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H . R. 3841

One Hundred Third Congress

of theUnited States of America

AT T HE SE COND SE SSI ON

Begun and held at the City of Washington on Tuesday,

the twenty-fifth day of January, one thousand nine hundred and ninety-four

An Act

To amend the Bank Holding Company Act of 1956, the Revised Statutes of theUnited States, and the Federal Deposit Insurance Act to provide for interstatebanking and branching.

Be it enacted by t he Senat e and H ouse of Repr esent ati ves ofth e U ni ted Stat es of Amer ica i n Congr ess assembled,

SECTION 1. SHORT TITLE ; TABLE OF CONTENTS.

(a) S H O R T TITLE .This Act may be cited as the Riegle-NealInt ersta te B a nking a nd B ra nching Efficiency Act of 1994.

(b) TAB L E O F C ONTEN TS .The table of contents for this Actis as follows:

TITLE IINTERSTATE BANKING AND BRANCHING

S e c. 101 . I n t ers t a t e b a nking.

S e c. 102 . I n t ers t a t e ba nk merg ers .

Sec. 103. Sta te opt-in elect ion to permit int erstat e branching through de novobranches.

S e c. 104 . B ra nc h ing b y f ore ig n b a nk s.

Sec. 105. Coordina t ion of examina t ion authori ty .

S e c. 106 . B ra nc h clos u re s.

Sec. 107. Eq ualizing competit ive opportunit ies for United Sta tes and foreign banks.

Sec. 108. Federa l Reserve Board s tudy on bank fees .

Sec. 109. P rohibit ion aga inst deposit production offices.

Sec. 110. Community Reinves tment Act eva lua t ion of banks with in terst a tebranches.

S e c. 111 . R es t a t e me n t o f ex is t ing l a w .

Sec. 112. GAO report on da ta col lec t ion under in ters t a te branching.

Sec. 113. Maximum interes t ra te on cert a in FMHA loans .

Sec. 114. Notice requirements for banking agency decisions preempting Stat e law .

Sec. 115. Mora torium on examina t ion fees under the Interna t iona l B anking Act of1978.

TITLE IIGE NERAL P ROVISIONS

Sec. 201. Amendments to Federa l D eposi t Insurance Act and Federa l Home LoanBank Act .

Sec. 202. Sense of the Senate concerning mult ila t eral export controls .

Sec. 203. Amendments re la t ing to s ilver meda ls for P ers ian G ulf veterans .

Sec. 204. Commemorat ion of 1995 Special Olympic World Ga mes.

Sec. 205. Nat iona l Community Service Commemora t ive Coins.

Sec. 206. Robert F . Kennedy Memoria l Commemora t ive Coins .Sec. 207. United S ta t es Mil i t a ry Academy Bicentennia l Commemora t ive Coins .

Sec. 208. United S ta tes Botanic Ga rden Commemora t ive Coins .Sec. 209. Mount Rushmore Commemora t ive Coins .Sec. 210. S tudy and report on the United S ta tes f inancia l services system.Sec. 211. Flexibility in choosing boards of directors.


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H. R. 38412

TITLE I INTERSTATE BANKING ANDBRANCHING

SEC. 101. INTERSTATE BANKING.

(a) I N G E NE RAL .Section 3(d) of the Bank Holding CompanyAct of 1956 (12 U.S.C. 1842(d)) is amended to read as follows:

(d) I NTER S TATE B ANKING .(1) AP P RO V AL S AU THO RI ZE D .

(A) AC Q U I S I TI O N O F B A N K S.The Board may approvean application under this section by a bank holding com-

pany that is adequately capital ized and adequately man-aged to acquire control of, or acquire all or substantiallyal l o f the assets o f , a bank located in a State o ther thanthe home State of such bank holding company, withoutregard to whether such transaction is prohibited underthe law of any S t a te .

(B ) P RES ERVATION OF STATE AGE LAWS .(i) I N G E N E R AL .Notwithstanding subparagraph

(A), the Board may not approve an application pursu-ant to such subparagraph that would have the ef fectof permitting an out-of-State bank holding companyto acquire a bank in a host State that has not beenin existence for the minimum period of time, if any,specified in the stat utory law of the host Sta te.

(ii) S P E C I AL RU L E F O R S TATE AGE L AWS S P E C I F Y I NGA P E R I OD O F M OR E TH AN 5 Y EAR S

.Notwithstandingclause (i), the Board may approve, pursuant tosubparagraph (A), the acquisition of a bank that hasbeen in existence for at least 5 years without regardto any longer minimum period of time specified ina sta tutory law of the host Sta te .(C ) S H E L L B AN K S.For purposes of this subsection,

a bank that has been chartered solely for the purposeof, a nd does not open for business prior t o, acquir ing cont rolof, or acquiring all or substantially all of the assets of,a n existing ban k sha ll be deemed to have been in existencefor the same period of time as the bank to be acquired.

(D ) E F F E C T O N S TATE C O NTI NG E NC Y L AWS .No provi-sion of this subsection shall be construed as affecting theapplicabil i ty o f a State law that makes an acquisi t ion ofa bank contingent upon a requirement to hold a portion

of such banks assets a va ilable for call by a St a te-sponsoredhousing enti ty establ ished pursuant to Sta te law , i f

(i) the State law does not have the effect ofdiscriminating against out-of-State banks, out-of-Stateban k holding compan ies, or s ubsidiaries of such ban ksor bank holding companies;

(ii) tha t S ta te law wa s in effect a s of the da teof enactment of the Riegle-Neal Interstate Bankinga nd B ra nching E fficiency Act of 1994;

(iii) the Federal Deposit Insurance Corporationhas not determined that compliance with such Statelaw would result in an unacceptable risk to the appro-priat e deposit insura nce fund; an d

(iv) the appropriate Federal banking agency forsuch bank has not found that compliance with such


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H. R. 38413

State law would place the bank in an unsafe orunsound condition.

(2) C ONCE NTRATION LIMI TS .(A) NATIONWIDE CONC ENTRATION LIMI TS .The Board

may not approve an applicat ion pursuant to paragraph(1)(A) if the applicant (including all insured depositoryinstitutions which are affiliates of the applicant) controls,or upon consummation of the acquisition for which suchapplication is filed would control, more than 10 percentof the tota l a mount of deposits of insured depository inst itu-tions in the United Sta tes.

(B ) STATE WI D E C O NC E NTRATI O N L I MI TS O THE R THAN

WI TH R E S P E C T TO I N I TI AL E N TR I E S .The Board may notapprove an application pursuant to paragraph (1)(A) if

(i) immediately before the consummation of theacquisition for which such application is filed, thea pplica nt (including a ny insured depository inst itut ionaffiliate of the applicant) controls any insured deposi-tory institution or any branch of an insured depositoryinstitution in the home State of any bank to beacquired or in any host State in which any such bankmain ta ins a branch ; and

(ii) the applicant (including all insured depositoryinstitutions which are affiliates of the applicant), uponconsummation of the acquisition, would control 30 per-cent or more of the total amount of deposits of insureddepository institut ions in any such St a te.(C ) E F F E C TI V E NE S S O F S TATE D E P O S I T C AP S .No provi-

sion of this subsection shall be construed as affecting theauthori ty o f any State to l imit , by statute , regulat ion , ororder, the percentage of the total amount of deposits ofinsured depository institutions in the State which maybe held or controlled by a ny ba nk or ba nk holding compan y(including all insured depository institutions which areaffiliates of the bank or bank holding company) to theextent the application of such limitation does not discrimi-nate against out-of-State banks, out-of-State bank holdingcompanies, or subsidiaries of such banks or holdingcompanies.

(D ) E X C E P TI O NS TO S U B P AR AG R AP H (B ).The Boardmay approve an application pursuant to paragraph (1)(A)without regard to the applicability of subparagraph (B)

with r espect t o any St at e if(i) there is a limitation described in subparagraph

(C) in a State statute, regulation, or order which hasthe effect of permitting a bank or bank holding com-pany (including all insured depository institutionswhich are affiliates of the bank or bank holding com-pany) to control a greater percentage of total depositsof all insured depository institutions in the State thanthe percentage permitted under subparagraph (B); or

(ii) the acquisition is approved by the appropriateState bank supervisor o f such State and the standardon which such approval is based does not have theeffect of discriminat ing a ga inst out-of-St a te ba nks, out-of-State bank holding companies, or subsidiaries ofsuch banks or holding companies.


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H. R. 38414

(E ) D E P O S IT D E F I NE D .For purposes of this para-gra ph, the term deposit has the sa me meaning a s insection 3(l) of the Federa l Deposit In sura nce Act.(3) C O MMU NI TY RE I NV E S T ME NT C O MP L I ANC E .In determin-

ing whether to approve an application under paragraph (1)(A),the Board shal l

(A) comply with the responsibilities of the Boardregarding such application under section 804 of theCommunity Reinvestment Act of 1977; and

(B) take into account the applicants record of compli-ance with applicable State community reinvestment laws.

(4) AP P L I C AB I L I T Y O F ANTI TRU S T L AWS

.No provision ofthis subsection sha ll be construed a s a ffecting(A) th e applicabilit y of the a nt itr ust la w s; or(B ) the a pplica bility, if a ny, of any St a te la w w hich

is similar to the anti trust la ws.(5) E X C E P TI O N F O R B A NK S I N D E F AU L T O R I N D AN G E R O F

D E F A U L T.The Board may approve an application pursuantto pa ra gra ph (1)(A) w hich involves

(A) an acquisition of 1 or more banks in default orin da nger of default ; or

(B ) an a cquisition w ith respect t o which a ssista nceis provided under s ection 13(c) of the Federa l Deposit In sur-a nce Act;

without regard to subparagraph (B) or (D) of paragraph (1)or pa ra gra ph (2) or (3)..(b) S TATE TAXATION AUTHORITY NOT AF F E C TE D .Section 7 of

the Bank Holding Company Act of 1956 (12 U.S.C. 1846) isamended

(1) by striking No provision and inserting (a) I N G E N-ERAL .No provision; a nd

(2) by adding at the end the following new subsection:(b) S TATE TAXATION AUTHORITY NOT AF F E C TE D .No provision

of this Act shall be construed as affecting the authority of anyState or political subdivision of any State to adopt, apply, or admin-ister any tax or method of taxation to any bank, bank holdingcompany , or foreign bank, or an y a ffiliat e of an y ba nk, bank holdingcompany, or foreign bank, to the extent that such tax or tax methodis otherwise permissible by or under th e Constitut ion of the U nitedSt a tes or other Federa l law ..

(c) D E F I NI T I O NS.Section 2 of the Bank Holding Company Actof 1956 (12 U.S.C. 1841) is amended by adding at the end the

following new subsections:(n ) I NCORPORATED D E F I NI T I O NS.For purposes of this Act,

the terms insured depository institution, appropriate Federalba nking a gency, defa ult, in da nger of defau lt, and St a te ba nksupervisor have the same meanings as in section 3 of the FederalDeposit Insura nce Act.

(o) OTHER D E F I NI T I O NS.For purposes of this Act, the follow-ing definitions sha ll apply:

(1) AD E Q U A TE L Y C AP I TAL I Z E D.The term adequatelycapitalized means a level of capitalization which meets orexceeds all applicable Federal regulatory capital standards.

(2) ANTITRU ST LAWS .Except as provided in section 11,the t erm ant i trust la ws

(A) has the same meaning as in subsection (a) ofthe first section of the C lay ton Act; an d


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(B) includes section 5 of the Federal Trade Commis-sion Act to the extent that such section 5 relates to unfairmeth ods of competit ion.(3) B RANCH .The term branch means a domestic branch

(as defined in section 3 of the Federal Deposit Insurance Act).(4) H OME STATE .The t erm home St a te mean s

(A) w ith r espect t o a na tiona l ban k, the St a te inwh ich t he ma in office of the ba nk is loca ted;

(B ) wit h respect t o a S ta te ba nk, the St a te by w hichthe bank is chartered; and

(C) with r espect t o a ba nk holding compan y, th e Sta te

in which the total deposits of all banking subsidiaries ofsuch compan y a re the lar gest on the lat er of

(i) J uly 1, 1966; or(ii) the date on which the company becomes a

ban k holding compan y under this Act.(5) H OS T S TATE .The term host S ta te means

(A) w ith r espect to a ban k, a St a te, other tha n t hehome State o f the bank, in which the bank maintains,or seeks to esta bl ish a nd ma intain , a branch; and

(B ) with r espect to a bank holding compan y, a St a te,other than the home State of the company, in which thecompany controls, or seeks to control, a bank subsidiary.(6) OU T-OF -S TATE B ANK .The term out-of-State bank

means, with respect to any State , a bank whose home Stateis another Sta te .

(7) OU T-OF -S TATE B A NK H O L D I NG C O MP A NY.The termout-of-State bank holding company means, with respect toany State , a bank holding company whose home State isanother State. .(d) S U B S I D I A R Y D E P O S I T O RY I NS TITUTION S AS AGENTS .Section

18 of the Federa l Deposit Ins ura nce Act (12 U .S.C . 1828) is a mendedby a dding at the end the following new subsection:

(r ) S U B S I D I A R Y D E P O S I T O RY I NS TITUTION S AS AGE NTS F O R C E R-TAIN AFFILIATES .

(1) I N G E N E R AL .Any bank subsidiary of a bank holdingcompany may receive deposits, renew time deposits, close loans,service loans, and receive payments on loans and other obliga-tions as a n agent for a depository institut ion affiliat e.

(2) B AN K AC TI N G AS AG E N T I S N O T A B R A NC H .Notwith-

sta nding any other provision of law , a bank a cting as a n a gentin accordance with paragraph (1) for a depository institutionaffiliate shall not be considered to be a branch of the affiliate.

(3) P RO HI B I TI O NS O N AC TI V I TI E S .A depository institutionma y not

(A) conduct a ny a ctivity a s a n a gent under pa ra gra ph(1) or (6) which such institution is prohibited from conduct-ing as a principal under any applicable Federal or Statelaw ; or

(B ) a s a principal, ha ve an a gent conduct a ny a ctivityunder paragraph (1) or (6) which the institution is prohib-ited from conducting under any applicable Federal or Statel aw .(4) E XI S TI NG AU T HO RI TY NO T AF F E C T E D.No provision of

this subsection sha ll be construed a s a ffecting


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H. R. 38416

(A) the authority of any depository institution to actas an agent on behalf of any other depository institutionunder a ny other provision of law ; or

(B) whether a depository institution which conductsany activity as an agent on behalf of any other depositoryinstitut ion under a ny other provision of law sha ll be consid-ered to be a bra nch of such other inst itut ion.(5) AG E N C Y R E L ATI O NS H I P R E Q U I R E D TO B E C O N S IS TE N T

WI TH S AF E AN D S O U N D B A NK I N G P R AC TI C E S .An agency rela-tionship between depository institutions under paragraph (1)or (6) shall be on terms that are consistent with safe andsound banking practices and all applicable regulations of anya ppropriat e Federal ba nking agency.

(6) AF F I L I ATE D I N S U R E D S AVI N G S AS S O C I ATI O NS .Aninsured savings associat ion which was an af f i l iate o f a bankon J uly 1, 1994, ma y conduct a ctivities a s a n a gent on beha lfo f such bank in the same manner as an insured bank af f i l iateof such bank may act as agent for such bank under th is sub-section to the extent such activities are conducted only in

(A) any St a te in w hich(i) the bank is not prohibited from operating a

branch under any provision of Federal or State law;a nd

(ii) the savings association maintained an officeor bra nch an d conducted business as of J uly 1, 1994;or(B ) a ny S ta te in w hich

(i) the bank is not expressly prohibited fromoperating a branch under a State law described insection 44(a )(2); a nd

(ii) the sa vings a ssociat ion m a inta ined a ma inoffice an d conducted busin ess a s of J uly 1, 1994..

(e) E FFECTIVE D ATE.The amendments made by this sectionshall take effect at the end of the 1-year period beginning onthe da te of the ena ctment of this Act.

SEC. 102. INTERSTATE BANK MERGERS.

(a) I N G E NE RAL .The Federal Deposit Insurance Act (12 U.S.C.1811 et seq.) is amended by adding at the end the following newsection:

SEC. 44. INTERSTATE BANK MERGERS.

(a ) AP P R O VAL O F I NTER S TATE ME R G E R TRANSACTIONS AUTHOR-I ZE D .

(1) I N G E N E R A L .B eginning on J une 1, 1997, th e respon-sible agency may approve a merger transaction under section18(c) between insured banks with different home States, with-out regard to whether such transaction is prohibited underthe law of any S ta te .

(2) S TATE E L E C TI O N TO P R O H I B I T I N TE R S TATE M E R G E RTRANSACTIONS.

(A) I N G E N E R AL .Notwithstanding paragraph (1), amerger t ra nsaction ma y not be approved pursuant to para -graph (1) if the transaction involves a bank the homeState o f which has enacted a law af ter the date o f enact-ment o f the Riegle-Neal In tersta te B anking a nd B ranchingEfficiency Act of 1994 and before J une 1, 1997, th a t

(i) applies equally to all out-of-State banks; and


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(ii) expressly prohibits merger tr a nsa ctions involv-ing out-of-State banks.(B ) NO E F F E C T O N P R I O R AP P R O VAL S O F M E R G E R TR AN S-

ACTIONS .A law enacted by a State pursuant to subpara-graph (A) shall have no effect on merger transactions thatwere approved before the effective date of such law.(3) S TATE E L E C TI O N TO P E RMI T E ARL Y I NTE RS T ATE ME RG E R

TRANSACTIONS.(A) I N G E N ER AL .A merger transaction may be

a pproved pursua nt t o par a gra ph (1) before J une 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 trans-ac t ion , a l aw tha t (i) applies equally to all out-of-State banks; and(ii) expressly permits interstate merger trans-

a ctions w ith a ll out-of-St a te ba nks.(B ) C ERTAIN CONDITIONS ALLOWED .A host State may

impose conditions on a branch within such State of a bankresult ing from a n intersta te merger t ra nsaction i f

(i) the conditions do not have the effect of discrimi-nating against out-of-State banks, out-of-State bankholding companies, or any subsidiary of such bankor company (other than on the basis of a nationwidereciprocal tr eat ment requirement);

(ii) the imposition of the conditions is not pre-empted by Federal la w; a nd

(iii) the conditions do not apply or requireperform a nce aft er Ma y 31, 1997.(4) I NTERS TATE ME RG ER TRANSACTIONS INVOLVING ACQUIS I-

T I O NS O F B RANC HE S .(A) I N G E N E R AL .An interstate merger transaction

may involve the acquisition of a branch of an insuredbank without the acquisition of the bank only if the lawof the State in which the branch is located permits out-of-State banks to acquire a branch of a bank in suchSta te without acquiring the bank.

(B ) TR E ATM E NT O F B R AN C H F OR P U R P O S E S O F TH I SSECTION .In the case of an interstate merger transactionwhich involves the acquisition of a branch of an insuredbank without the acquisition of the bank, the branch shallbe treated, for purposes of this section, as an insured

bank the home State o f which is the State in which thebra nch is located.(5) P RES ERVATION OF STATE AGE LAWS .

(A) I N G E N E R AL .The responsible agency may notapprove an application pursuant to paragraph (1) thatwould have the effect of permitting an out-of-State bankor out-of-State bank holding company to acquire a bankin a host State that has not been in existence for theminimum period of time, if any, specified in the statutorylaw of the host St at e .

(B ) S P E C I A L R U L E F O R S TATE AG E L AWS S P E C I F Y I N GA P E RI OD OF MOR E TH AN 5 YE AR S.Notwithstandingsubparagraph (A), the responsible agency may approve amerger transaction pursuant to paragraph (1) involvingthe acquisition of a bank that has been in existence at


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H. R. 38418

least 5 years without regard to any longer minimum periodof time specified in a statutory law of the host State.(6) S H E L L B A NK S .For purposes of this subsection, a bank

that has been chartered solely for the purpose of, and doesnot open for business prior to, acquiring control of, or acquiringall or substantially all of the assets of, an existing bank orbranch shall be deemed to have been in existence for thesame period of time as the bank or branch to be acquired.(b) P RO V I S I O NS R E L ATI NG TO AP P L I C ATI O N AN D AP P RO V AL

P R O C E S S .(1) C O MP L I ANC E WI TH S TATE F I L I NG RE Q U I RE ME NTS .

(A) IN G E N E R A L

.Any ba nk w hich files an a pplica tionfor a n in terstat e merger tra nsaction sha l l(i) comply with the filing requirements of any

host State of the bank which will result from suchtra nsaction to the extent t hat the requirement

(I) does not have the effect of discriminatingagainst out-of-State banks or out-of-State bankholding companies or subsidiaries of such banksor ba nk holding compa nies; and

(II) is similar in effect to any requirementimposed by the host State on a nonbanking cor-poration incorporated in another State thatengages in business in the host Sta te; and(ii) submit a copy of the application to the State

ban k supervisor of the host St a te.(B ) P E N A LTY F O R F AI L U R E TO C O M P L Y.The respon-

sible agency may not approve an application for an inter-state merger transaction i f the applicant material ly fai lsto comply w ith subpara gra ph (A).(2) C ONCE NTRATION LIMI TS .

(A) NATIONWIDE CONC ENTRATION LIMI TS .The respon-sible agency may not approve an application for an inter-state merger transaction if the resulting bank (includingall insured depository institutions which are affiliates ofthe resulting ba nk), upon consumma tion of the t ra nsa ction,would control more than 10 percent of the total amountof deposits of insured d epository institut ions in the U nitedSta tes .

(B ) S TATE WI D E C O NC E NTRATI O N L I MI TS O THE R THANWITH RES P EC T TO IN ITIAL E NTRIE S .The responsible agencymay not approve an application for an interstate merger

tra nsaction i f(i) a ny ba nk involved in t he tr a nsa ction (including

all insured depository institutions which are affiliatesof any such bank) has a branch in any State in whichany other bank involved in the transaction has abranch; and

(ii) the resulting bank (including all insureddepository institutions which would be affiliates of theresulting ba nk), upon consumma tion of the t ra nsa ction,would control 30 percent or more of the total amountof deposits of insured depository institutions in anysuch Sta te .(C ) E F F E C TI V E NE S S O F S TATE D E P O S I T C AP S .No provi-

sion of this subsection shall be construed as affecting theauthori ty o f any State to l imit , by statute , regulat ion , or


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H. R. 38419

order, the percentage of the total amount of deposits ofinsured depository institutions in the State which maybe held or controlled by a ny ba nk or ba nk holding compan y(including all insured depository institutions which areaffiliates of the bank or bank holding company) to theextent the application of such limitation does not discrimi-nate against out-of-State banks, out-of-State bank holdingcompanies, or subsidiaries of such banks or holdingcompanies.

(D ) E X C E P TI O N S TO S U B P A R AG R A P H (B ).The respon-sible agency may approve an application for an interstate

merger transaction pursuant to subsection (a) withoutregar d to the a pplica bility of subpara gra ph (B ) wit h respectto any S ta te i f

(i) there is a limitation described in subparagraph(C) in a State statute, regulation, or order which hasthe effect of permitting a bank or bank holding com-pany (including all insured depository institutionswhich are affiliates of the bank or bank holding com-pany) to control a greater percentage of total depositsof all insured depository institutions in the State thanthe percentage permitted under subparagraph (B); or

(ii) the transaction is approved by the appropriateState bank supervisor o f such State and the standardon which such approval is based does not have theeffect of discriminat ing a ga inst out-of-St a te ba nks, out-

of-State bank holding companies, or subsidiaries ofsuch banks or holding companies.(E ) E X C E P TI O N F O R C E R TAI N B A N K S.This paragraph

shall not a pply with respect t o any in tersta te merger tr ans-a ction involving only a ffiliat ed banks.(3) C O MMU NI TY RE I NV E S T ME NT C O MP L I ANC E .In determin-

ing whether to approve an application for an interstate mergertransaction in which the result ing bank would have a branchor bank affiliate immediately following the transaction in anyState in which the bank submitt ing the applicat ion (as theacquiring bank) had no branch or bank affiliate immediatelybefore the t ra nsa ction, th e responsible agency sha ll

(A) comply with the responsibilities of the agencyregarding such application under section 804 of theCommu nit y Reinvest ment Act of 1977;

(B ) ta ke into a ccount the m ost recent wr itt en evalua -tion under section 804 of the Community ReinvestmentAct of 1977 of any bank which would be an affiliate ofthe result ing bank; a nd

(C) take into account the record of compliance of anyapplicant bank with applicable State community reinvest-ment l aw s .(4) AD E Q U AC Y O F C AP I TAL AND MANAGE ME NT S KI L L S .The

responsible a gency ma y a pprove an a pplica tion for a n intersta temerger tra nsa ction pursua nt to subsection (a ) only if

(A) each bank involved in the transaction is ade-quately capitalized as of the date the application is filed;a nd

(B) the responsible agency determines that the result-ing bank will continue to be adequately capitalized and


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adequately managed upon the consummation of thetransaction.(5) S U R RE ND E R O F C H AR TE R AF TE R M ER G E R TR AN S-

ACTION .The charters of all banks involved in an interstatemerger transaction, other than the charter of the resultingbank, shall be surrendered, upon request, to the Federal bank-ing agency or State bank supervisor which issued the charter.(c) AP P L I C AB I L I TY O F C ERTAIN L AWS TO I NTERSTATE B ANKI NG

OP ERATIONS .(1) S TATE TAXATION AUTHORI TY NOT AFF EC TED .

(A) I N G E N E R AL .No provision of this section shall

be construed as affecting the authority of any State orpolitical subdivision of any State to adopt, apply, or admin-ister any tax or method of taxation to any bank, bankholding company, or foreign bank, or any affiliate of anyban k, bank holding compan y, or foreign ban k, to the extentsuch tax or tax method is otherwise permissible by orunder the Constitution of the United States or other Fed-era l l aw .

(B ) I M P O S I TI O N O F S H AR E S TAX B Y H O S T S TATE S .In the case of a branch of an out-of-State bank whichresults from an interstate merger transaction, a propor-tionate amount of the value of the shares of the out-of-State bank may be subject to any bank shares tax leviedor imposed by the host State, or any political subdivisionof such host State that imposes such tax based upon amethod adopted by the host State, which may includea llocation an d apportionment.(2) AP P L I C AB I L I T Y O F ANTI TRU S T L AWS .No provision of

this section sha ll be construed a s a ffecting(A) th e applicabilit y of the a nt itr ust la w s; or(B ) the a pplica bility, if a ny, of any St a te la w w hich

is similar to the anti trust la ws.(3) R ESERVATION OF CERTAIN RIGHTS TO STATES .No provi-

sion of this section shall be construed as limiting in any waythe right of a S ta te to

(A) determ ine the au th ority of Sta te ba nks cha rt eredby tha t St at e to esta bl ish and ma intain bra nches; or

(B ) supervise, regulate, a nd examine S ta te ban kschar te red by tha t S ta te .(4) S TATE-I M P O S E D N O TI C E R E Q U I R E M E N TS .A host State

may impose any notification or reporting requirement on a

bra nch of a n out-of-St a te ba nk if the requirement(A) does not discriminate against out-of-State banks

or bank h olding compan ies; and(B ) is not preempted by a ny F edera l law rega rding

the sa me subject.(d) OP ERATIONS OF THE R E S U L TI NG B ANK .

(1) C O NTI NU E D O P E RATI O NS .A resulting bank may, sub-ject to the approval of the appropriate Federal banking agency,retain and operate, as a main office or a branch, any officethat any bank involved in an in terstate merger transactionwas operating as a main office or a branch immediately beforethe merger tra nsaction.

(2) AD D I T I O NAL B RANC HE S .Following the consummationof any in terstate merger transaction, the result ing bank mayestablish, acquire, or operate additional branches at any loca-


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tion where any bank involved in the transaction could haveestablished, acquired, or operated a branch under applicableFederal or State law i f such bank had not been a party tothe merger tra nsaction.

(3) C E RTAI N C O ND I TI O NS AND C O MMI TME NTS C O NTI NU E D .If, as a condition for the acquisition of a bank by an out-of-St a te ba nk holding company before th e dat e of th e enactmentof the Riegle-Neal Interstate Banking and Branching EfficiencyAct of 1994

(A) the home State of the acquired bank imposedconditions on such acquisition by such out-of-State bank

holding compa ny; or(B) the bank holding company made commitmentsto such St a te in connection w ith t he acquisition,

the State may enforce such conditions and commitments withrespect to such bank holding company or any affiliated succes-sor company which controls a bank or branch in such Stateas a result o f an in terstate merger transaction to the sameextent as the State could enforce such conditions or commit-ments a gainst the ba nk holding compan y before the consumma -tion of the merger tra nsa ction.(e) E X C E P TI O N F O R B AN K S I N D E F AU L T O R I N D AN G E R O F

D E F A U L T.If an application under subsection (a)(1) for approvalof a merger transaction which involves 1 or more banks in defaultor in danger of default or with respect to which the Corporationprovides assistance under section 13(c), the responsible agency may

approve such application without regard to subsection (b), or para-graph (2), (4), or (5) of subsection (a).(f) D E F I NI T I O NS.For purposes of this section, the following

definitions sha ll a pply:(1) AD E Q U A TE L Y C AP I TAL I Z E D.The term adequately

capita lized ha s the sa me meaning a s in section 38.(2) ANTITRU ST LAWS .The term a nt itr ust la w s

(A) has the same meaning as in subsection (a) ofthe first section of the C lay ton Act; an d

(B) includes section 5 of the Federal Trade Commis-sion Act to the extent such section 5 relates to unfairmeth ods of competit ion.(3) B RANCH .The term branch means any domestic

branch.(4) H OME STATE .The term home State

(A) mea ns(i) w ith r espect t o a na tional ba nk, the S ta tein which the main office of the bank is located; and

(ii) wit h respect to a St a te ba nk, the S ta te bywhich the bank is chartered; and(B ) w ith r espect t o a ba nk holding compa ny, ha s th e

same meaning as in section 2(o)(4) of the Bank HoldingCompa ny Act of 1956.(5) H OST STATE .The term host St a te mea ns, w ith

respect to a bank, a State , o ther than the home State o fthe bank, in which the bank maintains, or seeks to establishand ma in ta in , a branch.

(6) I NTER STATE MERG ER TRANSACTION .The term inter-state merger transaction means any merger transactiona pproved purs ua nt to subsection (a)(1).


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(7) MERG ER TRANSACTION .The term merger transactionha s t he mea ning d eterm ined und er section 18(c)(3).

(8) OU T-OF -S TATE B ANK .The term out-of-State bankmeans, with respect to any State , a bank whose home Stateis another Sta te .

(9) OU T-OF -S TATE B A NK H O L D I NG C O MP A NY.The termout-of-State bank holding company means, with respect toany State , a bank holding company whose home State isano ther S ta te .

(10) R E S P O N S I B L E AG E N C Y.The term responsible agencymeans the agency determined in accordance with section

18(c)(2) w ith r espect t o a merger t ra nsa ction.(11) R E S U L TI N G B A N K.The term resulting bank meansa bank tha t ha s resulted from a n interstat e merger transa ctionunder th is section..(b) TE C HNI C AL AND C O NF O RMI NG AME ND ME NT S.

(1) R EVISE D STATUTES .Section 5155 of the Revised Stat-ut es (12 U .S.C . 36) is a mended

(A) by redesignating subsections (d) through (h) assubsections (h) th rough (l), respectively; a nd

(B) by inserting after subsection (c) the following newsubsections:

(d) B R A N C H E S R E S U L TI NG F R OM I NTER S TATE ME R G E R TRANS -ACTIONS .A national bank resulting from an interstate mergertransaction (as defined in section 44(f)(6) of the Federal DepositInsurance Act) may maintain and operate a branch in a Stateother than the home State (as defined in subsection (g)(3)(B)) ofsuch bank in accordance with section 44 of the Federal DepositInsura nce Act.

(e) E XC L U S I V E AUTHORITY FOR ADDITIONAL B R A N C H E S.(1) I N G E N E R A L .Effective J une 1, 1997, a n a tional ba nk

may not acquire , establ ish , or operate a branch in any Stateother than the banks home State (as defined in subsection(g)(3)(B)) or a State in which the bank already has a branchunless the acquisition, establishment, or operation of suchbranch in such State by such national bank is authorizedunder this section or section 13(f), 13(k), or 44 of the FederalDeposit Insura nce Act.

(2) R E TE N TI O N O F B R A N C H E S .In the case of a nationalbank which relocates the main office of such bank from 1State to another State af ter May 31, 1997, the bank mayretain and operate branches within the State which was the

banks home State (as defined in subsection (g)(3)(B)) beforethe relocation of such office only to the extent the bank wouldbe authorized, under this section or any other provision oflaw referred to in paragraph (1), to acquire, establish, or com-mence to opera te a bra nch in such St a te if

(A) th e ban k ha d no bra nches in such S ta te; or(B ) the br a nch r esulted from

(i) a n int erst a te merger t ra nsa ction approvedpursuan t to section 44 of the Federal D eposit I nsura nceAct; or

(ii) a transaction after May 31, 1997, pursuantto which the ba nk received assista nce from the FederalDeposit Insurance Corporation under section 13(c) ofsuch Act.

(f) L AW AP P L I C AB L E TO I NTER S TATE B RANC HI NG OPERATIONS .


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(1) L AW AP P L I C AB L E TO NATI O NAL B ANK B RANC HE S .(A) I N G E N E R A L .The law s of the host St a te regar ding

communit y reinvestment , consumer protection, fa ir lending,and establ ishment o f in trastate branches shal l apply toany branch in the host State of an out-of-State nationalbank to the same extent as such State laws apply toa branch of a ba nk char tered by tha t S ta te , except

(i) when Federal law preempts the applicationof such St at e law s to a na tional ba nk; or

(ii) when the Comptroller of the Currency deter-mines that the applicat ion of such State laws would

have a discriminatory effect on the branch in compari-son with the effect the application of such State lawswould have with respect to branches of a bank char-tered by the host S ta te .(B ) E N F O R C E M E N T O F AP P L I C AB L E S TATE L AWS .The

provisions of any St at e law to which a bra nch of a nat ionalbank is subject under this paragraph shall be enforced,with respect to such branch, by the Comptroller of theCurrency.(2) TR E A TM E N T O F B R A N C H AS B A N K.All laws of a host

State , o ther than the laws regarding community re investment,consumer protection, fair lending, establishment of intrastatebranches, and the applicat ion or administrat ion of any taxor method of taxation, shall apply to a branch (in such State)of an out-of-State national bank to the same extent as such

laws would apply i f the branch were a national bank thema in office of wh ich is in such St a te.(3) R U L E O F C O N S TR U C TI O N.No provision of this sub-

section may be construed as affecting the legal standards forpreemption of the application of State law to national banks. .

(2) AC T OF MAY 1, 1886.Section 2 of the Act entitledAn Act to enable national banking associations to increasetheir capital stock and to change their names and locations. and approved May 1, 1886 (12 U.S.C. 30) is amended by addinga t t he end the following n ew subsection:(c) C OORDINATION WI TH R E V I S E D S TATU TES .In the case of

a national bank which relocates the main office of such bank from1 State to another State af ter May 31, 1997, the bank may retainand operate branches within the State from which the bankrelocated such office only to the extent authorized in section

5155(e)(2) of the Revised Statutes..(3) F E D E R A L D E P O S I T I N S U R A N C E A C T.(A) E X C L U S I V E AU TH O R I TY F O R AD D I TI O N AL B R A N C H E S

O F S TATE NO NME MB E R B ANKS.Section 18(d) of t he F edera lDeposit Insurance Act (12 U.S.C. 1828(d)) is amended byadding a t t he end the fol lowing new pa ragra ph:(3) E X C L U S I V E AU TH O R I TY F O R AD D I TI O N AL B R A N C H E S .

(A) I N G E N E R AL .Effective J une 1, 1997, a S ta tenonmember bank may not acquire, establish, or operatea branch in any State o ther than the banks home State(as defined in section 44(f)(4)) or a State in which thebank a lready has a branch unless the a cquisi t ion , establ ish-ment, or operation of a branch in such State by a Statenonmember bank is authorized under this subsection orsect ion 13(f), 13(k), or 44.


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H. R. 384114

(B ) RE TE NTI O N O F B RANC HE S .In the case of a Statenonmember bank which relocates the main office of suchbank from 1 State to another State after May 31, 1997,the bank may r etain and operat e bra nches within the Stat ewhich was the banks home State (as defined in section44(f)(4)) before the relocation of such office only to theextent the bank would be authorized, under this sectionor any other provision of law referred to in subparagraph(A), to acquire, establish, or commence to operate a branchin such St at e i f

(i) the bank had no branches in such State; or(ii) the branch resulted from

(I) an interst a te m erger tr a nsa ction a pprovedpursua nt to section 44; or

(II) a transaction after May 31, 1997, pursu-ant to which the bank received assistance fromthe Corporation under section 13(c)..

(B) AC TI V I TI E S O F B R A N C H E S O F S TATE B A N K S R E S U L T-I NG F RO M I NTE RS T ATE ME RG E R TRANS AC TI O NS .Section 24of the Federal Deposit Insurance Act (12 U.S.C. 1831a)is amended by adding at the end the following new sub-section:

(j) ACTIVITIES OF B R AN C H E S O F OU T-OF -STATE B ANKS .(1) I N G E N E R AL .The laws of a host State, including laws

regarding community reinvestment, consumer protection, fairlending, and establishment of intrastate branches, shall applyto any branch in the host State o f an out-of-State State bank

to the same extent as such State laws apply to a branchof a bank chartered by tha t St at e .

(2) AC TI V I TI E S O F B RANC HE S .An insured Sta te bank t hatestabl ishes a branch in a host State may not conduct anyactivi ty at such branch that is not permissible for a bankchartered by the host Sta te .

(3) D E F I NI T I O NS.The terms host State, interstatemerger tr a nsa ction, a nd out-of-St a te ba nk have the sa memea nings a s in section 44(f)..

(4) AC T O F N OVE M B E R 7, 1918.The Act entitled An Actto provide for t he consolida tion of the na tional ba nking a ssocia-tions. and approved November 7, 1918 (12 U.S.C. 215 et seq.)is amended

(A) by redesigna tin g section 2 as section 3;(B ) by redesigna tin g section 3 a s section 5;

(C) in the 1st section, by st riking Tha t (a) an y na tiona lban king a ssociat ion and inserting t he following:

SECTION 1. SHORT TITLE.

This Act may be cited as the National Bank Consolidationa nd Merger Act.

SEC. 2. CONSOLIDATION OF BANKS WITHIN THE SAME STATE.

(a ) I N G E NE RAL .Any n a tional ba nk; a nd(D) by inserting after section 3 (as so redesignated

under subparagraph (A) of this paragraph) the followingnew section:

SEC. 4. INTERSTATE CONSOLIDATIONS AND MERGERS.

(a ) I N G E NE RAL .A national bank may engage in a consolida-tion or merger under this Act with an out-of-State bank if the


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H. R. 384115

consolidation or merger is approved pursuant to section 44 of theFederal D eposit Insura nce Act.

(b) S C OP E O F AP P L I C AT I O N.Subsection (a) shall not applyw ith r espect t o any consolidat ion or merger before J une 1, 1997,unless the home State of each bank involved in the transactionhas in effect a law described in section 44(a)(3) of the FederalDeposit Insura nce Act.

(c) D E F I NI T I O NS.The terms home State and out-of-Statebank have the same meaning as in section 44(f) of the FederalDeposit I nsur a nce Act..

(5) H O ME O WNE RS LOAN ACT.Section 3 of the Home Own-

ers Loa n Act (12 U .S.C . 1462a ) is a mended(A) by redesignating subsections (f) through (i) as sub-sections (g) th rough (j), r espectively; a nd

(B) by inserting after subsection (e), the following newsubsection:

(f) S TATE H OMESTEAD P RO V I S I O NS .No provision of this Actor any other provision of law administered by the Director shallbe construed as superseding any homestead provision of any Stateconstitution, including any implementing State statute, in effecton the date of enactment of the Riegle-Neal Interstate Bankingand Branching Efficiency Act of 1994, or any subsequent amend-ment to such a State constitutional or statutory provision in effecton such date, that exempts the homestead of any person fromforeclosure, or forced sale, for the payment of all debts, otherthan a purchase money obligation relating to the homestead, taxesdue on the homestead, or an obligation arising from work andmaterial used in constructing improvements on the homestead. .

SEC. 103. STATE OPT-IN ELECTION TO PERMIT INTERSTATE BRANCH-

ING THROUGH DE NOVO BRANCHES.

(a) NATIONAL B ANKS .Section 5155 of the Revised Statutes(12 U.S.C. 36) is amended by inserting after subsection (f) (asa dded by section 102(b)) the follow ing n ew subsection:

(g) S TATE OP T-IN E LECTION TO P E R M I T I NTER S TATE B RANCH -I NG TH R O U G H D E NOVO B RANC HE S .

(1) I N G E N E R A L .Subject to paragraph (2), the Comptrollerof the Currency may approve an application by a nationalbank to establ ish and operate a de novo branch in a State(other than the banks home State) in which the bank doesnot ma intain a branch i f

(A) there is in effect in t he host St a te a law tha t

(i) a pplies equa lly t o all ba nks; a nd(ii) expressly permits all out-of-State banks to

esta blish de novo bra nches in such St at e; and(B) the conditions established in, or made applicable

to th is para graph by, para graph (2) are met.(2) C O N D ITI O NS O N E S TAB L I S H M E N T AN D O P E R ATI O N O F

INTERS TATE B RANCH .(A) E S T AB L I S HME NT.An application by a national

bank to establish and operate a de novo branch in a hostState shall be subject to the same requirements and condi-tions to which an application for an interstate mergertransaction is subject under paragraphs (1), (3), and (4)of section 44(b) of th e Federa l Deposit I nsur a nce Act.

(B ) OPERATION.Subsections (c) and (d)(2) of section44 of the Federal Deposit Insurance Act shall apply with


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H. R. 384116

respect to each branch of a national bank which is estab-lished and operated pursuant to an application approvedunder this subsection in the same manner and to thesame extent such provisions of such section 44 apply toa branch of a national bank which resulted from an inter-state merger transaction approved pursuant to such section44.(3) D E F I NI T I O NS.The follow ing definit ions sha ll a pply for

purposes of th is section:(A) D E N OVO B R AN C H.The term de novo branch

means a branch of a na tional ba nk which

(i) is originally established by the national bankas a branch ; and(ii) does not become a branch of such bank as

a result of(I) the acquisition by the bank of an insured

depository institution or a branch of an insureddepository institution; or

(II) the conversion, merger, or consolidationof an y such institut ion or branch.

(B ) H OME STATE .The term home State means theState in which the main office of a national bank is located.

(C ) H OST STATE .The term host S ta te mea ns, w ithrespect to a bank, a State , o ther than the home Stateof the bank, in which the bank maintains, or seeks toestabl ish a nd ma intain , a branch. .

(b) S TATE B ANKS .Section 18(d) of the Federal Deposit Insur-ance Act (12 U.S.C. 1828(d)) is amended by inserting after para-graph (3) (as added by section 102(b)(3) of this title) the followingnew paragraph :

(4) S TATE OP T-I N E L E C TI O N TO P E R M I T I N TE R S TATEB R A N C H I N G TH R O U G H D E N O VO B R A N C H E S .

(A) I N G E N E R AL .Subject to subparagraph (B), theCorporation may approve an application by an insuredState nonmember bank to establish and operate a de novobranch in a State (o ther than the banks home State)in which the bank does not m ainta in a branch i f

(i) there is in effect in th e host St a te a law tha t(I) applies equa lly t o all ba nks; a nd(II) expressly permits all out-of-State banks

to establish de novo branches in such State; and(ii) the conditions established in, or made

applicable to th is par agra ph by, subpar agra ph (B) ar emet.(B ) C O N D I TI O N S O N E S TAB L I S H M E N T A N D O P E R A TI O N

OF INTERSTATE BRANCH .(i) E S TAB L I S H ME NT.An a pplica tion by a n insur ed

State nonmember bank to establ ish and operate a denovo branch in a host State shall be subject to thesame requirements and conditions to which an applica-tion for a merger transaction is subject under para-graphs (1), (3), and (4) of section 44(b).

(ii) OP ERATION .Subsections (c) and (d)(2) of sec-tion 44 shall apply with respect to each branch ofan insured State nonmember bank which is establishedand operated pursuant to an application approvedunder th is paragraph in the same manner and to the


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H. R. 384117

same extent such provisions of such section apply toa branch of a Sta te bank w hich resulted from a mergertr a nsa ction under s uch section 44.(C ) D E N O VO B R AN C H D E F I N E D .For purposes of this

para gra ph, the term de novo bra nch mean s a bra nch ofa S ta te bank which

(i) is originally established by the State bankas a branch ; and

(ii) does not become a branch of such bank asa result of

(I) the acquisition by the bank of an insured

depository institution or a branch of an insureddepository institution; or(II) the conversion, merger, or consolidation

of an y such institut ion or branch.(D ) H O M E S TATE D E F I N E D .The term home State

means the Sta te by which a S ta te bank is char tered.(E ) H O S T S TATE D E F I N E D.The term host State

means, with respect to a bank, a State , o ther than thehome State o f the bank, in which the bank maintains,or seeks to esta blish and ma inta in, a bra nch..

SEC. 104. BRANCHING BY FOREIGN BANKS.

(a) I N G E NE RAL .Section 5(a) of the International BankingAct of 1978 (12 U.S.C. 3103(a)) is amended to read as follows:

(a ) I NTER S TATE B RANC HI NG AND AG E N C Y OP ERATIONS .(1) F E D E R AL B R AN C H O R A G E N C Y.Subject to the provi-

sions of this Act and with the prior written approval by theBoard and the Comptroller of the Currency of an application,a foreign bank may establ ish and operate a Federal branchor agency in any State outside the home State of such foreignbank to the extent that the establishment and operation ofsuch branch would be permitted under section 5155(g) of theRevised S ta tut es or section 44 of the F edera l Deposit I nsura nceAct if the foreign bank were a national bank whose homeState is the same State as the home State o f the foreignbank.

(2) S TATE B R A N C H O R AG E N C Y .Subject to the provisionsof this Act and with the prior written approval by the Boardand the appropriate State bank supervisor of an application,a foreign bank may establ ish and operate a State branch oragency in any State outside the home State of such foreign

bank to the extent that such establishment and operation wouldbe permit ted under section 18(d)(4) or 44 of the Federa l D epositInsurance Act if the foreign bank were a State bank whosehome State is the same State as the home State o f the foreignbank.

(3) C R I TE R I A F O R D E TE R M I NATI O N.In approving anapplication under paragraph (1) or (2), the Board and (in thecase of an application under paragraph (1)) the Comptrollerof the Currency

(A) shall apply the standards applicable to theestablishment of a foreign bank office in the United Statesunder section 7(d);

(B ) ma y not a pprove a n a pplica tion unless th e Boa rdand (in the case of an application under paragraph (1))the C omptr oller of the Cur rency


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H. R. 384118

(i) determine that the foreign banks financialresources, including the capital level of the bank, areequivalent to those required for a domestic bank tobe approved for branching under section 5155 of theRevised St a tut es an d section 44 of the F edera l DepositInsura nce Act; and

(ii) consult with the Secretary of the Treasuryregarding capital equivalency; and(C) shall apply the same requirements and conditions

to which an applicat ion for an in terstat e merger t ra nsactionis subject under paragraphs (1), (3), and (4) of section

44(b) of the Federa l Deposit In sura nce Act.(4) OPERATION.Subsections (c) and (d)(2) of section 44of the Federal Deposit Insurance Act shall apply with respectto each branch and agency of a foreign bank which is estab-lished and operated pursuant to an application approved underthis subsection in the same manner and to the same extentsuch provisions of such section apply to a domestic branchof a national or State bank (as such terms are defined insection 3 of such Act) wh ich r esulted from a merger tr a nsa ctionunder such section 44.

(5) E X C L U S I V E AU TH O R I TY F O R AD D I TI O N AL B R A N C H E S .Except as provided in this section, a foreign bank may not,directly or indirectly, acquire, establish, or operate a branchor agency in any State o ther than the home State o f suchbank.

(6) R E Q U I RE M E NT F OR A S E P AR ATE S U B S I D I AR Y.If theBoard or the Comptroller of the Currency, taking into accountdiffering regulatory or accounting standards, f inds that adher-ence by a foreign bank to capital requirements equivalent tothose imposed under section 5155 of the Revised Statutes andsection 44 of the Federa l Deposit I nsur a nce Act could be verifiedonly if the banking activities of such bank in the United Statesare carried out in a domestic banking subsidiary within theUnited States, the Board and (in the case of an applicationunder paragraph (1)) the Comptroller of the Currency mayapprove an application under paragraph (1) or (2) subject toa requirement that the foreign bank or company controllingthe foreign bank establish a domestic banking subsidiary inthe United St at es.

(7) ADD ITIONAL AUTHOR ITY FOR INTERS TATE B RANCHE S ANDAG E N C I E S O F F O R E I G N B A NK S .Notwithstanding paragraphs (1)

and (2), a foreign bank may, with the approval of the Boardand the Comptroller of the Currency, establish and operatea Federal branch or Federal agency or, with the approvalof the Board and the appropriate State bank supervisor, aState branch or State agency in any State outside the foreignban ks home St a te if

(A) the establishment and operation of a branch oragency is expressly permitted by the State in which thebra nch or a gency is to be esta blished; an d

(B ) in t he case of a F edera l or St a te bra nch, thebranch receives only such deposits as would be permissiblefor a corpora tion orga nized under section 25A of th e Federa lReserve Act.(9) H O M E S TATE O F D O ME S TI C B A NK D E F I N E D.For pur-

poses of this subsection, the term home State means


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H. R. 384119

(A) w ith r espect t o a na tiona l ban k, the St a te inwh ich t he ma in office of the ba nk is located; a nd

(B ) wit h respect t o a S ta te ba nk, the St a te by w hichthe ba nk is cha rtered..

(b) C O NT I NU E D AU T HO RI TY F O R L IMITED B RANC HE S , AG E N C I E S ,OR C O MME RC I AL L E N D I N G C O MP ANI E S .Section 5(b) of the Inter-national Banking Act of 1978 (12 U.S.C. 3103(b)) is amended bya dding a t the end t he follow ing new sentence: Notwith sta ndingsubsection (a), a foreign bank may continue to operate, after theenactment o f the Riegle-Neal In terstate Banking and BranchingEfficiency Act of 1994, any Federal branch, State branch, Federal

agency, State agency, or commercial lending company subsidiarywhich such bank was operating on the day before the date ofthe enactment of such Act to the extent the branch, agency, orsubsidiary continues, after the enactment of such Act, to engagein operations which were lawful under the laws in effect on theda y before such da te..

(c) C L ARI F I C ATI O N O F B RANC HI NG R U L E S I N TH E C AS E OF AF O R E I G N B ANK WI TH A D OMESTIC B ANK S U B S I D I A R Y .Section 5of t he Int erna tiona l B anking Act of 1978 (12 U .S .C . 3103) isa mended by adding a t t he end the following new subsection:

(d) C L ARI F I C ATI O N O F B RANC HI NG R U L E S I N TH E C AS E OF AF O R E I G N B ANK WI TH A D OMESTIC B ANK S U B S I D I A R Y.In the caseof a foreign bank that has a domestic bank subsidiary withinthe United Sta tes

(1) th e fact t ha t such ba nk cont rols a domest ic ba nk sha llnot affect the authority of the foreign bank to establish Federaland State branches or agencies to the extent permitted undersubsection (a ); a nd

(2) the fact that the domestic bank is controlled by aforeign bank which has Federal or State branches or agenciesin States other than the home State of such domestic bankshall not affect the authority of the domestic bank to establishbranches outside the home State of the domestic bank to theextent permitted under section 5155(g) of the Revised Statutesor section 18(d)(4) or 44 of the Federal Deposit Insurance Act,a s th e ca se ma y be..(d) H OM E S TATE D ETERMINATIONS .Section 5(c) of the Inter-

national Banking Act of 1978 (12 U.S.C. 3103(c)) is amended toread a s follows:

(c) D ETERMINATION OF H OM E S TATE OF F O R E I G N B ANK .Forth e purposes of this section(1) in t he case of a foreign ban k th a t ha s a ny br a nch,

agency, subsidiary commercial lending company, or subsidiarybank in more than 1 State, the home State of the foreignbank is the 1 State of such States which is selected to bethe home State by the foreign bank or, in default of anysuch selection, by the B oard; a nd

(2) in the case of a foreign bank that does not havea branch, agency, subsidiary commercial lending company, orsubsidiary bank in more than 1 State , the home State o f theforeign bank is the State in which the foreign bank has abranch, agency, subsidiary commercial lending company, orsubsidiary ban k..


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H. R. 384120

SEC. 105. COORDINATION OF EXAMINATION AUTHORITY.

Section 10 of the Federal Deposit Insurance Act (12 U.S.C.1820) is amended by inserting after subsection (g) the followingnew subsection:

(h ) C OORDINATION OF E XAMINATION AUTHORITY.(1) I N G E N E R AL .The appropriate State bank supervisor

of a host State may examine a branch operated in such Stateby an out-of-State insured State bank that resulted from aninterstate merger transaction approved under section 44 ora branch established in such State pursuant to section 5155(g)of the R evised St a tu tes or section 18(d)(4)

(A) for the purpose of determining compliance withhost State laws, including those that govern banking,community reinvestment, fair lending, consumer protection,a nd permissible activities; a nd

(B ) to ensure t ha t the a ctivities of the bra nch a renot conducted in an un sa fe or unsound ma nner.(2) E N F O R C E M E N T.If the State bank supervisor of a host

State determines that there is a vio lat ion of the law of thehost St a te concerning t he activities being conducted by a bra nchdescribed in paragraph (1) or that the branch is being operatedin an unsafe and unsound manner, the State bank supervisorof the host State or, to the extent authorized by the law ofthe host State , a State law enforcement o f f icer may undertakesuch enforcement actions and proceedings as would be per-mitted under the law of the host State as i f the branch were

a ba nk char tered by that host Sta te .(3) C O O P E R ATI VE AG R E E M E N T.The State bank super-visors from 2 or more States may enter into cooperative agree-ments to facilitate State regulatory supervision of State banks,including cooperative agreements relating to the coordinationof examina tions and joint pa rticipa tion in exam inat ions.

(4) F EDERAL REGULATORY AUTHORITY.No provision of thissubsection shall be constr ued as limiting in any w a y the a uthor-ity of an appropriate Federal banking agency to examine orto take any enforcement actions or proceedings against anybank or branch of a bank for which the agency is the appro-priat e Federal ba nking a gency..

SEC. 106. BRANCH CLOSURES.

Section 42 of the Federal Deposit Insurance Act (12 U.S.C.

1831r 1) is am ended by adding a t t he end the follow ing new sub-section:(d) B RANCH C L O S U R E S I N I NTER S TATE B AN K I N G O R B RANC HI NG

OP ERATIONS .(1) N O TI C E RE Q U I RE ME NTS .In the case of an in terstate

ban k w hich proposes to close a ny br a nch in a low- or moderat e-income area, the notice required under subsection (b)(2) shallcontain the mailing address of the appropriate Federal bankingagency and a statement that comments on the proposed closingof such bra nch ma y be ma iled to such agency.

(2) AC TI O N R E Q U I R E D B Y AP P R O P R I ATE F E D E R AL B A NK I N GA G E N C Y.If, in the case of a bra nch referred to in para -gra ph (1)

(A) a person from the area in which such branchis located


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H. R. 384121

(i) submits a written request relating to the clos-ing of such branch to the appropriate Federal bankingagency; a nd

(ii) includes a statement of specific reasons forthe request, including a discussion of the adverse effectof such closing on the availability of banking servicesin the area affected by the closing of the branch; and(B ) t he a gency concludes t ha t t he req uest is not

frivolous,the a gency sha ll consult wit h communit y leaders in th e affectedarea and convene a meeting of representatives of the agency

and other interested depository institution regulatory agencieswith community leaders in the affected area and such otherindividuals, organizations, and depository institutions (asdefined in section 19(b)(1)(A) of the Federal Reserve Act) asthe agency may determine, in the discretion of the agency,to be appropriate, to explore the feasibility of obtaining ade-quate alternative facilities and services for the affected area,including the establishment of a new branch by another deposi-tory institution, the chartering of a new depository institution,or the est a blishment of a communit y development credit union,following t he closing of the bra nch.

(3) NO E F F E C T O N C L O S I N G .No action by t he a ppropria teFederal banking agency under paragraph (2) shall affect theauthority of an interstate bank to close a branch (includingthe timing of such closing) if the requirements of subsections(a) and (b) have been met by such bank with respect to thebra nch being closed.

(4) D E F I NI T I O NS.For purposes of this subsection, the fol-low ing definitions sha ll a pply:

(A) I NTE RS TATE B ANK D E F I NE D .The term interstatebank means a bank which maintains branches in morethan 1 S ta t e.

(B ) LOW- OR MODERATE -I N C O M E A R E A.The term low-or moderate-income area means a census tract for whichthe median fam ily income is

(i) less than 80 percent of the median familyincome for the metropolitan statistical area (as des-ignated by the Director of the Office of Managementand Budget) in which the census tract is located; or

(ii) in the case of a census tract which is notlocated in a metropoli tan stat is t ical area, less than

80 percent of the median family income for the Statein which the census tract is located, as determinedwit hout t a king into a ccount fa mily income in metr opoli-ta n sta t is t ical a reas in such St at e ..

SEC. 107. EQUALIZING COMPETITIVE OPPORTUNITIES FOR UNITED

STATES AND FOREIGN BANKS.

(a) R E GU L AT O RY OB J E C TI VE S .Section 6 of the InternationalB a nking Act of 1978 (12 U.S .C. 3104) is a mended

(1) by redesignating subsections (a) through (c) as sub-sections (b) th rough (d), respectively; a nd

(2) by inserting after SEC. 6 the following new subsection:(a ) OB J E C TI V E.In implementing this section, the Comptroller

a nd the Federal D eposit In sura nce Corpora tion shall each, by afford-ing equal competitive opportunities to foreign and United States


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H. R. 384122

banking organizations in their United States operations, ensuretha t foreign banking organiza tions do not r eceive an unfa ir competi-tive advantage over United States banking organizations. .

(b) R E V I E W O F R E GU L AT I O NS.(1) I N G E N E R A L .Each Federal banking agency, after con-

sultation with the other Federal banking agencies to assureuniformity , sha ll revise the regulat ions a dopted by such a gencyunder section 6 of the International Banking Act of 1978 toensure that the regulations are consistent with the objectiveset forth in section 6(a) of the International Banking Act of1978.

(2) SP E C I F I C F AC TO RS

.In ca rrying out pa ra gra ph (1), eachFederal banking agency shall consider whether to permit anuninsured branch of a foreign bank to accept initial depositsof less than $100,000 only from

(A) individuals who are not citizens or residents ofthe U nited Sta tes at the time of the initia l deposit;

(B ) individuals wh o(i) a re not citizens of the Unit ed St a tes;(ii) a re residents of the U nited St a tes; an d(iii) are employed by a foreign bank, foreign busi-

ness, foreign government, or recognized internationalorganization;(C) persons to whom the branch or foreign bank has

extended credit or provided other nondeposit bankingservices;

(D) foreign businesses and large United Statesbusinesses;

(E) foreign governmental units and recognized inter-nat ional organizat ions; and

(F) persons who are depositing funds in connectionwith the issuance of a financial instrument by the branchfor t he tra nsmission of funds.(3) R E D U C TI O N I N R E G U L A TO R Y D E M I NI M I S E X E MP TI O N.

In carrying out paragraph (1), each Federal banking agencysha ll limit a ny exemption which is

(A) ava ilable under a ny r egulation prescribed pursuantto section 6(d) of the International Banking Act of 1978providing for the acceptance of initial deposits of less than$100,000 by an uninsured branch of a foreign bank; and

(B) based on a percentage of the average deposits atsuch bra nch;

to not more than 1 percent of the average deposits at suchbranch.

(4) AD D I T I O NAL RE L E V ANT C O NS I D E RATI O NS .In carryingout paragraph (1), each Federal banking agency shall alsoconsider the importance of maintaining and improving thea va ilability of credit to a ll sectors of the Unit ed Sta tes economy,including the international trade finance sector of the UnitedSt a te economy.

(5) D E AD L I N E F O R P R E S C R I B I N G R E VI S E D R E G U L A TI O NS .Ea ch F ederal banking agency

(A) shall publish final regulations under paragraph(1) in the Federal Register not later than 12 months afterthe da te of enactment of this Act; a nd

(B) may establish reasonable transition rules to facili-tate any termination of any deposit- taking activi t ies that


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H. R. 384123

were permissible under regulations that were in effectbefore the da te of enactment of this Act.(6) D E F I NI T I O NS.For pur poses of th is subs ection

(A) the t erm Federa l ba nking a gency mean s(i) the Comptroller of the Currency with respect

to Federal bra nches of foreign banks; a nd(ii) the Federal Deposit Insurance Corporation

with respect to State branches of foreign banks; and(B) the term uninsured branch means a branch of

a foreign bank that is not an insured branch, as definedin section 3(s)(3) of the Federal Deposit Insurance Act

(12 U .S .C . 1813(s)(3)).(c) AM E N D M E N T AF F I R M I N G TH AT C O N S U M E R P ROTECTION L AWSAP P L Y TO F O R E I G N B ANKS .Section 9(b) of the Int ernat iona l B a nk-ing Act of 1978 (12 U.S.C. 3106a) is amended

(1) in pa ra gra ph (1)(A) by redesignating subparagraphs (A) and (B) as

subpara gra phs (B ) a nd (C), respectively; a nd(B) by inserting after which the following new

subparagraph:(A) impose requirements that protect the rights of

consumers in financial transactions, to the extent thatthe branch, agency, or commercial lending companyengages in activities that are subject to such laws; ; and(2) in pa ra gra ph (2)

(A) by redesignating subparagraphs (A) and (B) as

subpara gra phs (B ) a nd (C), respectively; a nd(B) by inserting after which the following newsubparagraph:

(A) impose requirements that protect the rights ofconsumers in financial transactions, to the extent thatthe branch, agency, or commercial lending companyengages in a ctivities th a t a re subject t o such la w s;.

(d) I N S U R E D B AN K S I N TE RRI T O RI E S NOT TREATED AS F O R E I G NB AN K S F O R P U R P O S E S O F R ETAIL D E P O S I T-TAKING R U LE .Section6(d) of the International Banking Act of 1978 (12 U.S.C. 3104(c))(as so redesignated by subsection (a)(1) of this section) is amendedby a dding at the end the fol lowing new pa ragra ph:

(3) I N SU RE D B AN KS I N U .S . TERRITORIES .For purposesof this subsection, the term foreign bank does not includeany bank organized under the laws of any terri tory o f the

United States, Puerto Rico , Guam, American Samoa, or theVirgin Islands the deposits of which are insured by the FederalDeposit Insurance Corporation pursuant to the Federal DepositIns ura nce Act..(e) AM E N D M E N T R EL ATING TO S H E L L B R A N C H E S.

(1) I N G E N E R AL .Section 7 of the International BankingAct of 1978 (12 U.S.C. 3105) is amended by adding at theend the following new subsection:(k) MANAGE ME NT O F S H E L L B RANC HE S .

(1) TRANS AC TI O NS P RO HI B I TE D .A branch or agency ofa foreign bank shall not manage, through an office of theforeign bank which is located outside the United States andis managed or controlled by such branch or agency, any typeof act ivi ty that a bank organized under the laws of the UnitedStates, any State , or the District o f Columbia is not permitted


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H. R. 384124

to manage at any branch or subsidiary o f such bank whichis located outside the U nited Sta tes.

(2) R E GU L AT I O NS.Any regulations promulgated to carryout t his section

(A) shall be promulgated in accordance with section13; and

(B ) sha ll be un iform, to t he ext ent pra cticable..(2) E FFE CTIVE DATE .The amendment made by paragraph

(1) shall become effective at the end of the 180-day periodbeginning on th e dat e of enactment of this Act.(f) MEETING C OMMUNITY C R E D I T NE E D S .Section 5(a) of the

International Banking Act of 1978 (12 U.S.C. 3103(a)) (as amendedby section 104 of this Act) is amended by inserting after paragraph(7) the following new para gra ph:

(8) C O N TI N U I N G R E Q U I R E M E N T F O R M E E TI N G C O M M U N I TYC R E D I T N E E D S AF TE R I N I TI AL I N TE R S TATE E N TR Y B Y AC Q U I S I -TION.

(A) I N G E N E R AL .If a foreign bank acquires a bankor a branch of a bank, in a State in which the foreignbank does not maintain a branch, and such acquired bankis, or is par t of, a r egulated fina ncial institut ion (a s definedin section 803 of t he Comm unit y R einvestm ent Act of 1977),the Community Reinvestment Act of 1977 shall continueto apply to each branch of the foreign bank which resultsfrom the acquisition as if such branch were a regulatedfinancial institution.

(B ) E XC E P TI ON F OR B R AN C H TH AT R E C E IVE S O NL YD E P O S I TS P E R M I S S I B L E F O R AN E D G E AC T C O R P O RATI O N.Paragraph (1) shal l not apply to any branch that receivesonly such deposits as are permissible for a corporationorganized under section 25A of the Federal Reserve Actto receive..

SEC. 108. FEDERAL RESERVE BOARD STUDY ON BANK FEES.

(a) I N G E NE RAL .Section 1002 of the Financial InstitutionsReform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1811note) is a mended to read a s follow s:

SEC. 1002. SURVEY OF BANK FEES AND SERVICES.

(a ) ANNU AL S U R V E Y R E Q U I R E D .The Board of Governors ofthe Federal Reserve System shall obtain a sample, which is rep-resentative by geographic location and size of the institution, of

(1) certain retail banking services provided by insureddepository instit utions; and

(2) the fees, if any, which are imposed by such institutionsfor providing any such service, including fees imposed for notsufficient funds, deposit items returned, and automated tellerma chine tra nsactions.(b) ANNU AL R EPORT TO C O N G R E S S R E Q U I R E D .

(1) P REP ARATION .The Board of Governors of the FederalReserve System shall prepare a report of the results of eachsurvey conducted pursuant to subsection (a).

(2) C O NTE N TS O F TH E R E P O RT.Each report preparedpursua nt t o pa ra gra ph (1) sha ll include

(A) a description of any discernible trend, in theNation as a whole and in each region, in the cost andavailability of retail banking services which delineates dif-


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H. R. 384125

ferences on the basis of size of the institution and engage-ment in multista te act ivity ; a nd

(B) a description of the correlation, if any, amongthe following factors:

(i) An increase or decrease in the amount of anydeposit insurance premium assessed by the FederalDeposit Insurance Corporation against insured deposi-tory institutions.

(ii) An increase or decrease in the amount ofthe fees imposed by such institutions for providingreta il banking services.

(iii) A decrea se in th e a va ila bility of such services.(3) S U B M I S S I O N TO C O NG R E S S .The Board of Governorsof the Federal Reserve System shall submit an annual reportto the Congress not later than September 1, 1995, and notlat er tha n J une 1 of each subsequent y ear. .(b) S U N S E T.The requirements of subsection (a) shall not apply

a fter t he end of the 7-year period beginning on the da te of enactmentof this Act.

SEC. 109. PROHIBITION AGAINST DEPOSIT PRODUCTION OFFICES.

(a) R E GU L AT I O NS.The appropriate Federal banking agenciessha ll prescribe uniform regula tions effective J une 1, 1997, whichprohibit any out-of-State bank from using any authority to engagein in terstate branching pursuant to th is t i t le , or any amendmentmade by this title to any other provision of law, primarily forth e purpose of deposit production.

(b) G U I D E L IN E S F O R MEETING C R E D I T NE E D S .Regulationsissued under subsection (a) shall include guidelines to ensure thatinterstate branches operated by an out-of-State bank in a hostSt a te a re reasona bly helping to meet the credit needs of the commu-nities wh ich th e bran ches serve.

(c) L IMITATION ON OU T-OF -STATE L OANS .(1) L IMITATION .Regulations issued under subsection (a)

shall require that, beginning no earlier than 1 year afteresta blishment or a cquisition of an interst a te bran ch or bra nchesin a host State by an out-of-State bank, if the appropriateFederal banking agency for the out-of-State bank determinesthat the banks level of lending in the host State relativeto the deposits from the host State (as reasonably determinablefrom available information including the agencys sampling ofthe banks loan files during an examination or such data as

is otherwise available) is less than half the average of totalloans in the host State relative to total deposits from thehost St a te (a s determina ble from releva nt sources) for a ll banksthe home St a te of which is such Sta te

(A) the appropriate Federal banking agency for theout-of-State bank shall review the loan portfolio of thebank and determine whether the bank is reasonably help-ing to meet the credit needs of the communities servedby the bank in the host St at e ; and

(B ) if the a gency determines th a t the out-of-St a te ba nkis not r easonably helping t o meet those needs

(i) the a gency may order tha t an in terstat e branchor branches of such bank in the host State be closedunless the bank provides reasonable assurances to thesatisfaction of the appropriate Federal banking agency


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H. R. 384126

that the bank has an acceptable plan that wil l reason-ably help to meet the credit needs of the communitiesserved by the bank in the host Sta te , and

(ii) the out-of-State bank may not open a newinterstate branch in the host State unless the bankprovides reasonable assurances to the satisfaction ofthe a ppropriat e Federal banking agency t hat the bankwill reasonably help to meet the credit needs of thecommunity t hat the new bra nch wil l serve .

(2) C ONSIDERATIONS .In making a determination underpara gra ph (1)(A), the a ppropria te Federa l ban king agency sha ll

consider(A) whether the interstate branch or branches of theout-of-State bank were formerly part of a failed or failingdepository institut ion;

(B) whether the in terstate branch was acquired undercircumstances where there was a low loan-to-deposit ratiobeca use of th e nat ure of the a cquired institut ions businessor loan port folio;

(C) whether the interstate branch or branches of theout-of-State bank have a higher concentration of commer-cial or credit card lending, trust services, or other special-ized a ctivities;

(D) the ratings received by the out-of-State bank underthe Community Reinvestment Act of 1977;

(E) economic conditions, including the level of loandemand, within the communities served by the interstatebra nch or bra nches of the out-of-St a te ba nk; an d

(F) the safe and sound operation and condition of theout-of-State bank.(3) B R A N C H C L O S I N G P R O C E D U R E .

(A) NO TI C E R E Q U I R E D .B efore exercising a ny a uthorityunder pa ra gra ph (1)(B )(i), t he a ppropria te F edera l ba nkingagency shall issue to the bank a notice of the agencysintention to close an interstate branch or branches andsha ll schedule a h earing.

(B) H E ARI NG .Section 8(h) of the Federal DepositInsura nce Act sha ll apply to a ny proceeding brought underth is paragraph .

(d) AP P L I C AT I O N.This section shall apply with respect to anyinterstate branch establ ished or acquired in a host State pursuantto th is t i t le or any amendment made by th is t i t le to any o ther

provision of law .(e) D E F I NI T I O NS.For t he purposes of th is section, th e following

definitions sha ll a pply:(1) AP P R O P R I ATE F E D E R AL B A NK I N G AG E N C Y, B ANK , S TATE ,

AN D S TATE B A N K.The terms appropriate Federal bankingagency, bank, State, and State bank have the same mean-ings as in section 3 of the Federal Deposit Insurance Act.

(2) H OME STATE .The term home State means(A) in the case of a national bank, the State in which

the ma in office of th e bank is located; a nd(B) in the case of a State bank, the State by which

the bank is chartered.(3) H OST STATE .The term host S ta te mea ns a St a te

in which a bank establ ishes a branch other than the homeSta te of the bank.


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H. R. 384127

(4) I NTE RS TATE B RANC H .The term interstate branchmeans a branch establ ished pursuant t o th is t i t le or a ny a mend-ment ma de by this tit le to a ny other provision of la w.

(5) OU T-OF -S TATE B ANK .The term out-of-State bankmeans, with respect to any State , a bank the home Stateof which is another State and, for purposes of this section,includes a foreign bank, the home State of which is anotherS t a te .

SEC. 110. COMMUNITY REINVESTMENT ACT EVALUATION OF BANKS

WITH INTERSTATE BRANCHES.

(a) IN

GE NE RAL

.Section 807 of the Community ReinvestmentAct of 1977 (12 U.S.C. 2906) is amended by adding at the endthe following new subsections:

(d) I NS TITUTION S WI TH I NTERSTATE B R A N C H E S.(1) S TATE -B Y-STATE EVALU ATION .In the case of a regu-

lated f inancial inst i tu tion that maintains domestic branchesin 2 or more States, the appropriate Federal f inancial super-visory a gency sha ll prepare

(A) a written evaluation of the entire institutionsrecord of performance under this title, as required by sub-sections (a), (b), and (c); and

(B ) for ea ch St a te in w hich the instit ution ma inta ins1 or more domestic branches, a separate written evaluationof the institut ions record of performance w ithin such S ta teunder this title, as required by subsections (a), (b), and(c).(2) MUL TIS TATE METROPOLI TAN AREAS.In the case of a

regulated f inancial inst i tu tion that maintains domesticbranches in 2 or more States within a multistate metropolitanarea, the appropriate Federal f inancial supervisory agency shallprepare a separate written evaluation of the institutions recordof performance within such metropolitan area under this title,as required by subsections (a), (b), and (c). If the agency pre-pares a wri t ten evaluation pursuant to th is paragraph, thescope of th e wr itten eva luat ion required under para gra ph (1)(B )sha ll be adjusted a ccordingly.

(3) C O N TE N T O F S TATE L E V E L E V AL U A TI O N.A writtenevalua tion prepared pursua nt t o pa ra gra ph (1)(B ) sha ll

(A) present the information required by subpara-graphs (A) and (B) of subsection (b)(1) separately for eachmetropoli tan area in which the insti tu tion maintains 1

or more domestic branch offices and separately for theremainder of the nonmetropolitan area of the State if theinstitution maintains 1 or more domestic branch officesin such nonmetropolita n a rea; a nd

(B) describe how the Federal financial supervisoryagency has performed the examination of the institution,including a list of the individual bra nches exam ined.

(e) D E F I NI T I O NS.For purposes of this section the followingdefinitions sha ll a pply:

(1) D O ME S T I C B RANC H .The t erm domestic bra nch mean sany branch office or other facility of a regulated financialinstitution that accepts deposits, located in any State.

(2) ME TRO P O L I T AN ARE A.The term metropolitan areameans any primary metropoli tan stat is t ical area, metropoli tanstat ist ical area, or consolidated metropoli tan stat is t ical area,


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H. R. 384128

as defined by the Director of the Office of Management andBudget, with a population of 250,000 or more, and any otherarea designated as such by the appropriate Federal f inancialsupervisory a gency.

(3) S TATE .The term St a te has t he sam e meaning a sin section 3 of th e Federa l Deposit In sura nce Act..(b) S EP ARATE P RESENTATION .Section 807(b)(1) of the Commu-

nity Reinvestment Act of 1977 (12 U.S.C. 2906(b)(1)) is amended(1) by redesignating subparagraphs (A) through (C) as

clauses (i) through (iii), respectively;(2) by striking The public and inserting the following:

(A) CONTENTS OF WRITTEN EVALU ATION

.The public;a nd(3) by adding at the end the following new subparagraph:

(B ) METROP OLITAN AREA DI STINC TIONS .The informa-tion required by clauses (i) and (ii) of subparagraph (A)shall be presented separately for each metropolitan areain which a regulated depository institution maintains oneor more domestic branch offices..

SEC. 111. RESTATEMENT OF EXISTING LAW.

No provision of this title and no amendment made by thistitle to any other provision of law shall be construed as affectingi n an y way

(1) the authority of any State or political subdivision ofany State to adopt, apply, or administer any tax or methodof taxation to any bank, bank holding company, or foreignbank, or any affiliate of any such bank, bank holding company,or foreign bank, to the extent that such tax or tax methodis otherwise permissible by or under the Constitution of theUnited St at es or o ther Federal law;

(2) the right of any State, or any political subdivisionof any State , to impose or maintain a nondiscriminatory fran-chise tax or other nonproperty tax instead of a franchise taxin a ccordance wit h section 3124 of tit le 31, Unit ed St a tes C ode;or

(3) the applicability of section 5197 of the Revised Statutesor section 27 of th e Federa l Deposit Insu ra nce Act.

SEC. 112. GAO REPORT ON DATA COLLECTION UNDER INTERSTATE

BRANCHING.

(a) I N G E NE RAL .The Comptroller G eneral of the U nited S ta tes

shal l submit to the Congress, not later than 9 months af ter theda te of enactment of this Act, a report t ha t

(1) examines statutory and regulatory requirements forinsured depository institutions to collect and report depositand lending data ; and

(2) determines what modifications to such requirementsa re needed, so tha t t he implementa tion of the intersta te bra nch-ing provisions contained in this title will result in no materialloss of information important to regulatory or congressionaloversight of insured depository institut ions.(b) C ONSULTATION.The Comptroller General, in preparing the

report required by this section, shall consult with individuals rep-resenting th e appropria te Federa l ban king a gencies, insured deposi-tory institutions, consumers, community groups, and otherinterested parties.


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H. R. 384129

(c) D E F I NI T I O NS.For purposes of this section, the termsappropriate Federal banking agency and insured depositoryinstitution have the same meanings as in section 3 of the FederalDeposit Insura nce Act.

SEC. 113. MAXIMUM INTEREST RATE ON CERTAIN FMHA LOANS.

(a) I N G E NE RAL .Section 307(a) of the Consolidated Farm andRur a l Development Act (7 U .S.C . 1927(a )) is a mended

(1) in paragraph (3)(A), by striking Except and insertingNotw ith st a nding t he provisions of the const itut ion or law sof any State l imiting the rate or amount o f in terest that may

be char ged, ta ken, received, or reserved, except; a nd(2) in pa ra gra ph (5)

(A) by st r iki ng (5) The a nd in ser t in g (5)(A) E xcepta s provided in subpa ra gra ph (B ), the; a nd

(B) by adding at the end the following new subpara-graph:

(B) In the case of a loan made under section 310B as aguaranteed loan, subparagraph (A) shal l apply notwithstandingthe provisions of the constitution or laws of any State limitingthe rate or amount of interest that may be charged, taken, received,or reserved..

(b) E FFECTIVE D ATE S .(1) I N G E N E R AL .Except as provided in paragraphs (2)

and (3), the amendments made by subsection (a) shall applyto a loan made, insured, or guaranteed under the ConsolidatedFarm and Rural Development Act (7 U.S.C. 1921 et seq.) ina St a te on or after t he

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