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H.R. 3474 (103rd): Riegle Community Development and Regulatory Improvement Act of 1994

The text of the bill below is as of Nov 21, 1993 (Passed the House).


HR 3474 EH

103d CONGRESS

1st Session

H. R. 3474


AN ACT

To reduce administrative requirements for insured depository institutions to the extent consistent with safe and sound banking practices, to facilitate the establishment of community development financial institutions, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

TITLE I--REGULATORY REFORM

SEC. 100. SHORT TITLE; TABLE OF SECTIONS.

    (a) SHORT TITLE- This title may be cited as the ‘Regulatory Reform Act of 1993’.

    (b) TABLE OF CONTENTS-

TITLE I--REGULATORY REFORM

      Sec. 100. Short title; table of sections.

Subtitle A--Amendments Relating to the Federal Deposit Insurance Corporation Improvement Act of 1991

      Sec. 101. Audit costs.

      Sec. 102. 18-month examination rule for certain small institutions.

      Sec. 103. Standards for safety and soundness.

      Sec. 104. Clarifying amendment relating to data collection.

Subtitle B--General Regulatory Reform

      Sec. 111. State regulation of real estate appraisals.

      Sec. 112. Collateralization of public deposits.

      Sec. 113. Bank Deposit Financial Assistance Program.

      Sec. 114. Coordinated and unified examinations.

      Sec. 115. Coordination of Federal and State reporting requirements to reduce duplicative efforts.

      Sec. 116. Limiting potential liability on foreign accounts.

      Sec. 117. Expedited procedures for forming a bank holding company.

      Sec. 118. Flexibility in choosing boards of directors.

      Sec. 119. Repeal of obsolete requirements for national banks.

      Sec. 120. Limited exemption authority.

Subtitle C--Other Regulatory Reform

      Sec. 121. Elimination of duplicative disclosures for home equity loans.

      Sec. 122. Alternative dispute resolutions.

      Sec. 123. Clarification of RESPA disclosure requirements.

      Sec. 124. Exemption of business loans from RESPA requirements.

      Sec. 125. Expedited procedures for bank holding companies to seek approval to engage in certain activities.

      Sec. 126. Waiver of right of rescission for certain refinancing transactions.

      Sec. 127. Simplified disclosure for existing depositors.

      Sec. 128. Deposit broker registration.

      Sec. 129. Agency ombudsman.

      Sec. 130. Alternative rules for disclosures for radio advertising of credit transactions, deposit accounts, and consumer leases.

Subtitle D--Reports, Studies, Streamlined Regulatory Requirements

      Sec. 131. Study on capital standards and their impact on the economy.

      Sec. 132. Study of the consumer credit system.

      Sec. 133. Studies on the impact of the payment of interest on reserves.

      Sec. 134. Streamlining of regulatory requirements.

      Sec. 135. Call report simplification.

      Sec. 136. Administrative consideration of burden with new regulations.

      Sec. 137. Elimination of duplicative filings.

      Sec. 138. Recourse agreements.

      Sec. 139. Antitrust reports in connection with merger transactions.

      Sec. 140. Bankers’ banks.

      Sec. 141. Due process protections relating to attachment of assets.

      Sec. 142. Time limit on agency consideration of completed applications.

      Sec. 143. Timely completion of CRA review.

      Sec. 144. Revisions of standards.

      Sec. 145. Feasibility study of data bank.

Subtitle A--Amendments Relating to the Federal Deposit Insurance Corporation Improvement Act of 1991

SEC. 101. AUDIT COSTS.

    (a) HOLDING COMPANY AUDIT REQUIREMENTS- Section 36(i) of the Federal Deposit Insurance Act (12 U.S.C. 1831m(i)) is amended by striking paragraph (2) and inserting the following:

      ‘(2) the institution is described in 1 of the following subparagraphs:

        ‘(A) The institution has total assets, as of the beginning of such fiscal year, of less than $5,000,000,000.

        ‘(B) The institution has--

          ‘(i) total assets, as of the beginning of such fiscal year, of $5,000,000,000 or more and less than $9,000,000,000; and

          ‘(ii) a CAMEL composite rating of 1 or 2 under the Uniform Financial Institutions Rating System (or an equivalent rating under a comparable rating system) as of the most recent examination of such institution by the Corporation or the appropriate Federal banking agency.

        ‘(C) The institution--

          ‘(i) has--

            ‘(I) total assets, as of the beginning of such fiscal year, of $9,000,000,000 or more; and

            ‘(II) a CAMEL composite rating of 1 or 2 under the Uniform Financial Institutions Rating System (or an equivalent rating under a comparable rating system) as of the most recent examination of such institution by the Corporation or the appropriate Federal banking agency; and

          ‘(ii) in the case of an institution which has a CAMEL composite rating of 2, is in compliance with the requirements of subsection (b) (without regard to any exemption such institution may otherwise have under this subsection from the requirements of subsection (b)).

    Notwithstanding paragraph (2), the audit committee of the holding company of an insured depository institution that the Corporation determines to be a large institution shall not include any large customers of the institution.’.

    (b) WRITTEN NOTICE OF REQUIREMENT FOR AUDIT OF QUARTERLY REPORTS- Section 36(g)(2) of the Federal Deposit Insurance Act (12 U.S.C. 1831m(g)(2)) is amended by adding at the end the following new subparagraph:

        ‘(D) NOTICE TO INSTITUTION- The Corporation shall promptly notify an insured depository institution, in writing, of a determination pursuant to subparagraph (A) to require a review of such institution’s quarterly financial reports.’.

SEC. 102. 18-MONTH EXAMINATION RULE FOR CERTAIN SMALL INSTITUTIONS.

    (a) IN GENERAL- Section 10(d)(4) of the Federal Deposit Insurance Act (12 U.S.C. 1820(d)(4)) is amended--

      (1) in subparagraph (A), by striking ‘$100,000,000’ and inserting ‘$250,000,000’;

      (2) in subparagraph (C), by striking ‘and’ at the end;

      (3) by redesignating subparagraph (D) as subparagraph (E); and

      (4) by inserting after subparagraph (C) the following new subparagraph:

        ‘(D) the insured institution is not currently subject to a formal enforcement proceeding or order by the Corporation or the appropriate Federal banking agency; and’.

    (b) GUIDELINES REQUIRED-

      (1) IN GENERAL- Section 10(d) of the Federal Deposit Insurance Act (12 U.S.C. 1820(d)) is amended by adding at the end the following new paragraph:

      ‘(6) STANDARDS FOR DETERMINING ADEQUACY OF STATE EXAMINATIONS- The Financial Institutions Examination Council shall prescribe guidelines establishing standards for determining whether a State examination carries out the purposes of this subsection for purposes of paragraph (3).’.

      (2) EFFECTIVE DATE OF INITIAL GUIDELINES- The initial guidelines required to be issued pursuant to the amendment made by subsection (a) shall be issued and shall take effect before the end of the 1-year period beginning on the date of the enactment of this Act.

SEC. 103. STANDARDS FOR SAFETY AND SOUNDNESS.

    (a) ELIMINATION OF STOCK VALUATION PROVISION- Section 39(b)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1831p-1(b)(1)) is amended--

      (1) in subparagraph (A), by adding ‘and’ at the end; and

      (2) by striking subparagraph (C).

    (b) HOLDING COMPANIES EXCLUDED FROM SCOPE OF STANDARDS- Section 39 of the Federal Deposit Insurance Act (12 U.S.C. 1831p-1) is amended--

      (1) in subsections (a) and (b), by striking ‘and depository institution holding companies’;

      (2) in paragraphs (1)(A) and (2) of subsection (e), by striking ‘or depository institution holding company’; and

      (3) in subsection (e), by striking ‘or company’ each place such term appears.

    (c) ESTABLISHING STANDARDS IN GUIDELINES-

      (1) IN GENERAL- Section 39(d)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1831p-1(d)(1)) is amended--

        (A) in the 1st sentence, by inserting ‘or guideline’ before the period; and

        (B) in the 2d sentence, by inserting ‘or guidelines’ after ‘Such regulations’.

      (2) CLERICAL AMENDMENT- The heading for section 39(d) of the Federal Deposit Insurance Act (12 U.S.C. 1831p-1(d)) is amended by striking ‘by Regulation’.

    (d) EFFECTIVE DATE- The amendments made by subsection (a) to section 39 of the Federal Deposit Insurance Act shall take effect as if such amendments had been included in such section as of the effective date of the section.

SEC. 104. CLARIFYING AMENDMENT RELATING TO DATA COLLECTION.

    Section 7(a)(9) of the Federal Deposit Insurance Act (12 U.S.C. 1817(a)(9)) is amended by adding at the end the following new sentence: ‘In prescribing reporting and other requirements for the collection of actual and accurate information pursuant to this paragraph, the Corporation shall minimize the regulatory burden imposed upon insured depository institutions while taking into account the benefit of the information to the Corporation, including the use of the information to enable the Corporation to more accurately determine the total amount of insured deposits in each insured depository institution.’.

Subtitle B--General Regulatory Reform

SEC. 111. STATE REGULATION OF REAL ESTATE APPRAISALS.

    Section 1122 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3351) is amended--

      (1) by redesignating subsections (b) through (e) as subsections (c) through (f), respectively;

      (2) by inserting after subsection (a) the following new subsection:

    ‘(b) RECIPROCITY- The Appraisal Subcommittee shall encourage the States to develop reciprocity agreements that readily authorize an appraiser who--

      ‘(1) is licensed or certified in 1 State; and

      ‘(2) is in good standing with the State appraiser certifying or licensing agency in such State,

    to perform appraisals in other States.’; and

      (3) in subsection (a)--

        (A) by redesignating paragraphs (1) through (3) as subparagraphs (A) through (C), respectively, and moving the left margin of such subparagraphs (as so redesignated) 2 ems to the right;

        (B) by striking ‘PRACTICE- A State’ and inserting ‘PRACTICE-

      ‘(1) IN GENERAL- A State’; and

        (C) by adding at the end the following new paragraph:

      ‘(2) FEES FOR TEMPORARY PRACTICE- A State appraiser certifying or licensing agency shall not impose excessive fees or burdensome requirements, as determined by the Appraisal Subcommittee, for temporary practice under this subsection.’.

SEC. 112. COLLATERALIZATION OF PUBLIC DEPOSITS.

    Section 13(e) of the Federal Deposit Insurance Act (12 U.S.C. 1823(e)) is amended--

      (1) by redesignating paragraphs (1) through (4) as subparagraphs (A) through (D), respectively, and moving the left margin of such subparagraphs (as so redesignated) 2 ems to the right;

      (2) by striking ‘CORPORATION- No agreement’ and inserting ‘CORPORATION-

      ‘(1) IN GENERAL- No agreement’; and

      (3) by adding at the end the following new paragraph:

      ‘(2) PUBLIC DEPOSITS- An agreement to provide for the lawful collateralization of--

        ‘(A) deposits of a Federal, State, or local governmental entity or any depositor referred to in section 11(a)(2), including an agreement to provide collateral in lieu of a surety bond;

        ‘(B) bankruptcy estate funds pursuant to section 345 of title 11, United States Code; or

        ‘(C) extensions of credit from any Federal reserve bank or Federal home loan bank,

      shall not be deemed to be invalid pursuant to paragraph (1)(B) solely because such agreement was not executed contemporaneously with changes in the collateral made in accordance with such agreement.’.

SEC. 113. BANK DEPOSIT FINANCIAL ASSISTANCE PROGRAM.

    (a) IN GENERAL- Effective December 19, 1993, section 7(i) of the Federal Deposit Insurance Act (12 U.S.C. 1817(i)) is amended--

      (1) by redesignating paragraph (3) as paragraph (4); and

      (2) by inserting after paragraph (2), the following new paragraph:

      ‘(3) BANK DEPOSIT FINANCIAL ASSISTANCE PROGRAM- Notwithstanding paragraph (1), funds deposited by an insured depository institution pursuant to the Bank Deposit Financial Assistance Program of the Department of Energy shall be separately insured in an amount not to exceed $100,000 for each insured depository institution depositing such funds.’.

    (b) TECHNICAL AND CONFORMING AMENDMENT- Section 11(a)(1)(C) of the Federal Deposit Insurance Act (12 U.S.C. 1821(a)(1)(C)) is amended by striking ‘section 7(i)(1)’ and inserting ‘paragraph (1) or (2) of section 7(i) or any funds described in section 7(i)(3)’.

SEC. 114. COORDINATED AND UNIFIED EXAMINATIONS.

    Section 10(d) of the Federal Deposit Insurance Act (12 U.S.C. 1820(d)) is amended by inserting after paragraph (6) (as added by section 102(b) of this Act) the following new paragraphs:

      ‘(7) COORDINATED EXAMINATIONS- To minimize the disruptive effects of examinations on the operations of insured depository institutions, each Federal banking agency shall, to the extent practicable and consistent with safety and soundness principles and the public interest--

        ‘(A) coordinate examinations to be conducted by that agency at an insured depository institution and any affiliate of such institution;

        ‘(B) coordinate with the other Federal banking agencies in the conduct of such examinations;

        ‘(C) work to coordinate the conduct of all examinations made pursuant to this subsection with the appropriate State bank supervisor; and

        ‘(D) use copies of reports of examinations of insured depository institutions made by any other Federal banking agency or appropriate State bank supervisor.

      ‘(8) SAFETY AND SOUNDNESS EXAMS- Notwithstanding any provision of paragraph (7) or any system established pursuant to such paragraph, any appropriate Federal banking agency may conduct a separate examination of an insured depository institution at any time for safety and soundness purposes.’.

SEC. 115. COORDINATION OF FEDERAL AND STATE REPORTING REQUIREMENTS TO REDUCE DUPLICATIVE EFFORTS.

    (a) STATE ACCESS TO FEDERAL AGENCY REPORTS- The 1st sentence of section 7(a)(2)(A) of the Federal Deposit Insurance Act (12 U.S.C. 1817(a)(2)(A)) is amended by inserting ‘and, with respect to any State depository institution, any appropriate State bank supervisor for such institution’ after ‘The Corporation’.

    (b) STATE COORDINATION WITH FEDERAL REPORTING REQUIREMENTS- The Federal banking agencies and State bank supervisors shall, to the greatest extent practicable--

      (1) coordinate the number, types, and frequency of reports required to be submitted to such agencies and supervisors by insured depository institutions and the type and amount of information required to be included in such reports; and

      (2) use copies of reports of condition and other reports submitted by such institutions to any such agency or supervisor.

SEC. 116. LIMITING POTENTIAL LIABILITY ON FOREIGN ACCOUNTS.

    (a) AMENDMENT TO THE FEDERAL RESERVE ACT- The Federal Reserve Act (12 U.S.C. 221 et seq.) is amended by inserting after section 25B the following new section:

‘SEC. 25C. POTENTIAL LIABILITY ON FOREIGN ACCOUNTS.

    ‘(a) IN GENERAL- A member bank shall not be required to repay any deposit made at a foreign branch of the bank if the branch cannot repay the deposit due to--

      ‘(1) an act of war, insurrection or civil strife; or

      ‘(2) an action by a foreign government or instrumentality (whether de jure or de facto) in the country in which the branch is located,

    unless the member bank has expressly agreed in writing to repay the deposit under those circumstances.

    ‘(b) REGULATIONS- The Board may prescribe such regulations as the Board may determine to be necessary to carry out this section.’.

    (b) Conforming Amendments to the Federal Deposit Insurance Act-

      (1) IN GENERAL- Section 18 of the Federal Deposit Insurance Act (12 U.S.C. 1828) is amended by adding at the end the following new subsection:

    ‘(q) SOVEREIGN RISK- Section 25C of the Federal Reserve Act shall apply to every nonmember insured bank in the same manner and to the same extent as if the nonmember insured bank were a member bank.’.

      (2) CONFORMING AMENDMENT- Subparagraph (A) of section 3(l)(5) of the Federal Deposit Insurance Act (12 U.S.C. 1813(l)(5)) is amended to read as follows:

        ‘(A) any obligation of a depository institution which is carried on the books and records of an office of such bank or savings association located outside of any State, unless--

          ‘(i) such obligation would be a deposit if it were carried on the books and records of the depository institution, and would have been payable at, an office located in any State; and

          ‘(ii) the contract evidencing the obligation provides by express terms, and not by implication, for payment at an office of the depository institution located in any State; and’.

    (c) EXISTING CLAIMS NOT AFFECTED- Section 25C of the Federal Reserve Act (as added by subsection (a)) shall not be applied retroactively and shall not be construed to affect or apply to any claim or cause of action (to which such section would otherwise apply) which arises from events or circumstances that occurred before the date of enactment of this Act.

SEC. 117. EXPEDITED PROCEDURES FOR FORMING A BANK HOLDING COMPANY.

    The 2d sentence of section 3(a) of the Bank Holding Company Act of 1956 (12 U.S.C. 1842(a)) is amended--

      (1) by striking ‘or (B)’ and inserting ‘(B)’; and

      (2) by inserting before the period the following: ‘; or (C) the acquisition, by a company, of control of a bank in a reorganization in which a person or group of persons exchange their shares of the bank for shares of a newly formed bank holding company and receive after the reorganization substantially the same proportional share interest in the holding company as they held in the bank except for changes in shareholders’ interests resulting from the exercise of dissenting shareholders’ rights under State or Federal law if--

          ‘(i) immediately following the acquisition--

            ‘(I) the bank holding company meets the capital and other financial standards prescribed by the Board by regulation for such a bank holding company; and

            ‘(II) the bank is adequately capitalized (as defined in section 38 of the Federal Deposit Insurance Act);

          ‘(ii) the holding company does not engage in any activities other than those of managing and controlling banks as a result of the reorganization;

          ‘(iii) the company provides 30 days prior notice to the Board and the Board does not object to such transaction during such 30-day period; and

          ‘(iv) the holding company will not acquire control of any additional bank as a result of the reorganization.’.

SEC. 118. FLEXIBILITY IN CHOOSING BOARDS OF DIRECTORS.

    Section 5146 of the Revised Statutes (12 U.S.C. 72) is amended in the 1st sentence, by striking ‘two thirds’ and inserting ‘a majority’.

SEC. 119. REPEAL OF OBSOLETE REQUIREMENTS FOR NATIONAL BANKS.

    (a) REPEAL OF PROVISIONS IN THE REVISED STATUTES- The following sections of the Revised Statutes are hereby repealed:

      (1) Section 5170 (12 U.S.C. 28).

      (2) Section 5203 (12 U.S.C. 87).

      (3) Section 5206 (12 U.S.C. 88).

      (4) Section 5196 (12 U.S.C. 89).

      (5) Section 5158 (12 U.S.C. 102).

      (6) Section 5159 (12 U.S.C. 101a).

      (7) Section 5172 (12 U.S.C. 104)

      (8) Section 5173 (12 U.S.C. 107).

      (9) Section 5174 (12 U.S.C. 108).

      (10) Section 5182 (12 U.S.C. 109).

      (11) Section 5183 (12 U.S.C. 110).

      (12) Section 5195 (12 U.S.C. 123).

      (13) Section 5184 (12 U.S.C. 124).

      (14) Section 5226 (12 U.S.C. 131).

      (15) Section 5227 (12 U.S.C. 132).

      (16) Section 5228 (12 U.S.C. 133).

      (17) Section 5229 (12 U.S.C. 134).

      (18) Section 5230 (12 U.S.C. 137).

      (19) Section 5231 (12 U.S.C. 138).

      (20) Section 5232 (12 U.S.C. 135).

      (21) Section 5233 (12 U.S.C. 136).

      (22) Section 5185 (12 U.S.C. 151).

      (23) Section 5186 (12 U.S.C. 152).

      (24) Section 5160 (12 U.S.C. 168).

      (25) Section 5161 (12 U.S.C. 169).

      (26) Section 5162 (12 U.S.C. 170).

      (27) Section 5163 (12 U.S.C. 171).

      (28) Section 5164 (12 U.S.C. 172).

      (29) Section 5165 (12 U.S.C. 173).

      (30) Section 5166 (12 U.S.C. 174).

      (31) Section 5167 (12 U.S.C. 175).

      (32) Section 5222 (12 U.S.C. 183).

      (33) Section 5223 (12 U.S.C. 184).

      (34) Section 5224 (12 U.S.C. 185).

      (35) Section 5225 (12 U.S.C. 186).

      (36) Section 5237 (12 U.S.C. 195).

    (b) REPEAL OF OTHER OBSOLETE PROVISIONS IN BANKING LAWS- The following provisions of law are hereby repealed:

      (1) Section 26 of the Federal Deposit Insurance Act (12 U.S.C. 1831c).

      (2) Section 12 of the Act entitled ‘An Act To define and fix the standard of value, to maintain the parity of all forms of money issued or coined by the United States, to refund the public debt, and for other purposes.’ and approved March 14, 1900 (12 U.S.C. 101).

      (3) Section 3 of the Act entitled ‘An Act To amend the laws relating to the denominations of circulating notes by national banks and to permit the issuance of notes of small denominations, and for other purposes.’ and approved October 5, 1917 (12 U.S.C. 103).

      (4) The following sections of the Act entitled ‘An Act fixing the amount of United States notes, providing for a redistribution of the national-bank currency, and for other purposes.’ and approved June 20, 1874:

        (A) Section 5 (12 U.S.C. 105).

        (B) Section 3 (12 U.S.C. 121).

        (C) Section 8 (12 U.S.C. 126).

        (D) Section 4 (12 U.S.C. 176).

      (5) The following sections of the Act entitled ‘An Act to enable national-banking associations to extend their corporate existence, and for other purposes.’ and approved July 12, 1882:

        (A) Section 8 (12 U.S.C. 177).

        (B) Section 9 (12 U.S.C. 178).

      (6) The Act entitled ‘An Act to amend the national bank act in providing for the redemption of national bank notes stolen from or lost by banks of issue.’ and approved July 28, 1892 (12 U.S.C. 125).

      (7) The Act entitled ‘An Act authorizing the conversion of national gold banks.’ and approved February 14, 1880 (12 U.S.C. 153).

      (8) The 1st sentence of the 8th undesignated paragraph of section 16 of the Federal Reserve Act (12 U.S.C. 418) is amended by striking ‘the Comptroller of the Currency shall under the direction of the Secretary of the Treasury,’ and inserting ‘the Secretary of the Treasury shall’.

      (9) The 9th undesignated paragraph of section 16 of the Federal Reserve Act (12 U.S.C. 419) is amended to read as follows:

      ‘When such notes have been prepared, the notes shall be delivered to the Board of Governors of the Federal Reserve System subject to the order of the Secretary of the Treasury for the delivery of such notes in accordance with this Act.’.

      (10) The 10th undesignated paragraph of section 16 of the Federal Reserve Act (12 U.S.C. 420) is amended--

        (A) by striking ‘Comptroller of the Currency’ and inserting ‘Secretary of the Treasury’; and

        (B) by striking ‘Federal Reserve Board’ and inserting ‘Board of Governors of the Federal Reserve System’.

      (11) The 11th undesignated paragraph of section 16 of the Federal Reserve Act (12 U.S.C. 421) is amended to read as follows:

      ‘The Secretary of the Treasury may examine the plates, dies, bed pieces, and other material used in the printing of Federal Reserve notes and issue regulations relating to such examinations.’.

    (c) AMENDMENTS TO OTHER LAWS-

      (1) The Act entitled ‘An Act to provide for the redemption of national-bank notes, Federal Reserve bank notes, and Federal Reserve notes which cannot be identified as to the bank of issue.’ and approved June 13, 1933, is amended--

        (A) in the 1st section (12 U.S.C. 121a)--

          (i) by striking ‘whenever any national-bank notes, Federal Reserve bank notes,’ and inserting ‘whenever any Federal Reserve bank notes’; and

          (ii) by striking ‘, and the notes, other than Federal Reserve notes, so redeemed shall be forwarded to the Comptroller of the Currency for cancellation and destruction’; and

        (B) in section 2 (12 U.S.C. 122a)--

          (i) by striking ‘National-bank notes and’; and

          (ii) by striking ‘national-bank notes and’.

      (2) The 1st section of the Act entitled ‘An Act making appropriations for sundry civil expenses of the Government for the fiscal year ending June thirtieth, eighteen hundred and seventy-six, and for other purposes.’ and approved March 3, 1875, is amended in the 1st paragraph which appears under the heading ‘NATIONAL CURRENCY’ by striking ‘Secretary of the Treasury: Provided, That’ and all that follows through the period and inserting ‘Secretary of the Treasury.’.

      (3) The Act entitled ‘An Act to simplify the accounts of the Treasurer of the United States, and for other purposes.’ and approved October 10, 1940 (12 U.S.C. 177a) is amended by striking all after the enacting clause and inserting the following: ‘That the cost of transporting and redeeming outstanding national bank notes and Federal Reserve bank notes as may be presented to the Treasurer of the United States for redemption shall be paid from the regular annual appropriation for the Department of the Treasury.’.

      (4) Section 5234 of the Revised Statutes (12 U.S.C. 192) is amended by striking ‘has refused to pay its circulating notes as therein mentioned, and’.

      (5) Section 5236 of the Revised Statutes (12 U.S.C. 194) is amended by striking ‘, after full provision has been first made for refunding to the United States any deficiency in redeeming the notes of such association’.

      (6) Section 5238 of the Revised Statutes (12 U.S.C. 196) is amended by striking the 1st sentence.

    (d) AMENDMENTS TO OUTDATED DIVIDEND PROVISIONS-

      (1) WITHDRAWAL OF CAPITAL- Section 5204 of the Revised Statutes (12 U.S.C. 56) is amended--

        (A) in the 2d sentence, by striking ‘net profits then on hand, deducting therefrom its losses and bad debts’ and inserting ‘undivided profits, subject to other applicable provisions of law’; and

        (B) by striking the 3d sentence.

      (2) DECLARATION OF DIVIDENDS- Section 5199 of the Revised Statutes (12 U.S.C. 60) is amended--

        (A) in the 1st sentence, by striking ‘net profits of the association’ and inserting ‘undivided profits of the association, subject to the limitations in subsection (b),’;

        (B) by striking ‘net profits’ each subsequent place such term appears and inserting ‘net income’; and

        (C) by striking subsection (c).

    (e) CLERICAL AMENDMENTS-

      (1) The table of sections for chapter 1 of title LXII of the Revised Statutes of the United States is amended--

        (A) by inserting after the item relating to section 5156 the following new item:

‘5156A. Mergers, consolidations, and other acquisitions authorized.’; and

        (B) by striking the items relating to sections 5141 and 5151.

      (2) The table of sections for chapter 2 of title LXII of the Revised Statutes of the United States is amended by striking the item relating to each of the following sections:

        (A) Section 5158.

        (B) Section 5159.

        (C) Section 5160.

        (D) Section 5161.

        (E) Section 5162.

        (F) Section 5163.

        (G) Section 5164.

        (H) Section 5165.

        (I) Section 5166.

        (J) Section 5167.

        (K) Section 5170.

        (L) Section 5171.

        (M) Section 5172.

        (N) Section 5173.

        (O) Section 5174.

        (P) Section 5175.

        (Q) Section 5176.

        (R) Section 5177.

        (S) Section 5178.

        (T) Section 5179.

        (U) Section 5180.

        (V) Section 5181.

        (W) Section 5182.

        (X) Section 5183.

        (Y) Section 5184.

        (Z) Section 5185.

        (AA) Section 5186.

        (BB) Section 5187.

        (CC) Section 5188.

        (DD) Section 5189.

      (3) The table of sections for chapter 3 of title LXII of the Revised Statutes of the United States is amended by striking the item relating to each of the following sections:

        (A) Section 5193.

        (B) Section 5194.

        (C) Section 5195.

        (D) Section 5196.

        (E) Section 5202.

        (F) Section 5203.

        (G) Section 5206.

        (H) Section 5209.

        (I) Section 5212.

      (3) The table of sections for chapter 4 of title LXII of the Revised Statutes of the United States is amended--

        (A) by inserting after the item relating to section 5239 the following new item:

‘5239A. Regulatory authority.’; and

        (B) by striking the items relating to the following sections:

          (i) Section 5222.

          (ii) Section 5223.

          (iii) Section 5224.

          (iv) Section 5225.

          (v) Section 5226.

          (vi) Section 5227.

          (vii) Section 5228.

          (viii) Section 5229.

          (ix) Section 5230.

          (x) Section 5231.

          (xi) Section 5232.

          (xii) Section 5233.

          (xiii) Section 5237.

          (xiv) Section 5243.

SEC. 120. LIMITED EXEMPTION AUTHORITY.

    Section 22(h)(5)(C) of the Federal Reserve Act (12 U.S.C. 375b(5)(C)) is amended by striking ‘subparagraph (A) for member banks with less than $100,000,000 in deposits if the Board’ and inserting ‘subparagraph (A) for--

          ‘(i) member banks with less than $100,000,000 in deposits; and

          ‘(ii) member banks which have--

            ‘(I) total deposits of $100,000,000 or more and less than $250,000,000; and

            ‘(II) a CAMEL composite rating of 1 or 2 under the Uniform Financial Institutions Rating System (or an equivalent rating under a comparable rating system) as of the most recent examination of such institution by the Federal Deposit Insurance Corporation or the appropriate Federal banking agency,

          if the Board’.

Subtitle C--Other Regulatory Reform

SEC. 121. ELIMINATION OF DUPLICATIVE DISCLOSURES FOR HOME EQUITY LOANS.

    Section 4(a) of the Real Estate Settlement Procedures Act (12 U.S.C. 2603(a)) is amended by adding at the end the following: ‘In the case of a federally related mortgage loan extended under an open end credit plan (as defined in section 103(i) of the Truth in Lending Act), disclosures made under section 127A(a) of the Truth in Lending Act may be used in lieu of the disclosures required under this section if--

      ‘(1) the disclosures made pursuant to such section 127A(a) contain all of the information that is required under this section; and

      ‘(2) the information is disclosed in a manner that is no less conspicuous than is required under this section.’.

SEC. 122. ALTERNATIVE DISPUTE RESOLUTIONS.

    (a) IN GENERAL- Each Federal banking agency shall develop and implement a program for using alternative means of dispute resolution of issues in controversy (hereafter in this section referred to as the ‘alternative dispute resolution program’) if the parties to the dispute, including the agency, agree to such proceeding.

    (b) STANDARDS- Alternative dispute resolution programs shall--

      (1) be fair to all interested parties to a dispute;

      (2) resolve disputes expeditiously; and

      (3) be less costly than traditional means of dispute resolution, including litigation.

    (c) IMPLEMENTATION OF PROGRAM- Each Federal banking agency shall--

      (1) within 18 months of the date of the enactment of this Act, establish a pilot alternative dispute resolution program which is consistent with the requirements of the subchapter IV of chapter 5 of title 5, United States Code;

      (2) within 24 months of such date, make a written evaluation of the pilot program on the basis of subsection (b); and

      (3) within 30 months of such date, implement an alternative dispute resolution program throughout the agency, taking into account the results of the evaluation made pursuant to paragraph (2).

    (d) INDEPENDENT EVALUATION- Before the end of the 30-month period beginning on the date of the enactment of this Act, the Administrative Conference of the United States shall submit to the Congress a report containing--

      (1) an evaluation of the pilot programs established under subsection (c)(1);

      (2) the extent to which the pilot programs meet the standards established under subsection (b);

      (3) the extent to which parties to disputes were offered alternative means of dispute resolution and the frequency with which the parties, including the agencies, accepted or declined to use such means; and

      (4) any recommendations of the Conference to improve the alternative dispute resolution procedures of the Federal banking agencies.

    (e) COORDINATION WITH EXISTING AGENCY ADR PROGRAMS-

      (1) EVALUATION REQUIRED- Any Federal banking agency which, as of the date of the enactment of this Act, maintains an alternative dispute resolution program under any other provision of law shall include such program in the evaluation conducted under subsection (c)(2).

      (2) MULTIPLE ADR PROGRAMS- No provision of this section shall be construed as precluding any Federal banking agency from establishing more than 1 alternative means of dispute resolution.

    (f) DEFINITIONS- For purposes of this section--

      (1) ALTERNATIVE MEANS OF DISPUTE RESOLUTION- The term ‘alternative means of dispute resolution’ has the meaning given to such term in section 571 of title 5, United States Code.

      (2) FEDERAL BANKING AGENCY- The term ‘Federal banking agency’--

        (A) has the meaning given to such term in section 3 of the Federal Deposit Insurance Act; and

        (B) includes the National Credit Union Administration.

      (3) ISSUES IN CONTROVERSY- The term ‘issues in controversy’ means--

        (A) any final agency decision involving any claim against an insured depository institution or insured credit union for which the agency has been appointed conservator or receiver;

        (B) any final action taken by an agency in the agency’s capacity as conservator or receiver for an insured depository institution or insured credit union; and

        (C) any other issue for which the appropriate Federal banking agency determines that alternative means of dispute resolution would be appropriate.

SEC. 123. CLARIFICATION OF RESPA DISCLOSURE REQUIREMENTS.

    Section 6(a)(1)(B) of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2605(a)(1)(B)) is amended--

      (1) by striking ‘(B) for each of the most recent’ and inserting ‘(B) at the choice of the person making a federally related mortgage loan--

          ‘(i) for each of the most recent’;

      (2) by redesignating clauses (i) and (ii) as subclauses (I) and (II), respectively, and moving the left margin of such subclauses (as so redesignated) 2 ems to the right;

      (3) by striking ‘and’ at the end of subclause (II) (as so redesignated by paragraph (2) of this section) and inserting ‘or’; and

      (4) by inserting after clause (i) (as so designated by paragraph (1) of this section) the following new clause:

          ‘(ii) a statement that the person making the loan has previously assigned, sold, or transferred the servicing of federally related mortgage loans; and’.

SEC. 124. EXEMPTION OF BUSINESS LOANS FROM RESPA REQUIREMENTS.

    The Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2601 et seq.) is amended by inserting after section 6 the following new section:

‘SEC. 7. EXEMPTED TRANSACTIONS.

    ‘This Act shall not apply to credit transactions involving extensions of credit--

      ‘(1) primarily for business, commercial, or agricultural purposes; or

      ‘(2) to government or governmental agencies or instrumentalities.’.

SEC. 125. EXPEDITED PROCEDURES FOR BANK HOLDING COMPANIES TO SEEK APPROVAL TO ENGAGE IN CERTAIN ACTIVITIES.

    Section 4 of the Bank Holding Company Act of 1956 (12 U.S.C. 1843) is amended by adding at the end the following new subsection:

    ‘(j) NOTICE PROCEDURES FOR NONBANKING ACTIVITIES-

      ‘(1) GENERAL NOTICE PROCEDURE-

        ‘(A) NOTICE REQUIREMENT- No bank holding company may engage in any nonbanking activity or acquire or retain ownership or control of the shares of a company engaged in activities described in subsection (c)(8) without providing the Board with written notice of the proposed transaction or activity at least 60 days before the transaction or activity is proposed to occur or commence.

        ‘(B) CONTENTS OF NOTICE- The notice submitted to the Board shall contain such information as the Board shall prescribe by regulation or by specific request in connection with a particular notice.

        ‘(C) PROCEDURE FOR AGENCY ACTION-

          ‘(i) NOTICE OF DISAPPROVAL- Any notice filed under this subsection shall be deemed to be approved by the Board unless, before the end of the 60-day period beginning on the date the Board receives a complete notice under subparagraph (A), the Board issues an order disapproving the transaction or activity and setting forth the reasons for disapproval.

          ‘(ii) EXTENSION OF PERIOD- The Board may extend the 60-day period referred to in clause (i) for an additional 30 days.

        ‘(D) APPROVAL BEFORE END OF PERIOD-

          ‘(i) IN GENERAL- Any transaction or activity may commence before the expiration of any period for disapproval established under this paragraph if the Board issues a written notice of approval.

          ‘(ii) SHORTER PERIODS BY REGULATION- The Board may prescribe regulations which provide for no notice under this paragraph or for a shorter notice period with respect to particular activities or transactions.

        ‘(E) EXTENSION OF PERIOD- In the case of any notice to engage in, or to acquire or retain ownership or control of shares of any company engaged in, any activity pursuant to subsection (c)(8) that has not been previously approved by order or regulation, the Board may extend the notice period under this subsection for an additional 90 days.

      ‘(2) GENERAL STANDARDS FOR REVIEW-

        ‘(A) CRITERIA- In connection with a notice under this subsection, the Board may consider the following criteria:

          ‘(i) The managerial resources of the companies involved.

          ‘(ii) The adequacy of the companies financial resources, including capital, giving consideration to the financial resources and capital of others engaged in similar activities.

          ‘(iii) Any material adverse effect on the safety and soundness or financial condition of any insured depository institution affiliate.

          ‘(iv) Whether, performance of the activity by a bank holding company or a subsidiary of such company can reasonably be expected to produce benefits to the public, such as greater convenience, increased competition, or gains in efficiency, that outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices.

        ‘(B) REQUIREMENTS FOR DISAPPROVAL- The Board shall not approve any proposed transaction under this subsection if the Board determines that any insured depository institution subsidiary of the bank holding company is engaging in any unsafe and unsound practice or is in an unsafe and unsound condition.

      ‘(3) PUBLIC NOTICE RELATING TO NEW ACTIVITIES-

        ‘(A) PUBLICATION AND OPPORTUNITY FOR COMMENT- The Board shall--

          ‘(i) publish in the Federal Register a notice of the receipt by the Board of a notice under paragraph (1) involving insurance or any other nonbanking activity which has not previously been determined by the Board (by regulation or order) to be closely related to banking as to be a proper incident thereto; and

          ‘(ii) provide a reasonable period for public comment.

        ‘(B) NOTICE OF APPROVAL BEFORE COMMENCEMENT OF ACTIVITY- The Board shall issue an order with respect to any such notice before the commencement of the proposed insurance activity or the other new activity.’.

SEC. 126. WAIVER OF RIGHT OF RESCISSION FOR CERTAIN REFINANCING TRANSACTIONS.

    The Board of Governors of the Federal Reserve System, in consultation with the consumer advisory council to such Board, shall, within 6 months of the date of the enactment of this Act, submit recommendations to the Congress regarding whether a waiver or modification, at the option of a consumer, of the right of rescission under section 125 of the Truth in Lending Act with respect to transactions which constitute a refinancing or consolidation (with no new advances) of the principal balance then due and any accrued and unpaid finance charges of an existing extension of credit by a different creditor secured by an interest in the same property would benefit consumers more than existing law.

SEC. 127. SIMPLIFIED DISCLOSURE FOR EXISTING DEPOSITORS.

    (a) IN GENERAL- Section 43(b)(3) of the Federal Deposit Insurance Act (12 U.S.C. 1831t(b)(3)) is amended to read as follows:

      ‘(3) ACKNOWLEDGEMENT OF DISCLOSURE-

        ‘(A) NEW DEPOSITORS- With respect to any depositor who was not a depositor at the depository institution before June 19, 1994, receive any deposit for the account of such depositor only if the depositor has signed a written acknowledgement that--

          ‘(i) the institution is not federally insured; and

          ‘(ii) if the institution fails, the Federal Government does not guarantee that the depositor will get back the depositor’s money.

        ‘(B) CURRENT DEPOSITORS- Receive any deposit after the effective date of this paragraph for the account of any depositor who was a depositor before June 19, 1994, only if--

          ‘(i) the depositor has signed a written acknowledgement described in subparagraph (A); or

          ‘(ii) the institution has complied with the provisions of subparagraph (C) which are applicable as of the date of the deposit.

        ‘(C) ALTERNATIVE PROVISION OF NOTICE TO CURRENT DEPOSITORS-

          ‘(i) IN GENERAL- Transmit to each depositor who was a depositor before June 19, 1994, and has not signed a written acknowledgement described in subparagraph (A)--

            ‘(I) a card containing the information described in clauses (i) and (ii) of subparagraph (A), and a line for the signature of the depositor; and

            ‘(II) accompanying materials requesting the depositor to sign the card, and return the signed card to the institution.

          ‘(ii) MANNER AND TIMING OF NOTICE-

            ‘(I) FIRST NOTICE- Make the transmission described in clause (i) via first class mail within 90 days after June 19, 1994.

            ‘(II) SECOND NOTICE- Make a 2d transmission described in clause (i) via first class mail not less than 30 days and not more than 45 days after a transmission to the depositor in accordance with subclause (I), if the institution has not, by the date of such mailing, received from the depositor a card referred to in clause (i)(I) which has been signed by the depositor.

            ‘(III) THIRD NOTICE- Make a 3d transmission described in clause (i) via first class mail not less than 30 days and not more than 45 days after a transmission to the depositor in accordance with subclause (II), if the institution has not, by the date of such mailing, received from the depositor a card referred to in clause (i)(I) which has been signed by the depositor.’.

    (b) EFFECTIVE DATE- Section 43(b)(3) of the Federal Deposit Insurance Act, as amended by subsection (a), shall take effect in accordance with section 151(a)(2)(D) of the Federal Deposit Insurance Corporation Improvement Act of 1991.

SEC. 128. DEPOSIT BROKER REGISTRATION.

    Section 29(g)(3) of the Federal Deposit Insurance Act (12 U.S.C. 1831f(g)(3)) is amended--

      (1) by inserting ‘that is not well capitalized’ after ‘includes any insured depository institution’;

      (2) by inserting ‘such’ after ‘any employee of any’; and

      (3) by striking ‘having the same type of charter’.

SEC. 129. AGENCY OMBUDSMAN.

    (a) ESTABLISHMENT REQUIRED- Not later than 180-days after the date of the enactment of this Act, each Federal banking agency and the National Credit Union Administration shall appoint an ombudsman.

    (b) DUTIES OF OMBUDSMAN- The ombudsman for any agency shall--

      (1) act as a liaison between the agency and any party with respect to the accuracy, consistency, or quality of any examination or regulatory activity of the agency that results in a material supervisory or agency determination rendered by the agency, or may result in an enforcement action by the agency, with respect to such party;

      (2) act as a liaison between the agency and any party with respect to any problem such party may have in dealing with the agency; and

      (3) assure that safeguards exist to encourage complainants to come forward and preserve confidentiality.

    (c) DEFINITIONS- For purposes of this section--

      (1) AGENCY- The term ‘agency’ means a Federal banking agency or the National Credit Union Administration.

      (2) FEDERAL BANKING AGENCY- The term ‘Federal banking agency’ has the meaning given to such term in section 3(z) of the Federal Deposit Insurance Act.

      (3) MATERIAL SUPERVISORY DETERMINATION- The term ‘material supervisory determination’--

        (A) means a supervisory determination relating to an insured depository institution that the Federal banking agency has determined to be material under guidelines which the agency shall issue; and

        (B) does not include a determination by a Federal banking agency to appoint a conservator or receiver for an insured depository institution or a decision to take action pursuant to section 38 of the Federal Deposit Insurance Act.

SEC. 130. ALTERNATIVE RULES FOR DISCLOSURES FOR RADIO ADVERTISING OF CREDIT TRANSACTIONS, DEPOSIT ACCOUNTS, AND CONSUMER LEASES.

    (a) OPEN END CREDIT PLANS- Section 143 of the Truth in Lending Act (15 U.S.C. 1663) is amended--

      (1) by striking ‘No advertisement’ and inserting ‘(a) IN GENERAL- No advertisement’; and

      (2) by adding at the end the following new subsections:

    ‘(b) RADIO ADVERTISEMENTS- In order to provide a practical alternative for complying with the disclosure requirements of subsection (a) at the option of a creditor, an advertisement by radio broadcast to aid, promote, or assist, directly or indirectly, the extension of consumer credit under an open end credit plan shall be deemed to meet the requirements of subsection (a) if the advertisement, clearly and conspicuously--

      ‘(1) states any periodic rate that may be applied under the plan, expressed as an annual percentage rate;

      ‘(2) states that a variable periodic rate applies under the plan, if such a rate applies; and

      ‘(3) includes--

        ‘(A) a referral to--

          ‘(i) a toll-free telephone number that may be used by consumers to obtain the information required under subsection (a) in accordance with subsection (c); or

          ‘(ii) an advertisement that--

            ‘(I) appears in a publication in general circulation in the community served by the radio station (on which such advertisement is broadcast) during the period beginning 7 days before the broadcast and ending 7 days after the broadcast; and

            ‘(II) includes the information required to be disclosed under subsection (a); and

        ‘(B) in any case to which subparagraph (A)(ii) applies, the name and date of the publication.

    ‘(c) ESTABLISHMENT OF TOLL-FREE TELEPHONE NUMBER-

      ‘(1) IN GENERAL- In the case of an advertisement described in subsection (b) or section 144(e) or 147(b) which includes a referral to a toll-free telephone number in accordance with such subsection or section, a creditor that offers the credit which such advertisement aids, supports, or assists shall--

        ‘(A) establish the telephone number by not later than the date on which any advertisement is broadcast which includes a referral to the number; and

        ‘(B) maintain the telephone number at least until the end of the 7-day period beginning on the date of any such broadcast.

      ‘(2) AVAILABILITY OF INFORMATION-

        ‘(A) IN GENERAL- The creditor referred to in paragraph (1) shall provide the information required under subsection (a) with respect to the open end credit plan for which the toll-free telephone line is established to any person who calls such number in response to an advertisement by radio broadcast.

        ‘(B) FORM OF INFORMATION- The information required to be provided under subparagraph (A) may be provided orally or by offering to mail a written copy of such information to such person.’.

    (b) CREDIT OTHER THAN UNDER OPEN END CREDIT PLANS- Section 144 of the Truth in Lending Act (15 U.S.C. 1664) is amended--

      (1) in subsection (a) by inserting ‘APPLICATION GENERALLY- ’ before ‘Except as provided’;

      (2) in subsection (b) by inserting ‘LIMITATION ON APPLICATION- ’ before ‘The provisions’;

      (3) in subsection (c) by inserting ‘DISCLOSURES REGARDING FINANCE CHARGES- ’ before ‘If any’;

      (4) in subsection (d) by inserting ‘OTHER REQUIRED DISCLOSURES- ’ before ‘If any advertisement’; and

      (5) by adding at the end the following new subsection:

    ‘(e) RADIO ADVERTISEMENTS- In order to provide a practical alternative for complying with the disclosure requirements of subsection (d) at the option of the creditor, an advertisement by radio broadcast to aid, promote, or assist, directly or indirectly, any consumer credit sale, loan, or other extension of credit subject to this title, other than an open end consumer credit plan, shall be deemed to meet the requirements of subsection (d) if the advertisement, clearly and conspicuously--

      ‘(1) states the rate of the finance charge, expressed as an annual percentage rate;

      ‘(2) states that the rate of finance charge may be increased after the date on which credit is extended, if such an increase is authorized under the terms of the extension of credit to which the advertisement relates; and

      ‘(3) includes--

        ‘(A) a referral to--

          ‘(i) a toll-free telephone number that may be used by consumers to obtain, in accordance with section 143(c), the information required under subsection (d); or

          ‘(ii) an advertisement that--

            ‘(I) appears in a publication in general circulation in the community served by the radio station (on which such advertisement is broadcast) during the period beginning 7 days before the broadcast and ending 7 days after the broadcast; and

            ‘(II) includes the information required to be disclosed under subsection (d); and

        ‘(B) in any case to which subparagraph (A)(ii) applies, the name and date of the publication.’.

    (c) CREDIT PLANS SECURED BY CONSUMER’S PRINCIPAL DWELLING- Section 147 of the Truth in Lending Act (15 U.S.C. 1665b) is amended--

      (1) by redesignating subsections (b), (c), (d), (e), and (f) as subsections (c), (d), (e), (f), and (g), respectively; and

      (2) by inserting after subsection (a) the following:

    ‘(b) RADIO ADVERTISEMENTS- In order to provide a practical alternative for complying with the disclosure requirements of subsection (a) at the option of a creditor, an advertisement by radio broadcast to aid, promote, or assist, directly or indirectly, the extension of consumer credit under an open end consumer credit plan under which extensions of credit are secured by a consumer’s principal dwelling shall be deemed to meet the requirements of subsection (a) if the advertisement, clearly and conspicuously--

      ‘(1) contains the information described in paragraphs (2) and (3) of subsection (a); and

      ‘(2) includes--

        ‘(A) a referral to--

          ‘(i) a toll-free telephone number that may be used by consumers to obtain the information required under subsection (a) in accordance with section 143(c); or

          ‘(ii) an advertisement that--

            ‘(I) appears in a publication in general circulation in the community served by the radio station (on which such advertisement is broadcast) during the period beginning 7 days before the broadcast and ending 7 days after the broadcast; and

            ‘(II) includes the information required to be disclosed under subsection (a); and

        ‘(B) in any case to which subparagraph (A)(ii) applies, the name and date of the publication.’.

    (d) DEPOSITS SUBJECT TO TRUTH IN SAVINGS- Section 263(b) of the Truth in Savings Act (12 U.S.C. 4302(b)) is amended--

      (1) by striking ‘EXCEPTION- The Board may--’ and inserting ‘EXCEPTION-

      ‘(1) IN GENERAL- The Board may’; and

      (2) by adding at the end the following new paragraph:

      ‘(2) RADIO ADVERTISEMENTS- Paragraphs (4), (5), and (6) of subsection (a) shall not apply with respect to an advertisement, announcement, or solicitation (which is otherwise subject to such subsection) by radio broadcast.’.

    (e) CONSUMER LEASES- Section 184 of the Truth in Leasing Act is amended--

      (1) by redesignating subsection (b) as subsection (d); and

      (2) by inserting after subsection (a) the following new subsections:

    ‘(b) RADIO ADVERTISEMENTS- In order to provide a practical alternative for complying with the disclosure requirements of subsection (a) at the option of a lessor, an advertisement by radio broadcast to aid, promote, or assist, directly or indirectly, any consumer lease shall be deemed to meet the requirements of subsection (a) if the advertisement, clearly and conspicuously--

      ‘(1) states the information described in paragraphs (1) and (2) of subsection (a);

      ‘(2) states the total amount of all payments required under the lease; and

      ‘(3) includes--

        ‘(A) a referral to--

          ‘(i) a toll-free telephone number that may be used by consumers to obtain the information required under subsection (a) in accordance with subsection (c); or

          ‘(ii) an advertisement that--

            ‘(I) appears in a publication in general circulation in the community served by the radio station (on which such advertisement is broadcast) during the period beginning 7 days before the broadcast and ending 7 days after the broadcast; and

            ‘(II) includes the information required to be disclosed under subsection (a); and

        ‘(B) in any case to which subparagraph (A)(ii) applies, the name and date of the publication.

    ‘(c) ESTABLISHMENT OF TOLL-FREE TELEPHONE NUMBER-

      ‘(1) IN GENERAL- In the case of an advertisement described in subsection (b) which includes a referral to a toll-free telephone number in accordance with such subsection, a lessor who offers the consumer lease which such advertisement aids, supports, or assists shall--

        ‘(A) establish the telephone number by not later than the date on which an advertisement is broadcast which includes a referral to the number; and

        ‘(B) maintain the telephone number at least until the end of the 7-day period beginning on the date of any such broadcast.

      ‘(2) AVAILABILITY OF INFORMATION-

        ‘(A) IN GENERAL- The lessor referred to in paragraph (1) shall provide the information required under subsection (a) with respect to the consumer lease for which the toll-free telephone line is established to any person who calls such number in response to an advertisement by radio broadcast.

        ‘(B) FORM OF INFORMATION- The information required to be provided under subparagraph (A) may be provided orally or by offering to mail a written copy of such information to such person.’.

Subtitle D--Reports, Studies, Streamlined Regulatory Requirements

SEC. 131. STUDY ON CAPITAL STANDARDS AND THEIR IMPACT ON THE ECONOMY.

    (a) IN GENERAL- The Secretary of the Treasury, in consultation with the Federal banking agencies, shall conduct a study of the effect that the implementation of risk-based capital standards, including the Basle international capital standards, is having on--

      (1) the safety and soundness of insured depository institutions;

      (2) the availability of credit, particularly to individuals and small businesses; and

      (3) economic growth.

    (b) REPORT-

      (1) IN GENERAL- Before the end of the 1-year period beginning on the date of the enactment of this Act, the Secretary of the Treasury shall submit a report to the Congress on the findings and conclusions of the Secretary with respect to the study conducted under subsection (a).

      (2) RECOMMENDATIONS- The report shall contain any recommendations with respect to capital standards that the Secretary of the Treasury may determine to be appropriate.

    (c) DEFINITIONS- For purposes of this section, the terms ‘Federal banking agency’ and ‘insured depository institution’ have the meanings given to such terms in section 3 of the Federal Deposit Insurance Act.

SEC. 132. STUDY OF THE CONSUMER CREDIT SYSTEM.

    (a) IN GENERAL- The Secretary of the Treasury, in consultation with the Board of Governors of the Federal Reserve System, the Administrator of the Small Business Administration, the Secretary of Housing and Urban Development, and the other Federal banking agencies, shall conduct a study of the manner in which and the extent to which credit is made available for consumers and small businesses in order to identify procedures which have the effect of--

      (1) reducing the amount of credit available for such purposes or the number of persons eligible for such credit; and

      (2) increasing the level of consumer inconvenience, cost, and time delays in connection with the extension of consumer and small business credit without any corresponding benefit with respect to the protection of consumers or small businesses or the safety and soundness of insured depository institutions.

    (b) REPORT-

      (1) IN GENERAL- Before the end of the 1-year period beginning on the date of the enactment of this Act, the Secretary of the Treasury shall submit report to the Congress on the findings and conclusions of the Secretary with respect to the study conducted under subsection (a).

      (2) RECOMMENDATIONS- The report shall contain any recommendations for administrative action that the Secretary of the Treasury may determine to be appropriate.

    (c) DEFINITIONS- For purposes of this section, the terms ‘Federal banking agency’ and ‘insured depository institution’ have the meanings given to such terms in section 3 of the Federal Deposit Insurance Act.

SEC. 133. STUDIES ON THE IMPACT OF THE PAYMENT OF INTEREST ON RESERVES.

    (a) FEDERAL RESERVE STUDY- Not later than 180 days after the date of enactment of this Act, the Board of Governors of the Federal Reserve System, in consultation with the Federal Deposit Insurance Corporation and the National Credit Union Administration, shall conduct a study and report to Congress on--

      (1) the necessity, for monetary policy purposes, of continuing to require insured depository institutions to maintain sterile reserves;

      (2) the appropriateness of paying a market rate of interest to insured depository institutions on sterile reserves or, in the alternative, providing for payment of such interest into the appropriate deposit insurance fund;

      (3) the monetary impact that the failure to pay interest on sterile reserves has had on insured depository institutions, including an estimate of the total dollar amount of interest and the potential income lost by insured depository institutions; and

      (4) the impact that the failure to pay interest on sterile reserves has had on the ability of the banking industry to compete with nonbanking providers of financial services and with foreign banks.

    (b) BUDGETARY IMPACT STUDY- Not later than 180 days after the date of enactment of this Act, the Director of the Office of Management and Budget and the Director of the Congressional Budget Office, in consultation with the Committees on the Budget of the Senate and the House of Representatives, shall each conduct a study and report to the Congress on the budgetary impact of--

      (1) paying a market rate of interest to insured depository institutions on sterile reserves; and

      (2) paying such interest into the respective deposit insurance funds.

    (c) INSURED DEPOSITORY INSTITUTION DEFINED- For purposes of this section, the term ‘insured depository institution’--

      (1) has the meaning given to such term in section 3(c) of the Federal Deposit Insurance Act; and

      (2) includes an insured credit union (as defined in section 101 of the Federal Credit Union Act).

SEC. 134. STREAMLINING OF REGULATORY REQUIREMENTS.

    (a) REVIEW OF REGULATIONS; REGULATORY UNIFORMITY- During the 2-year period beginning on the date of the enactment of this Act, each Federal banking agency shall, consistent with principles of safety and soundness and the public interest--

      (1) conduct a review of the regulations and written policies of that agency to--

        (A) streamline those regulations and policies in order to improve efficiency, reduce unnecessary costs, and eliminate unwarranted constraints on credit availability;

        (B) remove inconsistencies and outmoded and duplicative requirements; and

        (C) with respect to regulations prescribed pursuant to section 18(o) of the Federal Deposit Insurance Act, consider the impact that such standards have on the availability of credit for small business, residential, and agricultural purposes, and on low- and moderate-income communities;

      (2) work jointly with the other Federal banking agencies to make uniform all regulations and guidelines implementing common statutory or supervisory policies; and

      (3) review what information is collected under the fair housing data system, from which institutions the information is collected, how the information collected is used, and how that information compares with information collected under the Home Mortgage Disclosure Act of 1975.

    (b) REVIEW OF DISCLOSURES- The Board of Governors of the Federal Reserve System, in consultation with the consumer advisory council to such Board, shall--

      (1) review the regulations and written policies of the Board with respect to disclosures pursuant to the Truth in Lending Act with regard to variable-rate mortgages in order to simplify the disclosures and make the disclosures more meaningful for consumers; and

      (2) implement any regulatory changes, if appropriate, consistent with applicable law.

    (c) REPORT TO CONGRESS- The Federal banking agencies shall submit a joint report to the Congress annually for 3 years following the date of the enactment of this Act detailing the progress of the agencies in carrying out the requirements of subsection (a).

SEC. 135. CALL REPORT SIMPLIFICATION.

    (a) MODERNIZATION OF CALL REPORT FILING AND DISCLOSURE SYSTEM- In order to reduce the administrative requirements pertaining to bank reports of condition, savings association financial reports, and bank holding company consolidated financial statements, and to improve the timeliness of such reports and statements, the Federal banking agencies shall--

      (1) work jointly to develop a system under which--

        (A) insured depository institutions and their affiliates may file such reports and statements electronically; and

        (B) the Federal banking agencies may make such reports and statements available to the public electronically; and

      (2) not later than 1 year after the date of the enactment of this Act, submit a report to the Congress containing recommendations for legislation that would enhance efficiency for filers and users of such reports and statements.

    (b) UNIFORM REPORTS AND SIMPLIFICATION OF INSTRUCTIONS- The Federal banking agencies shall, consistent with the principles of safety and soundness, work jointly to--

      (1) adopt a single form for the filing of core information required to be submitted under Federal law to all such agencies in the reports and statements referred to in subsection (a);

      (2) simplify instructions accompanying such reports and statements; and

      (3) provide an index to the instructions that is adequate to meet the needs of both filers and users.

    (c) REVIEW OF CALL REPORT SCHEDULE- Each Federal banking agency shall--

      (1) review the information required by schedules supplementing the core information referred to in subsection (b); and

      (2) eliminate requirements that are not warranted for reasons of safety and soundness or other public purposes.

SEC. 136. ADMINISTRATIVE CONSIDERATION OF BURDEN WITH NEW REGULATIONS.

    (a) IN GENERAL- In determining the effective date and administrative compliance requirements for new regulations that impose additional reporting, disclosure, or other requirements on insured depository institutions, each Federal banking agency (as defined in section 3 of the Federal Deposit Insurance Act) shall consider, consistent with the principles of safety and soundness and the public interest--

      (1) any administrative burdens that such regulations would place on depository institutions, including small depository institutions, and customers of depository institutions; and

      (2) the benefits of such regulations.

    (b) ADEQUATE TRANSITION PERIOD FOR NEW REGULATIONS-

      (1) IN GENERAL- New regulations and amendments to regulations prescribed by a Federal banking agency which impose additional reporting, disclosures, or other new requirements on insured depository institutions shall take effect on the 1st day of the calendar quarter which begins at or after the end of the 90-day period beginning on the date the regulations are published in final form unless--

        (A) the agency makes a finding that--

          (i) an emergency exists which requires the regulation to take effect before the 1st day of such calendar quarter; or

          (ii) a delay would have a substantial impact upon the safety and soundness of insured depository institutions;

        (B) the regulation is issued by the Board of Governors of the Federal Reserve System in connection with the implementation of monetary policy; or

        (C) the regulation is required to take effect on a date other than the date determined under this paragraph pursuant to any other Act of Congress.

      (2) EARLY COMPLIANCE- Any person who is subject to a regulation described in paragraph (1) may comply with the regulation before the effective date of the regulation.

SEC. 137. ELIMINATION OF DUPLICATIVE FILINGS.

    The Federal banking agencies (as defined in section 3(z) of the Federal Deposit Insurance Act) shall work jointly--

      (1) to eliminate, to the extent practicable, duplicative or otherwise unnecessary requests for information in connection with applications or notices to the agencies; and

      (2) to harmonize, to the extent practicable, any inconsistent publication and public notice requirements.

SEC. 138. RECOURSE AGREEMENTS.

    The Federal banking agencies (as defined in section 3(z) of the Federal Deposit Insurance Act) shall jointly--

      (1) review the manner in which loans sold with recourse by insured depository institutions are treated under capital standards and other accounting principles applicable with respect to such insured depository institutions; and

      (2) revise any such standard or principle in accordance with the findings and conclusions of the agencies pursuant to such review before the end of the 1-year period beginning on the date of the enactment of this Act, except the revision may not be less stringent than generally accepted accounting principles.

SEC. 139. ANTITRUST REPORTS IN CONNECTION WITH MERGER TRANSACTIONS.

    (a) BANKING AGENCY REPORTS- Section 18(c)(4) of the Federal Deposit Insurance Act (12 U.S.C. 1828(c)(4)) is amended by adding at the end the following new sentence: ‘Notwithstanding the preceding sentence, a banking agency shall not be required to file a report requested by the responsible agency under this paragraph if the other banking agency advises the responsible agency by the applicable date under the preceding sentence that the report is not necessary because none of the effects described in paragraph (5) is likely to occur as a result of the transaction.’.

    (b) LIMITATION ON DELAY OF CONSUMMATION OF TRANSACTION- The last sentence of section 18(c)(6) of the Federal Deposit Insurance Act (12 U.S.C. 1828(c)(6)) is amended by inserting before the period at the end the following :‘, unless the agency is advised by the other 2 banking agencies before such date that the reports required under paragraph (4) on the anticompetitive effects of the transaction are not necessary because none of the effects described in paragraph (5) is likely to occur as a result of the transaction’.

SEC. 140. BANKERS’ BANKS.

    (a) OWNERSHIP BY DEPOSITORY INSTITUTION HOLDING COMPANIES-

      (1) PROVISION RELATING TO NATIONAL BANK INVESTMENTS- The 5th proviso of the 7th undesignated paragraph of section 5136 of the Revised Statutes of the United States (12 U.S.C. 24) is amended by inserting ‘or by depository institution holding companies (as defined in section 3(w) of the Federal Deposit Insurance Act)’ after ‘is owned exclusively (except to the extent directors’ qualifying shares are required by law) by depository institutions’.

      (2) PROVISION RELATING TO NATIONAL BANK CHARTERS- Section 5169(b)(1) of the Revised Statutes of the United States (12 U.S.C. 27(b)(1)) is amended by inserting ‘or by depository institution holding companies (as defined in section 3(w) of the Federal Deposit Insurance Act)’ after ‘is owned exclusively (except to the extent directors’ qualifying shares are required by law) by other depository institutions’.

    (b) OWNERSHIP BY SAVINGS ASSOCIATIONS- Section 5(c)(4) of the Home Owners’ Loan Act (12 U.S.C. 1464(c)(4)) is amended by adding at the end the following new subparagraph:

        ‘(E) BANKERS’ BANKS- A Federal savings association may purchase, for the association’s own account, shares of stock of a bankers’ bank or holding company described in the 5th proviso of the 7th undesignated paragraph of section 5136 of the Revised Statutes of the United States or section 5169(b) of such Revised Statutes on the same terms and conditions a national bank may purchase such shares.’.

    (c) TECHNICAL AND CONFORMING AMENDMENTS-

      (1) BANK HOLDING COMPANY ACT- Section 3(e) of the Bank Holding Company Act of 1956 (12 U.S.C. 1842(e)) is amended by striking the second sentence.

      (2) DEPOSITORY INSTITUTION MANAGEMENT INTERLOCKS ACT AMENDMENT- Section 202(3)(D) of the Depository Institution Management Interlocks Act (12 U.S.C. 3201(3)(D)) is amended by striking ‘the voting securities’ the 1st place such term appears and all that follows through ‘the surplus of such other bank; or’ and inserting ‘which is a bankers’ bank described in the 5th proviso of the 7th undesignated paragraph of section 5136 of the Revised Statutes of the United States; or’.

    (d) SERVICES-

      (1) PROVISION RELATING TO NATIONAL BANK INVESTMENTS- The 5th proviso of the 7th undesignated paragraph of section 5136 of the Revised Statutes of the United States (12 U.S.C. 24) is amended by striking ‘engaged exclusively in providing services for other depository institutions and their officers, directors and employees’ and inserting ‘engaged exclusively in providing services to or for other depository institutions and their officers, directors and employees and providing correspondent banking services at the request of other depository institutions (any such bank or company is commonly referred to as a ‘bankers’ bank’)’.

      (2) PROVISION RELATING TO NATIONAL BANK CHARTERS- Section 5169(b)(1) of the Revised Statutes of the United States (12 U.S.C. 27(b)(1)) is amended by striking ‘engage exclusively in providing services for other depository institutions and their officers, directors and employees’ and inserting ‘engage exclusively in providing services to or for other depository institutions and their officers, directors and employees and providing correspondent banking services at the request of other depository institutions (any such association is commonly referred to as a ‘bankers’ bank’)’.

SEC. 141. DUE PROCESS PROTECTIONS RELATING TO ATTACHMENT OF ASSETS.

    Section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818) is amended--

      (1) by striking subsection (i)(4)(B) and inserting the following new subparagraph:

        ‘(B) STANDARD-

          ‘(i) SHOWING- Rule 65 of the Federal Rules of Civil Procedure shall apply with respect to any proceeding under subparagraph (A) without regard to the requirement of such rule that the applicant show that the injury, loss, or damage is irreparable and immediate.

          ‘(ii) STATE PROCEEDING- If, in the case of any proceeding in a State court, the court determines that rules of civil procedure available under the laws of such State provide substantially similar protections to such party’s right to due process as Rule 65 (as modified with respect to such proceeding by clause (i)), the relief sought under subparagraph (A) may be requested under the laws of such State.’; and

      (2) in subsection (b), by adding the following new paragraph:

      ‘(9) STANDARD FOR CERTAIN ORDERS- No authority under this subsection or subsection (c) to prohibit any institution-affiliated party from withdrawing, transferring, removing, dissipating, or disposing of any funds, assets, or other property may be exercised unless the agency meets the standards of Rule 65 of the Federal Rules of Civil Procedure without regard to the requirement of such rule that the applicant show that the injury, loss, or damage is irreparable and immediate.’.

SEC. 142. TIME LIMIT ON AGENCY CONSIDERATION OF COMPLETED APPLICATIONS.

    (a) IN GENERAL- Each Federal banking agency (as defined in section 3(z) of the Federal Deposit Insurance Act) shall take final action on any application to the agency before the end of the 1-year period beginning on the date a completed application is received by the agency.

    (b) WAIVER BY APPLICANT AUTHORIZED- Any person submitting an application to a Federal banking agency may waive the applicability of subsection (a) with respect to such application at any time.

SEC. 143. TIMELY COMPLETION OF CRA REVIEW.

    The comprehensive regulatory review of the Community Reinvestment Act of 1977 that, as of the date of the enactment of this Act, is being conducted by the Federal banking agencies, shall be completed before the end of the 6-month period beginning on such date of enactment.

SEC. 144. REVISIONS OF STANDARDS.

    Section 305(b)(1) of the Federal Deposit Insurance Corporation Improvement Act of 1991 (12 U.S.C. 1828 note) is amended--

      (1) by striking ‘and’ at the end of subparagraph (A);

      (2) by striking the period at the end of subparagraph (B) and inserting ‘; and’; and

      (3) by adding at the end the following new subparagraph:

        ‘(C) ensure that such revisions take into account the size and activities of the institutions and do not cause undue reporting burdens.’.

SEC. 145. FEASIBILITY STUDY OF DATA BANK.

    (a) IN GENERAL- Not later than 18 months after the date of the enactment of this Act, the Financial Institutions Examination Council shall study the feasibility, including the costs and benefits to insured depository institutions, of establishing and maintaining a data bank for reports submitted by any depository institution to a Federal banking agency and report the results of such study to the Congress.

    (b) ADDITIONAL FACTORS- The study under subsection (a) shall consider the feasibility of--

      (1) permitting depository institutions to file reports directly with the data bank; and

      (2) permitting Federal banking agencies, State bank supervisors, and the public to obtain access to any appropriate report on file with the data bank which such agency or supervisor or the public is otherwise authorized to receive.

TITLE II--COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS

SEC. 201. SHORT TITLE; TABLE OF CONTENTS.

    (a) SHORT TITLE- This title may be cited as the ‘Community Development Banking and Financial Institutions Act of 1993’.

    (b) TABLE OF CONTENTS-

TITLE II--COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS

      Sec. 201. Short title; table of contents.

      Sec. 202. Findings and purpose.

      Sec. 203. Definitions.

      Sec. 204. Establishment of National Fund for Community Development Banking.

      Sec. 205. Applications for assistance.

      Sec. 206. Community development partnerships.

      Sec. 207. Selection of institutions.

      Sec. 208. Assistance provided by the Fund.

      Sec. 209. Capitalization assistance to enhance liquidity.

      Sec. 210. Encouragement of private entities.

      Sec. 211. Clearinghouse function.

      Sec. 212. Training assistance for organizing and operating community development financial institutions.

      Sec. 213. Recordkeeping, reports, and audits.

      Sec. 214. Investment of receipts and proceeds.

      Sec. 215. Enforcement provisions.

      Sec. 216. Authorization of appropriations.

      Sec. 217. Conforming amendment.

      Sec. 218. Appointment of Community Enterprise Assessment Credit Board.

      Sec. 219. Community development credit union assistance.

      Sec. 220. Insured community development financial institution access to Federal home loan bank advances.

      Sec. 221. Community investment program incentives.

      Sec. 222. 30 percent lending cap increased.

SEC. 202. FINDINGS AND PURPOSE.

    (a) FINDINGS- The Congress finds that--

      (1) many of the Nation’s urban and rural communities and Indian reservations face critical social and economic problems arising in part from the lack of economic growth, people living in poverty, and the lack of employment and other opportunities;

      (2) the restoration and maintenance of the economies of these communities will require coordinated development strategies, intensive supportive services, and increased access to capital and credit for development activities, including investment in businesses, housing, commercial real estate, human development, and other activities that promote the long-term economic and social viability of the community;

      (3) in many urban and rural communities, low- and moderate-income neighborhoods, and Indian reservations, there is a shortage of capital and credit for business and affordable housing;

      (4) access to capital and credit is essential to unleash the untapped entrepreneurial energy of America’s poorest communities and to empower individuals and communities to become self-sufficient; and

      (5) community development financial institutions have proven their ability to identify and respond to community needs for capital, credit, and development services in the absence of, or as a complement to, services provided by other lenders.

    (b) PURPOSES- The purposes of this title are as follows:

      (1) To create a Community Development Banking and Financial Institutions Fund that will support a program for making investments in and providing assistance to community development financial institutions, including enhancing the liquidity of community development financial institutions.

      (2) To enable the Community Development Banking and Financial Institutions Fund to--

        (A) provide financial and technical assistance, including training, to community development financial institutions;

        (B) serve as a national information clearinghouse; and

        (C) be an institutional voice for community development.

      (3) To provide for the establishment of, or qualification of existing financial institutions as, community development financial institutions that, with the support of the Community Development Banking and Financial Institutions Fund, will provide capital, credit, and development services to targeted investment areas or populations, and will promote economic revitalization and community development.

SEC. 203. DEFINITIONS.

    For purposes of this title--

      (1) AFFILIATE- The term ‘affiliate’ has the meaning given to such term in section 2(k) of the Bank Holding Company Act of 1956.

      (2) APPROPRIATE FEDERAL BANKING AGENCY- The term ‘appropriate Federal banking agency’ has the meaning given to such term in section 3(q) of the Federal Deposit Insurance Act.

      (3) COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION-

        (A) IN GENERAL- The term ‘community development financial institution’ means any bank, savings association, depository institution holding company (subject to section 205(d)), credit union, microenterprise loan fund, community development corporation, community development revolving loan fund, minority-owned or other insured depository institution, or nondepository organization that--

          (i) has as the institution’s primary mission the promotion of community development through the provision of capital, credit, or development services, directly, through an affiliate, or through a community development partner, in the institution’s investment areas or to targeted populations; and

          (ii) encourages, through representation on the institution’s governing board or otherwise, the input of residents in the investment areas or the targeted populations.

        (B) GOVERNMENT AGENCIES EXCLUDED- The term ‘community development financial institution’ does not include any agency or instrumentality of the United States or any agency or instrumentality of any State or of any political subdivision of any State.

      (4) COMMUNITY DEVELOPMENT PARTNER- The term ‘community development partner’ means a person (other than an individual) that provides loans, equity investments, or development services, including a depository institution holding company, an insured depository institution, an insured credit union, a nonprofit organization, a State or local government agency, and an investment company authorized to operate pursuant to the Small Business Investment Act of 1958.

      (5) COMMUNITY DEVELOPMENT PARTNERSHIP- The term ‘community development partnership’ means an agreement between a community development financial institution and a community development partner to provide development services and loans or equity investments to an investment area or targeted population.

      (6) DEPOSITORY INSTITUTION HOLDING COMPANY- The term ‘depository institution holding company’ has the meaning given to such term in section 3(w) of the Federal Deposit Insurance Act.

      (7) DEVELOPMENT SERVICES- The term ‘development services’ means activities conducted by a community development financial institution or community development partner that promote community development by developing, supporting, and strengthening the lending, investment, and capacity-building activities undertaken by institutions, including--

        (A) business planning services;

        (B) financial and credit counseling services;

        (C) marketing and management assistance; and

        (D) administrative activities associated with lending or investment.

      (8) INDIAN RESERVATION- The term ‘Indian reservation’ includes public domain Indian allotments, former Indian reservations in the State of Oklahoma, land held by incorporated Native groups, regional corporations and village corporations (as defined in or established pursuant to the Alaska Native Claims Settlement Act), and dependent Indian communities within the borders of the United States, whether within the original or subsequently acquired territory of the United States and whether within or without the borders of a State.

      (9) INDIAN TRIBE- The term ‘Indian tribe’ means any Indian tribe, band, pueblo, nation, or other organized group or community, including any Alaska Native village or regional or village corporation as defined in or established pursuant to the Alaska Native Claims Settlement Act, which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians.

      (10) INSURED COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION- The term ‘insured community development financial institution’ means any community development financial institution that is an insured depository institution or an insured credit union.

      (11) INSURED CREDIT UNION- The term ‘insured credit union’ has the meaning given to such term in section 101(7) of the Federal Credit Union Act.

      (12) INSURED DEPOSITORY INSTITUTION- The term ‘insured depository institution’ has the meaning given to such term in section 3(c) of the Federal Deposit Insurance Act.

      (13) INVESTMENT AREA- The term ‘investment area’ means an identifiable community, including an Indian reservation, or identifiable communities that--

        (A) meet objective criteria of distress, including the number of low-income families, the extent of poverty, the extent of unemployment, the extend of unmet credit needs, the degree of availability of basic financial services, the degree of limited access to capital and credit provided by existing financial institutions, and other factors that the Fund determines to be appropriate; or

        (B) are located in an empowerment zone or enterprise community designated under section 1391 of the Internal Revenue Code of 1986.

      (14) QUALIFIED COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION- The term ‘qualified community development financial institution’ means a community development financial institution that meets the requirements of paragraphs (2) through (8) of section 205(b).

      (15) STATE- The term ‘State’ has the meaning given to such term in section 3 of the Federal Deposit Insurance Act.

      (16) SUBSIDIARY- The term ‘subsidiary’ has the meaning given to such term in section 3 of the Federal Deposit Insurance Act, except that a community development institution that is a corporation shall not be considered to be a subsidiary of any insured depository institution or bank holding company that controls less than 25 percent of the voting shares of the corporation.

      (17) TARGETED POPULATION- The term ‘targeted population’ means an identifiable group or identifiable groups of low-income or disadvantaged persons that are underserved by existing financial institutions, including an Indian tribe.

SEC. 204. ESTABLISHMENT OF NATIONAL FUND FOR COMMUNITY DEVELOPMENT BANKING.

    (a) ESTABLISHMENT-

      (1) IN GENERAL- There is hereby established a corporation to be known as the Community Development Banking and Financial Institutions Fund (hereafter in this title referred to as the ‘Fund’) that shall have the powers and responsibilities specified by this Act.

      (2) SUCCESSION- The Fund shall have succession until dissolved.

      (3) RESERVATION OF POWER OF THE CONGRESS- The charter of the Fund may be revised, amended, or modified by Congress at any time.

      (4) OFFICES- The offices of the Fund shall be in Washington, D.C.

    (b) BOARD OF DIRECTORS-

      (1) IN GENERAL- The powers and management of the Fund shall be vested in a Board of Directors (hereafter referred to in this title as the ‘Board’), which shall have 15 members.

      (2) MEMBERS- The members of the Board shall consist of the following:

        (A) The Secretary of Agriculture.

        (B) The Secretary of Commerce.

        (C) The Secretary of Housing and Urban Development.

        (D) The Secretary of the Interior.

        (E) The Secretary of the Treasury.

        (F) The Administrator of the Small Business Administration.

        (G) 9 private citizens, appointed by the President, who shall be selected, to the maximum extent practicable, to provide for national geographic representation and racial, ethnic, and gender diversity, and shall consist of the following individuals:

          (i) 2 individuals who are officers of existing community development financial institutions.

          (ii) 2 individuals who are officers of insured depository institutions (as such term is defined in section 3 of the Federal Deposit Insurance Act).

          (iii) 2 individuals who are officers of national consumer or public interest organizations.

          (iv) 2 individuals who have expertise in community development.

          (v) 1 individual who has personal experience and specialized expertise in the unique lending and community development issues confronted by Indian tribes on Indian reservations.

      (3) CHAIRPERSON- The President shall appoint from among the members of the Board specified in paragraph (2)(G) a chairperson of the Board, who shall serve at the pleasure of the President for a term of 2 years.

      (4) VICE-CHAIRPERSON- The President shall appoint from among the members specified in paragraph (2) a vice-chairperson who will serve as chairperson in the absence, disability, or recusal of the chairperson. The vice-chairperson shall serve at the pleasure of the President for a term of 2 years.

      (5) TERMS OF APPOINTED MEMBERS-

        (A) IN GENERAL- Each member appointed pursuant to paragraph (2)(G) shall serve at the pleasure of the President for a term of 4 years, except as provided in subparagraph (C).

        (B) VACANCIES- Any member appointed to fill a vacancy occurring before the expiration of the term for which the previous member was appointed shall be appointed for the remainder of such term. Appointed members may continue to serve following the expiration of their terms until a successor is appointed and qualified.

        (C) TERMS- The terms of the initial appointed members shall be for 4 years and shall begin on the date each member is appointed, except that 2 of the members initially appointed pursuant to paragraph (2)(G) shall be designated to serve at the pleasure of the President for 5 years.

      (6) ACTING OFFICIALS- In the event of a vacancy or absence of the individual in any of the offices described in subparagraphs (A) through (F) of paragraph (2), the official acting in that office shall be a member of the Board.

      (7) AUTHORITY TO DELEGATE- Each member of the Board specified in subparagraphs (A) through (F) of paragraph (2) may designate another official who has been appointed by the President with the advice and consent of the Senate within the same agency to serve as a member in his or her stead.

      (8) COMPENSATION-

        (A) GOVERNMENT OFFICERS OR EMPLOYEES- Members of the Board who are otherwise officers or employees of the United States shall serve without additional compensation for their duties as members, but shall be reimbursed by the Fund for travel, per diem, and other necessary expenses incurred in the performance of their duties, in accordance with sections 5702 and 5703 of title 5, United States Code.

        (B) APPOINTED MEMBERS- The appointed members of the Board shall be entitled to receive compensation at the daily equivalent of the rate for a position under Level IV of the Executive Schedule under section 5315 of title 5, United States Code, and shall be reimbursed by the Fund for travel, per diem, and other necessary expenses incurred in the performance of their duties, in accordance with sections 5702 and 5703 of title 5, United States Code.

      (9) MEETINGS- The Board shall hold meetings at least quarterly. Special meetings of the Board may be called by the Chairperson or on the written request of 3 members of the Board. A majority of the members of the Board in office shall constitute a quorum.

    (c) OFFICERS AND EMPLOYEES-

      (1) CHIEF EXECUTIVE OFFICER- The Board shall appoint a chief executive officer who shall be responsible for the management of the Fund and such other duties deemed appropriate by the Board.

      (2) CHIEF FINANCIAL OFFICER- The Board shall appoint a chief financial officer who shall oversee all of the financial management activities of the Fund.

      (3) INSPECTOR GENERAL- The Board shall also appoint an inspector general.

      (4) OTHER OFFICERS AND EMPLOYEES- The Board may appoint such other officers and employees of the Fund as the Board determines to be necessary or appropriate.

      (5) APPOINTMENT PROVISION AND RATES OF PAY- The chief executive officer, chief financial officer, and up to 3 other officers of the Fund may be--

        (A) appointed without regard to the provisions of title 5 of the United States Code, governing appointments in the Federal service; and

        (B) subject to paragraph (6), compensated without regard to chapter 51 and subchapter III of chapter 53 of title 5 of the United States Code,

      (6) MAXIMUM RATES OF PAY- The rate of pay for the chief executive officer shall not exceed the rate for a position under Level II of the Executive Schedule under section 5313 of title 5 of the United States Code and the rate of pay for the remaining 4 officers shall not exceed the rate for a position under Level IV of the Executive Schedule under section 5315 of title 5 of the United States Code.

    (d) GENERAL POWERS- In carrying out the Fund’s powers and duties, the Fund--

      (1) shall have all necessary and proper powers to carry out the Fund’s authority under this title;

      (2) may adopt, alter, and use a corporate seal, which shall be judicially noticed;

      (3) may sue and be sued in the Fund’s corporate name and complain and defend in any court of competent jurisdiction;

      (4) may adopt, amend, and repeal bylaws and regulations governing the manner in which the Fund’s business may be conducted and shall have power to make such rules and regulations as may be necessary or appropriate to implement the provisions of this title;

      (5) may enter into and perform such agreements, contracts, and transactions as may be deemed necessary or appropriate to the conduct of activities authorized under this title;

      (6) may determine the character of and necessity for its expenditures and the manner in which they shall be incurred, allowed, and paid;

      (7) may utilize or employ the services of personnel of any agency or instrumentality of the United States with the consent of the agency or instrumentality concerned on a reimbursable or nonreimbursable basis; and

      (8) may execute all instruments necessary or appropriate in the exercise of any of the Fund’s functions under this title and may delegate to the members of the Board, to the chief executive officer, or the officers of the Fund such of the Fund’s powers and responsibilities as it deems necessary or appropriate for the administration of the Fund.

    (e) WHOLLY-OWNED GOVERNMENT CORPORATION-

      (1) IN GENERAL- The Fund shall be a wholly-owned Government corporation in the executive branch and shall be treated in all respects as an agency of the United States, except to the extent this title provides otherwise.

      (2) TECHNICAL AND CONFORMING AMENDMENT- Section 9101(3) of title 31, United States Code, is amended--

        (A) by redesignating paragraphs (B) through (M) as paragraphs (C) through (N), respectively; and

        (B) by inserting after paragraph (A) the following:

        ‘(B) the Community Development Banking and Financial Institutions Fund.’.

      (3) Section 9107(b) of title 31, United States Code, shall not apply to deposits of the Fund made pursuant to section 207.

    (f) LIMITATION OF FUND AND FEDERAL LIABILITY- The liability of the Fund and of the United States Government arising out of any investment in a community development financial institution in accordance with this title shall be limited to the amount of the investment and the Fund shall be exempt from any assessments and other liabilities that may be imposed on controlling or principal shareholders by any Federal law or the law of any State. A community development financial institution that receives assistance pursuant to this title shall not be deemed to be an agency, department, or instrumentality of the United States.

    (g) PROHIBITION OF ISSUANCE OF SECURITIES- The Fund may not issue stock, bonds, debentures, notes, or other securities.

SEC. 205. APPLICATIONS FOR ASSISTANCE.

    (a) FORM AND PROCEDURES-

      (1) IN GENERAL- An application for assistance under this title shall be submitted by an applicant in such form and in accordance with such procedures as the Board shall establish.

      (2) REGULATIONS- The Board shall publish regulations with respect to application requirements and procedures not later than 210 days after enactment of this title.

    (b) MINIMUM REQUIREMENTS- Except as provided in section 209, the Board shall require that the application--

      (1) demonstrate to the satisfaction of the Board that the applicant is, or upon the receipt of a charter will be, a community development financial institution;

      (2) demonstrate that the applicant will serve--

        (A) a targeted population; or

        (B) an area which is an investment area;

      (3) in the case of an applicant that has previously received assistance under this title, demonstrate that the applicant--

        (A) has successfully carried out its responsibilities under this title;

        (B) has become or is about to become an entity that will not be dependent upon assistance from the Fund for continued viability; and

        (C) will expand its operations into a new investment area, offer new services, or will increase the volume of its current business;

      (4) in the case of a community development financial institution with existing operations, demonstrate a record of success of serving investment areas or targeted populations;

      (5) include a detailed and comprehensive strategic plan for the organization that contains--

        (A) a business plan of at least 5 years that demonstrates the applicant is properly managed and has the capacity to form and operate a community development financial institution that is, or will become, an entity that will not be dependent upon assistance from the Fund for continued viability;

        (B) a statement that the applicant has, or will have, in its charter or other governing documents a primary commitment to community development, or other evidence of a prior history and a continuing affirmation of a primary commitment to community development;

        (C) an analysis of the needs of the investment areas or targeted populations and a strategy for how the applicant will attempt to meet those needs;

        (D) a plan to coordinate use of assistance from the Fund with existing assistance programs of the Federal Government, State and local governments, Indian tribes, and government-sponsored enterprises and with private sector financial services;

        (E) a statement that the proposed activities of the applicant are consistent with existing economic, community, and housing development plans adopted by or applicable to the investment areas;

        (F) a description of how the applicant will affiliate, network, or otherwise coordinate with a full range of community organizations and financial institutions which provide, or will provide, capital, credit, or secondary markets in order to assure that banking, economic development, investment, affordable housing, and other related services will be available within the investment areas or to targeted populations; and

        (G) such other information as the Board deems appropriate for inclusion in the strategic plan;

      (6) demonstrate that the applicant will carry on its activities consistent with the purposes of this title within an investment area or with respect to a targeted population;

      (7) include a detailed and specific statement of applicant’s plans and likely sources of funds to match the amount of assistance from the Fund with funds from private sources in accordance with the requirements of section 208(e); and

      (8) include such other information as the Board may require.

    (c) PRE-APPLICATION OUTREACH PROGRAM- The Fund shall provide for an outreach program to identify and provide information to potential applicants and to increase the capacity of potential applicants to meet the application and other requirements of this title.

    (d) CONDITIONS FOR QUALIFICATION OF HOLDING COMPANIES-

      (1) CONSOLIDATED TREATMENT- A depository institution holding company may qualify as a community development financial institution only if the holding company and the holding company’s subsidiaries collectively satisfy the requirements of clauses (i) and (ii) of subparagraph (A) of section 203(3)(A).

      (2) EXCLUSION OF SUBSIDIARY FOR FAILURE TO MEET CONSOLIDATED TREATMENT RULE- No subsidiary of a depository institution holding company may qualify as a community development financial institution if the holding company and the company’s subsidiaries collectively do not meet the requirements of clauses (i) and (ii) of subparagraph (A) of section 203(3)(A).

SEC. 206. COMMUNITY DEVELOPMENT PARTNERSHIPS.

    (a) APPLICATION- An application for assistance may be filed jointly by a community development financial institution and a community development partner to carry out a community development partnership.

    (b) APPLICATION REQUIREMENTS- The Fund shall require a community development partnership application to--

      (1) meet the minimum requirements established for community development financial institutions under section 205(b), except that the criteria specified in paragraph (1) and subparagraphs (A) and (B) of paragraph (5) of such section shall not apply to the community development partner;

      (2) describe how each coapplicant will participate in carrying out the community development partnership and how the partnership will enhance activities serving the investment area or targeted population; and

      (3) demonstrate that the community development partnership activities are consistent with the strategic plan submitted by the community development financial institution coapplicant.

    (c) SELECTION CRITERIA- The Fund shall consider a community development partnership application based on the selection criteria set out in section 207, except that the criterion specified in subparagraphs (A) and (L) of subsection (a)(2) of such section shall not apply to the community development partner.

    (d) LIMITATION ON DISTRIBUTION OF ASSISTANCE- Assistance provided upon approval of an application under this section shall be distributed only to the community development financial institution coapplicant, and shall not be used to fund any activities carried out directly by the community development partner or an affiliate of the partner.

    (e) PERFORMANCE GOALS- The Fund shall negotiate performance goals for each community development partnership in the manner provided in section 208(f)(3)(B). Such performance goals shall be incorporated into the performance goals of the community development financial institution coapplicant.

    (f) OTHER REQUIREMENTS AND LIMITATIONS- All other requirements and limitations imposed by this subtitle on a community development financial institution assisted under this subtitle shall apply (in the manner that the Fund determines to be appropriate) to assistance provided to carry out community development partnerships. The Fund may establish additional guidelines and restrictions on the use of Federal funds to carry out community development partnerships.

SEC. 207. SELECTION OF INSTITUTIONS.

    (a) SELECTION CRITERIA-

      (1) IN GENERAL- Except as provided in section 209, the Board shall, in the Board’s discretion, select applications that meet the requirements of section 205 and award assistance from the Fund in accordance with section 208.

      (2) FACTORS TO BE CONSIDERED- In selecting applications, the Board shall consider applications based on the following factors and such other factors as the Board may determine to be appropriate:

        (A) The likelihood of success of the applicant in forming and operating a community development financial institution.

        (B) The range and comprehensiveness of the capital, credit, and development services to be provided by the applicant.

        (C) The extent of the need, as measured by objective criteria of distress, within the investment areas or targeted populations for the types of activities proposed by the applicant.

        (D) The likelihood that the proposed activities will benefit a significant portion of the investment areas or targeted populations or, in the case of a community development financial institution with existing operations, evidence of a record of success in serving investment areas or targeted populations.

        (E) The extent to which the applicant will concentrate its activities on serving low and very low-income families.

        (F) The evidence of the extent of a broad cross-section of support from the investment areas or targeted populations.

        (G) The experience and background of the proposed management team.

        (H) The amount of legally enforceable commitments available at the time of application to meet or exceed the matching requirements under section 208(e) and the strength of the plan for raising the balance of the match.

        (I) In the case of applicants that have previously received assistance pursuant to this title, the extent to which they have met or exceeded the performance goals established in connection with such assistance.

        (J) The extent to which the proposed activities will expand the employment base within the investment areas or the targeted populations.

        (K) The extent to which the applicant is, or will be, community-owned or community-governed.

        (L) Whether the applicant is, or will become, an insured community development financial institution.

        (M) Whether the applicant is, or will be located, in an empowerment zone or enterprise community designated under section 1391 of the Internal Revenue Code of 1986 or a rural or urban area which is not an empowerment zone or enterprise community and which has a median income of 80 percent or less of the national median income.

        (N) In the case of an institution that is not an insured community development financial institution, the extent to which the institution has or will have the ability to increase its resources through affiliation with a secondary market, insured depository institution, or other financial intermediary in order to multiply the amount of capital or credit available for community development.

        (O) In the case of an insured depository institution or insured credit union applicant, whether the institution--

          (i) has or will have a substantial affiliation with an entity or network of entities that are community development financial institutions; and

          (ii) has a comprehensive plan for providing meaningful financial assistance to such an entity or network of entities.

    (b) GEOGRAPHIC DIVERSITY-

      (1) IN GENERAL- In addition to the above, in making its selections the Board shall seek to fund a geographically diverse group of applicants, which shall include applicants from nonmetropolitan and rural areas and small cities.

      (2) GOAL FOR FUNDING- The Board should seek to provide funding for applicants which are serving nonmetropolitan and rural areas and small cities with no less than one quarter of the funds available to the Board in any year.

    (c) PUBLICATION REQUIREMENT- The Board shall publish regulations with respect to its selection criteria not later than 210 days after the date of the enactment of this title.

SEC. 208. ASSISTANCE PROVIDED BY THE FUND.

    (a) PURPOSE OF ASSISTANCE-

      (1) GENERAL PURPOSES- The Fund shall work to promote an environment hospitable to business formation, economic growth, community development, and affordable housing in distressed communities.

      (2) COORDINATION WITH OTHER AGENCIES AND PROGRAMS- The Fund shall coordinate the Fund’s activities with existing Federal and other community and economic development programs.

      (3) ASSISTANCE TO INSTITUTIONS AND PARTNERSHIPS- Assistance may be provided to an existing qualified community development financial institution or community development partnership to--

        (A) expand the institution’s or partnership’s activities in order to serve investment areas or targeted populations not currently served by another qualified community development financial institution or community development partnership receiving assistance under this section;

        (B) expand the volume of the institution’s or partnership’s activities consistent with the purposes of this title;

        (C) form a new entity to undertake activities consistent with the purposes of this title; or

        (D) assist an existing entity to modify the institution’s or partnership’s structure or activities in order to undertake activities consistent with the purposes of this title.

    (b) TYPES OF ASSISTANCE-

      (1) FINANCIAL ASSISTANCE- The Fund may provide financial assistance, and make commitments to provide financial assistance, to qualified community development financial institutions or community development partnerships through equity investments, loans, deposits, membership shares, and grants.

      (2) TECHNICAL ASSISTANCE- The Fund may also provide technical assistance, including training, and grants for technical assistance to qualified community development financial institutions or community development partnerships.

      (3) ALLOCATION- The allocation of awards of assistance between insured and uninsured community development financial institutions shall be in the discretion of the Board.

      (4) RULES RELATING TO EQUITY INVESTMENTS-

        (A) LIMITATION ON EQUITY INVESTMENT- The Fund shall structure financial assistance to a qualified community development financial institution in such a manner that the provision of such assistance does not result in the Fund’s--

          (i) ownership of more than 50 percent of the equity of such institution; or

          (ii) control of the operations of such institution.

        (B) FUND DEEMED NOT TO CONTROL- Notwithstanding any other provision of law, the Fund shall not be deemed to control a qualified community development financial institution by reason of any assistance provided under this title for the purpose of any other applicable law to the extent the Fund complies with paragraph (1).

        (C) FORM OF INVESTMENT- With respect to equity investments, the Fund shall hold only transferable, nonvoting investments, except that such equity investments may provide for convertibility to voting stock upon transfer by the Fund.

      (5) DEPOSITS NOT SUBJECT TO COLLATERAL OR SECURITY REQUIREMENTS- Notwithstanding any other provision of law, deposits made pursuant to this section in qualified insured community development financial institutions shall not be subject to any requirement for collateral or security.

      (6) LIMITATIONS ON OBLIGATIONS- Direct loan obligations may be incurred only to the extent that appropriations of budget authority to cover their costs, as defined in section 502 of the Congressional Budget Act of 1974, are made in advance.

    (c) PURPOSE OF FINANCIAL ASSISTANCE- Financial assistance made available under this title may be used by assisted institutions to develop or support--

      (1) commercial facilities that enhance revitalization, community stability, or job creation and retention efforts;

      (2) business creation and expansion efforts that--

        (A) create or retain jobs for low-income people;

        (B) enhance the availability of products and services to low-income people; or

        (C) create or facilitate the retention of businesses owned by low-income people or residents of a targeted area;

      (3) community facilities that provide benefits to low-income people or enhance community stability;

      (4) the provision of basic financial services to low-income people or residents of a targeted area;

      (5) the provision of development services;

      (6) home ownership opportunities that are affordable to low-income households;

      (7) rental housing that is principally affordable to low-income households; and

      (8) other activities determined to be appropriate by the Fund.

    (d) AMOUNT OF ASSISTANCE-

      (1) IN GENERAL- Except as provided in paragraph (2), the Fund may provide--

        (A) not to exceed $5,000,000 of assistance per application to any 1 qualified insured community development financial institution, including such institution’s affiliate or community development partnership; and

        (B) not to exceed $2,000,000 per application to any other qualified community development financial institution, including such institution’s affiliate or community development partnership.

      (2) EXCEPTION- In the case of an existing community development financial institution that proposes to serve an investment area or targeted population outside of any State or metropolitan area presently served by the institution, the Fund shall have the discretion to provide assistance in an amount exceeding the maximum amount established in paragraph (1) if--

        (A) the additional amount is used to establish affiliates to serve such investment area or targeted population;

        (B) the existing community development financial institution is located in a State other than that of the new affiliate; and

        (C) no other application for assistance has been submitted to the Board under which the needs of the target community could be met.

      (3) AUTHORITY TO SET MINIMUM AMOUNTS OF ASSISTANCE- The Fund shall have the authority to set minimum amounts of assistance per institution.

    (e) MATCHING REQUIREMENTS-

      (1) INSURED COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS OR PARTNERSHIPS- Subject to paragraph (3), the Fund may provide no assistance to qualified insured community development financial institutions or community development partnerships unless each dollar provided by the Fund is matched by no less than 1 dollar of equity, deposits or membership shares.

      (2) OTHER MATCHING REQUIREMENTS- Subject to paragraph (3), the Fund shall require a match for all other assistance, the amount and form of which shall be in the discretion of the Fund.

      (3) NO MATCHING REQUIREMENTS FOR CERTAIN TYPES OF ASSISTANCE- The Fund may not establish matching requirements with respect to assistance provided in the form of deposits or membership shares of $100,000 or less, technical assistance, or grants for technical assistance.

      (4) LEGALLY ENFORCIBLE COMMITMENTS REQUIRED-

        (A) IN GENERAL- The Fund shall provide no assistance except technical assistance or grants for technical assistance until a qualified community development financial institution or community development partnership has secured legally enforceable commitments for the entire match required.

        (B) COORDINATION WITH FUND AUTHORITY TO MAKE COMMITMENTS- Subparagraph (A) shall not restrict the authority of the Fund under subsection (b)(1) to make a commitment to provide financial assistance to a qualified community development financial institution or community development partnership to the extent such commitment is contingent on the institution or partnership meeting the requirements of this subsection.

      (5) FORM OF PAYMENTS- Assistance may be provided in 1 lump sum, or over a period of time, as determined by the Fund.

      (6) OTHER FEDERAL ASSISTANCE MAY NOT BE TREATED AS MATCHING FUNDS- No funds or assistance provided to any qualified community development financial institution or community development partnership by any agency or instrumentality of the Federal Government may be taken into account or otherwise treated as matching funds for purposes of this subsection.

    (f) TERMS AND CONDITIONS-

      (1) IN GENERAL- The Fund shall provide assistance authorized under this title in such form and subject to such restrictions as are necessary to ensure that, to the maximum extent practicable--

        (A) all assistance granted is used by the qualified community development financial institution or community development partnership in a manner consistent with the purposes of this title;

        (B) qualified community development financial institutions or community development partnerships receiving assistance that are not otherwise regulated by the Federal Government or by a State government are financially and managerially sound;

        (C) assistance results in a net increase in capital, credit, and development services, both nationally and in the local communities in which assistance is provided; and

        (D) assistance is provided in a manner that encourages affiliations and partnerships between insured depository institutions, secondary markets or other sources of credit or leverage and local organizations dedicated to community development.

      (2) CONSULTATION WITH BANKING REGULATORS- Before providing assistance to a qualified insured community development financial institution, the Board shall consult with the appropriate Federal banking agency or, in the case of an insured credit union, the National Credit Union Administration.

      (3) ASSISTANCE AGREEMENT-

        (A) IN GENERAL- The Board shall impose restrictions on the use of assistance through a stock purchase agreement, share purchase agreement, or through a contract entered into in consideration for the provision of assistance.

        (B) PERFORMANCE GOALS-

          (i) REQUIRED- Any agreement or contract referred to in subparagraph (A) shall require institutions assisted under this title to comply with performance goals.

          (ii) NEGOTIATION OF GOALS- The performance goals shall be negotiated between the Board and each qualified community development financial institution receiving assistance based upon the strategic plan submitted pursuant to section 205(b)(5).

          (iii) RENEGOTIATION- The performance goals may be renegotiated jointly as necessary or appropriate, subject to subparagraph (C) of this section.

          (iv) CONSULTATION WITH BANKING AGENCIES- Activity levels for insured community development financial institutions shall be determined by the Board in consultation with the appropriate Federal banking agency or, in the case of an insured credit union, with the National Credit Union Administration.

        (C) CONTRACT SANCTIONS-

          (i) IN GENERAL- Any agreement or contract referred to in subparagraph (A) shall specify sanctions available to the Board, in the Board’s discretion, in the event of noncompliance with the purposes of this title or the terms of the agreement or contract.

          (ii) CERTAIN SANCTIONS AVAILABLE- The sanctions may include revocation of approval of the application, terminating or reducing future assistance, requiring repayment of assistance, and requiring changes to the performance goals imposed pursuant to subparagraph (B) or to the strategic plan submitted pursuant to section 205(b)(5).

          (iii) CONSULTATION WITH BANKING AGENCIES- In the case of an insured community development financial institution, the Board shall consult with the appropriate Federal banking agency or, in the case of an insured credit union, the National Credit Union Administration, before imposing sanctions pursuant to this paragraph.

      (4) REVIEW-

        (A) IN GENERAL- At least annually, the Fund shall review the performance of each assisted qualified community development financial institution or community development partnership in carrying out the institution’s or partnership’s strategic plan and performance goals.

        (B) CONSULTATION WITH TRIBAL GOVERNMENTS- In reviewing the performance of any assisted qualified community development financial institution whose investment area includes an Indian reservation, the Board shall consult with, and seek input from, any appropriate tribal government.

      (5) REPORTING- The Board shall require each qualified community development financial institution receiving assistance to submit an annual report to the Fund on the institution’s activities and financial condition, the institution’s success in meeting performance goals, and the institution’s compliance with the other requirements of this title.

    (g) AUTHORITY TO SELL EQUITY INVESTMENTS AND LOANS- The Board shall have the authority at any time to sell its investments and loans and may, in its discretion, retain the power to enforce limitations on assistance entered into in accordance with the requirements of this title.

    (h) NO AUTHORITY TO LIMIT SUPERVISION AND REGULATION- No provision of this title shall affect any authority of the appropriate Federal banking agency or, in the case of an insured credit union, the National Credit Union Administration, to supervise and regulate an insured community development financial institution.

SEC. 209. CAPITALIZATION ASSISTANCE TO ENHANCE LIQUIDITY.

    (a) ASSISTANCE-

      (1) IN GENERAL- Notwithstanding the provisions of section 208, the Fund may provide assistance for the purpose of providing capital to organizations that will purchase loans or otherwise enhance the liquidity of community development financial institutions if--

        (A) the primary purpose of such organizations is to promote community development; and

        (B) any assistance received is matched with funds--

          (i) from sources other than the Federal Government;

          (ii) on the basis of not less than $1 for each dollar provided by the Fund; and

          (iii) that are comparable in form and value to the assistance provided by the Fund.

      (2) LIMITATION ON OTHER ASSISTANCE- An organization which receives assistance under this section may not receive other financial or technical assistance under this subtitle.

    (b) SELECTION- The selection of organizations to receive assistance under this section shall be at the discretion of the Fund and in accordance with criteria established by the Fund. In establishing such criteria, the Fund shall take into account the criteria contained in sections 205(b) and 207, as appropriate.

    (c) AMOUNT OF ASSISTANCE-

      (1) MAXIMUM AMOUNT LIMITATION- The Fund may provide a total of not more than $5,000,000 of assistance to an organization under this section during any 3-year period.

      (2) FORM OF PAYMENT- Assistance may be provided in a lump sum or over a period of time, as determined by the Fund.

    (d) AUDIT AND REPORT REQUIREMENTS-

      (1) IN GENERAL- Organizations that receive assistance from the Fund in accordance with this section shall--

        (A) submit to the Fund not less than once in every 18-month period, financial statements audited by an independent certified public accountant;

        (B) submit an annual report on its activities; and

        (C) keep such records as may be necessary to disclose the manner in which any assistance under this section is used.

      (2) ACCESS- The Fund shall have access, on demand and for the purposes of determining compliance with this section, to any records of such organizations.

    (e) LIMITATIONS ON LIABILITY-

      (1) LIABILITY OF FUND- The liability of the Fund and the United States Government arising out of the provision of assistance to any organization in accordance with this section shall be limited to the amount of such assistance. The Fund shall be exempt from any assessments and any other liability that may be imposed on controlling or principal shareholders by any Federal law or the law of any State.

      (2) LIABILITY OF GOVERNMENT-

        (A) NO OBLIGATION TO PROVIDE FUNDS- This section shall not be construed as obliging the Federal Government, either directly or indirectly, to provide any funds to any organization assisted pursuant to this section, or to honor, reimburse, or otherwise guarantee any obligation or liability of such an organization.

        (B) NO FULL FAITH AND CREDIT- This section shall not be construed to imply that any such organization or any obligation or security of any such organization is backed by the full faith and credit of the United States.

    (f) USE OF PROCEEDS- Any proceeds from the sale of loans to an organization assisted under this section shall be used by the seller for community development purposes.

SEC. 210. ENCOURAGEMENT OF PRIVATE ENTITIES.

    The Board may cause to be incorporated, or encourage the incorporation of, private nonprofit and for-profit entities that will complement the activities of the Fund in carrying out the purposes of this title. The purposes of any such entities shall be limited to investing in and assisting community development financial institutions in a manner similar to the activities of the Fund under this title. Any such entities shall be managed exclusively by private individuals who are selected in accordance with the laws of the jurisdiction of incorporation.

SEC. 211. CLEARINGHOUSE FUNCTION.

    The Fund shall establish and maintain an information clearinghouse in coordination with the Departments of Agriculture, Commerce, and Housing and Urban Development, the Small Business Administration, other Federal agencies, and community development financial institutions--

      (1) to cause to be collected, compiled, and analyzed information pertinent to community development financial institutions that will assist in creating, developing, expanding, and preserving these institutions; and

      (2) to cause to be established a service center for comprehensive information on financial, technical, and management assistance, case studies of the activities of community development financial institutions, regulations, and other information that may promote the purposes of this title.

SEC. 212. TRAINING ASSISTANCE FOR ORGANIZING AND OPERATING COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS.

    (a) ASSISTANCE TO ESTABLISH AND OPERATE COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS- The Fund shall carry out a program under this subsection to provide training assistance in establishing and operating community development financial institutions, which shall include the following activities:

      (1) Educating organizations, financial institutions, and other entities and persons in low-income neighborhoods and elsewhere regarding the need for, and the capabilities, functions, and organization of, community development financial institutions.

      (2) Educating and training organizations, depository and other financial institutions, and other entities and persons in organizing community development financial institutions.

      (3) Recruiting, and assisting organizations, and other entities and persons to recruit existing organizations, depository and other financial institutions, and other entities and persons to establish community development financial institutions.

      (4) Assisting entities and persons interested in establishing qualified community development financial institutions in identifying community lending needs.

      (5) Educating and training regarding management and operation of community development financial institutions, including--

        (A) designing and utilizing lending practices to target credit to low-income families and neighborhoods;

        (B) complying with requirements regarding financial and managerial soundness pursuant to section 208(f)(1)(B) and any recordkeeping requirements pursuant to section 213(a)(1).

        (C) Implementing effective asset management and fund development techniques; and

      (6) Collecting and disseminating information from various qualified community development financial institutions regarding successful management and operation techniques, lending practices, and lending activities.

    (b) PROVISION OF ASSISTANCE- The Fund may provide training assistance under this section directly or through public or private organizations pursuant to contracts with such organizations.

    (c) ADMINISTRATION- The Fund may require--

      (1) that training assistance provided under this section to qualified community development lenders and other applicants that receive assistance under section 208 be made available pursuant to a request for such assistance in an application under section 205;

      (2) the selection of the application for the award of assistance; and

      (3) the inclusion of terms in the agreement or contract for assistance under section 208(f)(3).

SEC. 213. RECORDKEEPING, REPORTS, AND AUDITS.

    (a) RECORDKEEPING-

      (1) MAINTENANCE BY INSTITUTION- A qualified community development financial institution receiving assistance from the Fund shall keep such records as may be reasonably necessary to disclose the disposition of any assistance under this title and to ensure compliance with the requirements of this title.

      (2) FUND ACCESS TO RECORDS- The Fund shall have access, for the purpose of determining compliance with this title, to any books, documents, papers, and records of a qualified community development financial institution receiving assistance from the Fund that are pertinent to assistance received under this title.

    (b) REPORTS-

      (1) ANNUAL REPORT- The Fund shall conduct an annual evaluation of the activities carried out pursuant to this title and shall submit a report on the Fund’s findings to the President within 120 days of the end of each fiscal year of the Fund. The report shall include financial statements audited in accordance with subsection (c).

      (2) INSTITUTIONAL VOICE FOR COMMUNITY DEVELOPMENT-

        (A) ONGOING STUDY- The Fund shall conduct, or cause to be conducted, an ongoing study to identify and evaluate the most effective and financially sound policies and practices for encouraging investment in distressed communities, including small business and commercial lending, business formation and expansion, community and economic development, commercial real estate and multi-family housing, and home mortgages.

        (B) ADDITIONAL FACTORS- In addition to the factors described in subparagraph (A), the Fund may study, or cause to be studied, (in connection with the study conducted pursuant to such subparagraph) related matters, such as identification of sources of and access to capital and loans for community investment, development of secondary markets for economic and community development, small business and commercial loans, and home mortgage loans and investments, and methods to involve all segments of the financial services industry in community development.

        (C) STUDY OF BANKING PRACTICES ON INDIAN RESERVATIONS- In addition to the study required under subparagraph (A), the Fund shall conduct a separate and thorough study of banking practices on Indian reservations that specifically addresses the unique lending issues with respect to Indian reservations such as lending with respect to trust lands, Indian headrights, or other trust property, availability of collateral, and related issues.

        (D) CONSULTATION- In the conduct of the studies required under subparagraphs (A) and (C), the Fund shall consult, or cause consultation with, the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, the Federal Housing Finance Board, the Farm Credit Administration, the Director of the Office of Thrift Supervision, the National Credit Union Administration, Indian tribal governments, community reinvestment, civil rights, consumer and financial organizations, and such representatives of agencies or other persons as the Fund may determine.

        (E) REPORTS-

          (i) PRELIMINARY REPORT- Within 270 days after the date of the enactment of this title, the Fund shall submit a report to the President containing the Fund’s initial findings and recommendations regarding the matters set forth in subparagraphs (A) and (C).

          (ii) SUBSEQUENT REPORTS- The Fund shall submit an annual report to the President containing the Fund’s findings and recommendations regarding the matters set forth in subparagraph (A) with the annual report required by subsection (b)(1).

      (3) INVESTMENT, GOVERNANCE, AND ROLE OF FUND-

        (A) STUDY REQUIRED- Before the end of the 6-year period beginning on the date of the enactment of this title, the Fund, in accordance with the procedures described in subparagraphs (A) and (B) of paragraph (2), shall conduct a study evaluating the structure, governance, and performance of the Fund.

        (B) REPORT- A report on the study conducted pursuant to subparagraph (A) shall be submitted to the President.

        (C) EVALUATION AND RECOMMENDATIONS- The report submitted pursuant to subparagraph (B) shall include--

          (i) an evaluation of the overall performance of the Fund in meeting the purposes of this title;

          (ii) any recommendation of the Fund for--

            (I) restructuring the Board:

            (II) altering procedures under which the Fund is governed; or

            (III) the future role of the Fund in addressing community development; and

          (iii) an assessment of the ability of the Fund to become a private, self-sustaining entity capable of fulfilling the purposes of this title.

    (c) EXAMINATION AND AUDIT- The financial statements of the Fund shall be audited in accordance with section 9105 of title 31, United States Code, except that audits required by section 9105(a) of such title shall be performed annually.

SEC. 214. INVESTMENT OF RECEIPTS AND PROCEEDS.

    Any dividends on equity investments and proceeds from the disposition of investments, deposits, or membership shares that are received by the Fund as a result of assistance provided pursuant to section 208 or 209 shall be deposited and accredited, subject to amounts approved in appropriation Acts, to an account of the Fund established to carry out the authorized purposes of this title. Upon request of the chief executive officer, the Secretary of the Treasury shall invest amounts deposited in such account in public debt securities with maturities suitable to the needs of the Fund, as determined by the chief executive officer, and bearing interest at rates determined by the Secretary of the Treasury, taking into consideration current market yields on outstanding marketable obligations of the United States of comparable maturities. Amounts deposited into the account and interest earned on such amounts pursuant to this section shall be available to the Fund until expended.

SEC. 215. ENFORCEMENT PROVISIONS.

    (a) REGULATIONS-

      (1) IN GENERAL- The Board shall prescribe such regulations as may be necessary to carry out the requirements of this Act.

      (2) REGULATIONS REQUIRED- The regulations prescribed under paragraph (1) shall include regulations to--

        (A) prevent conflicts of interest on the part of directors, officers, and employees of qualified community development financial institutions as the Board determines to be appropriate; and

        (B) establish such standards with respect to loans by a qualified community development institution to any director, officer, or employee of such institution as the Board determines to be appropriate, including loan amount limitations.

    (b) ADMINISTRATIVE ENFORCEMENT-

      (1) IN GENERAL- The provisions of this Act, and regulations prescribed under and agreements entered into under this Act, shall be enforced under section 8 of the Federal Deposit Insurance Act by--

        (A) the appropriate Federal banking agency, in the case of an insured community development financial institution; and

        (B) the Board, in the case of a community development financial institution which is not an insured community development financial institution.

      (2) APPLICABILITY OF SECTION 8 TO BOARD- For purposes of applying section 8 of the Federal Deposit Insurance Act to the provisions of this Act in accordance with paragraph (1)--

        (A) a violation of this Act, or any regulation prescribed under or any agreement entered into under this Act, shall be treated as a violation of the Federal Deposit Insurance Act; and

        (B) the Board shall be treated as an appropriate Federal banking agency.

    (c) CRIMINAL PROVISION- Section 657 of title 18, United States Code, is amended by inserting ‘or any qualified community development financial institution receiving financial assistance under the Community Development Banking and Financial Institutions Act of 1993,’ after ‘small business investment company,’.

SEC. 216. AUTHORIZATION OF APPROPRIATIONS.

    (a) IN GENERAL- There are authorized to be appropriated to the Fund, to remain available until expended, $60,000,000 for fiscal year 1994, $104,000,000 for fiscal year 1995, $107,000,000 for fiscal year 1996, and $111,000,000 for fiscal year 1997, or such greater sums as may be appropriated, to carry out the purposes of the title.

    (b) AVAILABILITY FOR FUNDING BEA- Not less than 33 1/3 percent of the amounts appropriated to the Fund for any fiscal year pursuant to the authorization in subsection (a) shall be available for use in carrying out sections 232 and 233 of the Bank Enterprise Act and the amendments made by such sections to other provisions of law.

    (c) ADMINISTRATIVE EXPENSES- The Fund may set aside up to $10,000,000 each fiscal year to pay administrative costs and expenses.

    (d) CAPITALIZATION ASSISTANCE- Not more than 5 percent of the amounts authorized to be appropriated under subsection (a) may be used as provided in section 209.

SEC. 217. CONFORMING AMENDMENT.

    Section 8F(a)(2) of the Inspector General Act of 1978 (5 U.S.C. App. 8F(a)(2)) is amended by inserting ‘the Community Development Banking and Financial Institutions Fund,’ immediately following ‘the Commodity Futures Trading Commission,’.

SEC. 218. APPOINTMENT OF COMMUNITY ENTERPRISE ASSESSMENT CREDIT BOARD.

    The President shall appoint the members of the Community Enterprise Assessment Credit Board described in section 233(d)(2)(D) of the Bank Enterprise Act before the end of the 90-day period beginning on the date of the enactment of this Act.

SEC. 219. COMMUNITY DEVELOPMENT CREDIT UNION ASSISTANCE.

    (a) AUTHORIZATION OF ADDITIONAL APPROPRIATIONS- In addition to the amounts appropriated to the Community Development Credit Union Revolving Loan Fund pursuant to section 101(j) of the joint resolution entitled ‘Joint Resolution making continuing appropriations for the fiscal year 1980, and for other purposes’ and approved October 12, 1979, there is authorized to be appropriated to the National Credit Union Administration Board for purposes of the Community Development Credit Union Revolving Loan Fund--

      (1) $3,000,000 for fiscal year 1994;

      (2) $4,000,000 for fiscal year 1995;

      (3) $4,000,000 for fiscal year 1996; and

      (4) $4,000,000 for fiscal year 1997.

    (b) INVESTMENT OF FUNDS- The National Credit Union Administration Board may invest any moneys in the Community Development Credit Union Revolving Loan Fund which are not needed for current expenditures in United States Treasury securities. Any interest accrued on such securities shall, subject to amounts approved in appropriation Acts, be deposited into and accredited to the Fund.

    (c) AUTHORITY- Notwithstanding any other provision of law, the National Credit Union Administration Board may exercise the authority granted to the Board by the Community Development Credit Union Revolving Fund Transfer Act, including any additional appropriations made and earnings accrued, subject only to this section and to regulations prescribed by the Board.

SEC. 220. INSURED COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION ACCESS TO FEDERAL HOME LOAN BANK ADVANCES.

    Section 10 of the Federal Home Loan Bank Act (12 U.S.C. 1430) is amended by adding at the end the following new subsection:

    ‘(k) COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION ACCESS TO ADVANCES- Any insured community development financial institution (as defined in section 3(e) of the Community Development Banking and Financial Institutions Act of 1993) which meets the requirements of subparagraphs (A) and (B) of section 4(a)(1) may obtain advances from the appropriate Federal home loan bank in accordance with this section in the same manner and to the same extent as members of such bank without regard to any stock purchase requirement imposed on members under this Act.’.

SEC. 221. COMMUNITY INVESTMENT PROGRAM INCENTIVES.

    (a) ASSETS DERIVED FROM CIP ADVANCES INCLUDIBLE WITHOUT LIMITATION FOR PURPOSES OF QTL TEST- Section 10(m)(4)(C)(ii) of the Home Owners’ Loan Act (12 U.S.C. 1467a(m)(4)(C)(ii)) is amended by adding at the end the following new subclause:

            ‘(VII) Loan assets derived from the proceeds of an advance made to the savings association from a Federal home loan bank under the community investment program of such bank.’.

    (b) AUTHORITY TO WAIVE FHLB STOCK PURCHASE REQUIREMENT IN CONNECTION WITH A CIP ADVANCE- Section 6(b) of the Federal Home Loan Bank Act (12 U.S.C. 1426(b)) is amended by adding at the end the following new paragraph:

      ‘(6) TREATMENT OF CIP ADVANCES- A Federal home loan bank may waive the requirement that advances to such member from the bank’s community investment program be taken into account in determining the amount of aggregate outstanding advances to the member from the bank for purposes of this subsection.’.

    (c) TREATMENT OF ECONOMIC DEVELOPMENT LOANS AND ASSETS DERIVED FROM CIP ADVANCES AS COLLATERAL FOR ADDITIONAL FHLB ADVANCES- Section 10(a) of the Federal Home Loan Bank Act (12 U.S.C. 1430(a)) is amended--

      (1) by redesignating paragraph (5) as paragraph (6);

      (2) in paragraph (6) (as so redesignated), by striking ‘(1) through (4)’ and inserting ‘(1) through (5)’; and

      (3) by inserting after paragraph (4) the following new paragraph:

      ‘(5) Economic development loans derived from the proceeds of an advance made to a member from a Federal home loan bank under the community investment program of such bank.’.

SEC. 222. 30 PERCENT LENDING CAP INCREASED.

    Paragraph (2) of the 1st subsection (e) of section 10 of the Federal Home Loan Bank Act (12 U.S.C. 1430(e)(2)) is amended by striking ‘30 percent’ and inserting ‘40 percent’.

Passed the House of Representatives November 21, 1993.

Attest:

Clerk.

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