| Home > 106th Congressional Bills > S. 900 (pcs) To enhance competition in the financial services industry by providing a prudential framework for the affiliation of banks, securities firms, insurance companies, and other financial service providers, and for other purposes. [Placed on Calen...
S. 900 (pcs) To enhance competition in the financial services industry by providing a prudential framework for the affiliation of banks, securities firms, insurance companies, and other financial service providers, and for other purposes. [Placed on Calen...
106th CONGRESS 1st Session S. 900 _______________________________________________________________________ AN ACT To enhance competition in the financial services industry by providing a prudential framework for the affiliation of banks, securities firms, insurance companies, and other financial service providers, 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 ``Financial Services Modernization Act of 1999''. (b) Table of Contents.--The table of contents for this Act is as follows: Sec. 1. Short title; table of contents. TITLE I--FACILITATING AFFILIATION AMONG BANKS, SECURITIES FIRMS, AND INSURANCE COMPANIES Subtitle A--Affiliations Sec. 101. Glass-Steagall Act repealed. Sec. 102. Financial activities. Sec. 103. Conforming amendments. Sec. 104. Operation of State law. Subtitle B--Streamlining Supervision of Bank Holding Companies Sec. 111. Streamlining bank holding company supervision. Sec. 112. Authority of State insurance regulator and Securities and Exchange Commission. Sec. 113. Role of the Board of Governors of the Federal Reserve System. Sec. 114. Examination of investment companies. Sec. 115. Equivalent regulation and supervision. Sec. 116. Interagency consultation. Sec. 117. Preserving the integrity of FDIC resources. Subtitle C--Activities of National Banks Sec. 121. Authority of national banks to underwrite municipal revenue bonds. Sec. 122. Subsidiaries of national banks. Sec. 123. Agency activities. Sec. 124. Prohibiting fraudulent representations. Sec. 125. Insurance underwriting by national banks. Subtitle D--National Treatment of Foreign Financial Institutions Sec. 151. National treatment of foreign financial institutions. Sec. 152. Representative offices. TITLE II--INSURANCE CUSTOMER PROTECTIONS Sec. 201. Functional regulation of insurance. Sec. 202. Insurance customer protections. Sec. 203. Federal and State dispute resolution. TITLE III--REGULATORY IMPROVEMENTS Sec. 301. Elimination of SAIF and DIF special reserves. Sec. 302. Expanded small bank access to S corporation treatment. Sec. 303. Meaningful CRA examinations. Sec. 304. Financial information privacy protection. Sec. 305. Cross marketing restriction; limited purpose bank relief; divestiture. Sec. 306. ``Plain language'' requirement for Federal banking agency rules. Sec. 307. Retention of ``Federal'' in name of converted Federal savings association. Sec. 308. Community Reinvestment Act exemption. Sec. 309. Bank officers and directors as officers and directors of public utilities. Sec. 310. Control of bankers' banks. Sec. 311. Multistate licensing and interstate insurance sales activities. Sec. 312. CRA sunshine requirements. Sec. 313. Interstate branches and agencies of foreign banks. Sec. 314. Disclosures to consumers under the Truth in Lending Act. Sec. 315. Approval for purchases of securities. Sec. 316. Provision of technical assistance to microenterprises Sec. 317. Federal reserve audits. Sec. 318. Study and report on advertising practices of online brokerage services. Sec. 319. Eligibility of community development financial institution to borrow from the Federal Home Loan Bank system. TITLE IV--FEDERAL HOME LOAN BANK SYSTEM MODERNIZATION Sec. 401. Short title. Sec. 402. Definitions. Sec. 403. Savings association membership. Sec. 404. Advances to members; collateral. Sec. 405. Eligibility criteria. Sec. 406. Management of banks. Sec. 407. Resolution Funding Corporation. Sec. 408. GAO study on Federal Home Loan Bank System capital. TITLE V--FUNCTIONAL REGULATION OF BROKERS AND DEALERS Sec. 501. Definition of broker. Sec. 502. Definition of dealer. Sec. 503. Definition and treatment of banking products. Sec. 504. Qualified investor defined. Sec. 505. Government securities defined. Sec. 506. Effective date. Sec. 507. Rule of construction. TITLE VI--UNITARY SAVINGS AND LOAN HOLDING COMPANIES Sec. 601. Prevention of creation of new S&L holding companies with commercial affiliates. Sec. 602. Optional conversion of Federal savings associations. TITLE VII--ATM FEE REFORM Sec. 701. Short title. Sec. 702. Electronic fund transfer fee disclosures at any host ATM. Sec. 703. Disclosure of possible fees to consumers when ATM card is issued. Sec. 704. Feasibility study. Sec. 705. No liability if posted notices are damaged. TITLE I--FACILITATING AFFILIATION AMONG BANKS, SECURITIES FIRMS, AND INSURANCE COMPANIES Subtitle A--Affiliations SEC. 101. GLASS-STEAGALL ACT REPEALED. (a) Section 20 Repealed.--Section 20 of the Banking Act of 1933 (12 U.S.C. 377) (commonly referred to as the ``Glass-Steagall Act'') is repealed. (b) Section 32 Repealed.--Section 32 of the Banking Act of 1933 (12 U.S.C. 78) is repealed. SEC. 102. FINANCIAL ACTIVITIES. (a) In General.--Section 4 of the Bank Holding Company Act of 1956 (12 U.S.C. 1843) is amended by adding at the end the following new subsections: ``(k) Engaging in Activities That Are Financial in Nature.-- ``(1) In general.--Notwithstanding subsection (a), a bank holding company may engage in any activity, and may acquire and retain the shares of any company engaged in any activity, that the Board, in coordination with the Secretary of the Treasury, determines (by regulation or order) to be financial in nature or incidental to such financial activities. ``(2) Coordination between the board and the secretary of the treasury.-- ``(A) Proposals raised before the board.-- ``(i) Consultation.--The Board shall notify the Secretary of the Treasury of, and consult with the Secretary of the Treasury concerning, any request, proposal, or application under this subsection for a determination of whether an activity is financial in nature or incidental to such a financial activity. ``(ii) Treasury view.--The Board shall not determine that any activity is financial in nature or incidental to a financial activity under this subsection if the Secretary of the Treasury notifies the Board in writing, not later than 30 days after the date of receipt of the notice described in clause (i) (or such longer period as the Board determines to be appropriate in light of the circumstances) that the Secretary of the Treasury believes that the activity is not financial in nature or incidental to a financial activity. ``(B) Proposals raised by the treasury.-- ``(i) Treasury recommendation.--The Secretary of the Treasury may, at any time, recommend in writing that the Board find an activity to be financial in nature or incidental to a financial activity. ``(ii) Time period for board action.--Not later than 30 days after the date of receipt of a written recommendation from the Secretary of the Treasury under clause (i) (or such longer period as the Secretary of the Treasury and the Board determine to be appropriate in light of the circumstances), the Board shall determine whether to initiate a public rulemaking proposing that the subject recommended activity be found to be financial in nature or incidental to a financial activity under this subsection, and shall notify the Secretary of the Treasury in writing of the determination of the Board and, in the event that the Board determines not to seek public comment on the proposal, the reasons for that determination. ``(3) Factors to be considered.--The Board shall determine that an activity is financial in nature or incidental to financial activities, if the Board finds that such activity is consistent with-- ``(A) the purposes of this Act and the Financial Services Modernization Act of 1999; ``(B) changes or reasonably expected changes in the marketplace in which bank holding companies compete; ``(C) changes or reasonably expected changes in the technology for delivering financial services; and ``(D) fostering-- ``(i) effective competition with any company seeking to provide financial services in the United States; ``(ii) the efficient delivery of information and services that are financial in nature through the use of technological means, including any application necessary to protect the security or efficacy of systems for the transmission of data or financial transactions; and ``(iii) the provision to customers of any available or emerging technological means for using financial services. ``(4) Activities that are financial in nature.--For purposes of this subsection, the following activities shall be considered to be financial in nature: ``(A) Lending, exchanging, transferring, investing for others, or safeguarding money or securities. ``(B) Insuring, guaranteeing, or indemnifying against loss, harm, damage, illness, disability, or death, or providing and issuing annuities, and acting as principal, agent, or broker for purposes of the foregoing, in any State, in full compliance with the laws and regulations of that State that apply to each type of insurance license or authorization in that State. ``(C) Providing financial, investment, or economic advisory services, including advising an investment company (as defined in section 3 of the Investment Company Act of 1940). ``(D) Issuing or selling instruments representing interests in pools of assets permissible for a bank to hold directly. ``(E) Underwriting, dealing in, or making a market in securities. ``(F) Engaging in any activity that the Board has determined, by order or regulation that is in effect on the date of enactment of the Financial Services Modernization Act of 1999, to be so closely related to banking or managing or controlling banks as to be a proper incident thereto (subject to the same terms and conditions contained in such order or regulation, unless modified by the Board). ``(G) Engaging, in the United States, in any activity that-- ``(i) a bank holding company may engage in outside of the United States; and ``(ii) the Board has determined, under regulations issued pursuant to subsection (c)(13) (as in effect on the day before the date of enactment of the Financial Services Modernization Act of 1999) to be usual in connection with the transaction of banking or other financial operations abroad. ``(H) Directly or indirectly acquiring or controlling, whether as principal, on behalf of 1 or more entities (including entities, other than a depository institution or subsidiary of a depository institution that the bank holding company controls), or otherwise, shares, assets, or ownership interests (including debt or equity securities, partnership interests, trust certificates, or other instruments representing ownership) of a company or other entity, whether or not constituting control of such company or entity, engaged in any activity not authorized pursuant to this section if-- ``(i) the shares, assets, or ownership interests are not acquired or held by a depository institution or subsidiary of a depository institution; and ``(ii) such shares, assets, or ownership interests are acquired and held by-- (I) a securities affiliate or an
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