FDIC Law, Regulations, Related Acts
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1000 - Federal Deposit Insurance Act
SEC. 44. INTERSTATE BANK MERGERS.
(a) Approval of Interstate Merger Transactions Authorized.--
(1) IN GENERAL.--Beginning on June 1, 1997, the
responsible agency may approve a merger transaction under section 18(c)
between insured banks with different home States, without regard to
whether such transaction is prohibited under the law of any State.
(2) STATE ELECTION TO PROHIBIT INTERSTATE MERGER
TRANSACTIONS.--
(A) IN GENERAL.--Notwithstanding paragraph (1), a merger
transaction may not be approved pursuant to paragraph (1) if the
transaction involves a bank the home State of which has enacted a law
after September 29, 1994 and before June 1, 1997, that--
(i) applies equally to all out-of-State banks; and
(ii) expressly prohibits merger transactions involving
out-of-State banks.
(B) NO EFFECT ON PRIOR APPROVALS OF MERGER
TRANSACTIONS.--A law enacted by a State pursuant to subparagraph
(A) shall have no effect on merger transactions that were approved
before the effective date of such law.
(3) STATE ELECTION TO PERMIT EARLY INTERSTATE MERGER
TRANSACTIONS.--
(A) IN GENERAL.--A merger transaction may be approved
pursuant to paragraph (1) before June 1, 1997, if the home State of
each bank involved in the transaction has in effect, as of the date of
the approval of such transaction, a law that--
(i) applies equally to all out-of-State banks; and
(ii) expressly permits interstate merger transactions with all
out-of-State banks.
(B) CERTAIN CONDITIONS ALLOWED.--A host State may impose
conditions on a branch within such State of a bank resulting from an
interstate merger transaction if--
(i) the conditions do not have the effect of discriminating
against out-of-State banks, out-of-State bank holding companies, or any
subsidiary of such bank or company (other than on the basis of a
nationwide reciprocal treatment requirement);
(ii) the imposition of the conditions is not preempted by Federal
law; and
(iii) the conditions do not apply or require performance after
May 31, 1997.
(4) INTERSTATE MERGER TRANSACTIONS INVOLVING ACQUISITIONS OF
BRANCHES.--
(A) IN GENERAL.--An interstate merger transaction may
involve the acquisition of a branch of an insured bank without the
acquisition of the bank only if the law of the State in which the
branch is located permits out-of-State banks to acquire a branch of a
bank in such State without acquiring the bank.
(B) TREATMENT OF BRANCH FOR PURPOSES OF THIS
SECTION.--In the case of an interstate merger transaction which
involves the acquisition of a branch of an insured bank without the
acquisition of the bank, the branch shall be treated, for purposes of
this section, as an insured bank the home State of which is the State
in which the branch is located.
(5) PRESERVATION OF STATE AGE LAWS.--
(A) IN GENERAL.--The responsible agency may not approve
an application pursuant to paragraph (1) that would have the effect of
permitting an out-of-State bank or out-of-State bank holding company to
acquire a bank in a host State that has not been in existence for the
minimum period of time, if any, specified in the statutory law of the
host State.
(B) SPECIAL RULE FOR STATE AGE LAWS SPECIFYING A PERIOD OF
MORE THAN 5 YEARS.--Notwithstanding subparagraph (A), the
responsible agency may approve a merger transaction pursuant to
paragraph (1) involving the acquisition of a bank that has been in
existence at least 5 years without regard to any longer minimum period
of time specified in a statutory law of the host State.
(6) SHELL BANKS.--For purposes of this subsection, a
bank that has been chartered solely for the purpose of, and does not
open for business prior to, acquiring control of, or acquiring all or
substantially all of the assets of, an existing bank or branch shall be
deemed to have been in existence for the same period of time as the
bank or branch to be acquired.
[Codified to 12 U.S.C. 1831u(a)]
[Source: Section 2[44(a)] of the Act of September 21,
1950 (Pub. L. No. 797; 64 Stat. 882), effective September 21, 1950, as
added by section 102(a) of title I of the Act of September 29, 1994
(Pub. L. No. 103--328; 108 Stat. 2343), effective September 29,
1994]
(b) Provisions Relating to Application and Approval Process.--
(1) COMPLIANCE WITH STATE FILING REQUIREMENTS.--
(A) IN GENERAL.--Any bank which files an application for
an interstate merger transaction shall--
(i) comply with the filing requirements of any host State of the
bank which will result from such transaction to the extent that the
requirement--
(I) does not have the effect of discriminating against
out-of-State banks or out-of-State bank holding companies or
subsidiaries of such banks or bank holding companies; and
(II) is similar in effect to any requirement imposed by the host
State on a nonbanking corporation incorporated in another State that
engages in business in the host State; and
(ii) submit a copy of the application to the State bank
supervisor of the host State.
(B) PENALTY FOR FAILURE TO COMPLY.--The responsible
agency may not approve an application for an interstate merger
transaction if the applicant materially fails to comply with
subparagraph (A).
(2) CONCENTRATION LIMITS.--
(B) NATIONWIDE CONCENTRATION LIMITS.--The responsible
agency may not approve an application for an interstate merger
transaction if the resulting bank (including all insured depository
institutions which are affiliates of the resulting bank), upon
consummation of the transaction, would control more than 10 percent of
the total amount of deposits of insured depository institutions in the
United States.
(B) STATEWIDE CONCENTRATION LIMITS OTHER THAN WITH RESPECT
TO INITIAL ENTRIES.--The responsible agency may not approve an
application for an interstate merger transaction if--
(i) any bank involved in the transaction (including all insured
depository institutions which are affiliates of any such bank) has a
branch in any State in which any other bank involved in the transaction
has a branch; and
(ii) the resulting bank (including all insured depository
institutions which would be affiliates of the resulting bank), upon
consummation of the transaction, would control 30 percent or more of
the total amount of deposits of insured depository institutions in any
such State.
(C) EFFECTIVENESS OF STATE DEPOSIT CAPS.--No provision
of this subsection shall be construed as affecting the authority of any
State to limit, by statute, regulation, or order, the percentage of the
total amount of deposits of insured depository institutions in the
State which may be held or controlled by any bank or bank holding
company (including all insured depository institutions which are
affiliates of the bank or bank holding company) to the extent the
application of such limitation does not discriminate against
out-of-State banks, out-of-State bank holding companies, or
subsidiaries of such banks or holding companies.
(D) EXCEPTIONS TO SUBPARAGRAPH (B).--The responsible
agency may approve an application for an interstate merger transaction
pursuant to subsection (a) without regard to the applicability of
subparagraph (B) with respect to any State if--
(i) there is a limitation described in subparagraph (C) in a
State statute, regulation, or order which has the effect of permitting
a bank or bank holding company (including all insured depository
institutions which are affiliates of the bank or bank holding company)
to control a greater percentage of total deposits of all insured
depository institutions in the State than the percentage permitted
under subparagraph (B); or
(ii) the transaction is approved by the appropriate State bank
supervisor of such State and the standard on which such approval is
based does not have the effect of
discriminating against out-of-State banks,
out-of-State bank holding companies, or subsidiaries of such banks or
holding companies.
(E) EXCEPTION FOR CERTAIN BANKS.--This paragraph shall
not apply with respect to any interstate merger transaction involving
only affiliated banks.
(3) COMMUNITY REINVESTMENT COMPLIANCE.--In determining
whether to approve an application for an interstate merger transaction
in which the resulting bank would have a branch or bank affiliate
immediately following the transaction in any State in which the bank
submitting the application (as the acquiring bank) had no branch or
bank affiliate immediately before the transaction, the responsible
agency shall--
(A) comply with the responsibilities of the agency regarding such
application under section 804 of the Community Reinvestment Act of
1977;
(B) take into account the most recent written evaluation under
section 804 of the Community Reinvestment Act of 1977 of any bank which
would be an affiliate of the resulting bank; and
(C) take into account the record of compliance of any applicant
bank with applicable State community reinvestment laws.
(4) ADEQUACY OF CAPITAL AND MANAGEMENT SKILLS.--The
responsible agency may approve an application for an interstate merger
transaction pursuant to subsection (a) only if--
(A) each bank involved in the transaction is adequately
capitalized as of the date the application is filed; and
(B) the responsible agency determines that the resulting bank
will be well capitalized and well managed upon the consummation of the
transaction.
(5) SURRENDER OF CHARTER AFTER MERGER TRANSACTION.--The
charters of all banks involved in an interstate merger transaction,
other than the charter of the resulting bank, shall be surrendered,
upon request, to the Federal banking agency or State bank supervisor
which issued the charter.
[Codified to 12 U.S.C. 1831u(b)]
[Source: Section 2[44(b)] of the Act of September 21, 1950 (Pub.
L. No. 797; 64 Stat. 882), effective September 21, 1950, as added by
section 102(a) of title I of the Act of September 29, 1994 (Pub. L. No.
103--328; 108 Stat. 2345), effective September 29, 1994; section 607(b)
of title VI of the Act of July 21, 2010 (Pub. L. No, 111--203; 124
Stat. 1608), effective July 21, 2011]
(c) Applicability of Certain Laws to Interstate Banking Operations.--
(1) STATE TAXATION AUTHORITY NOT AFFECTED.--
(A) IN GENERAL.--No provision of this section shall be
construed as affecting the authority of any State or political
subdivision of any State to adopt, apply, or administer any tax or
method of taxation to any bank, bank holding company, or foreign bank,
or any affiliate of any bank, bank holding company, or foreign bank, to
the extent such tax or tax method is otherwise permissible by or under
the Constitution of the United States or other Federal law.
(B) IMPOSITION OF SHARES TAX BY HOST STATES.--In the
case of a branch of an out-of-State bank which results from an
interstate merger transaction, a proportionate amount of the value of
the shares of the out-of-State bank may be subject to any bank shares
tax levied or imposed by the host State, or any political subdivision
of such host State that imposes such tax based upon a method adopted by
the host State, which may include allocation and apportionment.
(2) APPLICABILITY OF ANTITRUST LAWS.--No provision of
this section shall be construed as affecting--
(A) the applicability of the antitrust laws; or
(B) the applicability, if any, of any State law which is similar
to the antitrust laws.
(3) RESERVATION OF CERTAIN RIGHTS TO STATES.--No
provision of this section shall be construed as limiting in any way the
right of a State to--
(A) determine the authority of State banks chartered by that
State to establish and maintain branches; or
(B) supervise, regulate, and examine State banks chartered by
that State.
(4) State-imposed notice requirements.--A host State may
impose any notification or reporting requirement on a branch of an
out-of-State bank if the requirement--
(A) does not discriminate against out-of-State banks or bank
holding companies; and
(B) is not preempted by any Federal law regarding the same
subject.
[Codified to 12 U.S.C. 1831u(c)]
[Source: Section 2[44(c)] of the Act of September 21, 1950 (Pub.
L. No. 797; 64 Stat. 882), effective September 21, 1950, as added by
section 102(a) of title I of the Act of September 29, 1994 (Pub. L. No.
103--328; 108 Stat. 2347), effective September 29,
1994]
(d) Operations of the Resulting Bank.--
(1) CONTINUED OPERATIONS.--A resulting bank may, subject
to the approval of the appropriate Federal banking agency, retain and
operate, as a main office or a branch, any office that any bank
involved in an interstate merger transaction was operating as a main
office or a branch immediately before the merger transaction.
(2) ADDITIONAL BRANCHES.--Following the consummation of
any interstate merger transaction, the resulting bank may establish,
acquire, or operate additional branches at any location where any bank
involved in the transaction could have established, acquired, or
operated a branch under applicable Federal or State law if such bank
had not been a party to the merger transaction.
(3) CERTAIN CONDITIONS AND COMMITMENTS CONTINUED.-- If,
as a condition for the acquisition of a bank by an out-of-State bank
holding company before September 29, 1994--
(A) the home State of the acquired bank imposed conditions on
such acquisition by such out-of-State bank holding company; or
(B) the bank holding company made commitments to such State in
connection with the acquisition,
the State may enforce such conditions and commitments with respect
to such bank holding company or any affiliated successor company which
controls a bank or branch in such State as a result of an interstate
merger transaction to the same extent as the State could enforce such
conditions or commitments against the bank holding company before the
consummation of the merger transaction.
[Codified to 12 U.S.C. 1831u(d)]
[Source: Section 2[44(d)] of the Act of September 21, 1950 (Pub.
L. No. 797; 64 Stat. 882), effective September 21, 1950, as added by
section 102(a) of title I of the Act of September 29, 1994 (Pub. L. No.
103--328; 108 Stat. 2347), effective September 29,
1994]
(e) Exception for Banks in Default or in Danger of Default.--If an application under subsection (a)(1) of this section
for approval of a merger transaction which involves 1 or more banks in
default or in danger of default or with respect to which the
Corporation provides assistance under section 13(c), the
responsible agency may approve such application without regard to
subsection (b) of this section, or paragraph (2), (4), or (5) of
subsection (a).
[Codified to 12 U.S.C. 1831u(e)]
[Source: Section 2[44(e)] of the Act of September 21, 1950 (Pub.
L. No. 797; 64 Stat. 882), effective September 21, 1950, as added by
section 102(a) of title I of the Act of September 29, 1994 (Pub. L. No.
103--328; 108 Stat. 2348), effective September 29,
1994]
(f) APPLICABLE RATE AND OTHER CHARGE LIMITATIONS.--
(1) IN GENERAL.--In the case of any State that has a
constitutional provision that sets a maximum lawful annual percentage
rate of interest on any contract at not more than 5 percent above the
discount rate for 90-day commercial paper in effect at the Federal
reserve bank for the Federal reserve district in which such State is
located, except as provided in
paragraph (2), upon the establishment in such
State of a branch of any out-of-State insured depository institution in
such State under this section, the maximum interest rate or amount of
interest, discount points, finance charges, or other similar charges
that may be charged, taken, received, or reserved (or in the case of a
governmental entity located in such State, paid) from time to time in
any loan or discount made or upon any note, bill of exchange, financing
transaction, or other evidence of debt by--
(A) any insured depository institution whose home State is such
State shall be equal to not more than the greater of--
(i) the maximum interest rate or amount of interest, discount
points, finance charges, or other similar charges that may be charged,
taken, received, or reserved in a similar transaction under the
constitution or any statute or other law of the home State of the
out-of-State insured depository institution establishing any such
branch, without reference to this section, as such maximum interest
rate or amount of interest may change from time to time; or
(ii) the maximum rate or amount of interest, discount points,
finance charges, or other similar charges that may be charged, taken,
received, or reserved in a similar transaction by a State insured
depository institution chartered under the laws of such State or a
national bank or Federal savings association whose main office is
located in such State without reference to this section; and
(B) any governmental entity located in such State or any person
that is not a depository institution described in subparagraph (A)
doing business in such State, shall be equal to not more than the
greater of the state's maximum lawful annual percentage rate or 17
percent--
(i) to facilitate the uniform implementation of federally
mandated or federally established programs and financings related
thereto, including--
(I) uniform accessibility of student loans, including the
issuance of qualified student loan bonds as set forth in section 144(b)
of the Internal Revenue Code of 1986;
(II) the uniform accessibility of mortgage loans, including the
issuance of qualified mortgage bonds and qualified veterans' mortgage
bonds as set forth in section 143 of such Code;
(III) the uniform accessibility of safe and affordable housing
programs administered or subject to review by the Department of Housing
and Urban Development, including--
(aa) the issuance of exempt facility bonds for qualified
residential rental property as set forth in section 142(d) of such
Code; and
(bb) the issuance of low income housing tax credits as set forth
in section 42 of such Code, and
(IV) the uniform accessibility of bonds and obligations issued
under the American Recovery and Reinvestment Act of 2009;
(ii) to facilitate interstate commerce through the issuance of
bonds and obligations under any provision of State law, including bonds
and obligations for the purpose of economic development, education, and
improvements to infrastructure; and
(iii) to facilitate interstate commerce generally, including
consumer loans, in the case of any person or governmental entity (other
than a depository institution subject to subparagraph (A) and paragraph
(2)).
(2) RULE OF CONSTRUCTION.--(A) RULE OF CONSTRUCTION.--No
provision of this subsection shall be construed as superseding or
affecting--
(i) the authority of any insured depository institution to take,
receive, reserve, and charge interest on any loan made in any State
other than the State referred to in paragraph (1); or
(ii) the applicability of section 501 of the Depository
Institutions Deregulation and Monetary Control Act of 1980, section
5197 of the Revised Statutes of the United States, or
section 27 of this Act.
(B) APPLICABILITY.--This subsection shall be construed
to apply to any loan or discount made, or note, bill of exchange,
financing transaction, or other evidence of debt, originated by an
insured depository institution, a governmental entity located in such
State, or a person that is not a depository institution described in
subparagraph (A) doing business in such State.
[Codified to 12 U.S.C. 1831u(f)]
[Source: Section 2[44(f)] of the Act of September 21, 1950 (Pub.
L. No. 797; 64 Stat. 882), effective September 21, 1950, as added by
section 731(2) of title VII of the Act of November 12, 1999 (Pub. L.
No. 106-102; 113 Stat. 1477), effective November 12, 1999; section
504(a) of title V of the Act of June 24, 2009 (Pub. L. No. 111--32; 123
Stat. 1880), effective June 24, 2009; section 563(a) and (b) of title
III of the Act of October 28, 2009 (Pub. L. No, 111--83; 123 Stat.
2183), effective October 28, 2009]
(g) Definitions.--For purposes of this section, the
following definitions shall apply:
(1) ADEQUATELY CAPITALIZED.--The term "adequately
capitalized" has the same meaning as in section 38.
(2) ANTITRUST LAWS.--The term "antitrust laws"--
(A) has the same meaning as in subsection (a) of the first
section of the Clayton Act; and
(B) includes section 5 of the Federal Trade Commission Act to the
extent such section 5 relates to unfair methods of competition.
(3) BRANCH.--The term "branch" means any domestic
branch.
(4) HOME STATE.--The term "home State"--
(A) means--
(i) with respect to a national bank, the State in which the main
office of the bank is located; and
(ii) with respect to a State bank, the State by which the bank is
chartered; and
(B) with respect to a bank holding company, has the same meaning
as in
section 2(o)(4) of the
Bank Holding Company Act of 1956.
(5) HOST STATE.--The term "host State" means, with
respect to a bank, a State, other than the home State of the bank, in
which the bank maintains, or seeks to establish and maintain, a branch.
(6) INTERSTATE MERGER TRANSACTION.--The term
"interstate merger transaction" means any merger transaction
approved pursuant to subsection (a)(1).
(7) MERGER TRANSACTION.--The term "merger
transaction" has the meaning determined under
section 18(c)(3).
(8) OUT-OF-STATE BANK.--The term "out-of-State
bank" means, with respect to any State, a bank whose home State is
another State.
(9) OUT-OF-STATE BANK HOLDING COMPANY.--The term
"out-of-State bank holding company" means, with respect to any
State, a bank holding company whose home State is another State.
(10) RESPONSIBLE AGENCY.--The term "responsible
agency" means the agency determined in accordance with section
18(c)(2) with respect to a merger transaction.
(11) RESULTING BANK.--The term "resulting bank"
means a bank that has resulted from an interstate merger transaction
under this section.
[Codified to 12 U.S.C. 1831u(g)]
[Source: Section 2[44(g)] (formerly section 44(f)) of
the Act of September 21, 1950 (Pub. L. No. 797; 64 Stat. 882),
effective September 21, 1950, as added by section 102(a) of title I of
the Act of September 29, 1994 (Pub. L. No. 103--328; 108 Stat. 2348),
effective September 29, 1994; redesignated as section 44(g) by section
731(1) of title VII of the Act of November 12, 1999 (Pub. L. No.
106--102; 113 Stat. 1477), effective November 12, 1999; section 504(a)
of title V of the Act of June 24, 2009 (Pub. L. No. 111--32; 123 Stat.
1880), effective June 24, 2009]
SEC. 45. AUTHORITY OF STATE INSURANCE REGULATOR AND SECURITIES
AND EXCHANGE COMMISSION.
(a) In General.--Notwithstanding any other provision of
law, the provisions of--
(1) section (5) of the Bank Holding Company Act of 1956 that
limit the authority of the Board of Governors of the Federal Reserve
System to require reports from, to make examinations of, or to impose
capital requirements on holding companies and their functionally
regulated subsidiaries or that require deference to other
regulators;
(2)
section 5(g) of the
Bank Holding Company Act of 1956 that limit the authority of the Board
to require a functionally regulated subsidiary of a holding company to
provide capital or other funds or assets to a depository institution
subsidiary of the holding company and to take certain actions including
requiring divestiture of the depository institution; and
(3)
section 10A of the
Bank Holding Company Act of 1956 that limit whatever authority the
Board might otherwise have to take direct or indirect action with
respect to holding companies and their functionally regulated
subsidiaries;
shall also limit whatever authority that a Federal banking agency
might otherwise have under any statute or regulation to require
reports, make examinations, impose capital requirements, or take any
other direct or indirect action with respect to any functionally
regulated affiliate of a depository institution, subject to the same
standards and requirements as are applicable to the Board under those
provisions.
[Codified to 12 U.S.C. 1831v(a)]
[Section 2[45](a) of the Act of September 21, 1950 (Pub. L. No.
797; 64 Stat. 882), effective September 21, 1950, as added by section
112(b) of title I of the Act of November 12, 1999 (Pub. L. No.
106--102; 113 Stat. 1368), effective March 12,
2000]
(b) Certain Exemption Authorized.--No provision of this
section shall be construed as preventing the Corporation, if the
Corporation finds it necessary to determine the condition of a
depository institution for insurance purposes, from examining an
affiliate of any depository institution, pursuant to section 10(b)(4), as may be
necessary to disclose fully the relationship between the depository
institution and the affiliate, and the effect of such relationship on
the depository institution.
[Codified to 12 U.S.C. 1831v(b)]
[Section 2[45](b) of the Act of September 21, 1950 (Pub. L. No.
797; 64 Stat. 882), effective September 21, 1950, as added by section
112(b) of title I of the Act of November 12, 1999 (Pub. L. No.
106--102; 113 Stat. 1368), effective March 12,
2000]
(c) Definitions.--For purposes of this section, the
following definitions shall apply:
(1) FUNCTIONALLY REGULATED SUBSIDIARY.--The term
"functionally regulated subsidiary" has the meaning given the
term in
section 5(c)(5) of the
Bank Holding Company Act of 1956.
(2) FUNCTIONALLY REGULATED AFFILIATE.--The term
"functionally regulated affiliate" means, with respect to any
depository institution, any affiliate of such depository institution
that is--
(A) not a depository institution holding company; and
(B) a company described in any clause of
section 5(c)(5)(B) of the Bank
Holding Company Act of 1956.
[Codified to 12 U.S.C. 1831v(c)]
[Section 2[45](c) of the Act of September 21, 1950 (Pub.
L. No. 797; 64 Stat. 882), effective September 21, 1950, as added by
section 112(b) of title I of the Act of November 12, 1999 (Pub. L. No.
106--102; 113 Stat. 1368), effective March 12, 2000]
SEC. 46. SAFETY AND SOUNDNESS FIREWALLS APPLICABLE TO FINANCIAL
SUBSIDIARIES OF BANKS.
(a) In General.--An insured State bank may control or hold
an interest in a subsidiary that engages in activities as principal
that would only be permissible for a national bank to conduct through a
financial subsidiary if--
(1) the State bank and each insured depository institution
affiliate of the State bank are well capitalized (after the capital
deduction required by paragraph (2));
(2) the State bank complies with the capital deduction and
financial statement disclosure requirements in section 5136A(c) of the
Revised Statutes of the United States;
(3) the State bank complies with the financial and operational
safeguards required by section 5136A(d) of the Revised Statutes of the
United States; and
(4) the State bank complies with the amendments to
sections 23A and
23B of the Federal Reserve Act
made by section 121(b) of the Gramm-Leach-Bliley Act.
[Codified to 12 U.S.C. 1831w(a)]
[Section 2[46](a) of the Act of September 21, 1950 (Pub. L. No.
797; 64 Stat. 882), effective September 21, 1950, as added by section
121(d)(1) of title I of the Act of November 12, 1999 (Pub. L. No.
106--102; 113 Stat. 1380), effective March 12,
2000]
(b) Preservation of Existing Subsidiaries.--Notwithstanding subsection (a), an insured State
bank may retain control of a subsidiary, or retain an interest in a
subsidiary, that the State bank lawfully controlled or acquired before
November 12, 1999, and conduct through such subsidiary any activities
lawfully conducted in such subsidiary as of such date.
[Codified to 12 U.S.C. 1831w(b)]
[Section 2[46](b) of the Act of September 21, 1950 (Pub. L. No.
797; 64 Stat. 882), effective September 21, 1950, as added by section
121(d)(1) of title I of the Act of November 12, 1999 (Pub. L. No.
106--102; 113 Stat. 1380), effective March 12,
2000]
(c) Definitions.--For purposes of this section, the
following definitions shall apply:
(1) SUBSIDIARY.--The term "subsidiary" means any
company that is a subsidiary (as defined in
section 3(w)(4)) of 1 or more
insured banks.
(2) FINANCIAL SUBSIDIARY.--The term "financial
subsidiary" has the meaning given the term in section 5136A(g) of
the Revised Statutes of the United States.
[Codified to 12 U.S.C. 1831w(c)]
[Section 2[46](c) of the Act of September 21, 1950 (Pub. L. No.
797; 64 Stat. 882), effective September 21, 1950, as added by section
121(d)(1) of title I of the Act of November 12, 1999 (Pub. L. No.
106--102; 113 Stat. 1381), effective March 12,
2000]
(d) Preservation of Authority.--
(1) THIS CHAPTER.--No provision of this section shall be
construed as superseding the authority of the Federal Deposit Insurance
Corporation to review subsidiary activities under
section 24.
(2) FEDERAL RESERVE ACT.--No provision of this section
shall be construed as affecting the applicability of the 20th
undesignated paragraph of section 9 of the Federal Reserve Act [12
U.S.C. § 335].
[Codified to 12 U.S.C. 1831w(d)]
[Section 2[46](d) of the Act of September 21, 1950 (Pub.
L. No. 797; 64 Stat. 882), effective September 21, 1950, as added by
section 121(d)(1) of title I of the Act of November 12, 1999 (Pub. L.
No. 106--102; 113 Stat. 1381), effective March 12, 2000]
SEC. 47. INSURANCE CUSTOMER PROTECTIONS.
(a) Regulations Required.--
(1) IN GENERAL.--The Federal banking agencies shall
prescribe and publish in final form, before the end of the 1-year
period beginning on November 12, 1999, customer protection regulations
(which the agencies jointly determine to be appropriate) that--
(A) apply to retail sales practices, solicitations, advertising,
or offers of any insurance product by any depository institution or any
person that is engaged in such activities at an office of the
institution or on behalf of the institution; and
(B) are consistent with the requirements of this Act and provide
such additional protections for customers to whom such sales,
solicitations, advertising, or offers are directed.
(2) APPLICABILITY TO SUBSIDIARIES.--The regulations
prescribed pursuant to paragraph (1) shall extend such protections to
any subsidiary of a depository institution, as deemed appropriate by
the regulators referred to in paragraph (3), where such extension is
determined to be necessary to ensure the consumer protections provided
by this section.
(3) CONSULTATION AND JOINT REGULATIONS.--The Federal
banking agencies shall consult with each other and prescribe joint
regulations pursuant to paragraph (1), after consultation with the
State insurance regulators, as appropriate.
[Codified to 12 U.S.C. 1831x(a)]
[Section 2[47](a) of the Act of September 21, 1950 (Pub. L. No.
797; 64 Stat. 882), effective September 21, 1950, as added by section
305 of title III of the Act of November 12, 1999 (Pub. L. No. 106--102;
113 Stat. 1410), effective November 12, 1999]
(b) Sales Practices.--The regulations prescribed pursuant
to subsection (a) of this section shall include antitying and
anticoercion rules applicable to the sale of insurance products that
prohibit a depository institution from engaging in any practice that
would lead a customer to believe an extension of credit, in violation
of section 106(b) of the Bank Holding Company Act Amendments of 1970,
is conditional upon--
(1) the purchase of an insurance product from the institution or
any of its affiliates; or
(2) an agreement by the consumer not to obtain, or a prohibition
on the consumer from obtaining, an insurance product from an
unaffiliated entity.
[Codified to 12 U.S.C. 1831x(b)]
[Section 2[47](b) of the Act of September 21, 1950 (Pub. L. No.
797; 64 Stat. 882), effective September 21, 1950, as added by section
305 of title III of the Act of November 12, 1999 (Pub. L. No. 106--102;
113 Stat. 1410), effective November 12, 1999]
(c) Disclosures and Advertising.--The regulations
prescribed pursuant to subsection (a) of this section shall include the
following provisions relating to disclosures and advertising in
connection with the initial purchase of an insurance product:
(1) DISCLOSURES.--
(A) IN GENERAL.--Requirements that the following
disclosures be made orally and in writing before the completion of the
initial sale and, in the case of clause (iii), at the time of
application for an extension of credit:
(i) UNINSURED STATUS.--As appropriate, the product is
not insured by the Federal Deposit Insurance Corporation, the United
States Government, or the depository institution.
(ii) INVESTMENT RISK.--In the case of a variable annuity
or other insurance product which involves an investment risk, that
there is an investment risk associated with the product, including
possible loss of value.
(iii) COERCION.--The approval of an extension of credit
may not be conditioned on--
(I) the purchase of an insurance product from the institution in
which the application for credit is pending or of any affiliate of the
institution; or
(II) an agreement by the consumer not to obtain, or a prohibition
on the consumer from obtaining, an insurance product from an
unaffiliated entity.
(B) MAKING DISCLOSURE READILY
UNDERSTANDABLE.--Regulations prescribed under subparagraph (A)
shall encourage the use of disclosure that is conspicuous, simple,
direct, and readily understandable, such as the following:
(i) "NOT FDIC--INSURED".
(ii) "NOT GUARANTEED BY THE BANK".
(iii) "MAY GO DOWN IN VALUE".
(iv) "NOT INSURED BY ANY GOVERNMENT AGENCY".
(C) LIMITATION.--Nothing in this paragraph requires the
inclusion of the foregoing disclosures in advertisements of a general
nature describing or listing the services or products offered by an
institution.
(D) MEANINGFUL DISCLOSURES.--Disclosures shall not be
considered to be meaningfully provided under this paragraph if the
institution or its representative states that disclosures required by
this subsection were available to the customer in printed material
available for distribution, where such printed material is not provided
and such information is not orally disclosed to the customer.
(E) ADJUSTMENTS FOR ALTERNATIVE METHODS OF PURCHASE.--In
prescribing the requirements under subparagraphs (A) and (F), necessary
adjustments shall be made for purchase in person, by telephone, or by
electronic media to provide for the most appropriate and complete form
of disclosure and acknowledgments.
(F) CONSUMER ACKNOWLEDGMENT.--A requirement that a
depository institution shall require any person selling an insurance
product at any office of, or on behalf of, the institution to obtain,
at the time a consumer receives the disclosures required under this
paragraph or at the time of the initial purchase by the consumer of
such product, an acknowledgment by such consumer of the receipt of the
disclosure required under this subsection with respect to such product.
(2) PROHIBITION ON MISREPRESENTATIONS.--A prohibition on
any practice, or any advertising, at any office of, or on behalf of,
the depository institution, or any subsidiary, as appropriate, that
could mislead any person or otherwise cause a reasonable person to
reach an erroneous belief with respect to--
(A) the uninsured nature of any insurance product sold, or
offered for sale, by the institution or any subsidiary of the
institution;
(B) in the case of a variable annuity or insurance product that
involves an investment risk, the investment risk associated with any
such product; or
(C) in the case of an institution or subsidiary at which
insurance products are sold or offered for sale, the fact that--
(i) the approval of an extension of credit to a customer by the
institution or subsidiary may not be conditioned on the purchase of an
insurance product by such customer from the institution or subsidiary;
and
(ii) the customer is free to purchase the insurance product from
another source.
[Codified to 12 U.S.C. 1831x(c)]
[Section 2[47](c) of the act of September 21, 1950 (Pub. L. No.
797; 64 Stat. 882), effective September 21, 1950, as added by section
305 of title III of the Act of November 12, 1999 (Pub. L. No. 106--102;
113 Stat. 1411), effective November 12, 1999]
(d) Separation of Banking and Nonbanking Activities.--
(1) REGULATIONS REQUIRED.--The regulations prescribed
pursuant to subsection (a) shall include such provisions as the Federal
banking agencies consider appropriate to ensure that the routine
acceptance of deposits is kept, to the extent practicable, physically
segregated from insurance product activity.
(2) REQUIREMENTS.--Regulations prescribed pursuant to
paragraph (1) shall include the following requirements:
(A) SEPARATE SETTING.--A clear delineation of the
setting in which, and the circumstances under which, transactions
involving insurance products should be conducted in a location
physically segregated from an area where retail deposits are routinely
accepted.
(B) REFERRALS.--Standards that permit any person
accepting deposits from the public in an area where such transactions
are routinely conducted in a depository institution to refer a customer
who seeks to purchase any insurance product to a qualified person who
sells such product, only if the person making the referral receives no
more than a one-time nominal fee of a fixed dollar amount for each
referral that does not depend on whether the referral results in a
transaction.
(C) QUALIFICATION AND LICENSING REQUIREMENTS.--Standards
prohibiting any depository institution from permitting any person to
sell or offer for sale any insurance product in any part of any office
of the institution, or on behalf of the institution, unless such person
is appropriately qualified and licensed.
[Codified to 12 U.S.C. 1831x(d)]
[Section 2[47](d) of the Act of September 21, 1950 (Pub. L. No.
797; 64 Stat. 882), effective September 21, 1950, as added by section
305 of title III of the Act of November 12, 1999 (Pub. L. No. 106--102;
113 Stat. 1412), effective November 12, 1999]
(e) Domestic Violence Discrimination Prohibition.--
(1) IN GENERAL.--In the case of an applicant for, or an
insured under, any insurance product described in paragraph (2), the
status of the applicant or insured as a victim of domestic violence, or
as a provider of services to victims of domestic violence, shall not be
considered as a criterion in any decision with regard to insurance
underwriting, pricing, renewal, or scope of coverage of insurance
policies, or payment of insurance claims, except as required or
expressly permitted under State law.
(2) SCOPE OF APPLICATION.--The prohibition contained in
paragraph (1) shall apply to any life or health insurance product which
is sold or offered for sale, as principal, agent, or broker, by any
depository institution or any person who is engaged in such activities
at an office of the institution or on behalf of the institution.
(3) DOMESTIC VIOLENCE DEFINED.--For purposes of this
subsection, the term "domestic violence" means the occurrence of
one or more of the following acts by a current or former family member,
household member, intimate partner, or caretaker:
(A) Attempting to cause or causing or threatening another person
physical harm, severe emotional distress, psychological trauma, rape,
or sexual assault.
(B) Engaging in a course of conduct or repeatedly committing acts
toward another person, including following the person without proper
authority, under circumstances that place the person in reasonable fear
of bodily injury or physical harm.
(C) Subjecting another person to false imprisonment.
(D) Attempting to cause or cause damage to property so as to
intimidate or attempt to control the behavior of another person.
[Codified to 12 U.S.C. 1831x(e)]
[Section 2[47](e) of the Act of September 21, 1950 (Pub. L. No.
797; 64 Stat. 882), effective September 21, 1950, as added by section
305 of title III of the Act of November 12, 1999 (Pub. L. No. 106--102;
113 Stat. 1413), effective November 12, 1999]
(f) Consumer Grievance Process.--The Federal banking
agencies shall jointly establish a consumer complaint mechanism, for
receiving and expeditiously addressing consumer complaints alleging a
violation of regulations issued under the section, which shall--
(1) establish a group within each regulatory agency to receive
such complaints;
(2) develop procedures for investigating such complaints;
(3) develop procedures for informing consumers of rights they may
have in connection with such complaints; and
(4) develop procedures for addressing concerns raised by such
complaints, as appropriate, including procedures for the recovery of
losses to the extent appropriate.
[Codified to 12 U.S.C. 1831x(f)]
[Section 2[47](f) of the Act of September 21, 1950 (Pub. L. No.
797; 64 Stat. 882), effective September 21, 1950, as added by section
305 of title III of the Act of November 12, 1999 (Pub. L. No. 106--102;
113 Stat. 1413), effective November 12, 1999]
(g) Effect on Other Authority.--
(1) IN GENERAL.--No provision of this section shall be
construed as granting, limiting, or otherwise affecting--
(A) any authority of the Securities and Exchange Commission, any
self-regulatory organization, the Municipal Securities Rulemaking
Board, or the Secretary of the Treasury under any Federal securities
law; or
(B) except as provided in paragraph (2), any authority of any
State insurance commission (or any agency or office performing like
functions), or of any State securities commission (or any agency or
office performing like functions), or other State authority under any
State law.
(2) COORDINATION WITH STATE LAW.--
(A) IN GENERAL.--Except as provided in subparagraph (B),
insurance customer protection regulations prescribed by a Federal
banking agency under this section shall not apply to retail sales,
solicitations, advertising, or offers of any insurance product by any
depository institution or to any person who is engaged in such
activities at an office of such institution or on behalf of the
institution, in a State where the State has in effect statutes,
regulations, orders, or interpretations, that are inconsistent with or
contrary to the regulations prescribed by the Federal banking agencies.
(B) PREEMPTION.--
(i) IN GENERAL.--If, with respect to any provision of
the regulations prescribed under this section, the Board of Governors
of the Federal Reserve System, the Comptroller of the Currency, and the
Board of Directors of the Corporation determine jointly that the
protection afforded by such provision for customers is greater than the
protection provided by a comparable provision of the statutes,
regulations, orders, or interpretations referred to in subparagraph (A)
of any State, the appropriate State regulatory authority shall be
notified of such determination in writing.
(ii) CONSIDERATIONS.--Before making a final
determination under clause (i), the Federal agencies referred to in
clause (i) shall give appropriate consideration to comments submitted
by the appropriate State regulatory authorities relating to the level
of protection afforded to consumers under State law.
(iii) FEDERAL PREEMPTION AND ABILITY OF STATES TO OVERRIDE
FEDERAL PREEMPTION.--If the Federal agencies referred to in clause
(i) jointly determine that any provision of the regulations prescribed
under this section affords greater protections than a comparable State
law, rule, regulation, order, or interpretation, those agencies shall
send a written preemption notice to the appropriate State regulatory
authority to notify the State that the Federal provision will preempt
the State provision and will become applicable unless, not later than 3
years after the date of such notice, the State adopts legislation to
override such preemption.
[Codified to 12 U.S.C. 1831x(g)]
[Section 2[47](g) of the Act of September 21, 1950 (Pub.
L. No. 797; 64 Stat. 882), effective September 21, 1950, as added by
section 305 of title III of the Act of November 12, 1999 (Pub. L. No.
106--102; 113 Stat. 1413), effective November 12, 1999]
(h) Non-Discrimination Against Non-Affiliated Agents.--The
Federal banking agencies shall ensure that the regulations prescribed
pursuant to subsection (a) shall not have the effect of discriminating,
either intentionally or unintentionally, against any person engaged in
insurance sales or solicitations that is not affiliated with a
depository institution.
[Codified to 12 U.S.C. 1831x(h)]
[Section 2[47](h) of the Act of September 21, 1950 (Pub.
L. No. 797; 64 Stat. 882), effective September 21, 1950, as added by
section 305 of title III of the Act of November 12, 1999 (Pub. L. No.
106--102; 113 Stat. 1414), effective November 12, 1999]
SEC. 48. CRA SUNSHINE REQUIREMENTS.
(a) Public Disclosure of Agreements.--Any agreement (as
defined in subsection (e)) entered into after November 12, 1999 by an
insured depository institution or affiliate with a nongovernmental
entity or person made pursuant to or in connection with the Community
Reinvestment Act of 1977 [12 U.S.C. § 2901 et seq.] involving funds
or other resources of such insured depository institution or
affiliate--
(1) shall be in its entirety fully disclosed, and the full text
thereof made available to the appropriate Federal banking agency with
supervisory responsibility over the insured depository institution and
to the public by each party to the agreement; and
(2) shall obligate each party to comply with this section.
[Codified to 12 U.S.C. 1831y(a)]
[Section 2[48](a) of the Act of September 21, 1950 (Pub. L. No.
797; 64 Stat. 882), effective September 21, 1950, as added by section
711 of title VII of the Act of November 12, 1999 (Pub. L. No. 106--102;
113 Stat. 1466), effective November 12, 1999]
(b) Annual Report of Activity by Insured Depository Institution.--Each insured depository institution or affiliate that
is a party to an agreement described in subsection (a) of this section
shall report to the appropriate Federal banking agency with supervisory
responsibility over the insured depository institution, not less
frequently than once each year, such information as the Federal banking
agency may by rule require relating to the following actions taken by
the party pursuant to the agreement during the preceding 12-month
period:
(1) Payments, fees, or loans made to any party to the agreement
or received from any party to the agreement and the terms and
conditions of the same.
(2) Aggregate data on loans, investments, and services provided
by each party in its community or communities pursuant to the
agreement.
(3) Such other pertinent matters as determined by regulation by
the appropriate Federal banking agency with supervisory responsibility
over the insured depository institution.
[Codified to 12 U.S.C. 1831y(b)]
[Section 2[48](a) of the Act of September 21, 1950 (Pub. L. No.
797; 64 Stat. 882), effective September 21, 1950, as added by section
711 of title VII of the Act of November 12, 1999 (Pub. L. No. 106--102;
113 Stat. 1466), effective November 12, 1999]
(c) Annual Report of Activity by Nongovernmental Entities.--
(1) IN GENERAL.--Each nongovernmental entity or person
that is not an affiliate of an insured depository institution and that
is a party to an agreement described in subsection (a) of this section
shall report to the appropriate Federal banking agency with supervisory
responsibility over the insured depository institution that is a party
to such agreement, not less frequently than once each year, an
accounting of the use of funds received pursuant to each such agreement
during the preceding 12-month period.
(2) SUBMISSION TO INSURED DEPOSITORY INSTITUTION.--A
nongovernmental entity or person referred to in paragraph (1) may
comply with the reporting requirement in such paragraph by transmitting
the report to the insured depository institution that is a party to the
agreement, and such insured depository institution shall promptly
transmit such report to the appropriate Federal banking agency with
supervisory authority over the insured depository institution.
(3) INFORMATION TO BE INCLUDED.--The accounting referred
to in paragraph (1) shall include a detailed, itemized list of the uses
to which such funds have been made, including compensation,
administrative expenses, travel, entertainment, consulting and
professional fees paid, and such other categories, as determined by
regulation by the appropriate Federal banking agency with supervisory
responsibility over the insured depository institution.
[Codified to 12 U.S.C. 1831y(c)]
[Section 2[48](c) of the Act of September 21, 1950 (Pub. L. No.
797; 64 Stat. 882), effective September 21, 1950, as added by section
711 of title VII of the Act of November 12, 1999 (Pub. L. No. 106--102;
113 Stat. 1467), effective November 12, 1999]
(d) Applicability.--Subsections (b) and (c) of this
section shall not apply with respect to any agreement entered into
before the end of the 6-month period beginning on November 12, 1999.
[Codified to 12 U.S.C. 1831y(d)]
[Section 2[48](d) of the Act of September 21, 1950 (Pub. L. No.
797; 64 Stat. 882), effective September 21, 1950, as added by section
711 of title VII of the Act of November 12, 1999 (Pub. L. No. 106--102;
Stat. 1467), effective November 12, 1999]
(e) Definitions.--
(1) AGREEMENT.--For purposes of this section, the term
"agreement"--
(A) means--
(i) any written contract, written arrangement, or other written
understanding that provides for cash payments, grants, or other
consideration with a value in excess of $10,000, or for loans the
aggregate amount of principal of which exceeds $50,000, annually (or
the sum of all such agreements during a 12-month period with an
aggregate value of cash payments, grants, or other consideration in
excess of $10,000, or with an aggregate amount of loan principal in
excess of $50,000); or
(ii) a group of substantively related contracts with an aggregate
value of cash payments, grants, or other consideration in excess of
$10,000, or with an aggregate amount of loan principal in excess of
$50,000, annually;
made pursuant to, or in connection with, the fulfillment of the
Community Reinvestment Act of 1977 [12 U.S.C. § 2901 et seq.], at
least 1 party to which is an insured depository institution or
affiliate thereof, whether organized on a profit or not-for-profit
basis; and
(B) does not include--
(i) any individual mortgage loan;
(ii) any specific contract or commitment for a loan or extension
of credit to individuals, businesses, farms, or other entities, if the
funds are loaned at rates not substantially below market rates and if
the purpose of the loan or extension of credit does not include any
re-lending of the borrowed funds to other parties; or
(iii) any agreement entered into by an insured depository
institution or affiliate with a nongovernmental entity or person who
has not commented on, testified about, or discussed with the
institution, or otherwise contacted the institution, concerning the
Community Reinvestment Act of 1977 [12 U.S.C. § 2901 et seq.].
(2) FULFILLMENT OF CRA.--For purposes of subparagraph
(A), the term "fulfillment" means a list of factors that the
appropriate Federal banking agency determines have a material impact on
the agency's decision--
(A) to approve or disapprove an application for a deposit
facility (as defined in section 803 of the Community Reinvestment Act
of 1977); or
(B) to assign a rating to an insured depository institution under
section 807 of the Community
Reinvestment Act of 1977.
[Codified to 12 U.S.C. 1831y(e)]
[Section 2[48](e) of the Act of September 21, 1950 (Pub. L. No.
797; 64 Stat. 882), effective September 21, 1950, as added by section
711 of title VII of the Act of November 12, 1999 (Pub. L. No. 106--102;
113 Stat. 1467), effective November 12, 1999]
(f) Violations.--
(1) VIOLATIONS BY PERSONS OTHER THAN INSURED DEPOSITORY
INSTITUTIONS OR THEIR AFFILIATES.--
(A) MATERIAL FAILURE TO COMPLY.--If the party to an
agreement described in subsection (a) of this section that is not an
insured depository institution or affiliate willfully fails to comply
with this section in a material way, as determined by the appropriate
Federal banking agency, the agreement shall be unenforceable after the
offending party has been given notice and a reasonable period of time
to perform or comply.
(B) DIVERSION OF FUNDS OR RESOURCES.--If funds or
resources received under an agreement described in subsection (a) have
been diverted contrary to the purposes of the agreement for personal
financial gain, the appropriate Federal banking agency with supervisory
responsibility over the insured depository institution may impose
either or both of the following penalties:
(i) Disgorgement by the offending individual of funds received
under the agreement.
(ii) Prohibition of the offending individual from being a party
to any agreement described in subsection (a) for a period of not to
exceed 10 years.
(2) DESIGNATION OF SUCCESSOR NONGOVERNMENTAL PARTY.--If
an agreement described in subsection (a) is found to be unenforceable
under this subsection, the appropriate Federal banking agency may
assist the insured depository institution in identifying a successor
nongovernmental party to assume the responsibilities of the agreement.
(3) INADVERTENT OR DE MINIMIS REPORTING ERRORS.--An
error in a report filed under subsection (c) that is inadvertent or de
minimis shall not subject the filing party to any penalty.
[Codified to 12 U.S.C. 1831y(f)]
[Section 2[48](f) of the Act of September 21, 1950 (Pub. L. No.
797; 64 Stat. 882), effective September 21, 1950, as added by section
711 of title VII of the Act of November 12, 1999 (Pub. L. No. 106--102;
113 Stat. 1467), effective November 12, 1999]
(g) Rule of Construction.--No provision of this section
shall be construed as authorizing any appropriate Federal banking
agency to enforce the provisions of any agreement described in
subsection (a).
[Codified to 12 U.S.C. 1831y(g)]
[Section 2[48](g) of the Act of September 21, 1950 (Pub. L. No.
797; 64 Stat. 882), effective September 21, 1950, as added by section
711 of title VII of the Act of November 12, 1999 (Pub. L. No. 106--102;
113 Stat. 1468), effective November 12, 1999]
(h) Regulations.--
(2) IN GENERAL.--Each appropriate Federal banking agency
shall prescribe regulations, in accordance with paragraph (4),
requiring procedures reasonably designed to ensure and monitor
compliance with the requirements of this section.
(2) PROTECTION OF PARTIES.--In carrying out paragraph
(1), each appropriate Federal banking agency shall--
(A) ensure that the regulations prescribed by the agency do not
impose an undue burden on the parties and that proprietary and
confidential information is protected; and
(B) establish procedures to allow any nongovernmental entity or
person who is a party to a large number of agreements described in
subsection (a) to make a single or consolidated filing of a report
under subsection (c) to an insured depository institution or an
appropriate Federal banking agency.
(3) PARTIES NOT SUBJECT TO REPORTING REQUIREMENTS.--The
Board of Governors of the Federal Reserve System may prescribe
regulations--
(A) to prevent evasions of subsection (e)(1)(B)(iii); and
(B) to provide further exemptions under such subsection,
consistent with the purposes of this section.
(4) COORDINATION, CONSISTENCY, AND COMPARABILITY.--In
carrying out paragraph (1), each appropriate Federal banking agency
shall consult and coordinate with the other such agencies for the
purposes of assuring, to the extent possible, that the regulations
prescribed by each such agency are consistent and comparable with the
regulations prescribed by the other such agencies.
[Codified to 12 U.S.C. 1831y(h)]
[Section 2[48](h) of the Act of September 21, 1950 (Pub.
L. No. 797; 64 Stat 882), effective September 21, 1950, as added by
section 711 of title VII of the Act of November 12, 1999 (Pub. L. No.
106--102; 113 Stat. 1468), effective November 12, 1999]
SEC. 49. BI-ANNUAL FDIC SURVEY AND REPORT ON ENCOURAGING USE
OF DEPOSITORY INSTITUTIONS BY THE UNBANKED.
(a) Survey required.--
(1) IN GENERAL.--The Corporation shall conduct a
bi-annual survey on efforts by insured depository institutions to bring
those individuals and families who have rarely, if ever, held a
checking account, a savings account or other type of transaction or
check cashing account at an insured depository institution (hereafter
in this section referred to as the "unbanked") into the
conventional finance system.
(2) FACTORS AND QUESTIONS TO CONSIDER.--In conducting
the survey, the Corporation shall take the following factors and
questions into account:
(A) To what extent do insured depository institutions promote
financial education and financial literacy outreach?
(B) Which financial education efforts appear to be the most
effective in bringing "unbanked" individuals and families into
the conventional finance system?
(C) What efforts are insured institutions making at converting
"unbanked" money order, wire transfer, and international
remittance customers into conventional account holders?
(D) What cultural, language and identification issues as well as
transaction costs appear to most prevent "unbanked" individuals
from establishing conventional accounts?
(E) What is a fair estimate of the size and worth of the
"unbanked' market in the United States?
[Codified to 12 U.S.C. 1831z(a)]
[Section 2[49](a) of the Act of September 21, 1950 (Pub. L. No.
797; 64 Stat. 882), effective September 21, 1950; as added by section 7
of the Act of February 15, 2006 (Pub. L. No. 190--173; 119 Stat.
3609), effective February 15, 2006]
(b) Reports.--The Chairperson of the Board of Directors
shall submit a bi-annual report to the Committee on Financial Services
of the House of Representatives and the Committee on Banking, Housing,
and Urban Affairs of the Senate containing the Corporation's findings
and conclusions with respect to the survey conducted pursuant to
subsection (a) of this section, together with such recommendations for
legislative or administrative action as the Chairperson may determine
to be appropriate.
[Codified to 12 U.S.C. 1831z(b)]
[Section 2[49](b) of the Act of September 21, 1950 (Pub. L. No.
797; 64 Stat. 882), effective September 21, 1950; as added by section 7
of the Act of February 15, 2006 (Pub. L. No. 190--173; 119 Stat.
3609), effective February 15, 2006]
SEC. 50. ENFORCEMENT OF AGREEMENTS.
(a) In General.--Notwithstanding clause (i) or (ii) of
section 8(b)(6)(A) or section 38(e)(2)(E)(i), the appropriate Federal
banking agency for a depository institution may enforce, under section
8, the terms of--
(1) any condition imposed in writing by the agency on the
depository institution or an institution-affiliated party in connection
with any action on any application, notice, or other request concerning
the depository institution; or
(2) any written agreement entered into between the agency and the
depository institution or an institution-affiliated party.
[Codified to 12 U.S.C. 1831aa(a)]
[Section 2[50](a) of the Act of September 21, 1950 (Pub. L. No.
797; 64 Stat. 882), effective September 21, 1950; as added by section
702(a) of title VII of the Act of October 13, 2006 (Pub. L. No.
190--351; 120 Stat. 1984), effective February 15,
2006]
(b) Receiverships and Conservatorships.--After the
appointment of the Corporation as the receiver or conservator for a
depository institution, the Corporation may enforce any condition or
agreement described in paragraph (1) or (2) of subsection (a) imposed
on or entered into with such institution or
institution-affiliated party through an action brought in an
appropriate United States district court.
[Codified to 12 U.S.C. 1831aa(b)]
[Section 2[50](b) of the Act of September 21, 1950 (Pub. L. No.
797; 64 Stat. 882), effective September 21, 1950; as added by section
702(a) of title VII of the Act of October 13, 2006 (Pub. L. No.
190--351; 120 Stat. 1984), effective February 15,
2006]
SEC. 51. CAPITAL REQUIREMENTS FOR CERTAIN ACQUISITION,
DEVELOPMENT, OR CONSTRUCTION LOANS.
(a) In general.--The appropriate Federal banking agencies
may only require a depository institution to assign a heightened risk
weight to a high volatility commercial real estate (HVCRE) exposure (as
such term is defined under section 324.2 of title 12, Code of Federal
Regulations, as of October 11, 2017, or if a successor regulation is in
effect as of the date of the enactment of this section, such term or
any successor term contained in such successor regulation) under any
risk-based capital requirement if such exposure is an HVCRE ADC
loan.
(b) hvcre adc loan defined.--For purposes of this section
and with respect to a depository institution, the term "HVCRE ADC
loan"--
(1) means a credit facility secured by land or improved real
property that, prior to being reclassified by the depository
institution as a non-HVCRE ADC loan pursuant to subsection (d)--
(A) primarily finances, has financed, or refinances the
acquisition, development, or construction of real property;
(B) has the purpose of providing financing to acquire, develop,
or improve such real property into income-producing real property; and
(C) is dependent upon future income or sales proceeds from, or
refinancing of, such real property for the repayment of such credit
facility;
(2) does not include a credit facility financing--
(A) the acquisition, development, or construction of properties
that are--
(i) one- to four-family residential properties;
(ii) real property that would qualify as an investment in
community development; or
(iii) agricultural land;
(B) the acquisition or refinance of existing income-producing
real property secured by a mortgage on such property, if the cash flow
being generated by the real property is sufficient to support the debt
service and expenses of the real property, in accordance with the
institution's applicable loan underwriting criteria for permanent
financings;
(C) improvements to existing income-producing improved real
property secured by a mortgage on such property, if the cash flow being
generated by the real property is sufficient to support the debt
service and expenses of the real property, in accordance with the
institution's applicable loan underwriting criteria for permanent
financings; or
(D) commercial real property projects in which--
(i) the loan-to-value ratio is less than or equal to the
applicable maximum supervisory loan-to-value ratio as determined by the
appropriate Federal banking agency;
(ii) the borrower has contributed capital of at least 15 percent
of the real property's appraised, as completed' value to the
project in the form of--
(I) cash;
(II) unencumbered readily marketable assets;
(III) paid development expenses out-of-pocket; or
(IV) contributed real property or improvements; and
(iii) the borrower contributed the minimum amount of capital
described under clause (ii) before the depository institution advances
funds (other than the advance of a nominal sum made in order to secure
the depository institution's lien against the real property) under the
credit facility, and such minimum amount of capital contributed by the
borrower is contractually required to remain in the project until the
credit facility has been reclassified by the depository institution as
a non-HVCRE ADC loan under subsection (d);
(3) does not include any loan made prior to January 1, 2015; and
(4) does not include a credit facility reclassified as a nonHVCRE
ADC loan under subsection (d).
(c) Value of contributed real property.--For purposes of
this section, the value of any real property contributed by a borrower
as a capital contribution shall be the appraised value of the property
as determined under standards prescribed pursuant to section 1110 of
the Financial Institutions Reform, Recovery, and Enforcement Act of
1989 (12 U.S.C. 3339), in connection with the extension of the credit
facility or loan to such borrower.
(d) Reclassification as a non-hvrce adc loan.--For
purposes of this section and with respect to a credit facility and a
depository institution, upon--
(1) the substantial completion of the development or construction
of the real property being financed by the credit facility; and
(2) cash flow being generated by the real property being
sufficient to support the debt service and expenses of the real
property, in accordance with the institution's applicable loan
underwriting criteria for permanent financings, the credit facility may
be reclassified by the depository institution as a Non-HVCRE ADC
loan.
(e) Existing authorities.--Nothing in this section shall
limit the supervisory, regulatory, or enforcement authority of an
appropriate Federal banking agency to further the safe and sound
operation of an institution under the supervision of the appropriate
Federal banking agency.
[Codified to 12 U.S.C. 1831bb]
[Source: Section 214[51] of title II of the Act of May 24, 2018
(Pub. Law. 115--174; 132 Stat. 1321), effective May 24, 2018]
SEC. 52. DATA STANDARDS.
(a) DEFINITION.—In this section, the term ‘financial company’ has the meaning given the term in section 201(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5381(a)).
(b) REQUIREMENT.—The Corporation shall, by rule, adopt data standards for all collections of information with respect to information received by the Corporation from any depository institution or financial company under this Act or under title II of the Dodd- Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5381 et seq.).
(c) CONSISTENCY.—The data standards required under subsection (b) shall incorporate, and ensure compatibility with (to the extent feasible), all applicable data standards established in the rules promulgated under section 124 of the Financial Stability Act of 2010, including, to the extent practicable, by having the characteristics described in clauses (i) through (vi) of subsection (c)(1)(B) of such section 124.
[Source: Section 5831 of Title LVIII of the Act of January 3, 2022 (Pub. Law. 117-263; 136 Stat. 49), effective December 23, 2022].
SEC. 53. OPEN DATA PUBLICATION.
All public data assets published by the Corporation under this Act or under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Public Law 111–203; 124 Stat. 1376) shall be—
(1) made available as an open Government data asset (as defined in section 3502 of title 44, United States Code);
(2) freely available for download;
(3) rendered in a human-readable format; and
(4) accessible via application programming interface where appropriate.
[Source: Section 5832 of Title LVIII of the Act of January 3, 2022 (Pub. Law. 117-263; 136 Stat. 49), effective December 23, 2022].
[End of FDI Act]
SEC. 213. MAKING ONLINE BANKING INITIATION LEGAL AND EASY
(a) Definitions.--In this section:
(1) AFFILIATE. The term "affiliate" has the
meaning given the term in section 1841 of this title.
(2) DRIVER'S LICENSE. The term "driver's
license" means a license issued by a State to an individual that
authorizes the individual to operate a motor vehicle on public streets,
roads, or highways.
(3) FEDERAL BANK SECRECY LAWS. The term "Federal bank
secrecy laws" means--
(A) section 1829b of this title;
(B) section 1953 of this title; and
(C) subchapter II of chapter 53 of title 31, United States Code.
(4) FINANCIAL INSTITUTION. The term "financial
institution" means--
(A) an insured depository institution;
(B) an insured credit union; or
(C) any affiliate of an insured depository institution or insured
credit union.
(5) FINANCIAL PRODUCT OR SERVICE. The term "financial
product or service" has the meaning given the term in section 5481
of this title.
(6) INSURED CREDIT UNION. The term "insured credit
union" has the meaning given the term in section 1752 of this title.
(7) INSURED DEPOSITORY INSTITUTION. The term "insured
depository institution" has the meaning given the term in section
1813 of this title.
(8) ONLINE SERVICE. The term "online service"
means any Internet-based service, such as a website or mobile
application.
(9) PERSONAL IDENTIFICATION CARD. The term "personal
identification card" means an identification document issued by a
State or local government to an individual solely for the purpose of
identification of that individual.
(10) PERSONAL INFORMATION. The term "personal
information" means the information displayed on or electronically
encoded on a driver's license or personal identification card that is
reasonably necessary to fulfill the purpose and uses permitted by
subsection (b).
(11) SCAN. The term "scan" means the act of using
a device or software to decipher, in an electronically readable format,
personal information displayed on or electronically encoded on a
driver's license or personal identification card.
(12) STATE. The term "State" means any State of
the United States, the District of Columbia, the Commonwealth of Puerto
Rico, and any other commonwealth, possession, or territory of the
United States.
(b) Use of a driver's license or personal identification card.--
(1) IN GENERAL. When an individual initiates a request
through an online service to open an account with a financial
institution or obtain a financial product or service from a financial
institution, the financial institution may record personal information
from a scan of the driver's license or personal identification card of
the individual, or make a copy or receive an image of the driver's
license or personal identification card of the individual, and store or
retain such information in any electronic format for the purposes
described in paragraph (2).
(2) USES OF INFORMATION. Except as required to comply
with Federal bank secrecy laws, a financial institution may only use
the information obtained under paragraph (1)--
(A) to verify the authenticity of the driver's license or
personal identification card;
(B) to verify the identity of the individual; and
(C) to comply with a legal requirement to record, retain, or
transmit the personal information in connection with opening an account
or obtaining a financial product or service.
(3) DELETION OF IMAGE. A financial institution that
makes a copy or receives an image of a driver's license or personal
identification card of an individual in accordance with paragraphs (1)
and (2) shall, after using the image for the purposes described in
paragraph (2), permanently delete--
(A) any image of the driver's license or personal identification
card, as applicable; and
(B) any copy of any such image.
(4) DISCLOSURE OF PERSONAL INFORMATION. Nothing in this
section shall be construed to amend, modify, or otherwise affect any
State or Federal law that governs a financial institution's disclosure
and security of personal information that is not publicly available.
(c) Relation to state law.--The provisions of this section
shall preempt and supersede any State law that conflicts with a
provision of this section, but only to the extent of such conflict.
[Codified to 12 U.S.C. 1829c]
[Source: Section 213 of title II of the Act of May 24, 2018 (Pub.
L. 115--174; 132 Stat. 1319), effective May 24, 2018]
SEC. 2. WITHDRAWALS BY NEGOTIABLE OR TRANSFERABLE INSTRUMENTS FOR
TRANSFERS TO THEIRD PARTIES*
(a) Authority of Depository Institution; Applicability.--(1) Notwithstanding any other provision of law but
subject to paragraph (2), a depository institution is authorized to
permit the owner of a deposit or account on which interest or dividends
are paid to make withdrawals by negotiable or transferable instruments
for the purpose of making transfers to third parties.
(2) Paragraph (1) shall apply only with respect to deposits or
accounts which consist solely of funds in which the entire beneficial
interest is held by one or more individuals or by an organization which
is operated primarily for religious, philanthropic, charitable,
educational, political, or other similar purposes and which is not
operated for profit, and with respect to deposits of public funds by an
officer, employee, or agent of the United States, any State, county,
municipality, or political subdivision thereof, the District of
Columbia, the Commonwealth of Puerto Rico, American Samoa, Guam, any
territory or possession of the United States, or any political
subdivision thereof.
(b) "Depository Institution" Defined.--For purposes
of this section, the term "depository institution" means--
(1) any insured bank as defined in section 1813 of this title;
(2) any State bank as defined in section 1813 of this title;
(3) any mutual savings bank as defined in section 1813 of this
title;
(4) any savings bank as defined in section 1813 of this title;
(5) any insured institution as defined in section 1724 of this
title; and
(6) any building and loan association or savings and loan
association organized and operated according to the laws of the State
in which it is chartered or organized; and, for purposes of this
paragraph, the term "State" means any State of the United States,
the District of Columbia, any territory of the United States, Puerto
Rico, Guam, American Samoa, or the Virgin Islands.
(c) Fine.--Any depository institution which violates this
section shall be fined $1,000 for each violation.
[Codified to 12 U.S.C. 1832]
[Source: Section 2 of the Act of August 16, 1973 (Pub. L. No.
93-100; 87 Stat. 342), effective September 14, 1973, as amended by
section 2 of the Act of February 27, 1976 (Pub. L. No. 94--222; 90
Stat. 197), effective February 27, 1976; section 1301 of title XIII of
the Act of November 10, 1978 (Pub. L. No. 95--630; 92 Stat. 3712),
effective November 10, 1978; section 106 of title I of the Act of
December 28, 1979 (Pub. L. No. 96--161; 93 Stat. 1235), effective
December 28, 1979; section 303 of title III of the Act of March 31,
1980 (Pub. L. No. 96--221; 94 Stat. 146), effective December 31, 1980;
section 706(a) of title VII of the Act of October 15, 1982 (Pub. L. No.
97--320; 96 Stat. 1540), effective October 15, 1982; and section 109 of
title I of the Act of August 10, 1987 (Pub. L. No. 100--86; 101 Stat.
579), effective August 10, 1987]
*Editor's note: This section was enacted by (Pub. L. 93--100,
August 18, 1987, 87 Stat. 342) and not as part of the Federal Deposit
Insurance Act. We include this section here for our readers
convenience.
SEC. 951. CIVIL PENALTIES*
(a) In General.--Whoever violates any provision of law to
which this section is made applicable by subsection (c) of this section
shall be subject to a civil penalty in an amount assessed by the court
in a civil action under this section.
(b) Maximum Amount of Penalty.--
(1) Generally
The amount of the civil penalty shall not exceed $1,000,000.
(2) Special rule for continuing violations
In the case of a continuing violation, the amount of the civil
penalty may exceed the amount described in paragraph (1) but may not
exceed the lesser of $1,000,000 per day or $5,000,000.
(3) Special rule for violations creating gain or loss
(A) If any person derives pecuniary gain from the violation, or
if the violation results in pecuniary loss to a person other than the
violator, the amount of the civil penalty may exceed the amounts
described in paragraphs (1) and (2) but may not exceed the amount of
such gain or loss.
(B) As used in this paragraph, the term "person" includes
the Bank Insurance Fund, the Savings Association Insurance Fund, and
after the merger of such funds, the Deposit Insurance Fund, and the
National Credit Union Share Insurance Fund.
(c) Violations of Which Penalty is Applicable.--This
section applies to a violation of, or a conspiracy to violate--
(1) section 215, 656, 657, 1005, 1006, 1007, 1014, or 1344 of
Title 18;
(2) section 287, 1001, 1032, 1341 or 1343 of Title 18 affecting a
federally insured financial institution; or
(3) section 645(a) of Title 15.
(d) Effective Date.--This section shall apply to
violations occurring on or after August 10, 1984.
(e) Attorney General to Bring Action.--A civil action to
recover a civil penalty under this section shall be commenced by the
Attorney General.
(f) Burden of Proof.--In a civil action to recover a civil
penalty under this section, the Attorney General must establish the
right to recovery by a preponderance of the evidence.
(g) Administrative Subpoenas.--
(1) IN GENERAL.--For the purpose of conducting a civil
investigation in contemplation of a civil proceeding under this
section, the Attorney General may--
(A) administer oaths and affirmations;
(B) take evidence; and
(C) by subpoena, summon witnesses and require the production of
any books, papers, correspondence, memoranda, or other records which
the Attorney General deems relevant or material to the inquiry. Such
subpoena may require the attendance of witnesses and the production of
any such records from any place in the United States at any place in
the United States designated by the Attorney General.
(2) Procedures applicable
The same procedures and limitations as are provided with respect to
civil investigative demands in subsections (g), (h), and (j) of section
1968 of Title 18 apply with respect to a subpoena issued under this
subsection. Process required by such subsections to be served upon the
custodian shall be served on the Attorney General. Failure to comply
with an order of the court to enforce such subpoena shall be punishable
as contempt.
(3) Limitation
In the case of a subpoena for which the return date is less than 5
days after the date of service, no person shall be found in contempt
for failure to comply by the return date if such person files a
petition under paragraph (2) not later than 5 days after the date of
service.
(h) Statute of Limitations.--A civil action under this
section may not be commenced later than 10 years after the cause of
action accrues.
[Codified to 12 U.S.C. § 1833a]
[Source: Section 951 of title IX of the Act of August 9, 1989 (Pub.
L. No. 101--73; 103 Stat. 498; sections 2533 and 2596(d) of title XXV
of the Act of November 29, 1990 (Pub. L. No. 101--647; 104 Stat. 4882
and 4908), effective November 29, 1990; section 330003(g) of title
XXXIII of the Act of September 13, 1994 (Pub. L. No. 103--22; 108 Stat.
2141), effective retroactive to November 29, 1990; section 9(g)(1) of
the Act of February 15, 2006 (Pub. L. No. 109--173; 119 Stat. 3618),
effective February 15, 2006]
*Editor's note: This section was enacted by (Pub. L. No.
101--73, August 9, 1989, 103 Stat. 498) and not as part of the Federal
Deposit Insurance Act. We include this section here for our readers
convenience.
SEC. 1206. COMPARABILITY IN COMPENSATION
SCHEDULES*
(a) In General.--The Federal Deposit Insurance
Corporation, the Comptroller of the Currency, the National Credit Union
Administration Board, the Federal Housing Finance Agency, the Office of
Financial Research, and the Bureau of Consumer Financial Protection,
the Farm Credit Administration, in establishing and adjusting schedules
of compensation and benefits which are to be determined solely by each
agency under applicable provisions of law, shall inform the heads of
the other agencies and the Congress of such compensation and benefits
and shall seek to maintain comparability regarding compensation and
benefits.
(b) Commodity Futures Trading Commission.--In establishing
and adjusting schedules of compensation and benefits for employees of
the Commodity Futures Trading Commission under applicable provisions of
law, the Commission shall--
(1) inform the heads of the agencies referred to in subsection
(a) of this section and Congress of such compensation and benefits; and
(2) seek to maintain comparability with those agencies regarding
compensation and benefits.
[Codified to 12 U.S.C. 1833b]
[Source: Section 1206 of title XII of the Act of August 9, 1989
(Pub. L. No. 101--73; 103 Stat. 523), effective August 9, 1989; section
302(a) of title III of the Act of December 12, 1991 (Pub. L. No.
102-33; Stat. 1767), effective February 1, 1992; section 8(d)(3) of the
Act of January 16, 2002 (Pub. L. No. 107--123; 115 Stat. 2400),
effective October 1, 2002; section 10702(b) of title X of the Act of
May 13, 2002 (Pub. L. No. 107--171; 116 Stat. 516), effective May 13,
2002; section 152(d)(3) of title I of the Act of July 21, 2010 (Pub. L.
No. 111--203; 124 Stat. 1414); section 367(8) of title III of the Act
of July 21, 2010 (Pub. L. No. 111--203; 124 Stat. 1557), effective July
21, 2010]
SEC. 1213. COMPTROLLER GENERAL AUDIT AND ACCESS TO
RECORDS*
(a) Audit of Agencies or Other Persons Performing Functions Under Banking Laws.--
(1) IN GENERAL.--Except as provided in paragraph (2),
all agencies, corporations, organizations, and other persons of any
description which perform any function or activity under this Act, or
any other Act which is amended by this Act, shall be subject to audit
by the Comptroller General of the United States with respect to such
function or activity.
(2) EXCEPTIONS.--Paragraph (1) shall not apply to--
(A) any function or activity of the Board of Governors of the
Federal Reserve System or the Federal Reserve banks that is described
in any paragraph of section 714(b) of Title 31; and
(B) any function or activity of the Federal National Mortgage
Association, except as provided in section 1723a(j) of this title.
(b) Audit of Persons Providing Certain Goods or Services.--All persons and organizations which, by contract, grant,
or otherwise, provide goods or services to, or receive financial
assistance from, any agency or other person performing functions or
activities under this Act shall be subject to audit by the Comptroller
General with respect to such provision of goods or services or receipt
of financial assistance.
(c) Provisions applicable to audits under this section
(1) NATURE AND SCOPE OF AUDIT.--The Comptroller General
shall determine the nature, scope, and terms and conditions of audits
conducted under this section.
(2) COORDINATION WITHOTHER PROVISIONS OF LAW.--The
authority of the Comptroller General under this section shall be in
addition to any audit authority available to the Comptroller General
under other provisions of this Act or any other law.
(3) RIGHTS OF ACCESS, EXAMINATION, AND COPYING.--The
Comptroller General, and any duly authorized representative of the
Comptroller General, shall have access to, and the right to examine and
copy, all records and other recorded information in any form, and
to
examine any property, within the possession or control of
any agency or person which is subject to audit under this section which
the Comptroller General deems relevant to an audit conducted under this
section.
(4) ENFORCEMENT OF RIGHT OF ACCESS.--The Comptroller
General's right of access to information under this section shall be
enforceable pursuant to section 716 of Title 31.
(5) MAINTENANCE OF CONFIDENTIAL RECORDS.--The provisions
of section 716(e) of Title 31 shall apply to information obtained by
the Comptroller General under this section.
[Codified to 12 U.S.C. § 1833c]
[Source: Section 1213 of title XII of the Act of August 9, 1989
(Pub. L. No. 101--73: 103 Stat. 528), effective August 9, 1989]
*Editor's note: This section was enacted by (Public L.
101--73, August 9, 1989, 103 Stat. 523) and not as part of the Federal
Deposit Insurance Act. We include this section here for our readers
convenience.
SEC. 1216. EQUAL OPPORTUNITY*
(a) In General.--For purposes of this Act, Executive Order
Numbered 11478, providing for equal employment opportunity in the
Federal Government, shall apply to--
(1) the Comptroller of the Currency;
(2) the Federal Housing Finance Agency; and
(3) the Federal Deposit Insurance Corporation.
(4) Redesignated (3)
(5) Repealed. Pub.L. 111--203, Title III, § 367(9)(A)(iii), 124
Stat. 1557
(6) Repealed. Pub.L. 111--203, Title III, § 367(9)(A)(iii), 124
Stat. 1557
(b) Affirmative Program for Equal Employment Opportunity.-- For purposes of this Act, sections 1 and 2 of
Executive Order Numbered 11478, providing for the adoption and
implementation of equal employment opportunity, shall apply to the
Federal Home Loan Banks, the Federal National Mortgage Association, and
the Federal Home Loan Mortgage Corporation.
(c) Solicitation of Contracts.--The Federal Deposit
Insurance Corporation, the Comptroller of the Currency, and the Federal
Housing Finance Agency, shall each prescribe regulations to establish
and oversee a minority outreach program within each such agency to
ensure inclusion, to the maximum extent possible, of minorities and
women, and entities owned by minorities and women, including financial
institutions, investment banking firms, underwriters, accountants, and
providers of legal services, in all contracts entered into by the
agency with such persons or entities, public and private, in order to
manage the institutions and their assets for which the agency is
responsible or to perform such other functions authorized under any law
applicable to such agency.
(d) Reports to Congress.--Before the end of the 180-day
period beginning on August 9, 1989--
(1) the Federal Deposit Insurance Corporation;
(2) the Comptroller of the Currency;
(3) the Federal Housing Finance Board;
(4) the Federal Home Loan Mortgage Corporation; and
(5) the Federal National Mortgage Association,
(6) Repealed. Pub.L. 111--203, Title III, § 367(9)(B)(i), 124
Stat. 1557
(7) Redesignated (4)
(8) Redesignated (5)
shall each submit to the Congress a report containing a complete
description of the actions taken by such agency pursuant to subsections
(a) and (b) of this section and such recommendations for administrative
and legislative action as each such agency may determine to be
appropriate to carry out the purposes of such subsection.
[Codified to 12 U.S.C. § 1833e]
[Source: Section 1216 of title XII of the Act of August 9, 1989
(Pub. L. No. 101--73: 103 Stat. 529), effective August 9, 1989; section
302(a) of title III of the Act of December 12, 1991 (Pub. L. No.
102--33; 105 Stat. 1767), effective February 1, 1992; section 1216(g)
of title II of the Act of July 30, 2008 (Pub. L. No. 110--289; 122
Stat. 2793), effective July 30, 2008; section 367(9) of title III of
the Act of July 21, 2010 (Pub. L. No. 111--203; 124 Stat. 1557),
effective July 21, 2010]
*Editor's note: This section was enacted by (Pub.L. 101--73,
August 9, 1989, 103 Stat. 529) and not as part of the Federal Deposit
Insurance Act. We include this section here for our readers
convenience.
SEC. 232. REDUCED ASSESSMENT RATE FOR DEPOSITS ATTRIBUTABLE TO
LIFELINE ACCOUNTS*
(a) Qualification of Lifeline Accounts.--
(1) IN GENERAL.--The Comptroller of the Currency and the
Federal Deposit Insurance Corporation shall establish minimum
requirements for accounts providing basic transaction services for
consumers at insured depository institutions in order for such
accounts to qualify as lifeline accounts for purposes of this section
and section 1817(b)(2)(E) of this title.
(2) FACTORS TO BE CONSIDERED.--In determining the
minimum requirements under paragraph (1) for lifeline accounts at
insured depository institutions, the Corporation shall consider the
following factors:
(A) Whether the account is available to provide basic transaction
services for individuals who maintain a balance of less than $1,000 or
such other amount which the Comptroller may determine to be
appropriate.
(B) Whether any service charges or fees to which the account is
subject, if any, for routine transactions do not exceed a minimal
amount.
(C) Whether any minimum balance or minimum opening requirement to
which the account is subject, if any, is not more than a minimal
amount.
(D) Whether checks, negotiable orders of withdrawal, or similar
instruments for making payments or other transfers to third parties may
be drawn on the account.
(E) Whether the depositor is permitted to make more than a
minimal number of withdrawals from the account each month by any means
described in subparagraph (D) or any other means.
(F) Whether a monthly statement itemizing all transactions for
the monthly reporting period is made available to the depositor with
respect to such account or a passbook is provided in which all
transactions with respect to such account are recorded.
(G) Whether depositors are permitted access to tellers at the
institution for conducting transactions with respect to such account.
(H) Whether other account relationships with the institution are
required in order to open any such account.
(I) Whether individuals are required to meet any prerequisite
which discriminates against low-income individuals in order to open
such account.
(J) Such other factors as the Corporation may determine to be
appropriate.
(3) DEFINITIONS.--For purposes of this subsection--
(A) COMPTROLLER.--The term "Comptroller" means the
Comptroller of the Currency.
(B) CORPORATION.-- The term "Corporation" means
the Federal Deposit Insurance Corporation.
(C) INSURED DEPOSITORY INSTITUTION.--The term
"insured depository institution" has the meaning given to such
term in section 1813(c)(2) of this title.
(D) LIFELINE ACCOUNT.--The term "lifeline account"
means any transaction account (as defined in section 461(b)(1)(C) of
this title) which meets the minimum requirements established by the
Corporation under this subsection.
(b) Omitted.--
(c) Availability of Funds.-- The provisions of this
section shall not take effect until appropriations are specifically
provided in advance. There are hereby authorized to be appropriated
such sums as may be necessary to carry out the provisions of this
section.
[Codified to 12 U.S.C. 1834(a)]
[Source: Section 232(a) of title II of the Act of December 19, 1991
(Pub. L. No. 102--242; 105 Stat. 2309), effective December 19, 1991; as
amended at section 303(b)(4) of title III of the Act of October 28,
1992 (Pub. L. No. 102--558; 106 Stat. 4225), effective March
1, 1992; section 3(a)(9)
of the Act of February 15, 2006 (Pub. L. No. 109--173; 119 Stat. 3606),
effective date shall take effect on the date that the final regulation
required under section 2109(a)(5) of the Federal Deposit Insurance
Reform Act of 2005 take effect; section 353 of title III of the Act of
July 21, 2010 (Pub. L. No. 111--203; 124 Stat. 1546), effective July
21, 2010]
*Editor's note: This section was enacted by (Public L.
102--242, December 19, 1991, 105 Stat. 2309) and not as part of the
Federal Deposit Insurance Act. We include this section here for our
readers convenience.
SEC. 233. ASSESSMENT CREDITS FOR QUALIFYING ACTIVITIES RELATING
TO DISTRESSED COMMUNITIES*
(a) Determination of Credits for Increases in Community Enterprise Activities.--
(1) IN GENERAL.--The Community Enterprise Assessment
Credit Board established under subsection (d) of this section shall
issue guidelines for insured depository institutions
eligible under this subsection for any community enterprise assessment
credit with respect to any semiannual period. Such guidelines shall--
(A) designate the eligibility requirements for any institution
meeting applicable capital standards to receive an assessment credit
under section 1817(b)(7) of this title; and
(B) determine the community enterprise assessment credit
available to any eligible institution under paragraph (3).
(2) QUALIFYING ACTIVITIES.--An insured depository
institution may apply for for any community enterprise assessment credit for any semiannual period
for--
(A) the amount, during such period, of new originations of
qualified loans and other assistance provided for low- and
moderate-income persons in distressed communities, or enterprises
integrally involved with such neighborhoods, which the Board determines
are qualified to be taken into account for purposes of this subsection;
(B) the amount, during such period, of deposits accepted from
persons domiciled in the distressed community, at any office of the
institution (including any branch) located in any qualified distressed
community, and new originations of any loans and other financial
assistance made within that community, except that in no case shall the
credit for deposits at any institution or branch exceed the credit for
loans and other financial assistance by the bank or branch in the
distressed community; and
(C) any increase during the period in the amount of new equity
investments in community development financial institutions.
(3) AMOUNT OF ASSESSMENT CREDIT.--The amount of any
community enterprise assessment credit available under section
1817(b)(7) of this title for any insured depository institution, or a
qualified portion thereof, shall be the amount which is equal to 5
percent, in the case of an institution which does not meet the
community development organization requirements under section 1834b of
this title, and 15 percent, in the case of an institution, or a
qualified portion thereof, which meets such requirements (or any
percentage designated under paragraph (5)) of--
(A) for the first full semiannual period in which community
enterprise assessment credits are available, the sum of--
(i) the amounts of assets described in paragraph (2)(A); and
(ii) the amounts of deposits, loans, and other financial
assistance described in paragraph (2)(B); and
(B) for any subsequent semiannual period, the sum of--
(i) any increase during such period in the amount of assets
described in paragraph (2)(A) that has been deemed eligible for credit
by the Board; and
(ii) any increase during such period in the amounts of deposits,
loans, and other financial assistance described in paragraph (2)(B)
that has been deemed eligible for credit by the Board.
(4) DETERMINATION OF QUALIFIED LOANS AND OTHER FINANCIAL
ASSISTANCE.-- Except as provided in paragraph (6), the types of
loans and other assistance which the Board may determine to be
qualified to be taken into account under paragraph (2)(A) for purposes
of the community enterprise assessment credit, may include the
following:
(A) Loans insured or guaranteed by the Secretary of Housing and
Urban Development, the Secretary of the Department of Veterans Affairs,
the Administrator of the Small Business Administration, and the
Secretary of Agriculture.
(B) Loans or financing provided in connection with activities
assisted by the Administrator of the Small Business Administration or
any small business investment company and investments in small business
investment companies.
(C) Loans or financing provided in connection with any
neighborhood housing service program assisted under the Neighborhood
Reinvestment Corporation Act [42 U.S.C.A. § 8101 et seq.].
(D) Loans or financing provided in connection with any activities
assisted under the community development block grant program under
title I of the Housing and Community Development Act of 1974 [42
U.S.C.A. § 5301 et seq.].
(E) Loans or financing provided in connection with activities
assisted under title II of the Cranston-Gonzalez National Affordable
Housing Act [42 U.S.C.A. § 12721 et seq.].
(F) Loans or financing provided in connection with a
homeownership program assisted under title III of the United States
Housing Act of 1937 [42 U.S.C.A. § 1437aaa et seq.] or subtitle B
or C of title IV of the Cranston-Gonzalez National Affordable Housing
Act [42 U.S.C.A. § 12871 et seq., § 12891 et seq.].
(G) Financial assistance provided through community development
corporations.
(H) Federal and State programs providing interest rate assistance
for homeowners.
(I) Extensions of credit to nonprofit developers or purchasers of
low-income housing and small business developments.
(J) In the case of members of any Federal home loan bank,
participation in the community investment fund program established by
the Federal home loan banks.
(K) Conventional mortgages targeted to low- or moderate-income
persons.
(L) Loans made for the purpose of developing or supporting--
(i) commercial facilities that enhance revitalization, community
stability, or job creation and retention efforts;
(ii) business creation and expansion efforts that--
(I) create or retain jobs for low-income people;
(II) enhance the availability of products and services to
low-income people; or
(III) create or retain businesses owned by low-income people or
residents of a targeted area;
(iii) community facilities that provide benefits to low-income
people or enhance community stability;
(iv) home ownership opportunities that are affordable to
low-income households;
(v) rental housing that is principally affordable to low-income
households; and
(vi) other activities deemed appropriate by the Board.
(M) The provision of technical assistance to residents of
qualified distressed communities in managing their personal finances
through consumer education programs either sponsored or offered by
insured depository institutions.
(N) The provision of technical assistance and consulting services
to newly formed small businesses located in qualified distressed
communities.
(O) The provision of technical assistance to, or servicing the
loans of low- or moderate-income homeowners and homeowners located in
qualified distressed communities.
(5) ADJUSTMENT OF PERCENTAGE.--The Board may increase or
decrease the percentage referred to in paragraph (3)(A) for determining
the amount of any community enterprise assessment credit pursuant to
such paragraph, except that the percentage established for insured
depository institutions which meet the community development
organization requirements under section 1834b of this title shall not
be less than 3 times the amount of the percentage applicable for
insured depository institutions which do not meet such requirements.
(6) CERTAIN INVESTMENTS NOT ELIGIBLE TO BE TAKEN INTO
ACCOUNT.--Loans, financial assistance, and equity investments made
by any insured depository institution that are not the result of
originations by the institution shall not be taken into account for
purposes of determining the amount of any credit pursuant to this
subsection.
(7) QUANTITATIVE ANALYSIS OF TECHNICAL ASSISTANCE.--The
Board may establish guidelines for analyzing the technical assistance
described in subparagraphs (M), (N), and
(O) of paragraph (4) for
the purpose of quantifying the results of such assistance in
determining the amount of any community assessment credit under this
subsection.
(b) "Qualified Distressed Community" Defined.--
(1) IN GENERAL.--For purposes of this section, the term
"qualified distressed community" means any neighborhood or
community which--
(A) meets the minimum area requirements under paragraph (3) and
the eligibility requirements of paragraph (4); and
(B) is designated as a distressed community by any insured
depository institution in accordance with paragraph (2) and such
designation is not disapproved under such paragraph.
(2) DESIGNATION REQUIREMENTS.--
(A) NOTICE OF DESIGNATION.--
(i) NOTICE TO AGENCY.--Upon designating an area as a
qualified distressed community, an insured depository institution shall
notify the appropriate Federal banking agency of the
designation.
(ii) PUBLIC NOTICE.--Upon the effective date of any
designation of an area as a qualified distressed community, an insured
depository institution shall publish a notice of such designation in
major newspapers and other community publications which serve such
area.
(B) AGENCY DUTIES RELATING TO DESIGNATIONS.--
(i) PROVIDING INFORMATION.--At the request of any
insured depository institution, the appropriate Federal banking agency
shall provide to the institution appropriate information to assist the
institution to identify and designate a qualified distressed community.
(ii) PERIOD FOR DISAPPROVAL.--Any notice received by the
appropriate Federal banking agency from any insured depository
institution under subparagraph (A)(i) shall take effect at the end of
the 90-day period beginning on the date such notice is received unless
written notice of the approval or disapproval of the application by the
agency is provided to the institution before the end of such period.
(3) MINIMUM AREA REQUIREMENTS.--For purposes of this
subsection, an area meets the requirements of this paragraph if--
(A) the area is within the jurisdiction of 1 unit of general
local government;
(B) the boundary of the area is contiguous; and
(C) the area--
(i) has a population, as determined by the most recent census
data available, of not less than--
(I) 4,000, if any portion of such area is located within a
metropolitan statistical area (as designated by the Director of the
Office of Management and Budget) with a population of 50,000 or more;
or
(II) 1,000, in any other case; or
(ii) is entirely within an Indian reservation (as determined by
the Secretary of the Interior).
(4) ELIGIBILITY REQUIREMENTS.--For purposes of this
subsection, an area meets the requirements of this paragraph if the
following criteria are met:
(A) At least 30 percent of the residents residing in the area
have incomes which are less than the national poverty level.
(B) The unemployment rate for the area is 1 1/2 times greater
than the national average (as determined by the Bureau of Labor
Statistics' most recent figures).
(C) Such additional eligibility requirements as the Board may, in
its discretion, deem necessary to carry out the provisions of this
subtitle.
(c) Omitted.--
(d) Community Enterprise Assessment Credit Board.--
(1) ESTABLISHMENT.-- There is hereby established the
"Community Enterprise Assessment Credit Board".
(2) NUMBER AND APPOINTMENT.--The Board shall be composed
of 5 members as follows:
(A) The Secretary of the Treasury or a designee of the
Secretary.
(B) The Secretary of Housing and Urban Development or a designee
of the Secretary.
(C) The Chairperson of the Federal Deposit Insurance Corporation
or a designee of the Chairperson.
(D) 2 individuals appointed by the President from among
individuals who represent community organizations.
(3) TERMS.--
(A) APPOINTED MEMBERS.--Each appointed member shall be
appointed for a term of 5 years.
(B) INTERIM APPOINTMENT.--Any member appointed to fill a
vacancy occurring before the expiration of the term to which such
member's predecessor was appointed shall be appointed only for the
remainder of such term.
(C) CONTINUATION OF SERVICE.--Each appointed member may
continue to serve after the expiration of the period to which such
member was appointed until a successor has been appointed.
(4) CHAIRPERSON.--The Secretary of the Treasury shall
serve as the Chairperson of the Board.
(5) NOPAY.--No members of the Commission may receive any
pay for service on the Board.
(6) TRAVEL EXPENSES.--Each member shall receive travel
expenses, including per diem in lieu of subsistence, in accordance with
sections 5702 and 5703 of Title 5.
(7) MEETINGS.-- The Board shall meet at the call of the
Chairperson or a majority of the Board's members.
(e) Duties of the Board.--
(1) Procedure for determining community enterprise assessment
credits The Board shall establish procedures for accepting and
considering applications by insured depository institutions under
subsection (a)(1) of this section for community enterprise assessment
credits and making determinations with respect to such applications.
(2) NOTICE TO FDIC.--The Board shall notify the
applicant and the Federal Deposit Insurance Corporation of any
determination of the Board with respect to any application referred to
in paragraph (1) in sufficient time for the Corporation to include the
amount of such credit in the computation of the semiannual assessment
to which such credit is applicable.
(f) Availability of Funds.--The provisions of this section
shall not take effect until appropriations are specifically provided in
advance. There are hereby authorized to be appropriated such sums as
may be necessary to carry out the provisions of this
section.
(g) Prohibition on Double Funding for Same Activities.--
No community development financial institution may receive a community
enterprise assessment credit if such institution, either directly or
through a community partnership--
(1) has received assistance within the preceding 12-month period,
or has an application for assistance pending, under section 4704 of
this title; or
(2) has ever received assistance, under section 4707 of this
title, for the same activity during the same semiannual period for
which the institution seeks a community enterprise assessment credit
under this section.
(h) Priority of Awards.--
(1) QUALIFYING LOANS AND SERVICES.--
(A) IN GENERAL.--If the amount of funds appropriated for
purposes of carrying out this section for any fiscal year are
insufficient to award the amount of assessment credits for which
insured depository institutions have applied and are eligible under
this section, the Board shall, in awarding community enterprise
assessment credits for qualifying activities under subparagraphs (A)
and (B) of subsection (a)(2) of this section for any semiannual period
for which such appropriation is available, determine which institutions
shall receive an award.
(B) PRIORITY FOR SUPPORT OF EFFORTS OF CDFI.--The Board
shall give priority to institutions that have supported the efforts of
community development financial institutions in the qualified
distressed community.
(C) OTHER FACTORS.--The Board may also consider the
following factors:
(i) DEGREE OF DIFFICULTY.--The degree of difficulty in
carrying out the activities that form the basis for the institution's
application.
(ii) COMMUNITY IMPACT.--The extent to which the
activities that form the basis for the institution's application have
benefited the qualified distressed community.
(iii) INNOVATION.--The degree to which the activities
that form the basis for the institution's application have incorporated
innovative methods for meeting community needs.
(iv) LEVERAGE.--The leverage ratio between the dollar
amount of the activities that form the basis for the institution's
application and the amount of the assessment credit calculated in
accordance with this section for such activities.
(v) SIZE.--The amount of total assets of the
institution.
(vi) NEW ENTRY.--Whether the institution had provided
financial services in the designated distressed community before such
semiannual period.
(vii) NEED FOR SUBSIDY.--The degree to which the
qualified activity which forms the basis for the application needs
enhancement through an assessment credit.
(viii) EXTENT OF DISTRESS IN COMMUNITY.--The degree of
poverty and unemployment in the designated distressed community, the
proportion of the total population of the community which are
low-income families and unrelated individuals, and the extent of other
adverse economic conditions in such community.
(2) QUALIFYING INVESTMENTS.--If the amount of funds
appropriated for purposes of carrying out this section for any fiscal
year are insufficient to award the amount of assessment credits for
which insured depository institutions have applied and are eligible
under this section, the Board shall, in awarding community enterprise
assessment credits for qualifying activities under subsection (a)(2)(C)
of this section for any semiannual period for which such appropriation
is available, determine which institutions shall receive an award based
on the leverage ratio between the dollar amount of the activities that
form the basis for the institution's application and the amount of the
assessment credit calculated in accordance with this section for such
activities.
(i) Determination of Amount of Assessment Credit.--Notwithstanding any other provision of this section, the
determination of the amount of any community enterprise assessment
credit under subsection (a)(3) of this section for any insured
depository institution for any semiannual period shall be made solely
at the discretion of the Board. No insured depository institution shall
be awarded community enterprise assessment credits for any semiannual
period in excess of an amount determined by the
Board.
(j) Definitions.--For purposes of this section--
(1) APPROPRIATE FEDERAL BANKING AGENCY.--The term
"appropriate Federal banking agency" has the meaning given to
such term in section 1813(q) of this title.
(2) BOARD.--The term "Board" means the Community
Enterprise Assessment Credit Board established under the amendment
made by subsection (d) of this section.
(3) INSURED DEPOSITORY INSTITUTION.--The term
"insured depository institution" has the meaning given to such
term in section 1813(c)(2) of this title.
(4) COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION.--The
term "community development financial institution" has the same
meaning as in section 4702(5) of this title.
(5) AFFILIATE.--The term "affiliate" has the same
meaning as in section 1841 of this title.
[Codified to 12 U.S.C. 1834a(a)]
[Source: Section 233(a) of title II of the Act of December 19, 1991
(Pub. L. No. 102--242; 105 Stat. 2311), effective December 19, 1991; as
amended by section 931(c) and (d) of title IX of the Act of October 28,
1992 (Pub. L. No. 102--550; 106 Stat. 3888), effective October 28,
1992; section 1604(b)(2) of title XVI of the Act of October 28, 1992
(Pub. L. No. 102--550; 106 Stat. 4083), effective December 19, 1991;
section 303(b)(2) and (9) of title III of the Act of October 28, 1992
(Pub. L. No. 102--558; 106 Stat. 4224 and 4225), effective March 1, 1992; sections
114(c)(1)--(5) of title I of the Act of September 23, 1994 (Pub. L. No.
103--325; 108 Stat. 2181 and 2182), effective September 23,
1994]
*Editor's note: This section was enacted as part of
the Gramm-Leach-Bliley Act (Pub.L. 106--102, November 12, 1999, 113
Stat. 1338) and not as part of the Federal Deposit Insurance Act. We
include this section here for our readers
convenience.
SEC. 234. COMMUNITY DEVELOPMENT
ORGANIZATIONS*
(a) Community Development Organizations Described.--For
purposes of this subtitle, any insured depository institution, or a
qualified portion thereof, shall be treated as meeting the community
development organization requirements of this section if--
(1) the institution--
(A) is a community development bank, or controls any community
development bank, which meets the requirements of subsection (b) of
this section;
(B) controls any community development corporation, or maintains
any community development unit within the institution, which meets the
requirements of subsection (c) of this section;
(C) invests in accounts in any community development credit union
designated as a low-income credit union, subject to restrictions
established for such credit unions by the National Credit Union
Administration Board; or
(D) invests in a community development organization jointly
controlled by two or more institutions;
(2) except in the case of an institution which is a community
development bank, the amount of the capital invested, in the form of
debt or equity, by the institution in the community development
organization referred to in paragraph (1) (or, in the case of any
community development unit, the amount which the institution
irrevocably makes available to such unit for the purposes described in
paragraph (3)) is not less than the greater of--
(A) 1/2 of 1 percent of the capital, as defined by generally
accepted accounting principles, of the institution; or
(B) the sum of the amounts invested in such community development
organization; and
(3) the community development organization provides loans for
residential mortgages, home improvement, and community development and
other financial services, other than financing for the purchase of
automobiles or extension of credit under any open-end credit plan (as
defined in section 1602(i) of Title 15), to low- and moderate-income
persons, nonprofit organizations, and small businesses located in
qualified distressed communities in a manner consistent with the intent
of this subtitle.
(b) Community Development Bank Requirements.--A community
development bank meets the requirements of this subsection if--
(1) the community development bank has a 15-member advisory board
designated as the "Community Investment Board" and consisting
entirely of community leaders who--
(A) shall be appointed initially by the board of directors of the
community development bank and thereafter by the Community Investment
Board from nominations received from the community; and
(B) are appointed for a single term of 2 years, except that, of
the initial members appointed to the Community Investment Board, 1/3
shall be appointed for a term of 8 months, 1/3 shall be appointed for a
term of 16 months, and 1/3 shall be appointed for a term of 24 months,
as designated by the board of directors of the community development
bank at the time of the appointment;
(2) 1/3 of the members of the community development bank's board
of directors are appointed from among individuals nominated by the
Community Investment Board; and
(3) the bylaws of the community development bank require that the
board of directors of the bank meet with the Community Investment Board
at least once every 3 months.
(c) Community Development Corporation Requirements.--Any
community development corporation, or community development unit within
any insured depository institution meets the requirements of this
subsection if the corporation or unit provides the same or greater, as
determined by the appropriate Federal banking agency, community
participation in the activities of such corporation or unit as would be
provided by a Community Investment Board under subsection (b) of this
section if such corporation or unit were a community development
bank.
(d) Adequate Dispersal Requirement.--The appropriate
Federal banking agency may approve the establishment of a community
development organization under this subtitle only upon finding that the
distressed community is not adequately served by an existing community
development organization.
(e) Definitions.--For purposes of this section--
(1) COMMUNITY DEVELOPMENT BANK.--The term "community
development bank" means any depository institution (as defined in
section 1813(c)(1) of this title).
(2) COMMUNITY DEVELOPMENT ORGANIZATION.--The term
"community development organization" means any community
development bank, community development corporation, community
development unit within any insured depository institution, or
community development credit union.
(3) LOW-AND MODERATE-INCOME PERSONS.--The term
"low-and moderate-income persons" has the meaning given such term
in section 5302(a)(20) of Title 42.
(4) NONPROFIT ORGANIZATION; SMALL BUSINESS.--The terms
"nonprofit organization" and "small business" have the
meanings given to such terms by regulations which the appropriate
Federal banking agency shall prescribe for purposes of this section.
(5) QUALIFIED DISTRESSED COMMUNITY.--The term
"qualified distressed community" has the meaning given to such
term in section 1834a(b) of this title.
[Codified to 12 U.S.C. 1834a(b)]
[Source: Section 233(b) of title II of the Act of December 19, 1991
(Pub. L. No. 102--42; 105 Stat. 2312), effective December 19, 1991; as
amended by section 931(e) of title IX of the Act of October 28, 1992
(Pub. L. No. 102--550; 106 Stat. 3889), effective October 28, 1992]
*Editor's note: This section was enacted as part of the
Gramm-Leach-Bliley Act (Pub.L. 106--102, November 12, 1999, 113 Stat.
1338) and not as part of the Federal Deposit Insurance Act. We include
this section here for our readers convenience.
SEC. 208. INSURED DEPOSITORY INTSTITUTION CAPITAL REQUIRMENTS FOR
TRANSFERS OF SMALL BUSINESS OBLIGATIONS*
(a) Accounting Principles.--The accounting principles
applicable to the transfer of a small business loan or a lease of
personal property with recourse contained in reports or statements
required to be filed with Federal banking agencies by a qualified
insured depository institution shall be consistent with generally
accepted accounting principles.
(b) Capital and Reserve Requirements.--With respect to the
transfer of a small business loan or lease of personal property with
recourse that is a sale under generally accepted accounting principles,
each qualified insured depository institution shall--
(1) establish and maintain a reserve equal to an amount
sufficient to meet the reasonable estimated liability of the
institution under the recourse arrangement; and
(2) include, for purposes of applicable capital standards and
other capital measures, only the amount of the retained recourse in the
risk-weighted assets of the institution.
(c) Qualified Institution Criteria.--An insured depository
institution is a qualified insured depository institution for purposes
of this section if, without regard to the accounting principles or
capital requirements referred to in subsections (a) and (b) of this
section, the institution is--
(1) well capitalized; or
(2) with the approval, by regulation or order, of the appropriate
Federal banking agency, adequately capitalized.
(d) Aggregate Amount of Recourse.--The total outstanding
amount of recourse retained by a qualified insured depository
institution with respect to transfers of small business loans and
leases of personal property under subsections (a) and (b) of this
section shall not exceed--
(1) 15 percent of the risk-based capital of the institution; or
(2) such greater amount, as established by the appropriate
Federal banking agency by regulation or order.
(e) Institutions that Cease to be Qualified or Exceed Aggregate Limits.--If an insured depository institution ceases to
be a qualified insured depository institution or exceeds the limits under subsection (d) of
this section, this section shall remain applicable to any transfers of
small business loans or leases of personal property that occurred
during the time that the institution was qualified and did not exceed
such limit.
(f) Prompt Corrective Action not Affected.--The capital of
an insured depository institution shall be computed without regard to
this section in determining whether the institution is adequately
capitalized, undercapitalized, significantly undercapitalized, or
critically undercapitalized under section 1831o of this
title.
(g) Regulations Required.--Not later than 180 days after
September 23, 1994, each appropriate Federal banking agency shall
promulgate final regulations implementing this
section.
(h) Alternative System Permitted.--
(1) IN GENERAL.--At the discretion of the appropriate
Federal banking agency, this section shall not apply if the regulations
of the agency provide that the aggregate amount of capital and reserves
required with respect to the transfer of small business loans and
leases of personal property with recourse does not exceed the aggregate
amount of capital and reserves that would be required under subsection
(b) of this section.
(2) EXISTING TRANSACTIONS NOT AFFECTED.--Notwithstanding
paragraph (1), this section shall remain in effect with respect to
transfers of small business loans and leases of personal property with
recourse by qualified insured depository institutions occurring before
the effective date of regulations referred to in paragraph
(1).
(i) Definitions.--For purposes of this section--
(1) the term "adequately capitalized" has the same meaning
as in section 1831o(b) of this title;
(2) the term "appropriate Federal banking agency" has the
same meaning as in section 1813 of this title;
(3) the term "capital standards" has the same meaning as in
section 1831o(c) of this title;
(4) the term "Federal banking agencies" has the same
meaning as in section 1813 of this title;
(5) the term "insured depository institution" has the same
meaning as in section 1813 of this title;
(6) the term "other capital measures" has the meaning as in
section 1831o(c) of this title;
(7) the term "recourse" has the meaning given to such term
under generally accepted accounting principles;
(8) the term "small business" means a business that meets
the criteria for a small business concern established by the Small
Business Administration under section 632(a) of Title 15; and
(9) the term "well capitalized" has the same meaning as in
section 1831o(b) of this title.
[Codified to 12 U.S.C. 1835]
[Source: Section 208 of title II of the Act of September 23, 1994
(Pub. L. No. 103--325; 108 Stat. 2201), effective September 23, 1994]
*Editor's note: This section was enacted as part of the
Gramm-Leach-Bliley Act (Pub.L. 106--102, November 12, 1999, 113 Stat.
1338) and not as part of the Federal Deposit Insurance Act. We include
this section here for our readers convenience.
SEC. 109. PROHIBITION AGAINST DEPOSIT PRODUCTION
OFFICES*
(a) Regulations.--The appropriate Federal banking agencies
shall prescribe uniform regulations effective June 1, 1997, which
prohibit any out-of-State bank from using any authority to engage in
interstate branching pursuant to this title, or any amendment made by
this title to any other provision of law, primarily for the purpose of
deposit production.
(b) Guidelines for Meeting Credit Needs.--Regulations
issued under subsection (a) of this section shall include guidelines to
ensure that interstate branches operated by an out-of-State bank in a host State are reasonably helping to meet the
credit needs of the communities which the branches
serve.
(c) Limitation on Out-of-State-Loans.--
(1) LIMITATION.--Regulations issued under subsection (a)
of this section shall require that, beginning no earlier than 1 year
after establishment or acquisition of an interstate branch or branches
in a host State by an out-of-State bank, if the appropriate Federal
banking agency for the out-of-State bank determines that the bank's
level of lending in the host State relative to the deposits from the
host State (as reasonably determinable from available information
including the agency's sampling of the bank's loan files during an
examination or such data as is otherwise available) is less than half
the average of total loans in the host State relative to total deposits
from the host State (as determinable from relevant sources) for all
banks the home State of which is such State--
(A) the appropriate Federal banking agency for the out-of-State
bank shall review the loan portfolio of the bank and determine whether
the bank is reasonably helping to meet the credit needs of the
communities served by the bank in the host State; and
(B) if the agency determines that the out-of-State bank is not
reasonably helping to meet those needs--
(i) the agency may order that an interstate branch or branches of
such bank in the host State be closed unless the bank provides
reasonable assurances to the satisfaction of the appropriate Federal
banking agency that the bank has an acceptable plan that will
reasonably help to meet the credit needs of the communities served by
the bank in the host State, and
(ii) the out-of-State bank may not open a new interstate branch
in the host State unless the bank provides reasonable assurances to the
satisfaction of the appropriate Federal banking agency that the bank
will reasonably help to meet the credit needs of the community that the
new branch will serve.
(2) CONSIDERATIONS.--In making a determination under
paragraph (1)(A), the appropriate Federal banking agency shall
consider--
(A) whether the interstate branch or branches of the out-of-State
bank were formerly part of a failed or failing depository institution;
(B) whether the interstate branch was acquired under
circumstances where there was a low loan-to-deposit ratio because of
the nature of the acquired institution's business or loan portfolio;
(C) whether the interstate branch or branches of the out-of-State
bank have a higher concentration of commercial or credit card lending,
trust services, or other specialized activities;
(D) the ratings received by the out-of-State bank under the
Community Reinvestment Act of 1977 [12 U.S.C.A. § 2901 et seq.];
(E) economic conditions, including the level of loan demand,
within the communities served by the interstate branch or branches of
the out-of-State bank; and
(F) the safe and sound operation and condition of the
out-of-State bank.
(3) BRANCH CLOSING PROCEDURE.--
(A) NOTICE REQUIRED.--Before exercising any authority
under paragraph (1)(B)(i), the appropriate Federal banking agency shall
issue to the bank a notice of the agency's intention to close an
interstate branch or branches and shall schedule a hearing.
(B) HEARING.--Section 1818(h) of this title shall apply
to any proceeding brought under this paragraph.
(d) Application.--This section shall apply with respect to
any interstate branch established or acquired in a host State pursuant
to this title or any amendment made by this title to any other
provision of law.
(e) Definitions.--For the purposes of this section, the
following definitions shall apply:
(1) APPROPRIATE FEDERAL BANKING AGENCY, BANK, STATE, AND
STATE BANK.--The terms "appropriate Federal banking agency",
"bank", "State", and "State bank" have the same
meanings as in section 1813 of this title.
(2) HOME STATE.--The term "home State" means--
(A) in the case of a national bank, the State in which the main
office of the bank is located; and
(B) in the case of a State bank, the State by which the bank is
chartered.
(3) HOST STATE.--The term "host State" means a
State in which a bank establishes a branch other than the home State of
the bank.
(4) INTERSTATE BRANCH.--The term "interstate
branch" means a branch established pursuant to this title or any
amendment made by this title to any other provision of law and any
branch of a bank controlled by an out-of-State bank holding company (as
defined in section 1841(o)(7) of this title).
(5) OUT-OF-STATE BANK.--The term "out-of-State
bank" means, with respect to any State, a bank the home State of
which is another State and, for purposes of this section, includes a
foreign bank, the home State of which is another State.
[Codified to 12 U.S.C. 1835a]
[Source: Section 109 of title I of the Act of September 29, 1994
(Pub. L. No. 103--328; 108 Stat. 2362), effective September 29, 1994;
as amended by section 106 of title I of the Act of November 12, 1999
(Pub. L. No. 106--102; Stat. 1359), effective March 12, 2000]
*Editor's note: This section was enacted as part of the
Gramm-Leach-Bliley Act (Pub.L. 106--102, November 12, 1999, 113 Stat.
1338) and not as part of the Federal Deposit Insurance Act. We include
this section here for our readers convenience.
[End Federal Deposit Insurance Act]
*Editor's Note. Section 1831u(f)(1) and (2) amended by
section 563(a) and (b) of title III of the Act of October 28, 2009
(Pub. L. No. 111--83; Stat. 2183 shall apply with respect to contracts
consummated during the period beginning on the date of enactment of
this Act and ending December 31, 2010. Go back to Text
1So in original. Go back to Text
2So in original. The words "under the amendment made"
probably should not appear. Go back to Text
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