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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 9, 1993 (Introduced).


HR 3474 IH

103d CONGRESS

1st Session

H. R. 3474

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.

IN THE HOUSE OF REPRESENTATIVES

November 9, 1993

Mr. GONZALEZ introduced the following bill; which was referred to the Committee on Banking, Finance and Urban Affairs


A BILL

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.

    This title may be cited as the ‘Regulatory Reform Act of 1993’.

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 more than $5,000,000,000 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 by any such agency 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 more 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 by any such agency 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) is in compliance with the requirements of subsection (b) (without regard to any exemption such institution may have from the requirements of such subsection under this subsection).

    Notwithstanding paragraph (2), the audit committee of the holding company of an 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.

    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’.

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), as added by section 132(a) of the Federal Deposit Insurance Corporation Improvements Act of 1991) 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. 1831a) 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- Section 39(d)(1) of the Federal Deposit Insurance Act is amended--

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

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

    (d) EFFECTIVE DATE- The amendments made by subsection (a) shall be construed to have the same effective date as section 39 of the Federal Deposit Insurance Act, as provided in section 132(c) of the Federal Deposit Insurance Corporation Improvements Act of 1991.

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 pursuant to this paragraph, the Corporation shall minimize the regulatory burden imposed upon insured depository institutions to the greatest extent possible while taking into account the benefit of the information to the Corporation in enabling the Corporation to more accurately determine the total amount of insured deposits in the banking system.’.

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), 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 deposits of a Federal, State, or local governmental entity or of any depositor referred to in section 11(a)(2) shall not be deemed to be invalid pursuant to paragraph (1)(B) solely because of changes in the collateral made in accordance with such agreement that do not substantially alter the degree of collateralization of such deposits.’.

SEC. 113. BANK DEPOSIT FINANCIAL ASSISTANCE PROGRAM.

    Effective December 19, 1994, section 7(i)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1817(i)(1)) is amended by inserting ‘, or pursuant to any revocable trust established under the Bank Deposit Financial Assistance Program of the Department of Energy,’ after ‘written trust agreement’.

SEC. 114. COORDINATED AND UNIFIED EXAMINATIONS.

    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 paragraphs:

      ‘(6) COORDINATED EXAMINATIONS- To minimize the disruptive effects of examinations on the operations of insured depository institutions, each appropriate 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 appropriate 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) obtain and use copies of reports of examinations of insured depository institutions made by any other appropriate Federal banking agency or appropriate State bank supervisor.

      ‘(7) SAFETY AND SOUNDNESS EXAMS- Notwithstanding any provision of paragraph (6) 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) obtain and 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 be 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).

    (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 second 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 third 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).

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 secured by a subordinate lien on residential property, 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. HOME OWNERSHIP DEBT COUNSELING NOTIFICATION.

    Section 106(c)(5)(B)(ii) of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701x(c)(5)(B)(ii)) is amended to read as follows:

          ‘(ii) before--

            ‘(I) the end of the 45-day period beginning on the date on which the failure referred to in such subparagraph occurs, except that creditors shall not be required to provide such notification pursuant to this subclause more than once annually; and

            ‘(II) any foreclosure on the property securing the loan.’.

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 REAL ESTATE SETTLEMENT PROCEDURES ACT 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. SPECIAL RULES FOR DISCLOSURES FOR RADIO ADVERTISING OF CREDIT PLANS, DEPOSITS, 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- An advertisement by radio broadcast to aid, promote, or assist, directly or indirectly, the extension of consumer credit under an open end credit plan meets 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 subparagraph (A) 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- ‘If any advertisement’; and

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

    ‘(e) RADIO ADVERTISEMENTS- 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, meets the requirements of subsection (d) if the advertisement, clearly and conspicuously--

      ‘(1) states the rate of the finance charge;

      ‘(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- An advertisement by radio broadcast to aid, promote, or assist, directly or indirectly, the extension of consumer credit under an open end credit plan secured by a consumer’s principal dwelling meets 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- An advertisement by radio broadcast to aid, promote, or assist, directly or indirectly, any consumer lease meets 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 sum of the amount financed and the finance charge, which shall be described as the ‘total of payments’; 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 subparagraph (A) 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 report on the findings and conclusions of the Secretary with respect to the study conducted under subsection (a) to the Committee on Banking, Finance and Urban Affairs of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate.

      (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 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 on the findings and conclusions of the Secretary with respect to the study conducted under subsection (a) to the Committee on Banking, Finance and Urban Affairs of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate.

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

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 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 the continuing appropriateness of collecting data for purposes of the Fair Housing Act which is not required to be collected under the Home Mortgage Disclosure Act of 1975.

    (b) 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 enactment of this Act, report to the Congress and make 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--

      (1) to 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); and

      (2) to simplify instructions accompanying such reports and statements and to 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- No new regulation issued by a Federal banking agency which imposes additional reporting, disclosure or other 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--

      (1) the agency makes a finding that--

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

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

      (2) the regulation is required to take effect before the 1st day of such calendar quarter pursuant to any other provision of law.

SEC. 137. ELIMINATION OF DUPLICATIVE FILINGS.

    The Federal banking agencies (as defined in section 3 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) issue an appropriate revision to any such standard or principle (which may not be less stringent than generally accepted accounting principles) before the end of the 180-day period beginning on the date of the enactment of this Act.

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

    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 BANKERS’ BANKS- 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--

        (A) 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’; and

        (B) by striking ‘employees’ and inserting ‘employees (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--

        (A) 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’; and

        (B) by striking ‘employees’ and inserting ‘employees (such association is commonly referred to as a ‘bankers’ bank’)’.

    (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’.

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.’.

TITLE II--COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS

SEC. 201. SHORT TITLE.

    This title may be cited as the ‘Community Development Banking and Financial Institutions Act of 1993’.

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) PURPOSE- The purpose of this title is to create a Community Development Banking and Financial Institutions Fund that will support a program of investment in and assistance to community development financial institutions. The Community Development Banking and Financial Institutions Fund will provide financial and technical assistance, including training, to community development financial institutions, serve as a national information clearinghouse, and be an institutional voice for community development. The community development financial institutions that the Community Development Banking and Financial Institutions Fund supports will provide capital, credit, and development services to targeted investment areas or populations, and will promote economic revitalization and community development.

SEC. 203. DEFINITIONS.

    (a) APPROPRIATE FEDERAL BANKING AGENCY- The term ‘appropriate Federal banking agency’ has the same meaning given such term in section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)).

    (b) COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION- The term ‘community development financial institution’ means any bank, savings association, depository institution holding company, credit union, micro-enterprise loan fund, community development corporation, community development revolving loan fund, minority-owned or other insured depository institution, or non-depository organization that--

      (1) has as its primary mission the promotion of community development through the provision of capital, credit, or development services in its investment areas or to targeted populations; and

      (2) encourages, through representation on its governing board or otherwise, the input of residents in the investment area or the targeted populations.

    A depository institution holding company may qualify as a community development financial institution only if the holding company and its subsidiaries collectively satisfy the requirements of paragraphs (1) and (2). No subsidiary of a depository institution holding company may qualify as a community development financial institution if the holding company and its subsidiaries collectively do not meet the requirements of paragraphs (1) and (2). The term ‘community development financial institution’ does not include an agency or instrumentality of the United States or an agency or instrumentality of any State or political subdivision thereof.

    (c) DEPOSITORY INSTITUTION HOLDING COMPANY- The term ‘depository institution holding company’ has the same meaning given such term in section 3(w) of the Federal Deposit Insurance Act (12 U.S.C. 1813(w)).

    (d) DEVELOPMENT SERVICES- The term ‘development services’ means activities conducted by a community development financial institution that promote community development by developing, supporting, and strengthening the lending, investment, and capacity-building activities undertaken by institutions, including, but not limited to--

      (1) business planning services;

      (2) financial and credit counseling services;

      (3) marketing and management assistance; and

      (4) administrative activities associated with lending or investment.

    (e) INSURED COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION- The term ‘insured community development financial institution’ means any community development financial institution that is an insured depository institution. The term also includes an insured credit union which has been designated as low-income by the National Credit Union Administration.

    (f) INSURED CREDIT UNION- The term ‘insured credit union’ has the same meaning given such term in section 101(7) of the Federal Credit Union Act (12 U.S.C. 1752(7)).

    (g) INSURED DEPOSITORY INSTITUTION- The term ‘insured depository institution’ has the same meaning given such term in section 3(c) of the Federal Deposit Insurance Act (12 U.S.C. 1813(c)).

    (h) INVESTMENT AREA- The term ‘investment area’ means an identifiable community that--

      (1) meets 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

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

    (i) QUALIFIED COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION- The term ‘qualified community development financial institution’ means a community development financial institution that meets the requirements of sections 5(b) (2) through (8) of this title.

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

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

    (a) IN GENERAL- There is hereby established a corporate 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. The Fund shall have succession until dissolved. The charter of the Fund may be revised, amended, or modified by Congress at any time. 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 nine 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 Treasury.

        (E) The Administrator of the Small Business Administration.

        (F) Four private citizens, appointed by the President with the advice and consent of the Senate, that collectively--

          (i) represent community groups whose constituencies include low-income persons or residents of investment areas,

          (ii) have expertise in the operations and activities of insured depository institutions, and

          (iii) have expertise in community development and lending; provided that there should not be less than one member from each of the three categories described in clauses (i) through (iii) of this subparagraph.

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

      (5) TERMS OF APPOINTED MEMBERS-

        (A) IN GENERAL- Each member appointed pursuant to paragraph (2)(F) shall serve at the pleasure of the President for a term of four years, except as provided in paragraph (5)(C).

        (B) VACANCIES- Any member appointed to fill a vacancy occurring prior to 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 four years and shall begin on the date each member is appointed, except that two of the members initially appointed pursuant to paragraph (2)(F) shall be designated to serve at the pleasure of the President for five years.

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

      (7) AUTHORITY TO DELEGATE- Each member of the Board specified in paragraphs (2) (A) through (E) 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- 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. 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 three members of the Board. A majority of the members of the Board in office shall constitute a quorum.

    (c) OFFICERS AND EMPLOYEES- The Board shall appoint a Chief Executive Officer who will be responsible for the management of the Fund and such other duties deemed appropriate by the Board. The Board shall appoint a Chief Financial Officer who shall oversee all of the financial management activities of the Fund. The Board shall also appoint an Inspector General. The Board may appoint such other officers and employees of the Fund as the Board determines to be necessary or appropriate. The Chief Executive Officer, Chief Financial Officer, and up to 3 other officers of the Fund may be appointed without regard to the provisions of title 5 of the United States Code governing appointments in the Federal service and compensated without regard to chapter 51 and subchapter III of chapter 53 of title 5 of the United States Code, except that 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 four 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 its powers and duties, the Fund--

      (1) shall have all necessary and proper powers to carry out its 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 its corporate name and complain and defend in any court of competent jurisdiction;

      (4) may adopt, amend, and repeal bylaws, rules, and regulations governing the manner in which its 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 its 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 its powers and responsibilities as it deems necessary or appropriate for the administration of the Fund.

    (e) WHOLLY-OWNED GOVERNMENT CORPORATION-

      (1) 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) 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.’; and

      (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, Territory, or the District of Columbia. 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- 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. 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- 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 as defined in section 203(a);

      (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 five 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 of community development;

        (C) an analysis of the needs of the investment area 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 Federal, government-sponsored enterprise, and State and local assistance programs, and 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 area;

        (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 area 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 the 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 207(d); 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.

SEC. 206. SELECTION OF INSTITUTIONS.

    (a) SELECTION CRITERIA- The Board shall, in its discretion, select applications that meet the requirements of section 205 and award assistance from the Fund in accordance with section 207. In selecting applications, the Board shall consider applications based on, but not limited to--

      (1) the likelihood of success of the applicant in forming and operating a community development financial institution;

      (2) the range and comprehensiveness of the capital, credit, and development services to be provided by the applicant;

      (3) 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;

      (4) 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;

      (5) the extent to which the applicant will concentrate its activities on serving low and very low-income families;

      (6) the evidence of the extent of a broad cross-section of support from the investment areas or targeted populations;

      (7) the experience and background of the proposed management team;

      (8) the amount of legally enforceable commitments available at the time of application to meet or exceed the matching requirements under section 207(d) and the strength of the plan for raising the balance of the match;

      (9) in the case of applicants that have previously received assistance pursuant to this title, the extent to which they have met or exceeded their performance goals;

      (10) the extent to which the proposed activities will expand the employment base within the investment areas or the targeted populations;

      (11) the extent to which the applicant is, or will be, community-owned or community-governed;

      (12) whether the applicant is, or will become, an insured community development financial institution;

      (13) 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;

      (14) 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;

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

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

        (B) has a comprehensive plan for providing meaningful financial assistance to such an entity or network of entities; and

      (16) other factors deemed appropriate by the Board.

    (b) GEOGRAPHIC DIVERSITY- 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.

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

SEC. 207. ASSISTANCE PROVIDED BY THE FUND.

    (a) PURPOSE OF ASSISTANCE-

      (1) The Fund shall work to promote an environment hospitable to business information, economic growth, community development, and affordable housing in distressed communities. The Fund shall coordinate its activities with existing Federal and other community and economic development programs.

      (2) Assistance may be provided to an existing qualified community development financial institution to expand its activities to serve investment areas or targeted populations not currently served by another qualified community development financial institution receiving assistance under this section or to expand the volume of its activities consistent with the purposes of this title, or to form a new entity to undertake activities consistent with the purposes of this title, or to assist an existing entity to modify its structure or activities in order to undertake activities consistent with the purposes of this title.

    (b) TYPES OF ASSISTANCE-

      (1) IN GENERAL- The Fund may provide financial assistance to qualified community development financial institutions through equity investments, loans, deposits, membership shares, and grants. The Fund may also provide technical assistance, including training, and grants for technical assistance to qualified community development financial institutions. The allocation of awards of assistance between insured and uninsured community development financial institutions shall be in the discretion of the Board: Provided, That due consideration shall be given to the allocation of funds to insured community development financial institutions.

      (2) FINANCIAL ASSISTANCE- The Fund shall structure financial assistance to a qualified community development financial institution in such a manner that it does not own more than 50 percent of the equity of such institution and does not control the operations of such institution. The Fund will not be deemed to control such institution for the purposes of applicable laws. With respect to equity investments, the Fund shall hold only transferable, nonvoting investments. Such equity investments may provide for convertibility to voting stock upon transfer by the Fund.

      (3) DEPOSITS- 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.

      (4) 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 retain 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 deemed appropriate by the Fund.

    (d) AMOUNT OF ASSISTANCE- The Fund may provide up to $5,000,000 of assistance per application to any one qualified insured community development financial institution and up to $2,000,000 per application to any other qualified community development financial institution. The Fund shall have the authority to set minimum amounts of assistance per institution.

    (e) MATCHING REQUIREMENTS-

      (1) Assistance provided to qualified insured community development financial institutions, other than deposits or membership shares of $100,000 or less, technical assistance, or grants for technical assistance, shall be matched by no less than one dollar of equity, deposits or membership shares for each dollar provided by the Fund. The Fund shall require a match for all other assistance, the amount and form of which shall be in the discretion of the Fund: Provided, That the Fund shall in no event require assistance provided in the form of deposits or membership shares of $100,000 or less, technical assistance, or grants for technical assistance to be matched. The Fund shall provide no assistance except technical assistance or grants for technical assistance until a qualified community development financial institution has secured legally enforceable commitments for the entire match required. Assistance may be provided in one lump sum, or over a period of time, as determined by the Fund.

      (2) Assistance shall be matched with funds from sources other than the Federal Government.

    (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 in a manner consistent with the purposes of this title;

        (B) qualified community development financial institutions 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, both nationally and in the local communities in which assistance is provided, in capital, credit, and development services; 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- Prior to providing assistance to a qualified insured community development financial institution, the Board should 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) 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) Such agreement or contract shall require institutions assisted under this title to comply with performance 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). The performance goals may be renegotiated jointly as necessary or appropriate, subject to subparagraph (C) of this section. Activity levels for insured community development financial institutions should 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) The agreement or contract shall specify sanctions available to the Board, in its discretion, in the event of noncompliance with the purposes of this title or the terms of the agreement. 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). 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- At least annually, the Board shall review the performance of each assisted qualified community development financial institution in carrying out its strategic plan and performance goals.

      (5) REPORTING- The Board shall require each qualified community development financial institution receiving assistance to submit an annual report to the Fund on its activities, its financial condition, its success in meeting performance goals, and its compliance with 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- Nothing in 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. 208. ENCOURAGEMENT OF PRIVATE ENTITIES.

    The Board may cause to be incorporated, or encourage the incorporation of, private non-profit 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. 209. 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. 210. RECORDKEEPING, REPORTS, AND AUDITS.

    (a) RECORDKEEPING-

      (1) 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) 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 of its 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. In addition, the Fund may study, or cause to be studied, 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.

        (B) CONSULTATION- In the conduct of the study, the Fund shall consult, or cause consultation with, the Office of 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 Office of Thrift Supervision, the National Credit Union Administration, community reinvestment, civil rights, consumer and financial organizations, and such representatives of agencies or other persons as the Fund may determine.

        (C) REPORTS- Within 270 days after the date of enactment of this title, the Fund shall report to the President its initial findings and recommendations regarding the matters set forth in subparagraph (A). Thereafter, the Fund shall report its findings and recommendations to the President with the annual report required by paragraph (b)(1).

      (3) INVESTMENT, GOVERNANCE, AND ROLE OF FUND- Six years following the date of enactment of this title, the Fund, in accordance with the procedures described in paragraphs (2)(A) and (B), shall conduct a study evaluating the structure, governance, and performance of the Fund. The study shall be submitted to the President. Such study shall include an evaluation of the overall performance of the Fund in meeting the purposes of this title and any recommendations of the Fund for restructuring the Board, altering procedures under which the Fund is governed, the future role of the Fund in addressing community development, and 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 that title shall be performed annually.

SEC. 211. 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 217 shall be deposited and accredited 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. 212. 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) ADMINISTRATIVE EXPENSES- The Fund may set aside up to $10,000,000 each fiscal year to pay administrative costs and expenses.

SEC. 213. CONFORMING AMENDMENT.

    Section 8E(a)(2) of the Inspector General Act of 1978 (5 U.S.C. app. 3, 8E(a)(2)) is amended by inserting ‘the Community Development Banking and Financial Institutions Fund,’ immediately following ‘the Commodity Futures Trading Commission.’.