 U.S.C. 
1606(c)) is amended to read as follows: 
PUBLIC LAW 96-221—MAR. 31, 1980 
94 STAT. 171 
"(c) The disclosure of an annual percentage rate is accurate for the 
purpose of this title if the rate disclosed is within a tolerance not 
greater than one-eighth of 1 per centum more or less than the actual 
rate or rounded to the nearest one-fourth of 1 per centum. The Board 
may allow a greater tolerance to simplify compliance where irregular 
payments are involved.". 
(b) Section 107(e) of the Truth in Lending Act (15 U.S.C. 1606(e)) is 
amended by striking out "(c) or". 
(c) Section 107(f) of the Truth in Lending Act (15 U.S.C. 1606(f)) is Repeal. 
hereby repealed. 
RESTITUTION 
SEC. 608. (a) Section 108 of 
the Truth in Lending Act (15 U.S.C. 1607) 
is amended by adding at the end thereof the following: 
"(e)(1) In carrying out its enforcement activities under this section, 
each agency referred to in subsection (a) or (c), in cases where an 
annual percentage rate or finance charge was inaccurately disclosed, 
shall notify the creditor of such disclosure error and is authorized in 
accordance with the provisions of this subsection to require the 
creditor to make an adjustment to the account of the person to whom 
credit was extended, to assure that such person will not be required to 
pay a finance charge in excess of 
the finance charge actually disclosed 
or the dollar equivalent of the annual percentage rate actually 
disclosed, whichever is lower. For the purposes of this subsection, 
except where such disclosure error resulted from a willful violation 
which was intended to mislead the person to whom credit was 
extended, in determining whether a disclosure error has occurred 
and in calculating any adjustment, (A) each agency shall apply (i) 
with respect to the annual percentage rate, a tolerance of one-quarter 
of 1 percent more or less than the actual rate, determined without 
regard to section 107(c) of this title, except in the case of an irregular ^nte, p. 170. 
mortgage lending transaction, and (ii) with respect to the finance 
charge, a corresponding numerical tolerance as generated by the 
tolerance provided under this subsection for the annual percentage 
rate; except that (B) with respect to transactions consummated after 
two years following the effective date of section 608 of the Truth in 
Lending Simplification and Reform Act, each agency shall apply (i) Supra. 
for transactions that have a scheduled amortization of ten years or 
less, with respect to the annual percentage rate, a tolerance not to 
exceed one-quarter of 1 percent more or less than the actual rate, 
determined without regard to section 107(c) of this title, but in no 
event a tolerance of less than the tolerances allowed under section 
107(c), (ii) for transactions that have a scheduled amortization of more 
than ten years, with respect to the annual percentage rate, only such 
tolerances as are allowed under section 107(c) of this title, and (iii) for 
all transactions, with respect to the finance charge, a corresponding 
numerical tolerance as generated by the tolerances provided under 
this subsection for the annual percentage rate. 
"(2) Each agency shall require such an adjustment when it deter-
mines that such disclosure error resulted from (A) a clear and 
consistent pattern or practice of 
violations, (B) gross negligence, or (C) 
a willful violation which was intended to mislead the person to whom 
the credit was extended. Notwithstanding the preceding sentence, 
except where such disclosure error resulted from a willful violation 
which was intended to mislead the person to whom credit was 
extended, an agency need not require such an adjustment if it 
determines that such disclosure error— 
94 STAT. 172 
PUBLIC LAW 96-221—MAR. 31, 1980 
"(A) resulted from an error involving the disclosure of a fee or 
charge that would otherwise be excludable in computing the 
finance charge, including but not limited to violations involving 
the disclosures described in sections 106(b), (c) and (d) of this title, 
in which event the agency may require such remedial action as it 
determines to be equitable, except that for transactions consum-
mated after two years after the effective date of section 608 of the 
^"'^'P i"^! 
Truth in Lending Simplification and Reform Act, such an adjust-
15 use 1605. 
j^gj^^ gjjg^jj tjg ordered for violations of section 106(b); 
"(B) involved a disclosed amount which was 10 per centum or 
less of the amount that should have been disclosed and (i) in cases 
where the error involved a disclosed finance charge, the annual 
percentage rate was disclosed correctly, and (ii) in cases where 
the error involved a disclosed annual percentage rate, the fi-
nance charge was disclosed correctly; in which event the agency 
may require such adjustment as it determines to be equitable; 
"(C) involved a total failure to disclose either the annual 
percentage rate or the finance charge, in which event the agency 
may require such adjustment as it determines to be equitable; or 
"(D) resulted from any other unique circumstance involving 
clearly technical and nonsubstantive disclosure violations that 
do not adversely affect information provided to the consumer and 
that have not misled or otherwise deceived the consumer. 
In the case of other such disclosure errors, each agency may require 
such an adjustment. 
"(3) Notwithstanding paragraph (2), no adjustment shall be ordered 
(A) if it would have a significantly adverse impact upon the safety or 
soundness of the creditor, but in any such case, the agency may 
require a partial adjustment in an amount which does not have such 
an impact, except that with respect to any transaction consummated 
after the effective date of section 608 of the Truth in Lending 
Ante, p. 171. 
Simplification and Reform Act, the agency shall require the full 
adjustment, but permit the creditor to make the required adjustment 
in partial payments over an extended period of time which the 
agency considers to be reasonable, (B) if the amount of the adjustment 
would be less than $1, except that if more than one year has elapsed 
since the date of the violation, the agency may require that such 
amount be paid into the Treasury of the United States, or (C) except 
where such disclosure error resulted from a willful violation which 
was intended to mislead the person to whom credit was extended, in 
the case of an open-end credit plan, more than two years after the 
violation, or in the case of any other extension of credit, as follows: 
i 
"(i) with respect to creditors that are subject to examination by 
the agencies referred to in paragraphs (1) through (3) of section 
108(a) of this title, except in connection with violations arising 
from practices identified in the current examination and only in 
connection with transactions that are consummated after the 
date of the immediately preceding examination, except that 
where practices giving rise to violations identified in earlier 
examinations have not been corrected, adjustments for those 
violations shall be required in connection with transactions 
consummated after the date of the examination in which such 
practices were first identified; 
"(ii) with respect to creditors that are not subject to examina-
tion by such agencies, except in connection with transactions 
that are consummated after May 10,1978; and 
PUBLIC LAW 96-221—MAR. 31, 1980 
94 STAT. 173 
"(iii) in no event after the later of (I) the expiration of the life of 
the credit extension, or (II) two years after the agreement to 
extend credit was consummated. 
"(4)(A) Notwithstanding any other provision of this section, an 
adjustment under this subsection may be required by an agency 
referred to in subsection (a) or (c) only by an order issued in 
accordance with cease and desist procedures provided by the provi-
sion of law referred to in such subsections. 
"(B) In the case of an agency which is not authorized to conduct 
cease and desist proceedings, such an order may be issued after an 
agency hearing on the record conducted at least thirty but not more 
than sixty days after notice of the alleged violation is served on the 
creditor. Such a hearing shall be deemed to be a hearing which is 
subject to the provisions of section 8(h) of the Federal Deposit 
Insurance Act and shall be subject to judicial review as provided 1
2 use 1818. 
therein. 
"(5) Except as otherwise specifically provided in this subsection and 
notwithstanding any provision of law referred to in subsection (a) or 
(c), no agency referred to in subsection (a) or (c) may require a creditor 
to make dollar adjustments for errors in any requirements under this 
title, except with regard to the requirements of section 165. 
Post, p. 184. 
"(6) A creditor shall not be subject to an order to make an 
adjustment, if within sixty days after discovering a disclosure error, 
whether pursuant to a final written examination report or through 
the creditor's own procedures, the creditor notifies the person con-
cerned of the error and adjusts the account so as to assure that such 
person will not be required to pay a finance charge in excess of the 
finance charge actually disclosed or the dollar equivalent of the 
annual percentage rate actually disclosed, whichever is lower. 
"(7) Notwithstanding the second sentence of subsection (e)(1), 
subsection (eX3KCXi), and subsection (eX3XCXii), each agency referred 
to in subsection (a) or (c) shall require an adjustment for an annual 
percentage rate disclosure error that exceeds a tolerance of one 
quarter of one percent less than the actual rate, determined without 
regard to section 107(c) of this title, except in the case of an irregular ^«^e, p. 170. 
mortgage lending transaction, with respect to any transaction con-
summated between January 1,1977, and the effective date of section 
608 of the Truth in Lending Simplification and Reform Act.". 
Ante, p. I7i. 
O
t
)
) This section shall take effect on the date of enactment of the ?
|
^
f
?
*
j
:
^
®
^
^
*
® 
Truth in Lending Simplification and Reform Act. 
^^t^sc 1
6
0
7 
(c) Effective one year after the date of enactment of the Truth in 
Lending Simplification and Reform Act, section 108(eXlXAXi) and ^^te, p. 168. 
section 108(eX7) of the Truth in Lending Act are amended by striking ^^ use 1607. 
out ", except in the case of an irregular mortgage lending transac- 
" ' ^' 
tion". 
EFFECT ON OTHER LAWS 
SEC. 609. Section 111(a) of the Truth in Lending Act (15 U.S.C. 
1610(a)) is amended to read as follows: 
"(a)(1) Chapters 1, 2, and 3 do not annul, alter, or affect the laws of 15 use 1601 et 
any State relating to the disclosure of information in connection with *|^i ^^^^ ^
* *^9' 
credit transactions, except to the extent that those laws are inconsist- 
^ *^^' 
ent with the provisions of this title, and then only to the extent of the 
inconsistency. Upon its own motion or upon the request of any 
creditor, State, or other interested party which is submitted in 
accordance with procedures prescribed in regulations of the Board, 
the Board shall determine whether any such inconsistency exists. 
If the Board determines that a State-required disclosure is incon-
94 STAT. 174 
PUBLIC LAW 96-221—MAR. 31, 1980 
sistent, creditors located in that State may not make disclosures 
using the inconsistent term or form, and shall incur no liability under 
the law of that State for failure to use such term or form, 
notwithstanding that such determination is subsequently amended, 
rescinded, or determined by judicial or other authority to be invalid 
for any reason. 
"(2) Upon its own motion or upon the request of any creditor. State, 
or other interested party which is submitted in accordance with 
procedures prescribed in regulations of the Board, the Board shall 
determine whether any disclosure required under the law of any 
State is substantially the same in meaning as a disclosure required 
State-required 
under this title. If the Board determines that a State-required 
disclosure. 
disclosure is substantially the same in meaning as a disclosure 
required by this title, then creditors located in that State may make 
such disclosure in compliance with such State law in lieu of the 
disclosure required by this title, except that the annual percentage 
rate and finance charge shall be disclosed as required by section 
Post, p. 175. 
122.". 
ANNUAL REPORTS 
SEC. 610. (a) Section 114 of the Truth in Lending Act (15 U.S.C. 1613) 
is amended by striking out "Not later than January 3 of each year 
after 1969," and inserting in lieu thereof "Each year". 
(b) Section 18(f)(6) of the Federal Trade Commission Act (15 U.S.C. 
57a(f)(6)) is amended by striking out "not later than March 15 of'. 
(c) Section 707 of the Equal Credit Opportunity Act (15 U.S.C. 1691f) 
is amended by striking out "Not later than February 1 of each year 
after 1976" and inserting in lieu thereof "Each year". 
GENERAL DISCLOSURE REQUIREMENTS 
SEC. 611. Sections 121 and 122 of the Truth in Lending Act (15 
U.S.C. 1631 and 1632) are amended to read as follows: 
*'§121. General requirement of disclosure 
"(a) Subject to subsection (b), a creditor or lessor shall disclose to 
the person who is obligated on a consumer lease or a consumer credit 
transaction the information required under this title. In a transac-
tion involving more than one obligor, a creditor or lessor, except in a 
15 use 1635. 
transaction under section 125, need not disclose to more than one of 
such obligors if the obligor given disclosure is a primary obligor. 
"(b) If a transaction involves one creditor as defined in section 
^"(^' P i|8. 
103(f), or one lessor as defined in section 181(3), such creditor or lessor 
15 use 1667. 
shaXX make the disclosures. If a transaction involves more than one 
creditor or lessor, only one creditor or lessor shall be required to 
make the disclosures. The Board shall by regulation specify which 
creditor or lessor shall make the disclosures. 
"(c) The Board may provide by regulation that any portion of the 
information required to be disclosed by this title may be given in the 
form of estimates where the provider of such information is not in a 
position to know exact information. 
"(d) The Board shall determine whether tolerances for numerical 
disclosures other than the annual percentage rate are necessary to 
facilitate compliance with this title, and if it determines that such 
tolerances are necessary to facilitate compliance, it shall by regula-
tion permit disclosures within such tolerances. The Board shall 
exercise its authority to permit tolerances for numerical disclosures 
other than the annual percentage rate so that such tolerances are 
PUBLIC LAW 96-221—MAR. 31, 1980 
94 STAT. 175 
narrow enough to prevent such tolerances from resulting in mislead-
ing disclosures or disclosures that circumvent the purposes of this 
title. 
"§ 122. Form of disclosure; additional information 
"(a) Information required by this title shall be disclosed clearly and 
conspicuously, in accordance with regulations of the Board. The 
terms 'annual percentage rate' and 'finance charge' shall be disclosed 
more conspicuously than other terms, data, or information provided 
in connection with a transaction, except information relating to the 
identity of the creditor. Regulations of the Board need not require 
that disclosures pursuant to this title be made in the order set forth in 
this title and, except as otherwise provided, may permit the use of 
terminology different from that employed in this title if it conveys 
substantially the same meaning. 
"(b) Any creditor or lessor may supply additional information or 
explanation with any disclosures required under chapters 4 and 5 
and, except as provided in section 128(b)(1), under this chapter.". 
RESCISSION 
"Annual 
percentage rate" 
and "finance 
charge." 
15 u s e 1666 et 
seq., 1667 et seq. 
Post, p. 179. 
SEC. 612. (a)(1) Section 125(a) of the Truth in Lending Act (15 U.S.C. 
1635(a)) is amended to read as follows: 
"(a) Except as otherwise provided in this section, in the case of any 
consumer credit transaction (including opening or increasing the 
credit limit for an open end credit plan) in which a security interest, 
including any such interest arising by operation of law, is or will be 
retained or acquired in any property which is used as the principal 
dwelling of the person to whom credit is extended, the obligor shall 
have the right to rescind the transaction until midnight of the third 
business day following the consummation of the transaction or the 
delivery of the information and rescission forms required under this 
section together with a statement containing the material disclosures 
required under this title, whichever is later, by notifying the creditor, 
in accordance with regulations of the Board, of his intention to do so. 
The creditor shall clearly and conspicuously disclose, in accordance 
with regulations of the Board, to any obligor in a transaction subject 
to this section the rights of the obligor under this section. The 
creditor shall also provide, in accordance with regulations of the 
Board, appropriate forms for the obligor to exercise his right to 
rescind any transaction subject to this section.". 
(2) Section 103 of the Truth in Lending Act (15 U.S.C. 1602), as 
amended by section 603(b), is amended by adding at the end thereof ^^^^> P-169-
the following: 
"(u) The term 'material disclosures' means the disclosure, as 
required by this title, of the annual percentage rate, the method of 
determining the finance charge and the balance upon which a 
finance charge will be imposed, the amount of the finance charge, the 
amount to be financed, the total of payments, the number and 
amount of payments, and the due dates or periods of payments 
scheduled to repay the indebtedness.". 
(3) Section 125(b) of the Truth in Lending Act (15 U.S.C. 1635(b)) is 
amended by striking out "ten days" each place it appears therein and 
inserting in lieu thereof "20 days". 
(4) Section 125(b) of the Truth in Lending Act (15 U.S.C. 1635(b)) is 
amended by adding at the end thereof the following new sentence: 
"The procedures prescribed by this subsection shall apply except 
when otherwise ordered by a court.". 
"Material 
disclosures." 
79-194 
O—81—pt. 1 
15 : QL3 
94 STAT. 176 
PUBLIC LAW 96-221—MAR. 31, 1980 
Infra. 
Ante, p. 168. 
15 u s e 1635. 
15 u s e 1640. 
"Dwelling." 
"Residential 
mortgage 
transaction." 
(5) Section 125(0) of the Truth in Lending Act (15 U.S.C. 1635(c)) is 
amended by inserting "information, forms, and" after "whom". 
(6) Section 125 of the Truth in Lending Act (15 U.S.C. 1635) is 
amended by striking out subsections (e) and (0 and inserting in Heu 
thereof the following: 
"(e)(1) This section does not apply to— 
"(A) a residential mortgage transaction as defined in section 
103(w); 
"(B) a transaction which constitutes a refinancing or consolida-
tion (with no new advances) of the principal balance then due 
and any accrued and unpaid finance charges of an existing 
extension of credit by the same creditor secured by an interest in 
the same property; 
"(C) a transaction in which an agency of a State is the creditor; 
or 
"(D) advances under a preexisting open end credit plan if a 
security interest has already been retained or acquired and such 
advances are in accordance with a previously established credit 
limit for such plan. 
"(2) The provisions of paragraph (1)(D) shall cease to be effective 3 
years after the effective date of the Truth in Lending Simplification 
and Reform Act. 
"(f) An obligor's right of rescission shall expire three years after the 
date of consummation of the transaction or upon the sale of the 
property, whichever occurs first, notwithstanding the fact that the 
information and forms required under this section or any other 
disclosures required under this chapter have not been delivered to 
the obligor, except that if (1) any agency empowered to enforce the 
provisions of this title institutes a proceeding to enforce the provi-
sions of this section within three years after the date of consumma-
tion of the transaction, (2) such agency finds a violation of section 125, 
and (3) the obligor's right to rescind is based in whole or in part on 
any matter involved in such proceeding, then the obligor's right of 
rescission shall expire three years after the date of consummation of 
the transaction or upon the earlier sale of the property, or upon the 
expiration of one year following the conclusion of the proceeding, or 
any judicial review or period for judicial review thereof, whichever is 
later. 
"(g) In any action in which it is determined that a creditor has 
violated this section, in addition to rescission the court may award 
relief under section 130 for violations of this title not relating to the 
right to rescind.". 
(b) Section 103 of the Truth in Lending Act (15 U.S.C. 1602) is 
amended by inserting after subsection (u) the following: 
"(v) The term 'dwelling' means a residential structure or mobile 
home which contains one to four family housing units, or individual 
units of condominiums or cooperatives. 
"(w) The term 'residential mortgage transaction' means a transac-
tion in which a mortgage, deed of trust, purchase money security 
interest arising under an installment sales contract, or equivalent 
consensual security interest is created or retained against the con-
sumer's dwelling to finance the acquisition or initial construction of 
such dwelling.". 
OPEN END DISCLOSURES 
SEC. 613. (a) Section 127(a) of the Truth in Lending Act (15 U.S.C. 
1637(a)) is amended— 
PUBLIC LAW 96-221—MAR. 31, 1980 
94 STAT. 177 
(1) by adding at the end of paragraph (1) the following new 
sentence: "If no such time period is provided, the creditor shall 
disclose such fact."; 
(2) by striking out paragraph (5) and redesignating paragraphs 
(6), (7), and (8) as paragraphs (5), (6), and (7), respectively; and 
(3) by amending paragraphs (5) and (6), as redesignated by 
paragraph (2), to read as follows: 
"(5) Identification of other charges which may be imposed as 
part of the plan, and their method of computation, in accordance 
with regulations of the Board. 
"(6) In cases where the credit is or will be secured, a statement 
that a security interest has been or will be taken in (A) the 
property purchased as part of the credit transaction, or (B) 
property not purchased as part of the credit transaction identi-
fied by item or type.". 
(b) Section 127(b)(2) of the Truth in Lending Act (15 U.S.C. 
1637(b)(2)) is amended to read as follows: 
"(2) The amount and date of each extension of credit during the 
period, and a brief identification, on or accompan3dng the state-
ment of each extension of credit in a form prescribed by the 
Board sufficient to enable the obligor either to identify the 
transaction or to relate it to copies of sales vouchers or similar 
instruments previously furnished, except that a creditor's failure 
to disclose such information in accordance with this paragraph 
shall not be deemed a failure to comply with this chapter or this 
title if (A) the creditor maintains procedures reasonably adapted 
to procure and provide such information, and (B) the creditor 
responds to and treats any inquiry for clarification or documen-
tation as a billing error and an erroneously billed amount under 
section 161. In lieu of complying with the requirements of the 15 use 1666. 
previous sentence, in the case of any transaction in which the 
creditor and seller are the same person, as defined by the Board, 
and such person's open end credit plan has fewer than 15,000 
accounts, the creditor may elect to provide only the amount and 
date of each extension of credit during the period and the seller's 
name and location where the transaction took place if (A) a brief 
identification of the transaction has been previously furnished, 
and (B) the creditor responds to and treats any inquiry for 
clarification or documentation as a billing error and an errone-
ously billed amount under section 161.". 
15 USC 1666. 
(c) Section 127(b) of the Truth in Lending Act (15 U.S.C. 1637) is 
amended by striking out paragraph (7) and by redesignating para-
graphs (8), (9), (10), and (11) as paragraphs (7), (8), (9), and (10), 
respectively. 
(d) Section 127(a)(7) of the Truth in Lending Act (15 U.S.C. 1637(a)), 
as redesignated by subsection (a)(2), is amended by striking out "each 
of two billing cycles per year, at semiannual intervals" and inserting 
in lieu thereof "one billing cycle per calendar year, at intervals of not 
less than six months or more than eighteen months". 
(e) Section 127(c) of the Truth in Lending Act (15 U.S.C. 1637(c)) is Repeal, 
hereby repealed. 
(f) Section 143 of the Truth in Lending Act (15 U.S.C. 1663) is Post, p. 183. 
amended by striking out "or the appropriate rate determined under 
section 127(a)(5)". 
^nte, p. 176. 
(g) Section 161(a) of the Truth in Lending Act (15 U.S.C. 1666(a)) 
is amended by redesignating the references to sections 127(b)(ll) 
and 127(a)(8) as references to sections 127(b)(10) and 127(aX7), 
respectively. 
94 STAT. 178 
PUBLIC LAW 96-221—MAR. 31, 1980 
"Amount 
financed." 
Computation 
method. 
15 u s e 1605. 
"Itemization of 
the amount 
financed." 
Ante, p. 174. 
OTHER THAN OPEN END DISCLOSURES 
SEC. 614. (a) Section 128(a) of the Truth in Lending Act (15 U.S.C. 
1638(a)) is amended to read as follows: 
"(a) For each consumer credit transaction other than under an 
open end credit plan, the creditor shall disclose each of the following 
items, to the extent applicable: 
"(1) The identity of the creditor required to make disclosure. 
"(2)(A) The 'amount financed', using that term, which shall be 
the amount of credit of which the consumer has actual use. This 
amount shall be computed as follows, but the computations need 
not be disclosed and shall not be disclosed with the disclosures 
conspicuously segregated in accordance with subsection (bXD: 
"(i) take the principal amount of the loan or the cash price 
less downpayment and trade-in; 
"(ii) add any charges which are not part of the finance 
charge or of the principal amount of the lo£in and which are 
financed by the consumer, including the cost of any items 
excluded from the finance charge pursuant to section 106; 
and 
"(iii) subtract any charges which are part of the finance 
charge but which will be paid by the consumer before or at 
the time of the consummation of the transaction, or have 
been withheld from the proceeds of the credit. 
"(B) In conjunction with the disclosure of the amount financed, 
a creditor shall provide a statement of the consumer's right to 
obtain, upon a written request, a written itemization of the 
amount financed. The statement shall include spaces for a 'yes* 
and 'no' indication to be initialed by the consumer to indicate 
whether the consumer wants a written itemization of the 
amount financed. Upon receiving an affirmative indication, the 
creditor shall provide, at the time other disclosures are required 
to be furnished, a written itemization of the amount financed. 
For the purposes of this subparagraph, 'itemization of the 
amount financed' means a disclosure of the following items, to 
the extent applicable: 
"(i) the amount that is or will be paid directly to the 
consumer; 
"(ii) the amount that is or will be credited to the con-
sumer's account to discharge obligations owed to the creditor; 
"(iii) each amount that is or will be paid to third persons by 
the creditor on the consumer's behalf, together with an 
identification of or reference to the third person; and 
"(iv) the total amount of any charges described in the 
preceding subparagraph (A)(iii). 
"(3) The 'finance charge', not itemized, using that term. 
"(4) The finance charge expressed as an 'annual percentage 
rate', using that term. This shall not be required if the amount 
financed does not exceed $75 and the finance charge does not 
exceed $5, or if the amount financed exceeds $75 and the finance 
charge does not exceed $7.50. 
"(5) The sum of the amount financed and the finance charge, 
which shall be termed the 'total of payments'. 
"(6) The number, amount, and due dates or period of pajnnents 
scheduled to repay the total of payments. 
"(7) In a sale of property or services in which the seller is the 
creditor required to disclose pursuant to section 121(b), the 'total 
sale price', using that term, which shall be the total of the cash 
PUBLIC LAW 96-221—MAR. 31, 1980 
94 STAT. 179 
Secured credit 
statement. 
price of the property or services, additional charges, and the 
finance charge. 
"(8) Descriptive explanations of the terms 'amount financed', 
'finance charge', 'annual percentage rate', 'total of payments', 
and 'total sale price' as specified by the Board. The descriptive 
explanation of 'total sale price' shall include reference to the 
amount of the downpayment. 
"(9) Where the credit is secured, a statement that a security 
interest has been taken in (A) the property which is purchased as 
part of the credit transaction, or (B) property not purchased as 
part of the credit transaction identified by item or type. 
"(10) Any dollar charge or percentage amount which may be 
imposed by a creditor solely on account of a late payment, other 
than a deferral or extension charge. 
"(11) A statement indicating whether or not the consumer is 
entitled to a rebate of any finance charge upon refinancing or 
prepayment in full pursuant to acceleration or otherwise, if the 
obligation involves a precomputed finance charge. A statement 
indicating whether or not a penalty will be imposed in those 
same circumstances if the obligation involves a finance charge 
computed from time to time by application of a rate to the unpaid 
principal balance. 
"(12) A statement that the consumer should refer to the 
appropriate contract document for any information such docu-
ment provides about nonpayment, default, the right to accelerate 
the maturity of the debt, and prepayment rebates and penalties. 
"(13) In any residential mortgage transaction, a statement 
indicating whether a subsequent purchaser or assignee of the 
consumer may assume the debt obligation on its original terms 
and conditions.". 
(b) Section 128(b) of the Truth in Lending Act (15 U.S.C. 1638(b)) is 
amended to read as follows: 
"03)(1) Except as otherwise provided in this chapter, the disclosures 
required under subsection (a) shall be made before the credit is 
extended. Except for the disclosures required by subsection (a)(1) of 
this section, all disclosures required under subsection (a) and any 
disclosure provided for in subsection (h), (c), or (d) of section 106 shall 
be conspicuously segregated from all other terms, data, or informa-
tion provided in connection with a transaction, including any compu-
tations or itemization. 
"(2) In the case of a residential mortgage transaction, as defined in 
section 103(w), which is also subject to the Real Estate Settlement 
Procedures Act, good faith estimates of the disclosures required 
under subsection (a) shall be made in accordance with regulations of 
the Board under section 121(c) before the credit is extended, or shall 
be delivered or placed in the mail not later than three business days 
after the creditor receives the consumer's written application, which-
ever is earlier. If the disclosure statement furnished within three 
days of the written application contains an annual percentage rate 
which is subsequently rendered inaccurate within the meaning of 
section 107(c), the creditor shall furnish another statement at the ^"^^' P I
'
^
'
O 
time of settlement or consummation.". 
(c) Section 128(c) of the Truth in Lending Act (15 U.S.C. 1638(c)) is 
amended— 
(1) by inserting "(1)" after "(c)"; 
(2) by striking out "deferred payment price" and inserting in 
lieu thereof "total sale price"; and 
(3) by adding at the end thereof the following new paragraph: 
15 use 1605. 
Ante, p. 176. 
12 use 2601 
note. 
Ante, p. 174. 
94 STAT. 180 
PUBLIC LAW 96-221—MAR. 31, 1980 
Repeal. 
Repeal. 
"(2) If a creditor receives a request for a loan by mail or telephone 
without personal solicitation and the terms of financing, including 
the annual percentage rate for representative amounts of credit, are 
set forth in the creditor's printed material distributed to the public, 
or in the contract of loan or other printed material delivered to the 
obligor, then the disclosures required under subsection (a) may be 
made at any time not later than the date the first payment is due.". 
(d)(1) Section 129 of the Truth in Lending Act (15 U.S.C. 1639) is 
hereby repealed. 
(2) The table of sections at the beginning of chapter 2 of the Truth 
in Lending Act is amended by striking out the item relating to section 
129 and inserting in lieu thereof the following: 
"129. [Repealed].". 
(e)(1) Section 126 of the Truth in Lending Act (15 U.S.C. 1636) is 
hereby repealed. 
(2) The table of sections at the beginning of chapter 2 of the Truth 
in Lending Act is amended by striking out the item relating to section 
126 and inserting in lieu thereof the following: 
"126. [Repealed].". 
(f)(1) The table of sections at the beginning of chapter 2 of the Truth 
in Lending Act is amended by striking out the item relating to section 
128 and inserting in lieu thereof the following: 
"128. Consumer credit not under open end credit plans.". 
(2) The section heading for section 128 of the Truth in Lending Act 
(15 U.S.C. 1638) is amended by striking out "SALES" and inserting in 
lieu thereof "CONSUMER CREDIT". 
15 u s e 1635. 
15 u s e 1607, 
1611. 
15 u s e 1631 et 
seq., 1667 et seq. 
Ante, p. 171. 
15 u s e 1635. 
CIVIL LIABILITY 
SEC. 615. (a) Section 130 of the Truth in Lending Act (15 U.S.C. 1640) 
is amended— 
(1) in subsection (a)(2)(B), by striking out "in such action" and 
inserting in lieu thereof "under this subparagraph in any class 
action or series of class actions arising out of the same failure to 
comply by the same creditor"; 
(2) in subsection (a)(3), by inserting "or in any action in which a 
person is determined to have a right of rescission under section 
125" after "liability"; 
(3) by amending subsections (b), (c), and (d) to read as follows: 
"(b) A creditor or assignee has no liability under this section or 
section 108 or section 112 for any failure to comply with any 
requirement imposed under this chapter or chapter 5, if within sixty 
days after discovering an error, whether pursuant to a final written 
examination report or notice issued under section 108(e)(1) or through 
the creditor's or assignee's own procedures, and prior to the institu-
tion of an action under this section or the receipt of written notice of 
the error from the obligor, the creditor or assignee notifies the person 
concerned of the error and makes whatever adjustments in the 
appropriate account are necessary to assure that the person will not 
be required to pay an amount in excess of the charge actually 
disclosed, or the dollar equivalent of the annual percentage rate 
actually disclosed, whichever is lower. 
"(c) A creditor or assignee may not be held liable in any action 
brought under this section or section 125 for a violation of this title if 
the creditor or assignee shows by a preponderance of evidence that 
the violation was not intentional and resulted from a bona fide error 
notwithstanding the maintenance of procedures reasonably adapted 
PUBLIC LAW 96-221—MAR. 31, 1980 
94 STAT. 181 
to avoid any such error. Examples of a bona fide error include, but are 
not limited to, clerical, calculation, computer malfunction and pro-
graming, and printing errors, except that an error of legal judgment 
with respect to a person's obligations under this title is not a bona fide 
error. 
"(d) When there are multiple obligors in a consumer credit transac-
tion or consumer lease, there shall be no more than one recovery of 
damages under subsection (a)(2) for a violation of this title."; 
(4) in subsection (e), by adding at the end thereof the following 
new sentence: "This subsection does not bar a person from 
asserting a violation of this title in an action to collect the debt 
which was brought more than one year from the date of the 
occurrence of the violation as a matter of defense by recoupment 
or set-off in such action, except as otherwise provided by State 
law."; 
(5) in subsection (f), by inserting ", section 108(b), section 108(c), 15 use 1607. 
section 108(e)," after "this section"; 
Ante, p. 171. 
(6) in subsection (g), by adding at the end thereof the following 
new sentence: "This subsection does not bar any remedy permit-
ted by section 125."; and 
15 USC 1635. 
(7) by amending subsection (h) to read as follows: 
"(h) A person may not take any action to offset any amount for 
which a creditor or assignee is potentially liable to such person under 
subsection (a)(2) against any amount owed by such person, unless the 
amount of the creditor's or assignee's liability under this title has 
been determined by judgment of a court of competent jurisdiction in 
an action of which such person was a party. This subsection does not 
bar a consumer then in default on the obligation from asserting a 
violation of this title as an original action, or as a defense or 
counterclaim to an action to collect amounts owed by the consumer 
brought by a person liable under this title.". 
(b) Section 130(a) of the Truth in Lending Act (15 U.S.C. 1640(a)) is 
amended— 
(1) by inserting ", including any requirement under section 
125," immediately after "this chapter"; and 
(2) by adding at the end thereof the following: "In connection 
with the disclosures referred to in section 127, a creditor shall 15 USC 1637. 
have a liability determined under paragraph (2) only for failing 
to comply with the requirements of section 125, section 127(a), or ^"*^' P i'^^ 
of paragraph (4), (5), (6), (7), (8), (9), or (10) of section 127(b) or for Ante, p. 177. 
failing to comply with disclosure requirements under State law 
for any term or item which the Board has determined to be 
substantially the same in meaning under section 111(a)(2) as any Ante, p. 173. 
of the terms or items referred to in section 127(a) or any of those 
paragraphs of section 127(b). In connection with the disclosures 
referred to in section 128, a creditor shall have a liability 15 USC 1638. 
determined under paragraph (2) only for failing to comply with 
the requirements of section 125 or of paragraph (2) (insofar as it 
requires a disclosure of the 'amount financed'), (3), (4), (5), (6), or 
(9) of section 128(a), or for failing to comply with disclosure Ante, p. 178. 
requirements under State law for any term which the Board has 
determined to be substantially the same in meaning under 
section 111(a)(2) as any of the terms referred to in any of those 
paragraphs of section 128(a). With respect to any failure to make 
disclosures required under this chapter or chapter 4 or 5 of this 
title, liability shall be imposed only upon the creditor required to 
15 USC 1631 et 
make disclosure, except as provided in section 131.". 
*g^-^ ^^^^ ^* *^9' 
Post, p. 182. 
94 STAT. 182 
PUBLIC LAW 96-221—MAR. 31, 1980 
LIABILITY OF ASSIGNEES 
SEC. 616. (a) Section 131 of the Truth in Lending Act (15 U.S.C. 1641) 
is amended to read as follows: 
"§ 13L Liability of assignees 
"(a) Except as otherwise specifically provided in this title, any civil 
15 use 1607. 
action for a violation of this title or proceeding under section 108 
which may be brought against a creditor may be maintained against 
any assignee of such creditor only if the violation for which such 
action or proceeding is brought is apparent on the face of the 
disclosure statement, except where the assignment was involuntary. 
For the purpose of this section, a violation apparent on the face of the 
disclosure statement includes, but is not limited to (1) a disclosure 
which can be determined to be incomplete or inaccurate from the face 
of the disclosure statement or other documents assigned, or (2) a 
disclosure which does not use the terms required to be used by this 
title. 
Ante, p. 176. 
"(b) Except as provided in section 125(c), in any action or proceed-
ing by or against any subsequent assignee of the original creditor 
without knowledge to the contrary by the assignee when he acquires 
the obligation, written acknowledgement of receipt by a person to 
whom a statement is required to be given pursuant to this title shall 
be conclusive proof of the delivery thereof and, except as provided in 
subsection (a), of compliance with this chapter. This section does not 
affect the rights of the obligor in any action against the original 
creditor. 
"(c) Any consumer who has the right to rescind a transaction under 
15 use 1635. 
section 125 may rescind the transaction as against any assignee of the 
obligation.". 
Repeal. 
(b) Section 115 of the Truth in Lending Act (15 U.S.C. 1614) is 
hereby repealed. 
(c)(1) The table of sections at the beginning of chapter 1 of the Truth 
in Lending Act is amended by striking out the item relating to section 
115 and inserting in lieu thereof the following: 
"115. [Repealed].". 
(2) The table of sections at the beginning of chapter 2 of the Truth 
in Lending Act is amended by striking out the item relating to section 
131 and inserting in lieu thereof the following: 
"131. Liability of assignees.". 
LIABILITY OF CREDIT CARDHOLDER 
SEC. 617. Section 133(a) of the Truth in Lending Act (15 U.S.C. 
1643(a)) is amended to read as follows: 
"(a)(1) A cardholder shall be liable for the unauthorized use of a 
credit card only i
f
— 
"(A) the card is an accepted credit card; 
"(B) the liability is not in excess of $50; 
"(C) the card issuer gives adequate notice to the cardholder of 
the potential liability; 
"(D) the card issuer has provided the cardholder with a 
description of a means by which the card issuer may be notified 
of loss or theft of the card, which description may be provided on 
the face or reverse side of the statement required by section 
127(b) or on a separate notice accompanying such statement; 
"(E) the unauthorized use occurs before the card issuer has 
been notified that an unauthorized use of the credit card has 
PUBLIC LAW 96-221—MAR. 31, 1980 
94 STAT. 183 
occurred or may occur as the result of loss, theft, or otherwise; 
and 
"(F) the card issuer has provided a method whereby the user of 
such card can be identified as the person authorized to use it. 
"(2) For purposes of this section, a card issuer has been notified 
when such steps as may be reasonably required in the ordinary 
course of business to provide the card issuer with the pertinent 
information have been taken, whether or not any particular officer, 
employee, or agent of the card issuer does in fact receive such 
information.". 
DISSEMINATION OF ANNUAL PERCENTAGE RATES 
SEC. 618. (a) Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 
et seq.) is amended by adding at the end thereof the following new 
section: 
"§ 136. Dissemination of annual percentage rates 
15 use 1646. 
"(a) The Board shall collect, publish, and disseminate to the public, 
on a demonstration basis in a number of standard metropolitan 
statistical areas to be determined by the Board, the annual percent-
age rates charged for representative types of nonsale credit by 
creditors in such areas. For the purpose of this section, the Board is 
authorized to require creditors in such areas to furnish information 
necessary for the Board to collect, publish, and disseminate such 
information. 
"(b) The Board is authorized to enter into contracts or other 
arrangements with appropriate persons, organizations, or State agen-
cies to carry out its functions under subsection (a) and to furnish 
financial assistance in support thereof.". 
(b) The table of sections contained at the beginning of such chapter 
is amended by adding at the end thereof the following new item: 
"136. Dissemination of annual percentage rates.". 
CREDIT ADVERTISING 
SEC. 619. (a) Section 143 of the Truth in Lending Act (15 U.S.C. 1662) 
is amended to read as follows: 
"§ 143. Advertising of open end credit plans 
15 use 1663. 
"No advertisement to aid, promote, or assist directly or indirectly 
the extension of consumer credit under an open end credit plan may 
set forth any of the specific terms of that plan unless it also clearly 
and conspicuously sets forth all of the following items: 
"(1) Any minimum or fixed amount which could be imposed. 
"(2) In any case in which periodic rates may be used to compute 
the finance charge, the periodic rates expressed as annual 
percentage rates. 
"(3) Any other term that the Board may by regulation require 
to be disclosed.", 
(b) Section 144(d) of the Truth in Lending Act (15 U.S.C. 1664) is 
amended by striking out paragraphs (1) through (4) thereof, and 
inserting in lieu thereof the following: 
"(1) The downpayment, if any. 
"(2) The terms of repayment. 
"(3) The rate of the finance charge expressed as an annual 
percentage rate.". 
94 STAT. 184 
PUBLIC LAW 96-221—MAR. 31, 1980 
CORRECTION OF BILUNG ERRORS 
SEC. 620. (a) Section 161(b) of the Truth in Lending Act (15 U.S.C. 
16660t))) is amended— 
(1) by redesignating paragraph (6) as paragraph (7); and 
(2) by inserting after paragraph (5) the following: 
"(6) Failure to transmit the statement required under section 
127(b) of this Act to the last address of the obligor which has been 
disclosed to the creditor, unless that address was furnished less 
than twenty days before the end of the billing cycle for which the 
statement is required.". 
O
b
) Section 161(c) of the Truth in Lending Act (15 U.S.C. 1666(c)) is 
amended by inserting ", which may include finance charges on 
amounts in dispute," after "of statements of account". 
CREDIT BALANCES 
SEC. 621. (a) Section 165 of the Truth in Lending Act (15 U.S.C. 
1666d) is amended to read as follows: 
"§ 165. Treatment of credit balances 
"Whenever a credit balance in excess of $1 is created in connection 
with a consumer credit transaction through (1) transmittal of funds 
to a creditor in excess of the total balance due on an account, (2) 
rebates of unearned finance charges or insurance premiums, or (3) 
amounts otherwise owed to or held for the benefit of an obligor, the 
creditor shall— 
"(A) credit the amount of the credit balance to the consumer's 
account; 
"(B) refund any part of the amount of the remaining credit 
balance, upon request of the consumer; and 
"(C) make a good faith effort to refund to the consumer by cash, 
check, or money order any part of the amount of the credit 
balance remaining in the account for more than six months, 
except that no further action is required in any case in which the 
consumer's current location is not known by the creditor and 
cannot be traced through the consumer's last known address or 
telephone number.". 
(b) The table of sections at the beginning of chapter 4 of the Truth 
in Lending Act is amended by striking out the item relating to section 
165 and inserting in lieu thereof the following: 
"165. Treatment of credit balances.". 
GOVERNMENT EXEMPTION 
SEC. 622. (a) Section 113 of the Truth in Lending Act (15 U.S.C. 1612) 
is amended to read as follows: 
"§113. Effect on governmental agencies 
"(a) Any department or agency of the United States which adminis-
ters a credit program in which it extends, insures, or guarantees 
consumer credit and in which it provides instruments to a cieditor 
which contain any disclosures required by this title shall, prior to the 
issuance or continued use of such instruments, consult with the 
Board to assure that such instruments comply with this title. 
"(b) No civil or criminal penalty provided under this title for any 
violation thereof may be imposed upon the United States or any 
PUBLIC LAW 96-221—MAR. 31, 1980 
94 STAT. 185 
department or agency thereof, or upon any State or political subdivi-
sion thereof, or any agency of any State or political subdivision. 
"(c) A creditor participating in a credit program administered, 
insured, or guaranteed by any department or agency of the United 
States shall not be held liable for a civil or criminal penalty under 
this title in any case in which the violation results from the use of an 
instrument required by any such department or agency. 
"(d) A creditor participating in a credit program administered, 
insured, or guaranteed by any department or agency of the United 
States shall not be held liable for a civil or criminal penalty under the 
laws of any State (other than laws determined under section 111 to be 15 use 1610. 
inconsistent with this title) for £iny technical or procedural failure, 
such as a failure to use a specific form, to make information available 
at a specific place on an instrument, or to use a specific typeface, as 
required by State law, which is caused by the use of an instrument 
required to be used by such department or agency.". 
(b) The table of sections at the beginning of chapter 1 of the Truth 
in Lending Act is amended by striking out the item relating to section 
113 and inserting in lieu thereof the following: 
"113. Effect on governmental agencies.". 
ORAL DISCLOSURES 
SEC. 623. (a) Section 146 of the Truth in Lending Act (15 U.S.C. 
1665a) is amended to read as follows: 
"§ 146. Use of annual percentage rate in oral disclosures 
"In responding orally to any inquiry about the cost of credit, a 
creditor, regardless of the method used to compute finance charges, 
shall state rates only in terms of the annual percentage rate, except 
that in the case of an open end credit plan, the periodic rate also 
may be stated and, in the case of an other than open end credit plan 
where a major component of the finance charge consists of interest 
computed at a simple annual rate, the simple annual rate also may 
be stated. The Board may, by regulation, modify the requirements of 
this section or provide an exception from this section for a transac-
tion or class of transactions for which the creditor cannot determine 
in advance the applicable annual percentage rate.". 
(b) The table of sections at the beginning of chapter 3 of the Truth 
in Lending Act is amended by striking out the item relating to section 
146 and inserting in lieu thereof the following: 
"146. Use of annual percentage rate in oral disclosures.". 
CONSUMER LEASING 
SEC. 624. Section 185(b) of the Truth in Lending Act (15 U.S.C. 
1667d(b)) is amended by striking out "sections 115,130, and 131" and 
inserting in lieu thereof "sections 130 and 131". 
15 use 1640; 
Ante, p. 182. 
EFFECTIVE DATE 
SEC. 625. (a) Except as provided in section 608(b), the amendments 15 use 1
6
0
2 
made by this title shall take effect upon the expiration of two years ^P^-
after the date of enactment of this title. 
^"^^' ^ ^^^ 
(b) All regulations, forms, and clauses required to be prescribed 
under the amendments made by this title shall be promulgated at 
least one year prior to such effective date. 
94 STAT. 186 
PUBLIC LAW 96-221—MAR. 31, 1980 
(c) Notwithstanding subsections (a) and (b), any creditor may 
comply with the amendments made by this title, in accordance with 
the regulations, forms, and clauses prescribed by the Board, prior to 
such effective date. 
TITLE VII—AMENDMENTS TO THE NATIONAL BANKING 
LAWS 
PART A—NATIONAL BANKING LAWS 
POWER 
TO 
HOLD 
REAL 
PROPERTY 
OR 
INTERESTS 
IN 
REAL 
PROPERTY 
SEC. 701. (a) Section 5137 of the Revised Statutes (12 U.S.C. 29) is 
amended— 
(1) by inserting before the period at the end of the last 
paragraph thereof the following: "except as otherwise provided 
in this section"; and 
(2) by adding at the end thereof the following new paragraph: 
"For real estate in the possession of a national banking association 
upon application by the association, the Comptroller of the Currency 
may approve the possession of any such real estate by such associ-
ation for a period longer than five years, but not to exceed an 
additional five years, if (1) the association has made a good faith 
attempt to dispose of the real estate within the five-year period, or (2) 
disposal within the five-year period would be detrimental to the 
association. Upon notification by the association to the Comptroller 
of the Currency that such conditions exist that require the expendi-
ture of funds for the development and improvement of such real 
estate, and subject to such conditions and limitations as the Comp-
troller of the Currency shall prescribe, the association may expend 
such funds as are needed to enable such association to recover its 
total investment.". 
(b) Section 4(a) of the Bank Holding Company Act of 1956 (12 U.S.C. 
1843(a)) is amended by adding at the end thereof the following: 
"Notwithstanding any other provision of this Act, the period ending 
December 31, 1980, referred to in paragraph (2) above, may be 
extended by the Board of Governors to December 31, 1982, but only 
for the divestiture by a bank holding company of real estate or 
interests in real estate lawfully acquired for investment or develop-
ment. In making its decision whether to grant such extension, the 
Board shall consider whether the company has made a good faith 
effort to divest such interests and whether such extension is neces-
sary to avert substantial loss to the company.". 
DIVIDENDS ON PREFERRED STOCK 
SEC. 702. The first sentence of subsection (a) of section 302 of the 
Act entitled "An Act to provide relief in the existing national 
emergency in banking, and for other purposes", approved March 9, 
1933 (12 U.S.C. 51b), is amended by striking out "at a rate not 
exceeding 6 per centum per annum". 
CONSIDERATION OF PREFERRED STOCK IN DETERMINING IMPAIRMENT OF 
CAPITAL 
SEC. 703. The third sentence of section 345 of the Banking Act of 
1935 (12 U.S.C. 51b-l) is amended by striking out "at a rate not 
exceeding six per centum per annum". 
PUBLIC LAW 96-221—MAR. 31, 1980 
94 STAT. 187 
Notice of intent. 
Judicial review. 
REVOCATION OF TRUST POWERS 
SEC. 704. The first section of the Act of September 28,1962 (76 Stat. 
668; 12 U.S.C. 92a), is amended by adding at the end thereof the 
following new subsection: 
"(k)(l) In addition to the authority conferred by other law, if, in the 
opinion of the Comptroller of the Currency, a national banking 
association is unlawfully or unsoundly exercising, or has unlawfully 
or unsoundly exercised, or has failed for a period of five consecutive 
years to exercise, the powers granted by this section or otherwise fails 
or has failed to comply with the requirements of this section, the 
Comptroller may issue and serve upon the association a notice of 
intent to revoke the authority of the association to exercise the 
powers granted by this section. The notice shall contain a statement Hearing, 
of the facts constituting the alleged unlawful or unsound exercise of 
powers, or failure to exercise powers, or failure to comply, and shall 
fix a time and place at which a hearing will be held to determine 
whether an order revoking authority to exercise such powers should 
issue against the association. 
"(2) Such hearing shall be conducted in accordance with the 
provisions of subsection (h) of section 8 of the Federal Deposit 
Insurance Act (12 U.S.C. 1818(h)), and subject to judicial review as 
provided in such section, and shall be fixed for a date not earlier than 
thirty days nor later than sixty days after service of such notice 
unless an earlier or later date is set by the Comptroller at the request 
of any association so served. 
"(3) Unless the association so served shall appear at the hearing 
by a duly authorized representative, it shall be deemed to have 
consented to the issuance of the revocation order. In the event of such 
consent, or if upon the record made at any such hearing, the 
Comptroller shall find that any allegation specified in the notice of 
charges has been established, the Comptroller may issue and serve 
upon the association an order prohibiting it from accepting any new 
or additional trust accounts and revoking authority to exercise any 
and all powers granted by this section, except that such order shall 
permit the association to continue to service all previously accepted 
trust accounts pending their expeditious divestiture or termination. 
"(4) A revocation order shall become effective not earlier than the 
expiration of thirty days after service of such order upon the 
association so served (except in the case of a revocation order issued 
upon consent, which shall become effective at the time specified 
therein), and shall remain effective and enforceable, except to such 
extent as it is stayed, modified, terminated, or set aside by action of 
the Comptroller or a reviewing court.". 
Revocation 
orders, effective 
date. 
EMERGENCY UMITATIONS AND RESTRICTIONS ON BUSINESS OF MEMBER 
BANKS 
SEC. 705. Section 4 of the Act of March 9,1933 (48 Stat. 2; 12 U.S.C. 
95), is amended— 
(1) by inserting "(a)" after "SEC 4."; and 
(2) by adding at the end thereof the following: 
"(bXD In the event of natural calamity, riot, insurrection, war, or 
other emergency conditions occurring in any State whether caused 
by acts of nature or of man, the Comptroller of the Currency may 
designate by proclamation any day a legal holiday for the national 
banking associations located in that State. In the event that the 
emergency conditions affect only part of a State, the Comptroller of 
Legal holidays, 
designation. 
94 STAT. 188 
PUBLIC LAW 96-221—MAR. 31, 1980 
the Currency may designate the part so affected and may proclaim a 
legal holiday for the national banking associations located in that 
affected part. In the event that a State or a State official authorized 
by law designates any day as a legal holiday for either emergency or 
ceremonial reasons for all banks chartered by that State to do 
business within that State, that same day shall be a legal holiday for 
all national banking associations chartered to do business within that 
State unless the Comptroller of the Currency shall by written order 
permit all national banking associations located in that State to 
remain open. 
"State." 
"(2) For the purpose of this subsection, the term 'State' means any 
of the several States, the District of Columbia, the Commonwealth of 
Puerto Rico, the Northern Mariana Islands, Guam, the Virgin 
Islands, American Samoa, the Trust Territory of the Pacific Islands, 
or any other territory or possession of the United States.". 
PROCEDURE FOR CONVERSION, MERGER, OR CONSOLIDATION 
SEC. 706. The second sentence of subsection (b) of section 2 of the 
Act of August 17,1950 (64 Stat. 456; 12 U.S.C. 214a(b)), is amended by 
striking out "unanimous" and inserting in lieu thereof "majority". 
DELEGATION OF AUTHORITY 
SEC. 707. (a) Chapter 9 of title VII of the Revised Statutes (12 U.S.C. 
1 et seq.) is amended by inserting after section 327 the following new 
section: 
12 use 4a. 
"SEC. 327 
A. The Comptroller of the Currency may delegate to any 
duly authorized employee, representative, or agent any power vested 
in the office by law.". 
(b) The table of contents contained at the beginning of chapter 9 of 
title VII of the Revised Statutes is amended by inserting after the 
item relating to section 327 the following new item: 
"327A. Delegation of authority.". 
AUTHORITY TO PRESCRIBE REGULATIONS 
SEC. 708. Chapter 4 of title LXII of the Revised Statutes (12 U.S.C. 
21 et seq.) is amended by inserting immediately following section 5239 
a new section 5239A to read as follows: 
12 use 93a. 
"SEC. 5239A. Except to the extent that authority to issue such rules 
and regulations has been expressly and exclusively granted to 
another regulatory agency, the Comptroller of the Currency is 
authorized to prescribe rules and regulations to carry out the respon-
sibilities of the office, except that the authority conferred by this 
12 use 36. 
section does not apply to section 5155 of the Revised Statutes or to 
securities activities of National Banks under the Act commonly 
known as the 'Glass-Steagall Act'.". 
EXAMINATION OF NATIONAL BANKING ASSOCIATIONS 
SEC. 709. (a) Section 5240 of the Revised Statutes (12 U.S.C. 481) is 
amended by striking out the first two sentences and inserting in lieu 
thereof the following: "The Comptroller of the Currency, with the 
approval of the Secretary of the Treasury, shall appoint examiners 
who shall examine every national bank as often as the Comptroller of 
the Currency shall deem necessary.". 
Foreign 
(b) Section 5240 of the Revised Statutes (12 U.S.C. 481) is amended 
operations. 
^^ adding at the end thereof the following new sentence: "The 
PUBLIC LAW 96-221—MAR. 31, 1980 
94 STAT. 189 
Comptroller of the Currency, upon the request of the Board of 
Governors of the Federal Reserve System, is authorized to assign 
examiners appointed under this section to examine foreign oper-
ations of State banks which are members of the Federal Reserve 
System.". 
OWNERSHIP INTEREST OF DIRECTORS OF NATIONAL BANKS 
SEC. 710. The second sentence of section 5146 of the Revised 
Statutes (12 U.S.C. 72) is amended by striking out the second sentence 
and inserting in lieu thereof the following: "Every director must own 
in his or her own right either shares of the capital stock of the 
association of which he or she is a director the aggregate par value of 
which is not less than $1,000, or an equivalent interest, as determined 
by the Comptroller of the Currency, in any company which has 
control over such association within the meaning of section 2 of the 
Bank Holding Company Act of 1956 (12 U.S.C. 1841). If the capital of 
the bank does not exceed $25,000, every director must own in his or 
her own right either shares of such capital stock the aggregate par 
value of which is not less than $500, or an equivalent interest, as 
determined by the Comptroller of the Currency, in any company 
which has control over such association within the meaning of section 
2 of the Bank Holding Company Act of 1956 (12 U.S.C. 1841).". 
PURCHASE OF STOCK IN BANKERS' BANKS 
SEC. 711. The paragraph numbered "Seventh" of section 5136 of the 
Revised Statutes (12 U.S.C. 24(7)) is amended by inserting before the 
period at the end 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 if the stock of 
such bank is owned exclusively by other banks (except to the extent 
State law requires directors qualifying shares) and if such bank is 
engaged exclusively in providing banking services for other banks 
and their officers, directors, or employees, but in no event shall the 
total amount of such stock held by the association 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 the 
association's acquiring more than 5 per centum of any class of voting 
securities of such bank". 
INTERSTATE TRUST OPERATIONS 
SEC. 712. (a) Section 5169 of the Revised Statutes (12 U.S.C. 27) is 
amended by adding at the end thereof the following: "Notwithstand-
ing the provisions of the preceding sentence, a national banking 
association the operations of which are limited as provided in the 
preceding sentence shall be deemed an additional bank within the 
contemplation of section 3 of the Bank Holding Company Act of 
1956.". 
12 use 1842. 
(b) Section 3(d) of the Bank Holding Company Act of 1956 (12 U.S.C. 
1842(d)) is amended by inserting "(1)" after "(d)" and by adding at the 
end thereof the following: 
"(2)(A) Except as provided in subparagraph (B), the restrictions 
contained in paragraph (1) regarding the acquisition of shares or 
assets of, or interests in, an additional bank shall apply to the 
acquisition of shares or assets of, or interests in, a trust company. 
94 STAT. 190 
PUBLIC LAW 96-221—MAR. 31, 1980 
"Trust 
company.' 
Termination 
date. 
"(B) Subparagraph (A) shall not apply with respect to the acquisi-
tion of shares or assets of, or interests in, a trust company if such 
acquisition was approved by the Board on or before March 5, 1980, 
and if such trust company opened for business and was operating on 
or before March 5,1980. 
"(C) For the purpose of this paragraph, the term 'trust company' 
means any company whose powers are limited to the powers specified 
in subsection (a) of the first section of the Act entitled 'An Act to place 
authority over the trust powers of national banks in the Comptroller 
of the Currency', approved September 28, 1962 (12 U.S.C. 92a), for a 
national bank located in the same State in which such trust company 
is located.". 
(c) The amendments made by this section are hereby repealed on 
October 1,1981. 
LOANS FOR THE FORMATION OF A ONE-BANK HOLDING COMPANY 
SEC. 713. Section 3(c) of the Bank Holding Company Act of 1956 (12 
U.S.C. 1842(c)) is amended by adding at the end thereof the following: 
"Notwithstanding any other provision of law, the Board shall not 
follow any practice or policy in the consideration of any application 
for the formation of a one-bank holding company if following such 
practice or policy would result in the rejection of such application 
solely because the transaction to form such one-bank holding compa-
ny involves a bank stock loan which is for a period of not more than 
twenty-five years. The previous sentence shall not be construed to 
prohibit the Board from rejecting any application solely because the 
other financial arrangements are considered unsatisfactory. The 
Board shall consider transactions involving bank stock loans for the 
formation of a one-bank holding company having a maturity of 
twelve years or more on a case by case basis and no such transaction 
shall be approved if the Board believes the safety or soundness of the 
bank may be jeopardized.". 
PART B—TERMINATION OF NATIONAL BANK CLOSED RECEIVERSHIP 
FUND 
PURPOSE 
12 use 191 note. 
SEC. 721. The purpose of this part is to terminate the closed 
receivership fund by— 
(1) providing final notice of availability of liquidating dividends 
to creditors of national banks closed on or before January 22, 
1934; 
(2) barring rights of creditors to collect liquidating dividends 
from the Comptroller of the Currency after a reasonable period 
of time following such final notice; and 
(3) refunding to the Comptroller the principal amount of such 
fund and any income earned thereon. 
DEFINITIONS 
12 use 191 note. 
SEC. 722. For purposes of this part— 
(1) the term "closed receivership fund" means the aggregation 
of undisbursed liquidating dividends from national banks closed 
on or before January 22, 1934, held by the Comptroller in his 
capacity as successor to receivers of those banks; 
PUBLIC LAW 96-221—MAR. 31, 1980 
94 STAT. 191 
(2) the term "Comptroller" means the Comptroller of the 
Currency; 
(3) the term "claimant" means a depositor or other creditor 
who asserts a claim against a closed national bank for a liquidat-
ing dividend; and 
(4) the term "liquidating dividend" means an amount of money 
in the closed receivership fund determined by a receiver of a 
closed national bank or by the Comptroller to be owed by that 
bank to a depositor or other creditor. 
TERMINATION OF CLOSED RECEIVERSHIP FUND 
SEC. 723. (a) The Comptroller shall publish notice once a week for 
four weeks in the Federal Register that all rights of depositors and 
other creditors of closed national banks to collect liquidating divi-
dends from the closed receivership fund shall be barred after twelve 
months following the last date of publication of such notice. 
(b) The Comptroller shall pay the principal amount of a liquidating 
dividend, exclusive of any income earned thereon, to a claimant 
presenting a valid claim, if the claimant applies to collect within 
twelve months following the last date notice is published. 
(c) If a creditor shall fail to apply to collect a liquidating dividend 
within twelve months after the last date notice is published, all rights 
of the claimant against the closed receivership fund with respect to 
the liquidating dividend shall be barred. 
(d) The principal amount of any liquidating dividends (1) for which 
claims have not been asserted within twelve months following the 
last date notice is published or (2) for which the Comptroller has 
determined a valid claim has not been submitted shall, together with 
any income earned on liquidating dividends and other moneys, if any, 
remaining in the closed receivership fund, be covered into the general 
funds of the Comptroller. 
TITLE VIII—REGULATORY SIMPLIFICATION 
SHORT TITLE 
SEC. 801. This title may be cited as the 
Simplification Act of 1980". 
'Financial Regulation 
Notice, 
publication in 
Federal 
Register. 
12 u s e 191 note. 
Financial 
Regulation 
Simplification 
Act of 1980. 
12 u s e 3501 
note. 
FINDINGS 
SEC. 802. The Congress hereby finds that many regulations issued 
by the Board of Governors of the Federal Reserve System, the Board 
of Directors of the Federal Deposit Insurance Corporation, the 
Comptroller of the Currency, the Federal Home Loan Bank Board, 
and the National Credit Union Administration Board (hereinafter in 
this title referred to as the "Federal financial regulatory agencies") 
often impose costly, duplicative, and unnecessary burdens on both 
financial institutions and consumers. Regulations should be simple 
and clearly written. Regulations should achieve legislative goals 
effectively and efficiently. Regulations should not impose unneces-
sary costs and paperwork burdens on the economy, on financial 
institutions, or on consumers. 
12 u s e 3521. 
"Federal 
financial 
regulatory 
agencies." 
POLICY 
SEC. 803. Any regulation issued by the Federal financial regulatory 
agencies shall, to the maximum extent practicable, insure that— 
12 u s e 3522. 
79-194 
O—81—pt. 1 
16 : QL3 
94 STAT. 192 
PUBLIC LAW 96-221—MAR. 31, 1980 
(1) the need for and purpose of such regulation is established 
clearly; 
(2) meaningful alternatives to the promulgation of such regula-
tion are considered before such regulation is issued; 
(3) compliance costs, paperwork, and other burdens on the 
financial institutions, consumers, and public are minimized; 
(4) conflicts, duplication, and inconsistencies between the regu-
lations issued by the Federal financial regulatory agencies are to 
be avoided to the extent possible taking into account differences 
in statutory responsibilities, the classes of financial institutions' 
regulation and methods of implementation of statutory or policy 
objectives; 
(5) timely participation and comment by other Federal agen-
cies, appropriate State and local agencies, financial institutions, 
and consumers are available; and 
(6) any regulation issued shall be as simple and clearly written 
as possible and understandable by those who are subject to such 
regulation. 
REVIEW OF EXISTING REGULATIONS 
12 use 3523. 
SEC. 804. The Federal financial regulatory agencies shall establish 
a program which assures periodic review of existing regulations to 
determine whether those regulations achieve the policies stated in 
section 803. Those regulations which are not in keeping with such 
policies shall be revised accordingly. 
REPORTING 
Report to 
SEC. 805. Not later than six months after the date of enactment of 
congressional 
^his title and in subsequent annual reports, each Federal financial 
12^1180 3524. 
regulatory agency shall submit a report of its progress in implement-
ing this title to the Committee on Banking, Finance and Urban 
Affairs of the House of Representatives and the Committee on 
Banking, Housing, and Urban Affairs of the Senate. 
TERMINATION DATE 
12 use 3521 
SEC. 806. This title is hereby repealed five years after the date of 
^°^- 
enactment of this title. 
TITLE IX—FOREIGN CONTROL OF UNITED STATES 
FINANCIAL INSTITUTIONS 
DEFINITIONS 
12 use 3101 
SEC. 901. For purposes of this title— 
"°**' 
(1) the term "domestic financial institution" means any bank, 
mutual savings bank, or savings and loan association organized 
under the laws of any State or of the United States; 
(2) the term "foreign person" means any foreign organization 
or any individual resident in a foreign country or any organiza-
tion or individual owned or controlled by such an organization or 
individual; and 
(3) the term "takeover" means any acquisition of the stock or 
assets of any domestic financial institution if, after such acquisi-
tion, the amount of stock or assets held is 5 per centum or more of 
the institution's stock or assets. 
PUBLIC LAW 96-221—MAR. 31, 1980 
94 STAT. 193 
MORATORIUM 
SEC. 902. The Board of Governors of the Federal Reserve System, 12 use 3101 
the Comptroller of the Currency, the Board of Directors of the ^°^-
Federal Deposit Insurance Corporation, and the Federal Home Loan 
Bank Board may not approve any application relating to the 
takeover of any domestic financial institution by a foreign person 
until July 1,19o0, unless— 
(1) such takeover is necessary to prevent the bankruptcy or 
insolvency of the domestic financial institution involved; 
(2) the application was initially submitted for filing on or 
before March 5,1980; 
(3) the domestic financial institution has deposits of less than 
$100,000,000; 
(4) the application relates to a takeover of shares or assets 
pursuant to a foreign person's intrafirm reorganization of its 
interests in a domestic financial institution, including specifi-
cally any application to establish a bank holding company 
pursuant to such reorganization; 
(5) the application relates to a takeover of the assets or shares 
of a domestic financial institution if such assets or shares are 
owned or controlled by a foreign person; or 
(6) the application relates to the takeover of a domestic 
financial institution which is a subsidiary of a bank holding 
company under an order to divest by December 31,1980. 
Approved March 31, 1980. 
LEGISLATIVE HISTORY: 
HOUSE REPORT No. 96-842 (Comm. of Conference). 
SENATE REPORTS: No. 96-368 (Comm. on Banking, Housing, and Urban Affairs) 
and No. 96-640 (Comm. of Conference). 
CONGRESSIONAL RECORD: 
Vol. 125 (1979): Sept. 10, 11, considered and passed House. 
Oct. 23, 29, 31, Nov. 1, considered and passed Senate, amended. 
Nov. 7, House concurred in Senate amendment with amend-
ments. 
Vol. 126 (1980): Mar. 27, House agreed to conference report. 
Mar. 27, 28, Senate agreed to conference report. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS: 
Vol. 16, No. 14 (1980): Mar. 31, Presidential statement.