Home > 105th Congressional Bills > H.R. 4364 (ih) To streamline the regulation of depository institutions, to safeguard confidential banking and credit union supervisory information, and for other purposes. ...H.R. 4364 (ih) To streamline the regulation of depository institutions, to safeguard confidential banking and credit union supervisory information, and for other purposes. ...
105th CONGRESS
2d Session
H. R. 4364
_______________________________________________________________________
AN ACT
To streamline the regulation of depository institutions, to safeguard
confidential banking and credit union supervisory information, and for
other purposes.
105th CONGRESS
2d Session
H. R. 4364
_______________________________________________________________________
AN ACT
To streamline the regulation of depository institutions, to safeguard
confidential banking and credit union supervisory information, and for
other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Depository
Institution Regulatory Streamlining Act of 1998''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--IMPROVING MONETARY POLICY
Sec. 101. Payment of interest on reserve balances at Federal reserve
banks.
Sec. 102. Amendments relating to savings and demand deposit accounts at
depository institutions.
Sec. 103. Transfer of Federal reserve surpluses.
Sec. 104. Study of reserve ratios for deposit insurance funds.
TITLE II--IMPROVING DEPOSITORY INSTITUTION MANAGEMENT PRACTICES
Subtitle A--National Banks
Sec. 201. Authority to allow more than 25 directors.
Sec. 202. Loans on or purchases by institutions of their own stock.
Sec. 203. Expedited procedures for certain reorganizations.
Subtitle B--Savings Associations
Sec. 211. Noncontrolling investments by savings association holding
companies.
Sec. 212. Streamlining thrift service company investment requirements.
Sec. 213. Repeal of dividend notice requirement.
Sec. 214. Updating of authority for community development investments.
Subtitle C--Other Institutions
Sec. 221. Prohibition on accrual to insiders of economic benefits from
credit union conversions.
Sec. 222. Amendments relating to limited purpose banks.
Sec. 223. Business purpose credit extensions.
TITLE III--STREAMLINING FEDERAL BANKING AGENCY REQUIREMENTS AND
ELIMINATION OF UNNECESSARY OR OUTDATED REQUIREMENTS
Sec. 301. ``Plain English'' requirement for Federal banking agency
rules.
Sec. 302. Call report simplification.
Sec. 303. Purchased mortgage service rights.
Sec. 304. Judicial review of receivership appointment.
Sec. 305. Elimination of outdated statutory minimum capital
requirements.
Sec. 306. Elimination of individual branch capital requirements.
Sec. 307. Amendment to shareholder notice provisions relating to
consolidations and mergers.
Sec. 308. Payment of interest in receiverships with surplus funds.
Sec. 309. Repeal of deposit broker notification and recordkeeping
requirement.
Sec. 310. Allowances for certain extensions of credit to executive
officers.
Sec. 311. Federal Reserve Act lending limits.
Sec. 312. Repeal of Bank Holding Company Act provision limiting savings
bank life insurance.
Sec. 313. Amendment to section 5137 of the Revised Statutes of the
United States.
TITLE IV--DISCLOSURE SIMPLIFICATION
Sec. 401. Alternative disclosure for variable rate, open-ended home
secured credit.
TITLE V--BANK EXAMINATION REPORT PRIVILEGE ACT
Sec. 501. Amendment to the Federal Deposit Insurance Act.
Sec. 502. Amendment to Federal Credit Union Act.
TITLE VI--TECHNICAL CORRECTIONS
Sec. 601. Technical correction relating to deposit insurance funds.
Sec. 602. Rules for continuation of deposit insurance for member banks
converting charters.
Sec. 603. Waiver of citizenship requirement for national bank
directors.
Sec. 604. Technical amendment to prohibition on Comptroller interests
in national banks.
Sec. 605. Applicability of limitation to prior investments.
TITLE VII--SPECIAL RESERVE FUNDS
Sec. 701. Abolition of special reserve funds.
TITLE I--IMPROVING MONETARY POLICY
SEC. 101. PAYMENT OF INTEREST ON RESERVE BALANCES AT FEDERAL RESERVE
BANKS.
(a) In General.--Section 19(b) of the Federal Reserve Act (12
U.S.C. 461(b)) is amended by adding at the end the following new
paragraph:
``(12) Earnings on reserves.--
``(A) In general.--Balances maintained at a Federal
reserve bank by or on behalf of a depository
institution may receive earnings to be paid by the
Federal reserve bank at least once each calendar
quarter at a rate or rates not to exceed the general
level of short-term interest rates.
``(B) Regulations relating to payments and
distribution.--The Board may prescribe regulations
concerning--
``(i) the payment of earnings in accordance
with this paragraph;
``(ii) the distribution of such earnings to
the depository institutions which maintain
balances at such banks or on whose behalf such
balances are maintained; and
``(iii) the responsibilities of depository
institutions, Federal home loan banks, and the
National Credit Union Administration Central
Liquidity Facility with respect to the
crediting and distribution of earnings
attributable to balances maintained, in
accordance with subsection (c)(1)(B), in a
Federal reserve bank by any such entity on
behalf of depository institutions which are not
member banks.''.
(b) Authorization for Pass Through Reserves for Member Banks.--
Section 19(c)(1)(B) of the Federal Reserve Act (12 U.S.C. 461(c)(1)(B))
is amended by striking ``which is not a member bank''.
(c) Technical and Conforming Amendments.--Section 19 of the Federal
Reserve Act (12 U.S.C. 461) is amended--
(1) in subsection (b)(4) (12 U.S.C. 461(b)(4)), by striking
subparagraph (C) and redesignating subparagraphs (D) and (E) as
subparagraphs (C) and (D), respectively; and
(2) in subsection (c)(1)(A) (12 U.S.C. 461(c)(1)(A)), by
striking ``subsection (b)(4)(C)'' and inserting ``subsection
(b)''.
SEC. 102. AMENDMENTS RELATING TO SAVINGS AND DEMAND DEPOSIT ACCOUNTS AT
DEPOSITORY INSTITUTIONS.
(a) Immediate Increase in the Number of Interaccount Transfers
Allowed Each Month.--Section 2 of Public Law 93-100 (12 U.S.C. 1832) is
amended--
(1) by redesignating subsections (b) and (c) as subsections
(c) and (d), respectively; and
(2) by inserting after subsection (a) the following:
``(b) Interaccount Transfers.--
``(1) In general.--Notwithstanding any other provision of
law, any depository institution may permit the owner of any
deposit or account on which interest or dividends are paid to
make up to 24 transfers per month, for any purpose, to another
account of the owner in the same institution.
``(2) Rule of construction.--Nothing in this subsection
shall be construed to prevent an account offered pursuant to
this subsection from being considered a transaction account (as
defined in section 19(b) of the Federal Reserve Act (12 U.S.C.
461(b)) for purposes of such Act.''.
(b) Now Accounts Authorized for All Businesses After 2004.--
(1) In general.--Effective on the date provided in
paragraph (3), section 2 of Public Law 93-100 (12 U.S.C.
1832(a)(2)) (as amended by subsection (a) of this section) is
amended to read as follows:
``SEC. 2. WITHDRAWALS BY NEGOTIABLE OR TRANSFERABLE INSTRUMENTS FOR
TRANSFERS TO THIRD PARTIES.
``Notwithstanding any other provision of law, any depository
institution (as defined in section 3 of the Federal Deposit Insurance
Act) may permit the owner of any deposit or account to make withdrawals
from such deposit or account by negotiable or transferable instruments
for the purpose of making payments to third parties.''.
(2) Repeal of prohibition on payment of interest on demand
deposits.--
(A) Federal reserve act.--Section 19 of the Federal
Reserve Act (12 U.S.C. 371a) is amended by striking
subsection (i).
(B) Home owners' loan act.--The 1st sentence of
section 5(b)(1)(B) of the Home Owners' Loan Act (12
U.S.C. 1464(b)(1)(B)) is amended by striking ``savings
association may not--'' and all that follows through
``(ii) permit any'' and inserting ``savings association
may not permit any''.
(C) Federal deposit insurance act.--Section 18 of
the Federal Deposit Insurance Act (12 U.S.C. 1828) is
amended by striking subsection (g).
(3) Effective date.--The amendments made by this subsection
shall take effect on October 1, 2004.
SEC. 103. TRANSFER OF FEDERAL RESERVE SURPLUSES.
(a) Payments From Dividends and Surplus of Federal Reserve Banks.--
Section 7(a)(3) of the Federal Reserve Act (12 U.S.C. 289(3)) is
amended by striking ``fiscal years 1997 and 1998'' and inserting
``fiscal years 1998 through 2003''.
(b) Additional Transfers for Fiscal Years 1999 Through 2003.--
(1) In general.--In addition to the amounts required to be
transferred from the surplus funds of the Federal reserve banks
pursuant to section 7(a)(3) of the Federal Reserve Act and
section 3002(b) of the Omnibus Budget Reconciliation Act of
1993, the Federal reserve banks shall transfer from such
surplus funds to the Board of Governors of the Federal Reserve
System for transfer to the Secretary of the Treasury for
deposit in the general fund of the Treasury, such sums as are
necessary to equal the net cost of section 101, as estimated by
the Office of Management and Budget.
(2) Allocation by fed.--Of the total amount required to be
paid by the Federal reserve banks under paragraph (1) for
fiscal years 1999 through 2003, the Board of Governors of the
Federal Reserve System shall determine the amount each such
bank shall pay in such fiscal year.
(3) Replenishment of surplus fund prohibited.--No Federal
reserve bank may replenish such bank's surplus fund by the
amount of any transfer by such bank under paragraph (1) during
the fiscal year for which such transfer is made.
SEC. 104. STUDY OF RESERVE RATIOS FOR DEPOSIT INSURANCE FUNDS.
(a) Review and Recommendation.--The Board of Directors of the
Federal Deposit Insurance Corporation, in consultation with the Board
of Governors of the Federal Reserve System and the Secretary of the
Treasury, shall--
(1) conduct a study of the adequacy of the deposit
insurance funds, taking into account--
(A) expected operating expenses, case resolution
expenditures and income, and the effect of assessments
on members' earnings and capital;
(B) historical failure rates and loss experience;
(C) recent changes in the law, including statutory
changes requiring prompt corrective action, least-cost
resolutions, and risk-based assessment systems;
(D) the income of such funds from investments;
(E) the potential implication of the Year 2000
computer problem (as defined in section 2(b)(5) of the
Examination Parity and Year 2000 Readiness for
Financial Institutions Act) and industry consolidation;
and
(F) the historical experience of the Corporation in
providing rebates or credits from any deposit insurance
fund; and
(2) recommend to the Congress--
(A) an appropriate range of reserve ratios between
the net worth of any deposit insurance fund and the
aggregate amount of insured deposits insured by such
fund; and
(B) an appropriate mechanism for rebating or
providing credit from any deposit insurance fund when
the balance of the fund exceeds any applicable reserve
ratio.
(b) Report Required.--The Board of Directors of the Federal Deposit
Insurance Corporation, in consultation with the Board of Governors of
the Federal Reserve System and the Secretary of the Treasury, shall
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