HR 6556 — Failing Bank Acquisition Fairness Act

changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, and existing law in which no 
change is proposed is shown in roman):

 FEDERAL DEPOSIT INSURANCE ACT

 * * * * * * *
 Sec. 13. (a) Investment of Corporation's Funds.--
 (1) Authority.--Funds held in the Deposit Insurance 
 Fund or the FSLIC Resolution Fund, that are not 
 otherwise employed shall be invested in obligations of 
 the United States or in obligations guaranteed as to 
 principal and interest by the United States.
 (2) Limitation.--The Corporation shall not sell or 
 purchase any obligations described in paragraph (1) for 
 its own account, at any one time aggregating in excess 
 of $100,000, without the approval of the Secretary of 
 the Treasury. The Secretary may approve a transaction 
 or class of transactions subject to the provisions of 
 this paragraph under such conditions as the Secretary 
 may determine.
 (b) The depository accounts of the Corporation shall be 
kept with the Treasurer of the United States, or, with the 
approval of the Secretary of the Treasury, with a Federal 
Reserve bank, or with a depository institution designated as a 
depositary or fiscal agent of the United States: Provided, That 
the Secretary of the Treasury may waive the requirements of 
this subsection under such conditions as he may determine: And 
provided further, That this subsection shall not apply to the 
establishment and maintenance in any depository institution for 
temporary purposes of depository accounts not in excess of 
$50,000 in any one depository institution, or to the 
establishment and maintenance in any depository institution of 
any depository accounts to facilitate the payment of insured 
desposits, or the making of loans to, or the purchase of assets 
of, insured depository institutions. When designated for that 
purpose by the Secretary of the Treasury, the Corporation shall 
be a depositary of public moneys, except receipts from customs, 
under such regulations as may be prescribed by the said 
Secretary, and may also be employed as a financial agent of the 
Government. It shall perform all such reasonable duties as 
depositary of public moneys and financial agent of the 
Government as may be required of it.
 (c)(1) The Corporation is authorized, in its sole 
discretion and upon such terms and conditions as the Board of 
Directors may prescribe, to make loans to, to make deposits in, 
to purchase the assets or securities of, to assume the 
liabilities of, or to make contributions to, any insured 
depository institution--
 (A) if such action is taken to prevent the default 
 of such insured depository institution;
 (B) if, with respect to an insured bank in default, 
 such action is taken to restore such insured bank to 
 normal operation; or
 (C) if, when severe financial conditions exist 
 which threaten the stability of a significant number of 
 insured depository institutions or of insured 
 depository institutions possessing significant 
 financial resources, such action is taken in order to 
 lessen the risk to the Corporation posed by such 
 insured depository institution under such threat of 
 instability.
 (2)(A) In order to facilitate a merger or consolidation of 
another insured depository institution described in 
subparagraph (B) with another insured depository institution or 
the sale of any or all of the assets of such insured depository 
institution or the assumption of any or all of such insured 
depository institution's liabilities by another insured 
depository institution, or the acquisition of the stock of such 
insured depository institution, the Corporation is authorized, 
in its sole discretion and upon such terms and conditions as 
the Board of Directors may prescribe--
 (i) to purchase any such assets or assume any such 
 liabilities;
 (ii) to make loans or contributions to, or deposits 
 in, or purchase the securities of, such insured 
 institution or the company which controls or will 
 acquire control of such insured institution;
 (iii) to guarantee such insured institution or the 
 company which controls or will acquire control of such 
 insured institution against loss by reason of such 
 insured institution's merging or consolidating with or 
 assuming the liabilities and purchasing the assets of 
 such insured depository institution or by reason of 
 such company acquiring control of such insured 
 depository institution; or
 (iv) to take any combination of the actions 
 referred to in subparagraphs (i) through (iii).
 (B) For the purpose of subparagraph (A), the insured 
depository institution must be an insured depository 
institution--
 (i) which is in default;
 (ii) which, in the judgment of the Board of 
 Directors, is in danger of default; or
 (iii) which, when severe financial conditions exist 
 which threaten the stability of a significant number of 
 insured depository institutions or of insured 
 depository institutions possessing significant 
 financial resources, is determined by the Corporation, 
 in its sole discretion, to require assistance under 
 subparagraph (A) in order to lessen the risk to the 
 Corporation posed by such insured depository 
 institution under such threat of instability.
 (C) Any action to which the Corporation is or 
 becomes a party by acquiring any asset or exercising 
 any other authority set forth in this section shall be 
 stayed for a period of 60 days at the request of the 
 Corporation.
 (3) The Corporation may provide any person acquiring 
control of, merging with, consolidating with or acquiring the 
assets of an insured depository institution under subsection 
(f) or (k) of this section with such financial assistance as it 
could provide an insured institution under this subsection.
 (4) Least-cost resolution required.--
 (A) In general.--Notwithstanding any other 
 provision of this Act, the Corporation may not 
 exercise any authority under this subsection or 
 subsection (d), (f), (h), (i), or (k) with 
 respect to any insured depository institution 
 unless--
 (i) the Corporation determines that 
 the exercise of such authority is 
 necessary to meet the obligation of the 
 Corporation to provide insurance 
 coverage for the insured deposits in 
 such institution; and
 (ii) the total amount of the 
 expenditures by the Corporation and 
 obligations incurred by the Corporation 
 (including any immediate and long-term 
 obligation of the Corporation and any 
 direct or contingent liability for 
 future payment by the Corporation) in 
 connection with the exercise of any 
 such authority with respect to such 
 institution is the least costly to the 
 Deposit Insurance Fund of all possible 
 methods for meeting the Corporation's 
 obligation under this section.
 (B) Determining least costly approach.--In 
 determining how to satisfy the Corporation's 
 obligations to an institution's insured 
 depositors at the least possible cost to the 
 Deposit Insurance Fund, the Corporation shall 
 comply with the following provisions:
 (i) Present-value analysis; 
 documentation required.--The 
 Corporation shall--
 (I) evaluate alternatives 
 on a present-value basis, using 
 a realistic discount rate;
 (II) document that 
 evaluation and the assumptions 
 on which the evaluation is 
 based, including any 
 assumptions with regard to 
 interest rates, asset recovery 
 rates, asset holding costs, and 
 payment of contingent 
 liabilities; and
 (III) retain the 
 documentation for not less than 
 5 years.
 (ii) Foregone tax revenues.--
 Federal tax revenues that the 
 Government would forego as the result 
 of a proposed transaction, to the 
 extent reasonably ascertainable, shall 
 be treated as if they were revenues 
 foregone by the Deposit Insurance Fund.
 (C) Time of determination.--
 (i) General rule.--For purposes of 
 this subsection, the determination of 
 the costs of providing any assistance 
 under paragraph (1) or (2) or any other 
 provision of this section with respect 
 to any depository institution shall be 
 made as of the date on which the 
 Corporation makes the determination to 
 provide such assistance to the 
 institution under this section.
 (ii) Rule for liquidations.--For 
 purposes of this subsection, the 
 determination of the costs of 
 liquidation of any depository 
 institution shall be made as of the 
 earliest of--
 (I) the date on which a 
 conservator is appointed for 
 such institution;
 (II) the date on which a 
 receiver is appointed for such 
 institution; or
 (III) the date on which the 
 Corporation makes any 
 determination to provide any 
 assistance under this section 
 with respect to such 
 institution.
 (D) Liquidation costs.--In determining the 
 cost of liquidating any depository institution 
 for the purpose of comparing the costs under 
 subparagraph (A) (with respect to such 
 institution), the amount of such cost may not 
 exceed the amount which is equal to the sum of 
 the insured deposits of such institution as of 
 the earliest of the dates described in 
 subparagraph (C), minus the present value of 
 the total net amount the Corporation reasonably 
 expects to receive from the disposition of the 
 assets of such institution in connection with 
 such liquidation.
 (E) Deposit insurance fund available for 
 intended purpose only.--
 (i) In general.--After December 31, 
 1994, or at such earlier time as the 
 Corporation determines to be 
 appropriate, the Corporation may not 
 take any action, directly or 
 indirectly, with respect to any insured 
 depository institution that would have 
 the effect of increasing losses to the 
 Deposit Insurance Fund by protecting--
 (I) depositors for more 
 than the insured portion of 
 deposits (determined without 
 regard to whether such 
 institution is liquidated); or
 (II) creditors other than 
 depositors.
 (ii) Deadline for regulations.--The 
 Corporation shall prescribe regulations 
 to implement clause (i) not later than 
 January 1, 1994, and the regulations 
 shall take effect not later than 
 January 1, 1995.
 (iii) Purchase and assumption 
 transactions.--No provision of this 
 subparagraph shall be construed as 
 prohibiting the Corporation from 
 allowing any person who acquires any 
 assets or assumes any liabilities of 
 any insured depository institution for 
 which the Corporation has been 
 appointed conservator or receiver to 
 acquire uninsured deposit liabilities 
 of such institution so long as the 
 insurance fund does not incur any loss 
 with respect to such deposit 
 liabilities in an amount greater than 
 the loss which would have been incurred 
 with respect to such liabilities if the 
 institution had been liquidated.
 (F) Discretionary determinations.--Any 
 determination which the Corporation may make 
 under this paragraph shall be made in the sole 
 discretion of the Corporation.
 (G) Systemic risk.--
 (i) Emergency determination by 
 secretary of the treasury.--
 Notwithstanding subparagraphs (A) and 
 (E), if, upon the written 
 recommendation of the Board of 
 Directors (upon a vote of not less than 
 two-thirds of the members of the Board 
 of Directors) and the Board of 
 Governors of the Federal Reserve System 
 (upon a vote of not less than two-
 thirds of the members of such Board), 
 the Secretary of the Treasury (in 
 consultation with the President) 
 determines that--
 (I) the Corporation's 
 compliance with subparagraphs 
 (A) and (E) with respect to an 
 insured depository institution 
 for which the Corporation has 
 been appointed receiver would 
 have serious adverse effects on 
 economic conditions or 
 financial stability; and
 (II) any action or 
 assistance under this 
 subparagraph would avoid or 
 mitigate such adverse effects,
 the Corporation may take other action 
 or provide assistance under this 
 section for the purpose of winding up 
 the insured depository institution for 
 which the Corporation has been 
 appointed receiver as necessary to 
 avoid or mitigate such effects.
 (ii) Repayment of loss.--
 (I) In general.--The 
 Corporation shall recover the 
 loss to the Deposit Insurance 
 Fund arising from any action 
 taken or assistance provided 
 with respect to an insured 
 depository institution under 
 clause (i) from 1 or more 
 special assessments on insured 
 depository institutions, 
 depository institution holding 
 companies (with the concurrence 
 of the Secretary of the 
 Treasury with respect to 
 holding companies), or both, as 
 the Corporation determines to 
 be appropriate.
 (II) Treatment of 
 depository institution holding 
 companies.--For purposes of 
 this clause, sections 7(c)(2) 
 and 18(h) shall apply to 
 depository institution holding 
 companies as if they were 
 insured depository 
 institutions.
 (III) Regulations.--The 
 Corporation shall prescribe 
 such regulations as it deems 
 necessary to implement this 
 clause. In prescribing such 
 regulations, defining terms, 
 and setting the appropriate 
 assessment rate or rates, the 
 Corporation shall establish 
 rates sufficient to cover the 
 losses incurred as a result of 
 the actions of the Corporation 
 under clause (i) and shall 
 consider: the types of entities 
 that benefit from any action 
 taken or assistance provided 
 under this subparagraph; 
 economic conditions, the 
 effects on the industry, and 
 such other factors as the 
 Corporation deems appropriate 
 and relevant to the action 
 taken or the assistance 
 provided. Any funds so 
 collected that exceed actual 
 losses shall be placed in the 
 Deposit Insurance Fund.
 (iii) Documentation required.--The 
 Secretary of the Treasury shall--
 (I) document any 
 determination under clause (i); 
 and
 (II) retain the 
 documentation for review under 
 clause (iv).
 (iv) GAO review.--The Comptroller 
 General of the United States shall 
 review and report to the Congress on 
 any determination under clause (i), 
 including--
 (I) the basis for the 
 determination;
 (II) the purpose for which 
 any action was taken pursuant 
 to such clause; and
 (III) the likely effect of 
 the determination and such 
 action on the incentives and 
 conduct of insured depository 
 institutions and uninsured 
 depositors.
 (v) Notice.--
 (I) In general.--Not later 
 than 3 days after making a 
 determination under clause (i), 
 the Secretary of the Treasury 
 shall provide written notice of 
 any determination under clause 
 (i) to the Committee on 
 Banking, Housing, and Urban 
 Affairs of the Senate and the 
 Committee on Banking, Finance 
 and Urban Affairs of the House 
 of Representatives.
 (II) Description of basis 
 of determination.--The notice 
 under subclause (I) shall 
 include a description of the 
 basis for any determination 
 under clause (i).
 (H) Rule of construction.--No 
 provision of law shall be construed as 
 permitting the Corporation to take any 
 action prohibited by paragraph (4) 
 unless such provision expressly 
 provides, by direct reference to this 
 paragraph, that this paragraph shall 
 not apply with respect to such action.
 (I) Limitation on considering bad faith 
 bids.--In making a determination under this 
 paragraph of whether an exercise of authority 
 is the least costly to the Deposit Insurance 
 Fund, the Corporation may not consider any 
 application, proposed application, or bid from 
 a company, if such application, proposed 
 application, or bid would result in violation 
 of--
 (i) section 18(c)(13) or 44(b)(2); 
 or
 (ii) section 3(d)(2), 4(i)(8), or 
 14 of the Bank Holding Company Act of 
 1956.
 (5) The Corporation may not use its authority under this 
subsection to purchase the voting or common stock of an insured 
depository institution. Nothing in the preceding sentence shall 
be construed to limit the ability of the Corporation to enter 
into and enforce covenants and agreements that it determines to 
be necessary to protect its financial interest.
 (6)(A) During any period in which an insured depository 
institution has received assistance under this subsection and 
such assistance is still outstanding, such insured depository 
institution may defer the payment of any State or local tax 
which is determined on the basis of the deposits held by such 
insured depository institution or of the interest or dividends 
paid on such deposits.
 (B) When such insured depository institution no longer has 
any outstanding assistance, such insured depository institution 
shall pay all taxes which were deferred under subparagraph (A). 
Such payments shall be made in accordance with a payment plan 
established by the Corporation, after consultation with the 
applicable State and local taxing authorities.
 (7) The transfer of any assets or liabilities associated 
with any trust business of an insured depository institution in 
default under subparagraph (2)(A) shall be effective without 
any State or Federal approval, assignment, or consent with 
respect thereto.
 (8) Assistance before appointment of conservator or 
 receiver.--
 (A) In general.--Subject to the least-cost 
 provisions of paragraph (4), the Corporation 
 shall consider providing direct financial 
 assistance under this section for depository 
 institutions before the appointment of a 
 conservator or receiver for such institution 
 only under the following circumstances:
 (i) Troubled condition criteria.--
 The Corporation determines--
 (I) grounds for the 
 appointment of a conservator or 
 receiver exist or likely will 
 exist in the future unless the 
 depository institution's 
 capital levels are increased; 
 and
 (II) it is unlikely that 
 the institution can meet all 
 currently applicable capital 
 standards without assistance.
 (ii) Other criteria.--The 
 depository institution meets the 
 following criteria:
 (I) The appropriate Federal 
 banking agency and the 
 Corporation have determined 
 that, during such period of 
 time preceding the date of such 
 determination as the agency or 
 the Corporation considers to be 
 relevant, the institution's 
 management has been competent 
 and has complied with 
 applicable laws, rules, and 
 supervisory directives and 
 orders.
 (II) The institution's 
 management did not engage in 
 any insider dealing, 
 speculative practice, or other 
 abusive activity.
 (B) Public disclosure.--Any determination 
 under this paragraph to provide assistance 
 under this section shall be made in writing and 
 published in the Federal Register.
 (9) Any assistance provided under this subsection may be in 
subordination to the rights of depositors and other creditors.
 (10) In its annual report to the Congress, the Corporation 
shall report the total amount it has saved, or estimates it has 
saved, by exercising the authority provided in this subsection.
 (11) Unenforceability of certain agreements.--No 
 provision contained in any existing or future 
 standstill, confidentiality, or other agreement that, 
 directly or indirectly--
 (A) affects, restricts, or limits the 
 ability of any person to offer to acquire or 
 acquire,
 (B) prohibits any person from offering to 
 acquire or acquiring, or
 (C) prohibits any person from using any 
 previously disclosed information in connection 
 with any such offer to acquire or acquisition 
 of,
 all or part of any insured depository institution, 
 including any liabilities, assets, or interest therein, 
 in connection with any transaction in which the 
 Corporation exercises its authority under section 11 or 
 13, shall be enforceable against or impose any 
 liability on such person, as such enforcement or 
 liability shall be contrary to public policy.
 (d) Sale of Assets to Corporation.--
 (1) In general.-Any conservator, receiver, or 
 liquidator appointed for any insured depository 
 institution in default, including the Corporation 
 acting in such capacity, shall be entitled to offer the 
 assets of such depository institutions for sale to the 
 Corporation or as security for loans from the 
 Corporation.
 (2) Proceeds.--The proceeds of every sale or loan 
 of assets to the Corporation shall be utilized for the 
 same purposes and in the same manner as other funds 
 realized from the liquidation of the assets of such 
 depository institutions.
 (3) Rights and powers of corporation.--
 (A) In general.--With respect to any asset 
 acquired or liability assumed pursuant to this 
 section, the Corporation shall have all of the 
 rights, powers, privileges, and authorities of 
 the Corporation as receiver under sections 11 
 and 15(b).
 (B) Rule of construction.--Such rights, 
 powers, privileges, and authorities shall be in 
 addition to and not in derogation of any 
 rights, powers, privileges, and authorities 
 otherwise applicable to the Corporation.
 (C) Fiduciary responsibility.--In 
 exercising any right, power, privilege, or 
 authority described in subparagraph (A), the 
 Corporation shall continue to be subject to the 
 fiduciary duties and obligations of the 
 Corporation as receiver to claimants against 
 the insured depository institution in 
 receivership.
 (D) Disposition of assets.--In exercising 
 any right, power, privilege, or authority 
 described in subparagraph (A) regarding the 
 sale or disposition of assets sold to the 
 Corporation pursuant to paragraph (1), the 
 Corporation shall conduct its operations in a 
 manner which--
 (i) maximizes the net present value 
 return from the sale or disposition of 
 such assets;
 (ii) minimizes the amount of any 
 loss realized in the resolution of 
 cases;
 (iii) ensures adequate competition 
 and fair and consistent treatment of 
 offerors;
 (iv) prohibits discrimination on 
 the basis of race, sex, or ethnic 
 groups in the solicitation and 
 consideration of offers; and
 (v) maximizes the preservation of 
 the availability and affordability of 
 residential real property for low- and 
 moderate-income individuals.
 (4) Loans.--The Corporation, in its discretion, may 
 make loans on the security of or may purchase and 
 liquidate or sell any part of the assets of an insured 
 depository institution which is now or may hereafter be 
 in default.
 (e) Agreements Against Interests of Corporation.--
 (1) In general.--No agreement which tends to 
 diminish or defeat the interest of the Corporation in 
 any asset acquired by it under this section or section 
 11, either as security for a loan or by purchase or as 
 receiver of any insured depository institution, shall 
 be valid against the Corporation unless such 
 agreement--
 (A) is in writing,
 (B) was executed by the depository 
 institution and any person claiming an adverse 
 interest thereunder, including the obligor, 
 contemporaneously with the acquisition of the 
 asset by the depository institution,
 (C) was approved by the board of directors 
 of the depository institution or its loan 
 committee, which approval shall be reflected in 
 the minutes of said board or committee, and
 (D) has been, continuously, from the time 
 of its execution, an official record of the 
 depository institution.
 (2) Exemptions from contemporaneous execution 
 requirement.--An agreement to provide for the lawful 
 collateralization of--
 (A) deposits of, or other credit extension 
 by, a Federal, State, or local governmental 
 entity, or of any depositor referred to in 
 section 11(a)(2), including an agreement to 
 provide collateral in lieu of a surety bond;
 (B) bankruptcy estate funds pursuant to 
 section 345(b)(2) of title 11, United States 
 Code;
 (C) extensions of credit, including any 
 overdraft, from a Federal reserve bank or 
 Federal home loan bank; or
 (D) one or more qualified financial 
 contracts, as defined in section 11(e)(8)(D),
 shall not be deemed invalid pursuant to paragraph 
 (1)(B) solely because such agreement was not executed 
 contemporaneously with the acquisition of the 
 collateral or because of pledges, delivery, or 
 substitution of the collateral made in accordance with 
 such agreement.
 (f) Assisted Emergency Interstate Acquisitions.--(1) This 
subsection shall apply only to an acquisition of an insured 
bank or a holding company by an out-of-State bank savings 
association or out-of-State holding company for which the 
Corporation provides assistance under subsection (c).
 (2)(A) Whenever an insured bank with total assets of 
$500,000,000 or more (as determined from its most recent report 
of condition) is in default, the Corporation, as receiver, may, 
in its discretion and upon such terms and conditions as the 
Corporation may determine, arrange the sale of assets of the 
closed bank and the assumption of the liabilities of the closed 
bank, including the sale of such assets to and the assumption 
of such liabilities by an insured depository institution 
located in the State where the closed bank was chartered but 
established by an out-of-State bank or holding company. Where 
otherwise lawfully required, a transaction under this 
subsection must be approved by the primary Federal or State 
supervisor of all parties thereto.
 (B)(i) Before making a determination to take any action 
under subparagraph (A), the Corporation shall consult the State 
bank supervisor of the State in which the insured bank in 
default was chartered.
 (ii) The State bank supervisor shall be given a reasonable 
opportunity, and in no event less than forty-eight hours, to 
object to the use of the provisions of this paragraph. Such 
notice may be provided by the Corporation prior to its 
appointment as receiver, but in anticipation of an impending 
appointment.
 (iii) If the State supervisor objects during such period, 
the Corporation may use the authority of this paragraph only by 
a vote of 75 percent of the Board of Directors. The Board of 
Directors shall provide to the State supervisor, as soon as 
practicable, a written certification of its determination.
 (3) Emergency Interstate Acquisitions of Insured Banks in 
Danger of Default.--
 (A) Acquisition of insured banks in danger of 
 default.--One or more out-of-State banks or out-of-
 State holding companies may acquire and retain all or 
 part of the shares or assets of, or otherwise acquire 
 and retain--
 (i) an insured bank in danger of default 
 which has total assets of $500,000,000 or more; 
 or
 (ii) 2 or more affiliated insured banks in 
 danger of default which have aggregate total 
 assets of $500,000,000 or more, if the 
 aggregate total assets of such banks is equal 
 to or greater than 33 percent of the aggregate 
 total assets of all affiliated insured banks.
 (B) Acquisition of a holding company or other bank 
 affiliate.--If one or more out-of-State banks or out-
 of-State holding companies acquire 1 or more affiliated 
 insured banks under subparagraph (A) the aggregate 
 total assets of which is equal to or greater than 33 
 percent of the aggregate total assets of all affiliated 
 insured banks, any such out-of-State bank or out-of-
 State holding company may also, as part of the same 
 transaction, acquire and retain the shares or assets 
 of, or otherwise acquire and retain--
 (i) the holding company which controls the 
 affiliated insured banks so acquired; or
 (ii) any other affiliated insured bank.
 (C) Request for assistance by corporate board of 
 directors.--The Corporation may assist an acquisition 
 or merger authorized under subparagraph (A) only if the 
 board of directors or trustees of each insured bank in 
 danger of default which is being acquired has requested 
 in writing that the Corporation assist the acquisition 
 or merger.
 (D) Certain acquisitions authorized after 
 assistance is provided.--Notwithstanding paragraph (1), 
 if--
 (i) at any time after the date of the 
 enactment of the Financial Institutions 
 Emergency Acquisitions Amendments of 1987, the 
 Corporation provides any assistance under 
 subsection (c) to an insured bank; and
 (ii) at the time such assistance is 
 granted, the insured bank, the holding company 
 which controls the insured bank (if any), or 
 any affiliated insured bank is eligible to be 
 acquired by an out-of-State bank or out-of-
 State holding company under this paragraph,
 the insured bank, the holding company, and such other 
 affiliated insured bank shall remain eligible, subject 
 to such terms and conditions as the Corporation (in the 
 Corporation's discretion) may impose, to be acquired by 
 an out-of-State bank or out-of-State holding company 
 under this paragraph as long as any portion of such 
 assistance remains outstanding.
 (E) State bank supervisor approval.--The 
 Corporation may take no final action in connection with 
 any acquisition under this paragraph unless the State 
 bank supervisor of the State in which the bank in 
 danger of default is located approves the acquisition.
 (F) Other requirements not affected.--This 
 paragraph does not affect any other requirement under 
 Federal or State law for regulatory approval of an 
 acquisition under this paragraph.
 (G) Acquisition may be conditioned on receipt of 
 consideration for corporation's assistance.--Any 
 acquisition described in subparagraph (D) may be 
 conditioned on the receipt of such consideration for 
 the Corporation's assistance as the Board of Directors 
 deems appropriate.
 (4)(A) Acquisitions Not Subject to Certain Other Laws.--
Section 3(d) of the Bank Holding Company Act of 1956, any 
provision of State law, and section 408(e)(3) of the National 
Housing Act shall not apply to prohibit any acquisition under 
paragraph (2) or (3), except that an out-of-State bank may make 
such an acquisition only if such ownership is otherwise 
specifically authorized.
 (B) Any subsidiary created by operation of this subsection 
may retain and operate any existing branch or branches of the 
institution merged with or acquired under paragraph (2) or (3), 
but otherwise shall be subject to the conditions upon which a 
national bank may establish and operate branches in the State 
in which such insured institution is located.
 (C) No insured institution acquired under this subsection 
shall after it is acquired move its principal office or any 
branch office which it would be prohibited from moving if the 
institution were a national bank.
 (D) Subsequent Nonemergency Interstate Acquisitions Subject 
to State Law.--
 (i) In general.--Any out-of-State bank holding 
 company which acquires control of an insured bank in 
 any State under paragraph (2) or (3) may acquire any 
 other insured bank and establish branches in such State 
 to the same extent as a bank holding company whose 
 insured bank subsidiaries' operations are principally 
 conducted in such State may acquire any other insured 
 bank or establish branches.
 (ii) Delayed date of applicability.--Clause (i) 
 shall not apply with respect to any out-of-State bank 
 holding company referred to in such clause before the 
 earlier of--
 (I) the end of the 2-year period beginning 
 on the date the acquisition referred to in such 
 clause with respect to such company is 
 consummated; or
 (II) the end of any period established 
 under State law during which such out-of-State 
 bank holding company may not be treated as a 
 bank holding company whose insured bank 
 subsidiaries' operations are principally 
 conducted in such State for purposes of 
 acquiring other insured banks or establishing 
 bank branches.
 (iii) Determination of principally conducted.--For 
 purposes of this subparagraph, the State in which the 
 operations of a holding company's insured bank 
 subsidiaries are principally conducted is the State 
 determined under section 3(d) of the Bank Holding 
 Company Act of 1956 with respect to such holding 
 company.
 (E) Certain State Interstate Banking Laws Inapplicable.--
Any holding company which acquires control of any insured bank 
or holding company under paragraph (2) or (3) or subparagraph 
(D) of this paragraph shall not, by reason of such acquisition, 
be required under the law of any State to divest any other 
insured bank or be prevented from acquiring any other bank or 
holding company.
 (5) In determining whether to arrange a sale of assets and 
assumption of liabilities or an acquisition or a merger under 
the authority of paragraph (2) or (3), the Corporation may 
solicit such offers or proposals as are practicable from any 
prospective purchasers or merger partners it determines, in its 
sole discretion, are both qualified and capable of acquiring 
the assets and liabilities of the bank in default or the bank 
in danger of default.
 (6)(A) If, after receiving offers, the offer presenting the 
lowest expense to the Corporation, that is in a form and with 
conditions acceptable to the Corporation (hereinafter referred 
to as the ``lowest acceptable offer''), is from an offeror that 
is not an existing in-State bank of the same type as the bank 
that is in default or is in danger of default (or, where the 
bank is an insured bank other than a mutual savings bank, the 
lowest acceptable offer is not from an in-State holding 
company), the Corporation shall permit the offeror which made 
the initial lowest acceptable offer and each offeror who made 
an offer the estimated cost of which to the Corporation was 
within 15 per centum or $15,000,000, whichever is less, of the 
initial lowest acceptable offer to submit a new offer.
 (B) In considering authorizations under this subsection, 
the Corporation shall give consideration to the need to 
minimize the cost of financial assistance and to the 
maintenance of specialized depository institutions. The 
Corporation shall authorize transactions under this subsection 
considering the following priorities:
 (i) First, between depository institutions of the 
 same type within the same State.
 (ii) Second, between depository institutions of the 
 same type--
 (I) in different States which by statute 
 specifically authorize such acquisitions; or
 (II) in the absence of such statutes, in 
 different States which are contiguous.
 (iii) Third, between depository institutions of the 
 same type in different States other than the States 
 described in clause (ii).
 (iv) Fourth, between depository institutions of 
 different types in the same State.
 (v) Fifth, between depository institutions of 
 different types--
 (I) in different States which by statute 
 specifically authorize such acquisitions; or
 (II) in the absence of such statutes, in 
 different States which are contiguous.
 (vi) Sixth, between depository institutions of 
 different types in different States other than the 
 States described in clause (v).
 (C) Minority Bank Priority.--In the case of a minority-
controlled bank, the Corporation shall seek an offer from other 
minority-controlled banks before proceeding with the bidding 
priorities set forth in subparagraph (B).
 (D) In determining the cost of offers and reoffers, the 
Corporation's calculations and estimations shall be 
determinative. The Corporation may set reasonable time limits 
on offers and reoffers.
 (7) No sale may be made under the provisions of paragraph 
(2) or (3)--
 (A) which would result in a monopoly, or which 
 would be in furtherance of any combination or 
 conspiracy to monopolize or to attempt to monopolize 
 the business of banking in any part of the United 
 States;
 (B) whose effect in any section of the country may 
 be substantially to lessen competition, or to tend to 
 create a monopoly, or which in any other manner would 
 be in restraint of trade, unless the Corporation finds 
 that the anticompetitive effects of the proposed 
 transactions are clearly outweighed in the public 
 interest by the probable effect of the transaction in 
 meeting the convenience and needs of the community to 
 be served; or
 (C) if in the opinion of the Corporation the 
 acquisition threatens the safety and soundness of the 
 acquirer or does not result in the future viability of 
 the resulting depository institution.
 (8) As used in this subsection--
 (A) the term ``in-State depository institution or 
 in-State holding company'' means an existing insured 
 depository institution currently operating in the State 
 in which the bank in default or the bank in danger of 
 default is chartered or a company that is operating an 
 insured depository institution subsidiary in the State 
 in which the bank in default or the bank in danger of 
 default is chartered;
 (B) the term ``acquire'' means to acquire, directly 
 or indirectly, ownership or control through--
 (i) an acquisition of shares;
 (ii) an acquisition of assets or assumption 
 of liabilities;
 (iii) a merger or consolidation; or
 (iv) any similar transaction;
 (C) the term ``affiliated insured bank'' means--
 (i) when used in connection with a 
 reference to a holding company, an insured bank 
 which is a subsidiary of such holding company; 
 and
 (ii) when used in connection with a 
 reference to 2 or more insured banks, insured 
 banks which are subsidiaries of the same 
 holding company; and
 (D) the term ``subsidiary'' has the meaning given 
 to such term in section 2(d) of the Bank Holding 
 Company Act of 1956.
 (9) No Assistance Authorized for Certain Subsidiaries of 
Holding Companies.--
 (A) In general.--The Corporation shall not provide 
 any assistance to a subsidiary, other than a subsidiary 
 that is an insured depository institution, of a holding 
 company in connection with any acquisition under this 
 subsection.
 (B) Intermediate holding company permitted.--This 
 paragraph does not prohibit an intermediate holding 
 company or an affiliate of an insured depository 
 institution from being a conduit for assistance 
 ultimately intended for an insured bank.
 (10) Annual Report.--
 (A) Required.--In its annual report to Congress the 
 Corporation shall include a report on the acquisitions 
 under this subsection during the preceding year.
 (B) Contents.--The report required under 
 subparagraph (A) shall contain the following 
 information:
 (i) The number of acquisitions under this 
 subsection.
 (ii) A brief description of each such 
 acquisition and the circumstances under which 
 such acquisition occurred.
 (11) Determination of Total Assets.--For purposes of this 
subsection, the total assets of any insured bank shall be 
determined on the basis of the most recent report of condition 
of such bank which is available at the time of such 
determination.
 (12) Acquisition of minority bank by minority bank 
 holding company without regard to asset size.--
 (A) In general.--For the purpose of 
 ensuring continued minority control of a 
 minority-controlled bank, paragraphs (2) and 
 (3) shall apply with respect to the acquisition 
 of a minority-controlled bank by an out-of-
 State minority-controlled depository 
 institution or depository institution holding 
 company without regard to the fact that the 
 total assets of such minority-controlled bank 
 are less than $500,000,000.
 (B) Definitions.--For purposes of this 
 paragraph:
 (i) Minority bank.--The term 
 ``minority bank'' means any depository 
 institution described in clause (i), 
 (ii), or (iii) of section 19(b)(1)(A) 
 of the Federal Reserve Act--
 (I) more than 50 percent of 
 the ownership or control of 
 which is held by one or more 
 minority individuals; and
 (II) more than 50 percent 
 of the net profit or loss of 
 which accrues to minority 
 individuals.
 (ii) Minority.--The term 
 ``minority'' means any Black American, 
 Native American, Hispanic American, or 
 Asian American.
 (g) Prior to July 1, 1951, the Corporation shall pay out of 
its capital account to the Secretary of the Treasury an amount 
equal to 2 per centum simple interest per annum on amounts 
advanced to the Corporation on stock subscriptions by the 
Secretary of the Treasury and the Federal Reserve banks, from 
the time of such advances until the amounts thereof were 
repaid. The amount payable hereunder shall be paid in two equal 
installments, the first installment to be paid prior to 
December 31, 1950.
 (h) The powers conferred on the Board of Directors and the 
Corporation by this section to take action to reopen an insured 
depository institution in default or to avert the default of an 
insured depository institution may be used with respect to an 
insured branch of a foreign bank if, in the judgment of the 
Board of Directors, the public interest in avoiding the closing 
of such branch substantially outweighs any additional risk of 
loss to the Deposit Insurance Fund which the exercise of such 
powers would entail.
 (j) Loan Loss Amortization for Certain Banks.--
 (1) Eligibility.--The appropriate Federal banking 
 agency shall permit an agricultural bank to take the 
 actions referred to in paragraph (2) if it finds that--
 (A) there is no evidence that fraud or 
 criminal abuse on the part of the bank led to 
 the losses referred to in paragraph (2); and
 (B) the agricultural bank has a plan to 
 restore its capital, not later than the close 
 of the amortization period established under 
 paragraph (2), to a level prescribed by the 
 appropriate Federal banking agency.
 (2) Seven-year loss amortization.--(A) Any loss on 
 any qualified agricultural loan that an agricultural 
 bank would otherwise be required to show on its annual 
 financial statement for any year between December 31, 
 1983, and January 1, 1992, may be amortized on its 
 financial statements over a period of not to exceed 7 
 years, as provided in regulations issued by the 
 appropriate Federal banking agency.
 (B) An agricultural bank may reappraise any real 
 estate or other property, real or personal, that it 
 acquired coincident to the making of a qualified 
 agricultural loan and that it owned on January 1, 1983, 
 and any such additional property that it acquires prior 
 to January 1, 1992. Any loss that such bank would 
 otherwise be required to show on its annual financial 
 statements as the result of any such reappraisal may be 
 amortized on its financial statements over a period of 
 not to exceed 7 years, as provided in regulations 
 issued by the appropriate Federal banking agency.
 (3) Regulations.--Not later than 90 days after the 
 date of enactment of this subsection, the appropriate 
 Federal banking agency shall issue regulations 
 implementing this subsection with respect to banks that 
 it supervises, including regulations implementing the 
 capital restoration requirement of paragraph (1)(B).
 (4) Definitions.--As used in this subsection--
 (A) the term ``agricultural bank'' means a 
 bank--
 (i) the deposits of which are 
 insured by the Federal Deposit 
 Insurance Corporation;
 (ii) which is located in an area 
 the economy of which is dependent on 
 agriculture;
 (iii) which has assets of 
 $100,000,000 or less; and
 (iv) which has--
 (I) at least 25 percent of 
 its total loans in qualified 
 agricultural loans; or
 (II) fewer than 25 percent 
 of its total loans in qualified 
 agricultural loans but which 
 the appropriate Federal banking 
 agency or State bank 
 commissioner recommends to the 
 Corporation for eligibility 
 under this section, or which 
 the Corporation, on its motion, 
 deems eligible; and
 (B) the term ``qualified agricultural 
 loan'' means a loan made to finance the 
 production of agricultural products or 
 livestock in the United States, a loan secured 
 by farmland or farm machinery, or such other 
 category of loans as the appropriate Federal 
 banking agency may deem eligible.
 (5) Maintenance of portfolio.--As a condition of 
 eligibility under this subsection, the agricultural 
 bank must agree to maintain in its loan portfolio a 
 percentage of agricultural loans which is not lower 
 than the percentage of such loans in its loan portfolio 
 on January 1, 1986.
 (k) Emergency Acquisitions.--
 (1) In general.--
 (A) Acquisitions authorized.--
 (i) Transactions described.--
 Notwithstanding any provision of State 
 law, upon determining that severe 
 financial conditions threaten the 
 stability of a significant number of 
 savings associations, or of savings 
 associations possessing significant 
 financial resources, the Corporation, 
 in its discretion and if it determines 
 such authorization would lessen the 
 risk to the Corporation, may 
 authorize--
 (I) a savings association 
 that is eligible for assistance 
 pursuant to subsection (c) to 
 merge or consolidate with, or 
 to transfer its assets and 
 liabilities to, any other 
 savings association or any 
 insured bank,
 (II) any other savings 
 association to acquire control 
 of such savings association, or
 (III) any company to 
 acquire control of such savings 
 association or to acquire the 
 assets or assume the 
 liabilities thereof.
 The Corporation may not authorize any 
 transaction under this subsection 
 unless the Corporation determines that 
 the authorization will not present a 
 substantial risk to the safety or 
 soundness of the savings association to 
 be acquired or any acquiring entity.
 (ii) Terms of transactions.--
 Mergers, consolidations, transfers, and 
 acquisitions under this subsection 
 shall be on such terms as the 
 Corporation shall provide.
 (iii) Approval by appropriate 
 agency.--Where otherwise required by 
 law, transactions under this subsection 
 must be approved by the appropriate 
 Federal banking agency of every party 
 thereto.
 (iv) Acquisitions by savings 
 associations.--Any Federal savings 
 association that acquires another 
 savings association pursuant to clause 
 (i) may, with the concurrence of the 
 Comptroller of the Currency, hold that 
 savings association as a subsidiary 
 notwithstanding the percentage 
 limitations of section 5(c)(4)(B) of 
 the Home Owners' Loan Act.S
 (v) Dual service.--Dual service by 
 a management official that would 
 otherwise be prohibited under the 
 Depository Institution Management 
 Interlocks Act may, with the approval 
 of the Corporation, continue for up to 
 10 years.
 (vi) Continued applicability of 
 certain state restrictions.--Nothing in 
 this subsection overrides or supersedes 
 State laws restricting or limiting the 
 activities of a savings association on 
 behalf of another entity.
 (B) Consultation with state official.--
 (i) Consultation required.--Before 
 making a determination to take any 
 action under subparagraph (A), the 
 Corporation shall consult the State 
 official having jurisdiction of the 
 acquired institution.
 (ii) Period for state response.--
 The official shall be given a 
 reasonable opportunity, and in no event 
 less than 48 hours, to object to the 
 use of the provisions of this 
 paragraph. Such notice may be provided 
 by the Corporation prior to its 
 appointment as receiver, but in 
 anticipation of an impending 
 appointment.
 (iii) Approval over objection of 
 state official.--If the official 
 objects during such period, the 
 Corporation may use the authority of 
 this paragraph only by a vote of 75 
 percent or more of the voting members 
 of the Board of Directors. The 
 Corporation shall provide to the 
 official, as soon as practicable, a 
 written certification of its 
 determination.
 (2) Solicitation of offers.--
 (A) In general.--In considering 
 authorizations under this subsection, the 
 Corporation may solicit such offers or 
 proposals as are practicable from any 
 prospective purchasers or merger partners it 
 determines, in its sole discretion, are both 
 qualified and capable of acquiring the assets 
 and liabilities of the savings association.
 (B) Minority-controlled institutions.--In 
 the case of a minority-controlled depository 
 institution, the Corporation shall seek an 
 offer from other minority-controlled depository 
 institutions before seeking an offer from other 
 persons or entities.
 (3) Determination of costs.--In determining the 
 cost of offers under this subsection, the Corporation's 
 calculations and estimations shall be determinative. 
 The Corporation may set reasonable time limits on 
 offers.
 (4) Branching provisions.--
 (A) In general.--If a merger, 
 consolidation, transfer, or acquisition under 
 this subsection involves a savings association 
 eligible for assistance and a bank or bank 
 holding company, a savings association may 
 retain and operate any existing branch or 
 branches or any other existing facilities. If 
 the savings association continues to exist as a 
 separate entity, it may establish and operate 
 new branches to the same extent as any savings 
 association that is not affiliated with a bank 
 holding company and the home office of which is 
 located in the same State.
 (B) Restrictions.--
 (i) In general.--Notwithstanding 
 subparagraph (A), if--
 (I) a savings association 
 described in such subparagraph 
 does not have its home office 
 in the State of the bank 
 holding company bank 
 subsidiary, and
 (II) such association does 
 not qualify as a domestic 
 building and loan association 
 under section 7701(a)(19) of 
 the Internal Revenue Code of 
 1986, or does not meet the 
 asset composition test imposed 
 by subparagraph (C) of that 
 section on institutions seeking 
 so to qualify,
 such savings association shall be 
 subject to the conditions upon which a 
 bank may retain, operate, and establish 
 branches in the State in which the 
 savings association is located.
 (ii) Transition period.--The 
 Corporation, for good cause shown, may 
 allow a savings association up to 2 
 years to comply with the requirements 
 of clause (i).
 (5) Assistance before appointment of conservator or 
 receiver.--
 (A) Assistance proposals.--The Corporation 
 shall consider proposals by savings 
 associations for assistance pursuant to 
 subsection (c) before grounds exist for 
 appointment of a conservator or receiver for 
 such member under the following circumstances:
 (i) Troubled condition criteria.--
 The Corporation determines--
 (I) that grounds for 
 appointment of a conservator or 
 receiver exist or likely will 
 exist in the future unless the 
 member's tangible capital is 
 increased;
 (II) that it is unlikely 
 that the member can achieve 
 positive tangible capital 
 without assistance; and
 (III) that providing 
 assistance pursuant to the 
 member's proposal would be 
 likely to lessen the risk to 
 the Corporation.
 (ii) Other criteria.--The member 
 meets the following criteria:
 (I) Before enactment of the 
 Financial Institutions Reform, 
 Recovery, and Enforcement Act 
 of 1989, the member was solvent 
 under applicable regulatory 
 accounting principles but had 
 negative tangible capital.
 (II) The member's negative 
 tangible capital position is 
 substantially attributable to 
 its participation in 
 acquisition and merger 
 transactions that were 
 instituted by the Federal Home 
 Loan Bank Board or the Federal 
 Savings and Loan Insurance 
 Corporation for supervisory 
 reasons.
 (III) The member is a 
 qualified thrift lender (as 
 defined in section 10(m) of the 
 Home Owners' Loan Act) or would 
 be a qualified thrift lender if 
 commercial real estate owned 
 and nonperforming commercial 
 loans acquired in acquisition 
 and merger transactions that 
 were instituted by the Federal 
 Home Loan Bank Board or the 
 Federal Savings and Loan 
 Insurance Corporation for 
 supervisory reasons were 
 excluded from the member's 
 total assets.
 (IV) The appropriate 
 Federal banking agency has 
 determined that the member's 
 management is competent and has 
 complied with applicable laws, 
 rules, and supervisory 
 directives and orders.
 (V) The member's management 
 did not engage in insider 
 dealing or speculative 
 practices or other activities 
 that jeopardized the member's 
 safety and soundness or 
 contributed to its impaired 
 capital position.
 (VI) The member's offices 
 are located in an economically 
 depressed region.
 (B) Corporation consideration of assistance 
 proposal.--If a member meets the requirements 
 of clauses (i) and (ii) of subparagraph (A), 
 the Corporation shall consider providing direct 
 financial assistance.
 (C) Economically depressed region 
 defined.--For purposes of this paragraph, the 
 term ``economically depressed region'' means 
 any geographical region which the Corporation 
 determines by regulation to be a region within 
 which real estate values have suffered serious 
 decline due to severe economic conditions, such 
 as a decline in energy or agricultural values 
 or prices.

 * * * * * * *
 Sec. 18. (a) Representations of Deposit Insurance.--
 (1) Insured depository institutions.--
 (A) In general.--Each insured depository 
 institution shall display at each place of 
 business maintained by that institution a sign 
 or signs relating to the insurance of the 
 deposits of the institution, in accordance with 
 regulations to be prescribed by the 
 Corporation.
 (B) Statement to be included.--Each sign 
 required under subparagraph (A) shall include a 
 statement that insured deposits are backed by 
 the full faith and credit of the United States 
 Government.
 (2) Regulations.--The Corporation shall prescribe 
 regulations to carry out this subsection, including 
 regulations governing the substance of signs required 
 by paragraph (1) and the manner of display or use of 
 such signs.
 (3) Penalties.--For each day that an insured 
 depository institution continues to violate paragraph 
 (1) or any regulation issued under paragraph (2), it 
 shall be subject to a penalty of not more than $100, 
 which the Corporation may recover for its use.
 (4) False advertising, misuse of fdic names, and 
 misrepresentation to indicate insured status.--
 (A) Prohibition on false advertising and 
 misuse of fdic names.--No person may represent 
 or imply that any deposit liability, 
 obligation, certificate, or share is insured or 
 guaranteed by the Corporation, if such deposit 
 liability, obligation, certificate, or share is 
 not insured or guaranteed by the Corporation--
 (i) by using the terms ``Federal 
 Deposit'', ``Federal Deposit 
 Insurance'', ``Federal Deposit 
 Insurance Corporation'', any 
 combination of such terms, or the 
 abbreviation ``FDIC'' as part of the 
 business name or firm name of any 
 person, including any corporation, 
 partnership, business trust, 
 association, or other business entity; 
 or
 (ii) by using such terms or any 
 other terms, sign, or symbol as part of 
 an advertisement, solicitation, or 
 other document.
 (B) Prohibition on misrepresentations of 
 insured status.--No person may knowingly 
 misrepresent--
 (i) that any deposit liability, 
 obligation, certificate, or share is 
 insured, under this Act, if such 
 deposit liability, obligation, 
 certificate, or share is not so 
 insured; or
 (ii) the extent to which or the 
 manner in which any deposit liability, 
 obligation, certificate, or share is 
 insured under this Act, if such deposit 
 liability, obligation, certificate, or 
 share is not so insured, to the extent 
 or in the manner represented.
 (C) Authority of the appropriate federal 
 banking agency.--The appropriate Federal 
 banking agency shall have enforcement authority 
 in the case of a violation of this paragraph by 
 any person for which the agency is the 
 appropriate Federal banking agency, or any 
 institution-affiliated party thereof.
 (D) Corporation authority if the 
 appropriate federal banking agency fails to 
 follow recommendation.--
 (i) Recommendation.--The 
 Corporation may recommend in writing to 
 the appropriate Federal banking agency 
 that the agency take any enforcement 
 action authorized under section 8 for 
 purposes of enforcement of this 
 paragraph with respect to any person 
 for which the agency is the appropriate 
 Federal banking agency or any 
 institution-affiliated party thereof.
 (ii) Agency response.--If the 
 appropriate Federal banking agency does 
 not, within 30 days of the date of 
 receipt of a recommendation under 
 clause (i), take the enforcement action 
 with respect to this paragraph 
 recommended by the Corporation or 
 provide a plan acceptable to the 
 Corporation for responding to the 
 situation presented, the Corporation 
 may take the recommended enforcement 
 action against such person or 
 institution-affiliated party.
 (E) Additional authority.--In addition to 
 its authority under subparagraphs (C) and (D), 
 for purposes of this paragraph, the Corporation 
 shall have, in the same manner and to the same 
 extent as with respect to a State nonmember 
 insured bank--
 (i) jurisdiction over--
 (I) any person other than a 
 person for which another agency 
 is the appropriate Federal 
 banking agency or any 
 institution-affiliated party 
 thereof; and
 (II) any person that aids 
 or abets a violation of this 
 paragraph by a person described 
 in subclause (I); and
 (ii) for purposes of enforcing the 
 requirements of this paragraph, the 
 authority of the Corporation under--
 (I) section 10(c) to 
 conduct investigations; and
 (II) subsections (b), (c), 
 (d) and (i) of section 8 to 
 conduct enforcement actions.
 (F) Other actions preserved.--No provision 
 of this paragraph shall be construed as barring 
 any action otherwise available, under the laws 
 of the United States or any State, to any 
 Federal or State agency or individual.
 (b) No insured depository institution shall pay any 
dividends on its capital stock or interest on its capital notes 
or debentures (if such interest is required to be paid only out 
of net profits) or distribute any of its capital assets while 
it remains in default in the payment of any assessment due to 
the Corporation; and any director or officer of any insured 
depository institution who participates in the declaration or 
payment of any such dividend or interest or in any such 
distribution shall, upon conviction, be fined not more than 
$1,000 or imprisoned not more than one year, or both: Provided, 
That, if such default is due to a dispute between the insured 
depository institution and the Corporation over the amount of 
such assessment, this subsection shall not apply if the insured 
depository institution deposits security satisfactory to the 
Corporation for payment upon final determination of the issue.
 (c)(1) Except with the prior written approval of the 
responsible agency, which shall in every case referred to in 
this paragraph be the Corporation, no insured depository 
institution shall--
 (A) merge or consolidate with any noninsured bank 
 or institution;
 (B) assume liability to pay any deposits (including 
 liabilities which would be ``deposits'' except for the 
 proviso in section 3(l)(5) of this Act) made in, or 
 similar liabilities of, any noninsured bank or 
 institution; or
 (C) transfer assets to any noninsured bank or 
 institution in consideration of the assumption of 
 liabilities for any portion of the deposits made in 
 such insured depository institution.
 (2) No insured depository institution shall merge or 
consolidate with any other insured depository institution or, 
either directly or indirectly, acquire the assets of, or assume 
liability to pay any deposits made in, any other insured 
depository institution except with the prior written approval 
of the responsible agency, which shall be--
 (A) the Comptroller of the Currency if the 
 acquiring, assuming, or resulting bank is to be a 
 national bank or a Federal savings association;
 (B) the Board of Governors of the Federal Reserve 
 System if the acquiring, assuming, or resulting bank is 
 to be a State member bank; and
 (C) the Corporation if the acquiring, assuming, or 
 resulting bank is to be a State nonmember insured bank 
 or a State savings association.
 (3) Notice of any proposed transaction for which approval 
is required under paragraph (1) or (2) (referred to hereafter 
in this subsection as a ``merger transaction'') shall, unless 
the responsible agency finds that it must act immediately in 
order to prevent the probable default of one of the banks or 
savings associations involved, be published--
 (A) prior to the granting of approval of such 
 transaction,
 (B) in a form approved by the responsible agency,
 (C) at appropriate intervals during a period at 
 least as long as the period allowed for furnishing 
 reports under paragraph (4) of this subsection, and
 (D) in a newspaper of general circulation in the 
 community or communities where the main offices of the 
 banks or savings associations involved are located, or, 
 if there is no such newspaper in any such community, 
 then in the newspaper of general circulation published 
 nearest thereto.
 (4) Reports on competitive factors.--
 (A) Request for report.--In the interests 
 of uniform standards and subject to 
 subparagraph (B), before acting on any 
 application for approval of a merger 
 transaction, the responsible agency shall--
 (i) request a report on the 
 competitive factors involved from the 
 Attorney General of the United States; 
 and
 (ii) provide a copy of the request 
 to the Corporation (when the 
 Corporation is not the responsible 
 agency).
 (B) Furnishing of report.--The report 
 requested under subparagraph (A) shall be 
 furnished by the Attorney General to the 
 responsible agency--
 (i) not later than 30 calendar days 
 after the date on which the Attorney 
 General received the request; or
 (ii) not later than 10 calendar 
 days after such date, if the requesting 
 agency advises the Attorney General 
 that an emergency exists requiring 
 expeditious action.
 (C) Exceptions.--A responsible agency may 
 not be required to request a report under 
 subparagraph (A) if--
 (i) the responsible agency finds 
 that it must act immediately in order 
 to prevent the probable failure of 1 of 
 the insured depository institutions 
 involved in the merger transaction; or
 (ii) the merger transaction 
 involves solely an insured depository 
 institution and 1 or more of the 
 affiliates of such depository 
 institution.
 (5) The responsible agency shall not approve--
 (A) any proposed merger transaction which would 
 result in a monopoly, or which would be in furtherance 
 of any combination or conspiracy to monopolize or to 
 attempt to monopolize the business of banking in any 
 part of the United States, or
 (B) any other proposed merger transaction whose 
 effect in any section of the country may be 
 substantially to lessen competition, or to tend to 
 create a monopoly, or which in any other manner would 
 be in restraint of trade, unless it finds that the 
 anticompetitive effects of the proposed transaction are 
 clearly outweighed in the public interest by the 
 probable effect of the transaction in meeting the 
 convenience and needs of the community to be served.
In every case, the responsible agency shall take into 
consideration the financial and managerial resources and future 
prospects of the existing and proposed institutions, the 
convenience and needs of the community to be served, and the 
risk to the stability of the United States banking or financial 
system.
 (6) The responsible agency shall immediately notify the 
Attorney General of any approval by it pursuant to this 
subsection of a proposed merger transaction. If the agency has 
found that it must act immediately to prevent the probable 
failure of one of the insured depository institutions involved, 
or if the proposed merger transaction is solely between an 
insured depository institution and 1 or more of its affiliates, 
and the report on the competitive factors has been dispensed 
with, the transaction may be consummated immediately upon 
approval by the agency. If the agency has advised the Attorney 
General under paragraph (4)(B)(ii) of the existence of an 
emergency requiring expeditious action and has requested a 
report on the competitive factors within 10 days, the 
transaction may not be consummated before the fifth calendar 
day after the date of approval by the agency. In all other 
cases, the transaction may not be consummated before the 
thirtieth calendar day after the date of approval by the agency 
or, if the agency has not received any adverse comment from the 
Attorney General of the United States relating to competitive 
factors, such shorter period of time as may be prescribed by 
the agency with the concurrence of the Attorney General, but in 
no event less than 15 calendar days after the date of approval.
 (7)(A) Any action brought under the antitrust laws arising 
out of a merger transaction shall be commenced prior to the 
earliest time under paragraph (6) at which a merger transaction 
approved under paragraph (5) might be consummated. The 
commencement of such an action shall stay the effectiveness of 
the agency's approval unless the court shall otherwise 
specifically order. In any such action, the court shall review 
de novo the issues presented.
 (B) In any judicial proceeding attacking a merger 
transaction approved under paragraph (5) on the ground that the 
merger transaction alone and of itself constituted a violation 
of any antitrust laws other than section 2 of the Act of July 
2, 1890 (section 2 of the Sherman Antitrust Act, 15 U.S.C. 2), 
the standards applied by the court shall be identical with 
those that the banking agencies are directed to apply under 
paragraph (5).
 (C) Upon the consummation of a merger transaction in 
compliance with this subsection and after the termination of 
any antitrust litigation commenced within the period prescribed 
in this paragraph, or upon the termination of such period if no 
such litigation is commenced therein, the transaction may not 
thereafter be attacked in any judicial proceeding on the ground 
that it alone and of itself constituted a violation of any 
antitrust laws other than section 2 of the Act of July 2, 1890 
(section 2 of the Sherman Antitrust Act, 15 U.S.C. 2), but 
nothing in this subsection shall exempt any bank or savings 
association resulting from a merger transaction from complying 
with the antitrust laws after the consummation of such 
transaction.
 (D) In any action brought under the antitrust laws arising 
out of a merger transaction approved by a Federal supervisory 
agency pursuant to this subsection, such agency, and any State 
banking supervisory agency having jurisdiction within the State 
involved, may appear as a party of its own motion and as of 
right, and be represented by its counsel.
 (8) For the purposes of this subsection, the term 
``antitrust laws'' means the Act of July 2, 1890 (the Sherman 
Antitrust Act, 15 U.S.C. 1-7), the Act of October 15, 1914 (the 
Clayton Act, 15 U.S.C. 12-27), and any other Acts in pari 
materia.
 (9) Each of the responsible agencies shall include in its 
annual report to the Congress a description of each merger 
transaction approved by it during the period covered by the 
report, along with--
 (A) the name and total resources of each bank or 
 savings association involved;
 (B) whether a report was submitted by the Attorney 
 General under paragraph (4), and, if so, a summary by 
 the Attorney General of the substance of such report; 
 and
 (C) a statement by the responsible agency of the 
 basis for its approval.
 (10) Until June 30, 1976, the responsible agency shall not 
grant any approval required by law which has the practical 
effect of permitting a conversion from the mutual to the stock 
form of organization, including approval of any application 
pending on the date of enactment of this subsection, except 
that this sentence shall not be deemed to limit now or 
hereafter the authority of the responsible agency to grant 
approvals in cases where the responsible agency finds that it 
must act in order to maintain the safety, soundness, and 
stability of an insured depository institution. The responsible 
agency may by rule, regulation, or otherwise and under such 
civil penalties (which shall be cumulative to any other 
remedies) as it may prescribe take whatever action it deems 
necessary or appropriate to implement or enforce this 
subsection.
 (11) Money laundering.--In every case, the 
 responsible agency, shall take into consideration the 
 effectiveness of any insured depository institution 
 involved in the proposed merger transaction in 
 combatting money laundering activities, including in 
 overseas branches.
 (12) The provisions of this subsection do not apply to any 
merger transaction involving a foreign bank if no party to the 
transaction is principally engaged in business in the United 
States.
 (13)(A) Except as provided in subparagraph (B), the 
responsible agency may not approve an application for an 
interstate merger transaction if the resulting insured 
depository institution (including all insured depository 
institutions which are affiliates of the resulting insured 
depository institution), upon consummation of the transaction, 
would control more than 10 percent of the total amount of 
deposits of insured depository institutions in the United 
States.
 [(B) Subparagraph (A) shall not apply to an interstate 
merger transaction that involves 1 or more insured depository 
institutions in default or in danger of default, or with 
respect to which the Corporation provides assistance under 
section 13.]
 (B) Subparagraph (A) shall not apply to an interstate 
merger transaction if--
 (i) such interstate merger transaction involves 1 
 or more insured depository institutions in default or 
 in danger of default and the responsible agency 
 determines, based on clear and convincing evidence, 
 that consummation of the proposed interstate merger 
 transaction is necessary to prevent significant 
 economic disruption or significant adverse effects on 
 financial stability, and the Corporation has not 
 received any qualified bid from a company that is not 
 subject to the prohibition in subparagraph (A); or
 (ii) the Corporation provides assistance under 
 section 13 to facilitate such interstate merger 
 transaction and the responsible agency determines, 
 based on clear and convincing evidence, that 
 consummation of the proposed interstate merger 
 transaction is necessary to prevent significant 
 economic disruption or significant adverse effects on 
 financial stability, and the Corporation has not 
 received any qualified bid from a company that is not 
 subject to the prohibition in subparagraph (A).
 (C) In this paragraph--
 (i) the term ``interstate merger transaction'' 
 means a merger transaction involving 2 or more insured 
 depository institutions that have different home States 
 and that are not affiliates; [and]
 (ii) the term ``home State'' means--
 (I) with respect to a national bank, the 
 State in which the main office of the bank is 
 located;
 (II) with respect to a State bank or State 
 savings association, the State by which the 
 State bank or State savings association is 
 chartered; and
 (III) with respect to a Federal savings 
 association, the State in which the home office 
 (as defined by the regulations of the Director 
 of the Office of Thrift Supervision, or, on and 
 after the transfer date, the Comptroller of the 
 Currency) of the Federal savings association is 
 located[.];
 (iii) the term ``qualified bid'' means an 
 application, proposed application, or bid from a 
 company where--
 (I) if applicable, the company, any 
 affiliate insured depository institution, and 
 any affiliate depository institution holding 
 company is well capitalized and well managed, 
 as of the date of the application, proposed 
 application, or bid; and
 (II) upon consummation of the transaction, 
 the resulting insured depository institution is 
 well capitalized;
 (iv) the term ``well capitalized''--
 (I) with respect to an insured depository 
 institution, has the meaning given such term in 
 section 38(b) (12 U.S.C. 1831o(b));
 (II) with respect to a bank holding 
 company, has the meaning given such term in 
 section 2(o)(1)(B) of the Bank Holding Company 
 Act of 1956 (12 U.S.C. 1841(o)(1)(B));
 (III) with respect to a savings and loan 
 holding company, has the meaning given such 
 term in section 238.2 of title 12, Code of 
 Federal Regulations; and
 (IV) with respect to a company that is not 
 an insured depository institution, bank holding 
 company, or savings and loan holding company, 
 means maintaining equity capital that the 
 Corporation determines is commensurate with the 
 capital maintained by an insured depository 
 institution that is well capitalized; and
 (v) the term ``well managed'' has the meaning given 
 such term in section 2(o)(9) of the Bank Holding 
 Company Act of 1956 (12 U.S.C. 1841(o)(9)).
 (d)(1) No State nonmember insured bank shall establish and 
operate any new domestic branch unless it shall have the prior 
written consent of the Corporation, and no State nonmember 
insured bank shall move its main office or any such branch from 
one location to another without such consent. No foreign bank 
may move any insured branch from one location to another 
without such consent. The factors to be considered in granting 
or withholding the consent of the Corporation under this 
subsection shall be those enumerated in section 6 of this Act.
 (2) No State nonmember insured bank shall establish or 
operate any foreign branch, except with the prior written 
consent of the Corporation and upon such conditions and 
pursuant to such regulations as the Corporation may prescribe 
from time to time.
 (3) Exclusive authority for additional branches.--
 (A) In general.--Effective June 1, 1997, a 
 State nonmember bank may not acquire, 
 establish, or operate a branch in any State 
 other than the bank's home State (as defined in 
 section 44(f)(4)) or a State in which the bank 
 already has a branch unless the acquisition, 
 establishment, or operation of a branch in such 
 State by a State nonmember bank is authorized 
 under this subsection or section 13(f), 13(k), 
 or 44.
 (B) Retention of branches.--In the case of 
 a State nonmember bank which relocates the main 
 office of such bank from 1 State to another 
 State after May 31, 1997, the bank may retain 
 and operate branches within the State which was 
 the bank's home State (as defined in section 
 44(f)(4)) before the relocation of such office 
 only to the extent the bank would be 
 authorized, under this section or any other 
 provision of law referred to in subparagraph 
 (A), to acquire, establish, or commence to 
 operate a branch in such State if--
 (i) the bank had no branches in 
 such State; or
 (ii) the branch resulted from--
 (I) an interstate merger 
 transaction approved pursuant 
 to section 44; or
 (II) a transaction after 
 May 31, 1997, pursuant to which 
 the bank received assistance 
 from the Corporation under 
 section 13(c).
 (4) State ``opt-in'' election to permit interstate 
 branching through de novo branches.--
 (A) In general.--Subject to subparagraph 
 (B), the Corporation may approve an application 
 by an insured State nonmember bank to establish 
 and operate a de novo branch in a State (other 
 than the bank's home State) in which the bank 
 does not maintain a branch if--
 (i) the law of the State in which 
 the branch is located, or is to be 
 located, would permit establishment of 
 the branch, if the bank were a State 
 bank chartered by such State; and
 (ii) the conditions established in, 
 or made applicable to this paragraph 
 by, subparagraph (B) are met.
 (B) Conditions on establishment and 
 operation of interstate branch.--
 (i) Establishment.--An application 
 by an insured State nonmember bank to 
 establish and operate a de novo branch 
 in a host State shall be subject to the 
 same requirements and conditions to 
 which an application for a merger 
 transaction is subject under paragraphs 
 (1), (3), and (4) of section 44(b).
 (ii) Operation.--Subsections (c) 
 and (d)(2) of section 44 shall apply 
 with respect to each branch of an 
 insured State nonmember bank which is 
 established and operated pursuant to an 
 application approved under this 
 paragraph in the same manner and to the 
 same extent such provisions of such 
 section apply to a branch of a State 
 bank which resulted from a merger 
 transaction under such section 44.
 (C) De novo branch defined.--For purposes 
 of this paragraph, the term ``de novo branch'' 
 means a branch of a State bank which--
 (i) is originally established by 
 the State bank as 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 
 insured depository institution; 
 or
 (II) the conversion, 
 merger, or consolidation of any 
 such institution or branch.
 (D) Home state defined.--The term ``home 
 State'' means the State by which a State bank 
 is chartered.
 (E) Host state defined.--The term ``host 
 State'' means, with respect to a bank, a State, 
 other than the home State of the bank, in which 
 the bank maintains, or seeks to establish and 
 maintain, a branch.
 (e) The Corporation may require any insured depository 
institution to provide protection and indemnity against 
burglary, defalcation, and other similar insurable losses. 
Whenever any insured depository institution refuses to comply 
with any such requirement the Corporation may contract for such 
protection and indemnity and add the cost thereof to the 
assessment otherwise payable by such bank.
 (f) Whenever any insured depository institution (except a 
national bank), after written notice of the recommendations of 
the Corporation based on a report of examination of such 
insured depository institution by an examiner of the 
Corporation, shall fail to comply with such recommendations 
within one hundred and twenty days after such notice, the 
Corporation shall have the power, and is hereby authorized, to 
publish only such part of such report of examination as relates 
to any recommendation not complied with: Provided, That notice 
of intention to make such publication shall be given to the 
insured depository institution at least ninety days before such 
publication is made.
 (h) Penalty for Failure to Timely Pay Assessments.--
 (1) In general.--Subject to paragraph (3), any 
 insured depository institution which fails or refuses 
 to pay any assessment shall be subject to a penalty in 
 an amount of not more than 1 percent of the amount of 
 the assessment due for each day that such violation 
 continues.
 (2) Exception in case of dispute.--Paragraph (1) 
 shall not apply if--
 (A) the failure to pay an assessment is due 
 to a dispute between the insured depository 
 institution and the Corporation over the amount 
 of such assessment; and
 (B) the insured depository institution 
 deposits security satisfactory to the 
 Corporation for payment upon final 
 determination of the issue.
 (3) Special rule for small assessment amounts.--If 
 the amount of the assessment which an insured 
 depository institution fails or refuses to pay is less 
 than $10,000 at the time of such failure or refusal, 
 the amount of any penalty to which such institution is 
 subject under paragraph (1) shall not exceed $100 for 
 each day that such violation continues.
 (4) Authority to modify or remit penalty.--The 
 Corporation, in the sole discretion of the Corporation, 
 may compromise, modify or remit any penalty which the 
 Corporation may assess or has already assessed under 
 paragraph (1) upon a finding that good cause prevented 
 the timely payment of an assessment.
 (i)(1) No insured State nonmember bank shall, without the 
prior consent of the Corporation, reduce the amount or retire 
any part of its common or preferred capital stock, or retire 
any part of its capital notes or debentures.
 (2) No insured Federal depository institution shall convert 
into an insured State depository institution if its capital 
stock or its surplus will be less than the capital stock or 
surplus, respectively, of the converting bank at the time of 
the shareholder's meeting approving such conversion, without 
the prior written consent of--
 (A) the Board of Governors of the Federal Reserve 
 System if the resulting bank is to be a State member 
 bank;
 (B) the Corporation if the resulting bank is to be 
 a State nonmember insured bank; and
 (C) the Corporation if the resulting institution is 
 to be an insured State savings association.
 (3) Without the prior written consent of the Corporation, 
no insured depository institution shall convert into a 
noninsured bank or institution.
 (4) In granting or withholding consent under this 
subsection, the responsible agency shall consider--
 (A) the financial history and condition of the 
 bank,
 (B) the adequacy of its capital structure,
 (C) its future earnings prospects,
 (D) the general character and fitness of its 
 management,
 (E) the convenience and needs of the community to 
 be served, and
 (F) whether or not its corporate powers are 
 consistent with the purposes of this Act.
 (j) Restrictions on Transactions With Affiliates and 
Insiders.--
 (1) Transactions with affiliates.--
 (A) In general.--Sections 23A and 23B of 
 the Federal Reserve Act shall apply with 
 respect to every nonmember insured bank in the 
 same manner and to the same extent as if the 
 nonmember insured bank were a member bank.
 (B) Affiliate defined.--For the purpose of 
 subparagraph (A), any company that would be an 
 affiliate (as defined in sections 23A and 23B) 
 of a nonmember insured bank if the nonmember 
 insured bank were a member bank shall be deemed 
 to be an affiliate of that nonmember insured 
 bank.
 (2) Extensions of credit to officers, directors, 
 and principal shareholders.--Subsections (g) and (h) of 
 section 22 of the Federal Reserve Act shall apply with 
 respect to every nonmember insured bank in the same 
 manner and to the same extent as if the nonmember 
 insured bank were a member bank.
 (3) Avoiding extraterritorial application to 
 foreign banks.--
 (A) Transactions with affiliates.--
 Paragraph (1) shall not apply with respect to a 
 foreign bank solely because the foreign bank 
 has an insured branch.
 (B) Extensions of credit to officers, 
 directors, and principal shareholders.--
 Paragraph (2) shall not apply with respect to a 
 foreign bank solely because the foreign bank 
 has an insured branch, but shall apply with 
 respect to the insured branch.
 (C) Foreign bank defined.--For purposes of 
 this paragraph, the term ``foreign bank'' has 
 the same meaning as in section 1(b)(7) of the 
 International Banking Act of 1978.
 (k) Authority To Regulate or Prohibit Certain Forms of 
Benefits to Institution-Affiliated Parties.--
 (1) Golden parachutes and indemnification 
 payments.--The Corporation may prohibit or limit, by 
 regulation or order, any golden parachute payment or 
 indemnification payment.
 (2) Factors to be taken into account.--The 
 Corporation shall prescribe, by regulation, the factors 
 to be considered by the Corporation in taking any 
 action pursuant to paragraph (1) which may include such 
 factors as the following:
 (A) Whether there is a reasonable basis to 
 believe that the institution-affiliated party 
 has committed any fraudulent act or omission, 
 breach of trust or fiduciary duty, or insider 
 abuse with regard to the depository institution 
 or covered company that has had a material 
 affect on the financial condition of the 
 institution.
 (B) Whether there is a reasonable basis to 
 believe that the institution-affiliated party 
 is substantially responsible for--
 (i) the insolvency of the 
 depository institution or covered 
 company;
 (ii) the appointment of a 
 conservator or receiver for the 
 depository institution; or
 (iii) the troubled condition of the 
 depository institution (as defined in 
 the regulations prescribed pursuant to 
 section 32(f)).
 (C) Whether there is a reasonable basis to 
 believe that the institution-affiliated party 
 has materially violated any applicable Federal 
 or State banking law or regulation that has had 
 a material affect on the financial condition of 
 the institution.
 (D) Whether there is a reasonable basis to 
 believe that the institution-affiliated party 
 has violated or conspired to violate--
 (i) section 215, 656, 657, 1005, 
 1006, 1007, 1014, 1032, or 1344 of 
 title 18, United States Code; or
 (ii) section 1341 or 1343 of such 
 title affecting a federally insured 
 financial institution.
 (E) Whether the institution-affiliated 
 party was in a position of managerial or 
 fiduciary responsibility.
 (F) The length of time the party was 
 affiliated with the insured depository 
 institution or covered company, and the degree 
 to which--
 (i) the payment reasonably reflects 
 compensation earned over the period of 
 employment; and
 (ii) the compensation involved 
 represents a reasonable payment for 
 services rendered.
 (3) Certain payments prohibited.--No insured 
 depository institution or covered company may prepay 
 the salary or any liability or legal expense of any 
 institution-affiliated party if such payment is made--
 (A) in contemplation of the insolvency of 
 such institution or covered company or after 
 the commission of an act of insolvency; and
 (B) with a view to, or has the result of--
 (i) preventing the proper 
 application of the assets of the 
 institution to creditors; or
 (ii) preferring one creditor over 
 another.
 (4) Golden parachute payment defined.--For purposes 
 of this subsection--
 (A) In general.--The term ``golden 
 parachute payment'' means any payment (or any 
 agreement to make any payment) in the nature of 
 compensation by any insured depository 
 institution or covered company for the benefit 
 of any institution-affiliated party pursuant to 
 an obligation of such institution or covered 
 company that--
 (i) is contingent on the 
 termination of such party's affiliation 
 with the institution or covered 
 company; and
 (ii) is received on or after the 
 date on which--
 (I) the insured depository 
 institution or covered company, 
 or any insured depository 
 institution subsidiary of such 
 covered company, is insolvent;
 (II) any conservator or 
 receiver is appointed for such 
 institution;
 (III) the institution's 
 appropriate Federal banking 
 agency determines that the 
 insured depository institution 
 is in a troubled condition (as 
 defined in the regulations 
 prescribed pursuant to section 
 32(f));
 (IV) the insured depository 
 institution has been assigned a 
 composite rating by the 
 appropriate Federal banking 
 agency or the Corporation of 4 
 or 5 under the Uniform 
 Financial Institutions Rating 
 System; or
 (V) the insured depository 
 institution is subject to a 
 proceeding initiated by the 
 Corporation to terminate or 
 suspend deposit insurance for 
 such institution.
 (B) Certain payments in contemplation of an 
 event.--Any payment which would be a golden 
 parachute payment but for the fact that such 
 payment was made before the date referred to in 
 subparagraph (A)(ii) shall be treated as a 
 golden parachute payment if the payment was 
 made in contemplation of the occurrence of an 
 event described in any subclause of such 
 subparagraph.
 (C) Certain payments not included.--The 
 term ``golden parachute payment'' shall not 
 include--
 (i) any payment made pursuant to a 
 retirement plan which is qualified (or 
 is intended to be qualified) under 
 section 401 of the Internal Revenue 
 Code of 1986 or other nondiscriminatory 
 benefit plan;
 (ii) any payment made pursuant to a 
 bona fide deferred compensation plan or 
 arrangement which the Board determines, 
 by regulation or order, to be 
 permissible; or
 (iii) any payment made by reason of 
 the death or disability of an 
 institution-affiliated party.
 (5) Other definitions.--For purposes of this 
 subsection--
 (A) Indemnification payment.--Subject to 
 paragraph (6), the term ``indemnification 
 payment'' means any payment (or any agreement 
 to make any payment) by any insured depository 
 institution or covered company for the benefit 
 of any person who is or was an institution-
 affiliated party, to pay or reimburse such 
 person for any liability or legal expense with 
 regard to any administrative proceeding or 
 civil action instituted by the appropriate 
 Federal banking agency which results in a final 
 order under which such person--
 (i) is assessed a civil money 
 penalty;
 (ii) is removed or prohibited from 
 participating in conduct of the affairs 
 of the insured depository institution; 
 or
 (iii) is required to take any 
 affirmative action described in section 
 8(b)(6) with respect to such 
 institution.
 (B) Liability or legal expense.--The term 
 ``liability or legal expense'' means--
 (i) any legal or other professional 
 expense incurred in connection with any 
 claim, proceeding, or action;
 (ii) the amount of, and any cost 
 incurred in connection with, any 
 settlement of any claim, proceeding, or 
 action; and
 (iii) the amount of, and any cost 
 incurred in connection with, any 
 judgment or penalty imposed with 
 respect to any claim, proceeding, or 
 action.
 (C) Payment.--The term ``payment'' 
 includes--
 (i) any direct or indirect transfer 
 of any funds or any asset; and
 (ii) any segregation of any funds 
 or assets for the purpose of making, or 
 pursuant to an agreement to make, any 
 payment after the date on which such 
 funds or assets are segregated, without 
 regard to whether the obligation to 
 make such payment is contingent on--
 (I) the determination, 
 after such date, of the 
 liability for the payment of 
 such amount; or
 (II) the liquidation, after 
 such date, of the amount of 
 such payment.
 (D) Covered company.--The term ``covered 
 company'' means any depository institution 
 holding company (including any company required 
 to file a report under section 4(f)(6) of the 
 Bank Holding Company Act of 1956), or any other 
 company that controls an insured depository 
 institution.
 (6) Certain commercial insurance coverage not 
 treated as covered benefit payment.--No provision of 
 this subsection shall be construed as prohibiting any 
 insured depository institution or covered company, from 
 purchasing any commercial insurance policy or fidelity 
 bond, except that, subject to any requirement described 
 in paragraph (5)(A)(iii), such insurance policy or bond 
 shall not cover any legal or liability expense of the 
 institution or covered company which is described in 
 paragraph (5)(A).
 (l) When authorized by State law, a State nonmember insured 
bank may, but only with the prior written consent of the 
Corporation and upon such conditions and under such regulations 
as the Corporation may prescribe from time to time, acquire and 
hold, directly or indirectly, stock or other evidences of 
ownership in one or more banks or other entities organized 
under the law of a foreign country or a dependency or insular 
possession of the United States and not engaged, directly or 
indirectly, in any activity in the United States except as, in 
the judgment of the Board of Directors, shall be incidental to 
the international or foreign business of such foreign bank or 
entity; and, notwithstanding the provisions of subsection (j) 
of this section, such State nonmember insured bank may, as to 
such foreign bank or entity, engage in transactions that would 
otherwise be covered thereby, but only in the manner and within 
the limit prescribed by the Corporation by general or specific 
regulation or ruling.
 (m) Activities of Savings Associations and Their 
Subsidiaries.--
 (1) Procedures.--When an insured savings 
 association establishes or acquires a subsidiary or 
 when an insured savings association elects to conduct 
 any new activity through a subsidiary that the insured 
 savings association controls, the insured savings 
 association--
 (A) shall notify the Corporation or the 
 Comptroller of the Currency, as appropriate, 
 not less than 30 days prior to the 
 establishment, or acquisition, of any such 
 subsidiary, and not less than 30 days prior to 
 the commencement of any such activity, and in 
 either case shall provide at that time such 
 information as each such agency may, by 
 regulation, require; and
 (B) shall conduct the activities of the 
 subsidiary in accordance with regulations of 
 the Comptroller of the Currency and orders of 
 the Corporation and the Comptroller of the 
 Currency.
 (2) Enforcement powers.--With respect to any 
 subsidiary of an insured savings association:
 (A) the Corporation and the Comptroller of 
 the Currency, as appropriate, shall each have, 
 with respect to such subsidiary, the respective 
 powers that each has with respect to the 
 insured savings association pursuant to this 
 section or section 8; and
 (B) the Corporation or the Comptroller of 
 the Currency, as appropriate, may determine, 
 after notice and opportunity for hearing, that 
 the continuation by the insured savings 
 association of its ownership or control of, or 
 its relationship to, the subsidiary--
 (i) constitutes a serious risk to 
 the safety, soundness, or stability of 
 the insured savings association, or
 (ii) is inconsistent with sound 
 banking principles or with the purposes 
 of this Act.
 Upon making any such determination, the 
 Corporation or the Office of the Comptroller of 
 the Currency, as appropriate, shall have 
 authority to order the insured savings 
 association to divest itself of control of the 
 subsidiary. The Corporation or the Comptroller 
 of the Currency, as appropriate, may take any 
 other corrective measures with respect to the 
 subsidiary, including the authority to require 
 the subsidiary to terminate the activities or 
 operations posing such risks, as the 
 Corporation or the Comptroller of the Currency, 
 respectively, may deem appropriate.
 (3) Activities incompatible with deposit 
 insurance.--
 (A) In general.--The Corporation may 
 determine by regulation or order that any 
 specific activity poses a serious threat to the 
 Deposit Insurance Fund. Prior to adopting any 
 such regulation, the Corporation shall, in the 
 case of a Federal savings association, consult 
 with the Comptroller of the Currency and shall 
 provide appropriate State supervisors the 
 opportunity to comment thereon, and the 
 Corporation shall specifically take such 
 comments into consideration. Any such 
 regulation shall be issued in accordance with 
 section 553 of title 5, United States Code. If 
 the Board of Directors makes such a 
 determination with respect to an activity, the 
 Corporation shall have authority to order that 
 no savings association may engage in the 
 activity directly.
 (B) Authority of comptroller of the 
 currency.--This section does not limit the 
 authority of the Comptroller of the Currency to 
 issue regulations to promote safety and 
 soundness, or to enforce compliance as to 
 Federal savings associations with other 
 applicable laws.
 (C) Additional authority of fdic to prevent 
 serious risks to insurance fund.--
 Notwithstanding subparagraph (A), the 
 Corporation may prescribe and enforce such 
 regulations and issue such orders as the 
 Corporation determines to be necessary to 
 prevent actions or practices of savings 
 associations that pose a serious threat to the 
 Deposit Insurance Fund.
 (4) ``Subsidiary'' defined.--As used in this 
 subsection, the term ``subsidiary'' does not include an 
 insured depository institution.
 (5) Applicability to certain savings banks.--
 Subparagraphs (A) and (B) of paragraph (1) of this 
 subsection do not apply to--
 (A) any Federal savings bank that was 
 chartered prior to October 15, 1982, as a 
 savings bank under State law, or
 (B) a savings association that acquired its 
 principal assets from an institution that was 
 chartered prior to October 15, 1982, as a 
 savings bank under State law.
 (n) Calculation of Capital.--No appropriate Federal banking 
agency shall allow any insured depository institution to 
include an unidentifiable intangible asset in its calculation 
of compliance with the appropriate capital standard, if such 
unidentifiable intangible asset was acquired after April 12, 
1989, except to the extent permitted under section 5(t) of the 
Home Owners' Loan Act.
 (o) Real Estate Lending.--
 (1) Uniform regulations.--Not more than 9 months 
 after the date of enactment of the Federal Deposit 
 Insurance Corporation Improvement Act of 1991, each 
 appropriate Federal banking agency shall adopt uniform 
 regulations prescribing standards for extensions of 
 credit that are--
 (A) secured by liens on interests in real 
 estate; or
 (B) made for the purpose of financing the 
 construction of a building or other 
 improvements to real estate.
 (2) Standards.--
 (A) Criteria.--In prescribing standards 
 under paragraph (1), the agencies shall 
 consider--
 (i) the risk posed to the Deposit 
 Insurance Fund by such extensions of 
 credit;
 (ii) the need for safe and sound 
 operation of insured depository 
 institutions; and
 (iii) the availability of credit.
 (B) Variations permitted.--In prescribing 
 standards under paragraph (1), the appropriate 
 Federal banking agencies may differentiate 
 among types of loans--
 (i) as may be required by Federal 
 statute;
 (ii) as may be warranted, based on 
 the risk to the Deposit Insurance Fund; 
 or
 (iii) as may be warranted, based on 
 the safety and soundness of the 
 institutions.
 (3) Loan evaluation standard.--No appropriate 
 Federal banking agency shall adversely evaluate an 
 investment or a loan made by an insured depository 
 institution, or consider such a loan to be 
 nonperforming, solely because the loan is made to or 
 the investment is in commercial, residential, or 
 industrial property, unless such investment or loan may 
 affect the institution's safety and soundness.
 (4) Effective date.--The regulations adopted under 
 paragraph (1) shall become effective not later than 15 
 months after the date of enactment of the Federal 
 Deposit Insurance Corporation Improvement Act of 1991. 
 Such regulations shall continue in effect except as 
 uniformly amended by the appropriate Federal banking 
 agencies, acting in concert.
 (p) Periodic Review of Capital Standards.--Each appropriate 
Federal banking agency shall, in consultation with the other 
Federal banking agencies, biennially review its capital 
standards for insured depository institutions to determine 
whether those standards require sufficient capital to 
facilitate prompt corrective action to prevent or minimize loss 
to the Deposit Insurance Fund, consistent with section 38.
 (q) Sovereign Risk.--Section 25C of the Federal Reserve Act 
shall apply to every nonmember insured bank in the same manner 
and to the same extent as if the nonmember insured bank were a 
member bank.
 (r) Subsidiary Depository Institutions as Agents for 
Certain Affiliates.--
 (1) In general.--Any bank subsidiary of a bank 
 holding company may receive deposits, renew time 
 deposits, close loans, service loans, and receive 
 payments on loans and other obligations as an agent for 
 a depository institution affiliate.
 (2) Bank acting as agent is not a branch.--
 Notwithstanding any other provision of law, a bank 
 acting as an agent in accordance with paragraph (1) for 
 a depository institution affiliate shall not be 
 considered to be a branch of the affiliate.
 (3) Prohibitions on activities.--A depository 
 institution may not--
 (A) conduct any activity as an agent under 
 paragraph (1) or (6) which such institution is 
 prohibited from conducting as a principal under 
 any applicable Federal or State law; or
 (B) as a principal, have an agent conduct 
 any activity under paragraph (1) or (6) which 
 the institution is prohibited from conducting 
 under any applicable Federal or State law.
 (4) Existing authority not affected.--No provision 
 of this subsection shall be construed as affecting--
 (A) the authority of any depository 
 institution to act as an agent on behalf of any 
 other depository institution under any other 
 provision of law; or
 (B) whether a depository institution which 
 conducts any activity as an agent on behalf of 
 any other depository institution under any 
 other provision of law shall be considered to 
 be a branch of such other institution.
 (5) Agency relationship required to be consistent 
 with safe and sound banking practices.--An agency 
 relationship between depository institutions under 
 paragraph (1) or (6) shall be on terms that are 
 consistent with safe and sound banking practices and 
 all applicable regulations of any appropriate Federal 
 banking agency.
 (6) Affiliated insured savings associations.--An 
 insured savings association which was an affiliate of a 
 bank on July 1, 1994, may conduct activities as an 
 agent on behalf of such bank in the same manner as an 
 insured bank affiliate of such bank may act as agent 
 for such bank under this subsection to the extent such 
 activities are conducted only in--
 (A) any State in which--
 (i) the bank is not prohibited from 
 operating a branch under any provision 
 of Federal or State law; and
 (ii) the savings association 
 maintained an office or branch and 
 conducted business as of July 1, 1994; 
 or
 (B) any State in which--
 (i) the bank is not expressly 
 prohibited from operating a branch 
 under a State law described in section 
 44(a)(2); and
 (ii) the savings association 
 maintained a main office and conducted 
 business as of July 1, 1994.
 (s) Prohibition on Certain Affiliations.--
 (1) In general.--No depository institution may be 
 an affiliate of, be sponsored by, or accept financial 
 support, directly or indirectly, from any Government-
 sponsored enterprise.
 (2) Exception for members of a federal home loan 
 bank.--Paragraph (1) shall not apply with respect to 
 the membership of a depository institution in a Federal 
 home loan bank.
 (3) Routine business financing.--Paragraph (1) 
 shall not apply with respect to advances or other forms 
 of financial assistance provided by a Government-
 sponsored enterprise pursuant to the statutes governing 
 such enterprise.
 (4) Student loans.--
 (A) In general.--This subsection shall not 
 apply to any arrangement between the Holding 
 Company (or any subsidiary of the Holding 
 Company other than the Student Loan Marketing 
 Association) and a depository institution, if 
 the Secretary approves the affiliation and 
 determines that--
 (i) the reorganization of such 
 Association in accordance with section 
 440 of the Higher Education Act of 
 1965, as amended, will not be adversely 
 affected by the arrangement;
 (ii) the dissolution of the 
 Association pursuant to such 
 reorganization will occur before the 
 end of the 2-year period beginning on 
 the date on which such arrangement is 
 consummated or on such earlier date as 
 the Secretary deems appropriate: 
 Provided, That the Secretary may extend 
 this period for not more than 1 year at 
 a time if the Secretary determines that 
 such extension is in the public 
 interest and is appropriate to achieve 
 an orderly reorganization of the 
 Association or to prevent market 
 disruptions in connection with such 
 reorganization, but no such extensions 
 shall in the aggregate exceed 2 years;
 (iii) the Association will not 
 purchase or extend credit to, or 
 guarantee or provide credit enhancement 
 to, any obligation of the depository 
 institution;
 (iv) the operations of the 
 Association will be separate from the 
 operations of the depository 
 institution; and
 (v) until the ``dissolution date'' 
 (as that term is defined in section 440 
 of the Higher Education Act of 1965, as 
 amended) has occurred, such depository 
 institution will not use the trade name 
 or service mark ``Sallie Mae'' in 
 connection with any product or service 
 it offers if the appropriate Federal 
 banking agency for such depository 
 institution determines that--
 (I) the depository 
 institution is the only 
 institution offering such 
 product or service using the 
 ``Sallie Mae'' name; and
 (II) such use would result 
 in the depository institution 
 having an unfair competitive 
 advantage over other depository 
 institutions.
 (B) Terms and conditions.--In approving any 
 arrangement referred to in subparagraph (A) the 
 Secretary may impose any terms and conditions 
 on such an arrangement that the Secretary 
 considers appropriate, including--
 (i) imposing additional 
 restrictions on the issuance of debt 
 obligations by the Association; or
 (ii) restricting the use of 
 proceeds from the issuance of such 
 debt.
 (C) Additional limitations.--In the event 
 that the Holding Company (or any subsidiary of 
 the Holding Company) enters into such an 
 arrangement, the value of the Association's 
 ``investment portfolio'' shall not at any time 
 exceed the lesser of--
 (i) the value of such portfolio on 
 the date of the enactment of this 
 subsection; or
 (ii) the value of such portfolio on 
 the date such an arrangement is 
 consummated. The term ``investment 
 portfolio'' shall mean all investments 
 shown on the consolidated balance sheet 
 of the Association other than--
 (I) any instrument or 
 assets described in section 
 439(d) of the Higher Education 
 Act of 1965, as such section 
 existed on the day before the 
 date of the repeal of such 
 section;
 (II) any direct noncallable 
 obligations of the United 
 States or any agency thereof 
 for which the full faith and 
 credit of the United States is 
 pledged; or
 (III) cash or cash 
 equivalents.
 (D) Enforcement.--The terms and conditions 
 imposed under subparagraph (B) may be enforced 
 by the Secretary in accordance with section 440 
 of the Higher Education Act of 1965.
 (E) Definitions.--For purposes of this 
 paragraph, the following definition shall 
 apply--
 (i) Association; holding company.--
 Notwithstanding any provision in 
 section 3, the terms ``Association'' 
 and ``Holding Company'' have the same 
 meanings as in section 440(i) of the 
 Higher Education Act of 1965.
 (ii) Secretary.--The term 
 ``Secretary'' means the Secretary of 
 the Treasury.
 (5) Government-sponsored enterprise defined.--For 
 purposes of this subsection, the term ``Government-
 sponsored enterprise'' has the meaning given to such 
 term in section 1404(e)(1)(A) of the Financial 
 Institutions Reform, Recovery, and Enforcement Act of 
 1989.
 (t) Recordkeeping Requirements.--
 (1) Requirements.--Each appropriate Federal banking 
 agency, after consultation with and consideration of 
 the views of the Commission, shall establish 
 recordkeeping requirements for banks relying on 
 exceptions contained in paragraphs (4) and (5) of 
 section 3(a) of the Securities Exchange Act of 1934. 
 Such recordkeeping requirements shall be sufficient to 
 demonstrate compliance with the terms of such 
 exceptions and be designed to facilitate compliance 
 with such exceptions.
 (2) Availability to commission; confidentiality.--
 Each appropriate Federal banking agency shall make any 
 information required under paragraph (1) available to 
 the Commission upon request. Notwithstanding any other 
 provision of law, the Commission shall not be compelled 
 to disclose any such information. Nothing in this 
 paragraph shall authorize the Commission to withhold 
 information from Congress, or prevent the Commission 
 from complying with a request for information from any 
 other Federal department or agency or any self-
 regulatory organization requesting the information for 
 purposes within the scope of its jurisdiction, or 
 complying with an order of a court of the United States 
 in an action brought by the United States or the 
 Commission. For purposes of section 552 of title 5, 
 United States Code, this paragraph shall be considered 
 a statute described in subsection (b)(3)(B) of such 
 section 552.
 (3) Definition.--As used in this subsection the 
 term ``Commission'' means the Securities and Exchange 
 Commission.
 (u) Limitation on Claims.--
 (1) In general.--No person may bring a claim 
 against any Federal banking agency (including in its 
 capacity as conservator or receiver) for the return of 
 assets of an affiliate or controlling shareholder of 
 the insured depository institution transferred to, or 
 for the benefit of, an insured depository institution 
 by such affiliate or controlling shareholder of the 
 insured depository institution, or a claim against such 
 Federal banking agency for monetary damages or other 
 legal or equitable relief in connection with such 
 transfer, if at the time of the transfer--
 (A) the insured depository institution is 
 subject to any direction issued in writing by a 
 Federal banking agency to increase its capital; 
 and
 (B) for that portion of the transfer that 
 is made by an entity covered by section 5(g) of 
 the Bank Holding Company Act of 1956 or section 
 45 of this Act, the Federal banking agency has 
 followed the procedure set forth in such 
 section.
 (2) Definition of claim.--For purposes of paragraph 
 (1), the term ``claim''--
 (A) means a cause of action based on 
 Federal or State law that--
 (i) provides for the avoidance of 
 preferential or fraudulent transfers or 
 conveyances; or
 (ii) provides similar remedies for 
 preferential or fraudulent transfers or 
 conveyances; and
 (B) does not include any claim based on 
 actual intent to hinder, delay, or defraud 
 pursuant to such a fraudulent transfer or 
 conveyance law.
 (v) Loans by Insured Institutions on Their Own Stock.--
 (1) General prohibition.--No insured depository 
 institution may make any loan or discount on the 
 security of the shares of its own capital stock.
 (2) Exclusion.--For purposes of this subsection, an 
 insured depository institution shall not be deemed to 
 be making a loan or discount on the security of the 
 shares of its own capital stock if it acquires the 
 stock to prevent loss upon a debt previously contracted 
 for in good faith.
 (w) Written Employment References May Contain Suspicions of 
Involvement in Illegal Activity.--
 (1) Authority to disclose information.--
 Notwithstanding any other provision of law, any insured 
 depository institution, and any director, officer, 
 employee, or agent of such institution, may disclose in 
 any written employment reference relating to a current 
 or former institution-affiliated party of such 
 institution which is provided to another insured 
 depository institution in response to a request from 
 such other institution, information concerning the 
 possible involvement of such institution-affiliated 
 party in potentially unlawful activity.
 (2) Information not required.--Nothing in paragraph 
 (1) shall be construed, by itself, to create any 
 affirmative duty to include any information described 
 in paragraph (1) in any employment reference referred 
 to in paragraph (1).
 (3) Malicious intent.--Notwithstanding any other 
 provision of this subsection, voluntary disclosure made 
 by an insured depository institution, and any director, 
 officer, employee, or agent of such institution, under 
 this subsection concerning potentially unlawful 
 activity that is made with malicious intent, shall not 
 be shielded from liability from the person identified 
 in the disclosure.
 (4) Definition.--For purposes of this subsection, 
 the term ``insured depository institution'' includes 
 any uninsured branch or agency of a foreign bank.
 (x) Privileges Not Affected by Disclosure to Banking Agency 
or Supervisor.--
 (1) In general.--The submission by any person of 
 any information to the Bureau of Consumer Financial 
 Protection, any Federal banking agency, State bank 
 supervisor, or foreign banking authority for any 
 purpose in the course of any supervisory or regulatory 
 process of such Bureau, agency, supervisor, or 
 authority shall not be construed as waiving, 
 destroying, or otherwise affecting any privilege such 
 person may claim with respect to such information under 
 Federal or State law as to any person or entity other 
 than such Bureau, agency, supervisor, or authority.
 (2) Rule of construction.--No provision of 
 paragraph (1) may be construed as implying or 
 establishing that--
 (A) any person waives any privilege 
 applicable to information that is submitted or 
 transferred under any circumstance to which 
 paragraph (1) does not apply; or
 (B) any person would waive any privilege 
 applicable to any information by submitting the 
 information to the Bureau of Consumer Financial 
 Protection, any Federal banking agency, State 
 bank supervisor, or foreign banking authority, 
 but for this subsection.
 (y) State Lending Limit Treatment of Derivatives 
Transactions.--An insured State bank may engage in a derivative 
transaction, as defined in section 5200(b)(3) of the Revised 
Statutes of the United States (12 U.S.C. 84(b)(3)), only if the 
law with respect to lending limits of the State in which the 
insured State bank is chartered takes into consideration credit 
exposure to derivative transactions.
 (z) General Prohibition on Sale of Assets.--
 (1) In general.--An insured depository institution 
 may not purchase an asset from, or sell an asset to, an 
 executive officer, director, or principal shareholder 
 of the insured depository institution, or any related 
 interest of such person (as such terms are defined in 
 section 22(h) of Federal Reserve Act), unless--
 (A) the transaction is on market terms; and
 (B) if the transaction represents more than 
 10 percent of the capital stock and surplus of 
 the insured depository institution, the 
 transaction has been approved in advance by a 
 majority of the members of the board of 
 directors of the insured depository institution 
 who do not have an interest in the transaction.
 (2) Rulemaking.--The Board of Governors of the 
 Federal Reserve System may issue such rules as may be 
 necessary to define terms and to carry out the purposes 
 this subsection. Before proposing or adopting a rule 
 under this paragraph, the Board of Governors of the 
 Federal Reserve System shall consult with the 
 Comptroller of the Currency and the Corporation as to 
 the terms of the rule.
 (aa) Treatment of Certain Municipal Obligations.--
 (1) Definitions.--In this subsection--
 (A) the term ``investment grade'', with 
 respect to an obligation, has the meaning given 
 the term in section 1.2 of title 12, Code of 
 Federal Regulations, or any successor thereto;
 (B) the term ``liquid and readily-
 marketable'' has the meaning given the term in 
 section 249.3 of title 12, Code of Federal 
 Regulations, or any successor thereto; and
 (C) the term ``municipal obligation'' means 
 an obligation of--
 (i) a State or any political 
 subdivision thereof; or
 (ii) any agency or instrumentality 
 of a State or any political subdivision 
 thereof.
 (2) Municipal obligations.--For purposes of the 
 final rule entitled ``Liquidity Coverage Ratio: 
 Liquidity Risk Measurement Standards'' (79 Fed. Reg. 
 61439 (October 10, 2014)), the final rule entitled 
 ``Liquidity Coverage Ratio: Treatment of U.S. Municipal 
 Securities as High-Quality Liquid Assets'' (81 Fed. 
 Reg. 21223 (April 11, 2016)), and any other regulation 
 that incorporates a definition of the term ``high-
 quality liquid asset'' or another substantially similar 
 term, the appropriate Federal banking agencies shall 
 treat a municipal obligation as a high-quality liquid 
 asset that is a level 2B liquid asset if that 
 obligation is, as of the date of calculation--
 (A) liquid and readily-marketable; and
 (B) investment grade.

 * * * * * * *

SEC. 44. INTERSTATE BANK MERGERS.
 (a) Approval of Interstate Merger Transactions 
Authorized.--
 (1) In general.--Beginning on June 1, 1997, the 
 responsible agency may approve a merger transaction 
 under section 18(c) between insured banks with 
 different home States, without regard to whether such 
 transaction is prohibited under the law of any State.
 (2) State election to prohibit interstate merger 
 transactions.--
 (A) In general.--Notwithstanding paragraph 
 (1), a merger transaction may not be approved 
 pursuant to paragraph (1) if the transaction 
 involves a bank the home State of which has 
 enacted a law after the date of enactment of 
 the Riegle-Neal Interstate Banking and 
 Branching Efficiency Act of 1994 and before 
 June 1, 1997, that--
 (i) applies equally to all out-of-
 State banks; and
 (ii) expressly prohibits merger 
 transactions involving out-of-State 
 banks.
 (B) No effect on prior approvals of merger 
 transactions.--A law enacted by a State 
 pursuant to subparagraph (A) shall have no 
 effect on merger transactions that were 
 approved before the effective date of such law.
 (3) State election to permit early interstate 
 merger transactions.--
 (A) In general.--A merger transaction may 
 be approved pursuant to paragraph (1) before 
 June 1, 1997, if the home State of each bank 
 involved in the transaction has in effect, as 
 of the date of the approval of such 
 transaction, a law that--
 (i) applies equally to all out-of-
 State banks; and
 (ii) expressly permits interstate 
 merger transactions with all out-of-
 State banks.
 (B) Certain conditions allowed.--A host 
 State may impose conditions on a branch within 
 such State of a bank resulting from an 
 interstate merger transaction if--
 (i) the conditions do not have the 
 effect of discriminating against out-
 of-State banks, out-of-State bank 
 holding companies, or any subsidiary of 
 such bank or company (other than on the 
 basis of a nationwide reciprocal 
 treatment requirement);
 (ii) the imposition of the 
 conditions is not preempted by Federal 
 law; and
 (iii) the conditions do not apply 
 or require performance after May 31, 
 1997.
 (4) Interstate merger transactions involving 
 acquisitions of branches.--
 (A) In general.--An interstate merger 
 transaction may involve the acquisition of a 
 branch of an insured bank without the 
 acquisition of the bank only if the law of the 
 State in which the branch is located permits 
 out-of-State banks to acquire a branch of a 
 bank in such State without acquiring the bank.
 (B) Treatment of branch for purposes of 
 this section.--In the case of an interstate 
 merger transaction which involves the 
 acquisition of a branch of an insured bank 
 without the acquisition of the bank, the branch 
 shall be treated, for purposes of this section, 
 as an insured bank the home State of which is 
 the State in which the branch is located.
 (5) Preservation of state age laws.--
 (A) In general.--The responsible agency may 
 not approve an application pursuant to 
 paragraph (1) that would have the effect of 
 permitting an out-of-State bank or out-of-State 
 bank holding company to acquire a bank in a 
 host State that has not been in existence for 
 the minimum period of time, if any, specified 
 in the statutory law of the host State.
 (B) Special rule for state age laws 
 specifying a period of more than 5 years.--
 Notwithstanding subparagraph (A), the 
 responsible agency may approve a merger 
 transaction pursuant to paragraph (1) involving 
 the acquisition of a bank that has been in 
 existence at least 5 years without regard to 
 any longer minimum period of time specified in 
 a statutory law of the host State.
 (6) Shell banks.--For purposes of this subsection, 
 a bank that has been chartered solely for the purpose 
 of, and does not open for business prior to, acquiring 
 control of, or acquiring all or substantially all of 
 the assets of, an existing bank or branch shall be 
 deemed to have been in existence for the same period of 
 time as the bank or branch to be acquired.
 (b) Provisions Relating to Application and Approval 
Process.--
 (1) Compliance with state filing requirements.--
 (A) In general.--Any bank which files an 
 application for an interstate merger 
 transaction shall--
 (i) comply with the filing 
 requirements of any host State of the 
 bank which will result from such 
 transaction to the extent that the 
 requirement--
 (I) does not have the 
 effect of discriminating 
 against out-of-State banks or 
 out-of-State bank holding 
 companies or subsidiaries of 
 such banks or bank holding 
 companies; and
 (II) is similar in effect 
 to any requirement imposed by 
 the host State on a nonbanking 
 corporation incorporated in 
 another State that engages in 
 business in the host State; and
 (ii) submit a copy of the 
 application to the State bank 
 supervisor of the host State.
 (B) Penalty for failure to comply.--The 
 responsible agency may not approve an 
 application for an interstate merger 
 transaction if the applicant materially fails 
 to comply with subparagraph (A).
 (2) Concentration limits.--
 (A) Nationwide concentration limits.--The 
 responsible agency may not approve an 
 application for an interstate merger 
 transaction if the resulting bank (including 
 all insured depository institutions which are 
 affiliates of the resulting bank), upon 
 consummation of the transaction, would control 
 more than 10 percent of the total amount of 
 deposits of insured depository institutions in 
 the United States.
 (B) Statewide concentration limits other 
 than with respect to initial entries.--The 
 responsible agency may not approve an 
 application for an interstate merger 
 transaction if--
 (i) any bank involved in the 
 transaction (including all insured 
 depository institutions which are 
 affiliates of any such bank) has a 
 branch in any State in which any other 
 bank involved in the transaction has a 
 branch; and
 (ii) the resulting bank (including 
 all insured depository institutions 
 which would be affiliates of the 
 resulting bank), upon consummation of 
 the transaction, would control 30 
 percent or more of the total amount of 
 deposits of insured depository 
 institutions in any such State.
 (C) Effectiveness of state deposit caps.--
 No provision of this subsection shall be 
 construed as affecting the authority of any 
 State to limit, by statute, regulation, or 
 order, the percentage of the total amount of 
 deposits of insured depository institutions in 
 the State which may be held or controlled by 
 any bank or bank holding company (including all 
 insured depository institutions which are 
 affiliates of the bank or bank holding company) 
 to the extent the application of such 
 limitation does not discriminate against out-
 of-State banks, out-of-State bank holding 
 companies, or subsidiaries of such banks or 
 holding companies.
 (D) Exceptions to subparagraph (B).--The 
 responsible agency may approve an application 
 for an interstate merger transaction pursuant 
 to subsection (a) without regard to the 
 applicability of subparagraph (B) with respect 
 to any State if--
 (i) there is a limitation described 
 in subparagraph (C) in a State statute, 
 regulation, or order which has the 
 effect of permitting a bank or bank 
 holding company (including all insured 
 depository institutions which are 
 affiliates of the bank or bank holding 
 company) to control a greater 
 percentage of total deposits of all 
 insured depository institutions in the 
 State than the percentage permitted 
 under subparagraph (B); or
 (ii) the transaction is approved by 
 the appropriate State bank supervisor 
 of such State and the standard on which 
 such approval is based does not have 
 the effect of discriminating against 
 out-of-State banks, out-of-State bank 
 holding companies, or subsidiaries of 
 such banks or holding companies.
 (E) Exception for certain banks.--This 
 paragraph shall not apply with respect to any 
 interstate merger transaction involving only 
 affiliated banks.
 (3) Community reinvestment compliance.--In 
 determining whether to approve an application for an 
 interstate merger transaction in which the resulting 
 bank would have a branch or bank affiliate immediately 
 following the transaction in any State in which the 
 bank submitting the application (as the acquiring bank) 
 had no branch or bank affiliate immediately before the 
 transaction, the responsible agency shall--
 (A) comply with the responsibilities of the 
 agency regarding such application under section 
 804 of the Community Reinvestment Act of 1977;
 (B) take into account the most recent 
 written evaluation under section 804 of the 
 Community Reinvestment Act of 1977 of any bank 
 which would be an affiliate of the resulting 
 bank; and
 (C) take into account the record of 
 compliance of any applicant bank with 
 applicable State community reinvestment laws.
 (4) Adequacy of capital and management skills.--The 
 responsible agency may approve an application for an 
 interstate merger transaction pursuant to subsection 
 (a) only if--
 (A) each bank involved in the transaction 
 is adequately capitalized as of the date the 
 application is filed; and
 (B) the responsible agency determines that 
 the resulting bank will be well capitalized and 
 well managed upon the consummation of the 
 transaction.
 (5) Surrender of charter after merger 
 transaction.--The charters of all banks involved in an 
 interstate merger transaction, other than the charter 
 of the resulting bank, shall be surrendered, upon 
 request, to the Federal banking agency or State bank 
 supervisor which issued the charter.
 (c) Applicability of Certain Laws to Interstate Banking 
Operations.--
 (1) State taxation authority not affected.--
 (A) In general.--No provision of this 
 section shall be construed as affecting the 
 authority of any State or political subdivision 
 of any State to adopt, apply, or administer any 
 tax or method of taxation to any bank, bank 
 holding company, or foreign bank, or any 
 affiliate of any bank, bank holding company, or 
 foreign bank, to the extent such tax or tax 
 method is otherwise permissible by or under the 
 Constitution of the United States or other 
 Federal law.
 (B) Imposition of shares tax by host 
 states.--In the case of a branch of an out-of-
 State bank which results from an interstate 
 merger transaction, a proportionate amount of 
 the value of the shares of the out-of-State 
 bank may be subject to any bank shares tax 
 levied or imposed by the host State, or any 
 political subdivision of such host State that 
 imposes such tax based upon a method adopted by 
 the host State, which may include allocation 
 and apportionment.
 (2) Applicability of antitrust laws.--No provision 
 of this section shall be construed as affecting--
 (A) the applicability of the antitrust 
 laws; or
 (B) the applicability, if any, of any State 
 law which is similar to the antitrust laws.
 (3) Reservation of certain rights to states.--No 
 provision of this section shall be construed as 
 limiting in any way the right of a State to--
 (A) determine the authority of State banks 
 chartered by that State to establish and 
 maintain branches; or
 (B) supervise, regulate, and examine State 
 banks chartered by that State.
 (4) State-imposed notice requirements.--A host 
 State may impose any notification or reporting 
 requirement on a branch of an out-of-State bank if the 
 requirement--
 (A) does not discriminate against out-of-
 State banks or bank holding companies; and
 (B) is not preempted by any Federal law 
 regarding the same subject.
 (d) Operations of the Resulting Bank.--
 (1) Continued operations.--A resulting bank may, 
 subject to the approval of the appropriate Federal 
 banking agency, retain and operate, as a main office or 
 a branch, any office that any bank involved in an 
 interstate merger transaction was operating as a main 
 office or a branch immediately before the merger 
 transaction.
 (2) Additional branches.--Following the 
 consummation of any interstate merger transaction, the 
 resulting bank may establish, acquire, or operate 
 additional branches at any location where any bank 
 involved in the transaction could have established, 
 acquired, or operated a branch under applicable Federal 
 or State law if such bank had not been a party to the 
 merger transaction.
 (3) Certain conditions and commitments continued.--
 If, as a condition for the acquisition of a bank by an 
 out-of-State bank holding company before the date of 
 the enactment of the Riegle-Neal Interstate Banking and 
 Branching Efficiency Act of 1994--
 (A) the home State of the acquired bank 
 imposed conditions on such acquisition by such 
 out-of-State bank holding company; or
 (B) the bank holding company made 
 commitments to such State in connection with 
 the acquisition,
 the State may enforce such conditions and commitments 
 with respect to such bank holding company or any 
 affiliated successor company which controls a bank or 
 branch in such State as a result of an interstate 
 merger transaction to the same extent as the State 
 could enforce such conditions or commitments against 
 the bank holding company before the consummation of the 
 merger transaction.
 [(e) Exception for Banks in Default or in Danger of 
Default.--If an application under subsection (a)(1) for 
approval of a merger transaction which involves 1 or more banks 
in default or in danger of default or with respect to which the 
Corporation provides assistance under section 13(c), the 
responsible agency may approve such application without regard 
to subsection (b), or paragraph (2), (4), or (5) of subsection 
(a).]
 (e) Exception for Banks in Default or in Danger of 
Default.--
 (1) General exception.--The responsible agency may, 
 without regard to paragraph (1), (3), (4), or (5) of 
 subsection (b) or paragraph (2), (4), or (5) of 
 subsection (a), approve an application under subsection 
 (a)(1) for approval of a merger transaction if--
 (A) the merger transaction involves 1 or 
 more banks in default or in danger of default; 
 or
 (B) the Corporation provides assistance 
 under section 13(c) to facilitate such merger 
 transaction.
 (2) Concentration limit exception.--The responsible 
 agency may, without regard to subsection (b)(2), 
 approve an application under subsection (a)(1) for 
 approval of a merger transaction if--
 (A) the merger transaction involves 1 or 
 more banks in default or in danger of default 
 and the responsible agency determines, based on 
 clear and convincing evidence, that 
 consummation of the proposed interstate merger 
 transaction is necessary to prevent significant 
 economic disruption or significant adverse 
 effects on financial stability, and the 
 Corporation has not received any qualified bid 
 from another institution that is not subject to 
 the prohibition in subsection (b)(2); or
 (B) the Corporation provides assistance 
 under section 13(c) to facilitate such merger 
 transaction and the responsible agency 
 determines, based on clear and convincing 
 evidence, that consummation of the proposed 
 interstate merger transaction is necessary to 
 prevent significant economic disruption or 
 significant adverse effects on financial 
 stability, and the Corporation has not received 
 any qualified bid from another institution that 
 is not subject to the prohibition in subsection 
 (b)(2).
 (3) Qualified bid defined.--In this subsection, the 
 term ``qualified bid'' has the meaning given that term 
 in section 18(c)(13)(C).
 (f) Applicable Rate and Other Charge Limitations.--
 (1) In general.--In the case of any State that has 
 a constitutional provision that sets a maximum lawful 
 annual percentage rate of interest on any contract at 
 not more than 5 percent above the discount rate for 90-
 day commercial paper in effect at the Federal reserve 
 bank for the Federal reserve district in which such 
 State is located, except as provided in paragraph (2), 
 upon the establishment in such State of a branch of any 
 out-of-State insured depository institution in such 
 State under this section, the maximum interest rate or 
 amount of interest, discount points, finance charges, 
 or other similar charges that may be charged, taken, 
 received, or reserved (or in the case of a governmental 
 entity located in such State, paid) from time to time 
 in any loan or discount made or upon any note, bill of 
 exchange, financing transaction, or other evidence of 
 debt by--
 (A) any insured depository institution 
 whose home State is such State shall be equal 
 to not more than the greater of--
 (i) the maximum interest rate or 
 amount of interest, discount points, 
 finance charges, or other similar 
 charges that may be charged, taken, 
 received, or reserved in a similar 
 transaction under the constitution or 
 any statute or other law of the home 
 State of the out-of-State insured 
 depository institution establishing any 
 such branch, without reference to this 
 section, as such maximum interest rate 
 or amount of interest may change from 
 time to time; or
 (ii) the maximum rate or amount of 
 interest, discount points, finance 
 charges, or other similar charges that 
 may be charged, taken, received, or 
 reserved in a similar transaction by a 
 State insured depository institution 
 chartered under the laws of such State 
 or a national bank or Federal savings 
 association whose main office is 
 located in such State without reference 
 to this section; and
 (B) any governmental entity located in such 
 State or any person that is not a depository 
 institution described in subparagraph (A) doing 
 business in such State, shall be equal to not 
 more than the greater of the State's maximum 
 lawful annual percentage rate or 17 percent--
 (i) to facilitate the uniform 
 implementation of federally mandated or 
 federally established programs and 
 financings related thereto, including--
 (I) uniform accessibility 
 of student loans, including the 
 issuance of qualified student 
 loan bonds as set forth in 
 section 144(b) of the Internal 
 Revenue Code of 1986;
 (II) the uniform 
 accessibility of mortgage 
 loans, including the issuance 
 of qualified mortgage bonds and 
 qualified veterans' mortgage 
 bonds as set forth in section 
 143 of such Code;
 (III) the uniform 
 accessibility of safe and 
 affordable housing programs 
 administered or subject to 
 review by the Department of 
 Housing and Urban Development, 
 including--
 (aa) the issuance 
 of exempt facility 
 bonds for qualified 
 residential rental 
 property as set forth 
 in section 142(d) of 
 such Code; and
 (bb) the issuance 
 of low income housing 
 tax credits as set 
 forth in section 42 of 
 such Code,; and
 (IV) the uniform 
 accessibility of bonds and 
 obligations issued under the 
 American Recovery and 
 Reinvestment Act of 2009;
 (ii) to facilitate interstate 
 commerce through the issuance of bonds 
 and obligations under any provision of 
 State law, including bonds and 
 obligations for the purpose of economic 
 development, education, and 
 improvements to infrastructure; and
 (iii) to facilitate interstate 
 commerce generally, including consumer 
 loans, in the case of any person or 
 governmental entity (other than a 
 depository institution subject to 
 subparagraph (A) and paragraph (2)).
 (2) Rule of construction.--
 (A) In general.--No provision of this 
 subsection shall be construed as superseding or 
 affecting--
 (i) the authority of any insured 
 depository institution to take, 
 receive, reserve, and charge interest 
 on any loan made in any State other 
 than the State referred to in paragraph 
 (1); or
 (ii) the applicability of section 
 501 of the Depository Institutions 
 Deregulation and Monetary Control Act 
 of 1980, section 5197 of the Revised 
 Statutes of the United States, or 
 section 27 of this Act.
 (B) Applicability.--This subsection shall 
 be construed to apply to any loan or discount 
 made, or note, bill of exchange, financing 
 transaction, or other evidence of debt, 
 originated by an insured depository 
 institution, a governmental entity located in 
 such State, or a person that is not a 
 depository institution described in 
 subparagraph (A) doing business in such State.
 (g) Definitions.--For purposes of this section, the 
following definitions shall apply:
 (1) Adequately capitalized.--The term ``adequately 
 capitalized'' has the same meaning as in section 38.
 (2) Antitrust laws.--The term ``antitrust laws''--
 (A) has the same meaning as in subsection 
 (a) of the first section of the Clayton Act; 
 and
 (B) includes section 5 of the Federal Trade 
 Commission Act to the extent such section 5 
 relates to unfair methods of competition.
 (3) Branch.--The term ``branch'' means any domestic 
 branch.
 (4) Home state.--The term ``home State''--
 (A) means--
 (i) with respect to a national 
 bank, the State in which the main 
 office of the bank is located; and
 (ii) with respect to a State bank, 
 the State by which the bank is 
 chartered; and
 (B) with respect to a bank holding company, 
 has the same meaning as in section 2(o)(4) of 
 the Bank Holding Company Act of 1956.
 (5) Host state.--The term ``host State'' means, 
 with respect to a bank, a State, other than the home 
 State of the bank, in which the bank maintains, or 
 seeks to establish and maintain, a branch.
 (6) Interstate merger transaction.--The term 
 ``interstate merger transaction'' means any merger 
 transaction approved pursuant to subsection (a)(1).
 (7) Merger transaction.--The term ``merger 
 transaction'' has the meaning determined under section 
 18(c)(3).
 (8) Out-of-state bank.--The term ``out-of-State 
 bank'' means, with respect to any State, a bank whose 
 home State is another State.
 (9) Out-of-state bank holding company.--The term 
 ``out-of-State bank holding company'' means, with 
 respect to any State, a bank holding company whose home 
 State is another State.
 (10) Responsible agency.--The term ``responsible 
 agency'' means the agency determined in accordance with 
 section 18(c)(2) with respect to a merger transaction.
 (11) Resulting bank.--The term ``resulting bank'' 
 means a bank that has resulted from an interstate 
 merger transaction under this section.

 * * * * * * *

 ---------- 

 BANK HOLDING COMPANY ACT OF 1956

 * * * * * * * 
 
 acquisition of bank shares or assets

 Sec. 3. (a) It shall be unlawful, except with the prior 
approval of the Board, (1) for any action to be taken that 
causes any company to become a bank holding company; (2) for 
any action to be taken that causes a bank to become a 
subsidiary of a bank holding company; (3) for any bank holding 
company to acquire direct or indirect ownership or control of 
any voting shares of any bank if, after such acquisition, such 
company will directly or indirectly own or control more than 5 
per centum of the voting shares of such bank; (4) for any bank 
holding company or subsidiary thereof, other than a bank, to 
acquire all or substantially all of the assets of a bank; or 
(5) for any bank holding company to merge or consolidate with 
any other bank holding company. Notwithstanding the foregoing 
this prohibition shall not apply to (A) shares acquired by a 
bank, (i) in good faith in a fiduciary capacity, except where 
such shares are held under a trust that constitutes a company 
as defined in section 2(b) and except as provided in paragraphs 
(2) and (3) of section 2(g), or (ii) in the regular course of 
securing or collecting a debt previously contracted in good 
faith, but any shares acquired after the date of enactment of 
this Act in securing or collecting any such previously 
contracted debt shall be disposed of within a period of two 
years from the date on which they were acquired; (B) additional 
shares acquired by a bank holding company in a bank in which 
such bank holding company owned or controlled a majority of the 
voting shares prior to such acquisition; or (C) the 
acquisition, by a company, of control of a bank in a 
reorganization in which a person or group of persons exchanges 
their shares of the bank for shares of a newly formed bank 
holding company and receives after the reorganization 
substantially the same proportional share interest in the 
holding company as they held in the bank except for changes in 
shareholders' interests resulting from the exercise of 
dissenting shareholders' rights under State or Federal law if--
 (i) immediately following the 
 acquisition--
 (I) the bank holding 
 company meets the capital and 
 other financial standards 
 prescribed by the Board by 
 regulation for such a bank 
 holding company; and
 (II) the bank is adequately 
 capitalized (as defined in 
 section 38 of the Federal 
 Deposit Insurance Act);
 (ii) the holding company does not 
 engage in any activities other than 
 those of managing and controlling banks 
 as a result of the reorganization;
 (iii) the company provides 30 days 
 prior notice to the Board and the Board 
 does not object to such transaction 
 during such 30-day period; and
 (iv) the holding company will not 
 acquire control of any additional bank 
 as a result of the reorganization..
The Board is authorized upon application by a bank to extend, 
from time to time for not more than one year at a time, the 
two-year period referred to above for disposing of any shares 
acquired by a bank in the regular course of securing or 
collecting a debt previously contracted in good faith, if, in 
the Board's judgment, such an extension would not be 
detrimental to the public interest, but no such extension shall 
in the aggregate exceed three years. For the purpose of the 
preceding sentence, bank shares acquired after the date of 
enactment of the Bank Holding Company Act Amendments of 1970 
shall not be deemed to have been acquired in good faith in a 
fiduciary capacity if the acquiring bank or company has sole 
discretionary authority to exercise voting rights with respect 
thereto, but in such instances acquisitions may be made without 
prior approval of the Board if the Board, upon application 
filed within ninety days after the shares are acquired, 
approves retention or, if retention is disapproved, the 
acquiring bank disposes of the shares or its sole discretionary 
voting rights within two years after issuance of the order of 
disapproval.
 (b)(1) Notice and Hearing Requirements.--Upon receiving 
from a company any application for approval under this section, 
the Board shall give notice to the Comptroller of the Currency, 
if the applicant company or any bank the voting shares or 
assets of which are sought to be required is a national banking 
association, or to the appropriate supervisory authority of the 
interested State, if the applicant company or any bank the 
voting shares or assets of which are sought to be acquired is a 
State bank, in order to provide for the submission of the views 
and recommendations of the Comptroller of the Currency or the 
State supervisory authority, as the case may be. The views and 
recommendations shall be submitted within thirty calendar days 
of the date on which notice is given, or within ten calendar 
days of such date if the Board advises the Comptroller of the 
Currency or the State supervisory authority that an emergency 
exists requiring expeditious action. If the thirty-day notice 
period applies and if the Comptroller of the Currency or the 
State supervisory authority so notified by the Board 
disapproves the application in writing within this period, the 
Board shall forthwith give written notice of that fact to the 
applicant. Within three days after giving such notice to the 
applicant, the Board shall notify in writing the applicant and 
the disapproving authority of the date for commencement of a 
hearing by it on such application. Any such hearing shall be 
commenced not less than ten nor more than thirty days after the 
Board has given written notice to the applicant of the action 
of the disapproving authority. The length of any such hearing 
shall be determined by the Board, but it shall afford all 
interested parties a reasonable opportunity to testify at such 
hearing. At the conclusion thereof, the Board shall, by order, 
grant or deny the application on the basis of the record made 
at such hearing. In the event of the failure of the Board to 
act on any application for approval under this section within 
the ninety-one-day period which begins on the date of 
submission to the Board of the complete record on that 
application, the application shall be deemed to have been 
granted. Notwithstanding any other provision of this 
subsection, if the Board finds that it must act immediately on 
any application for approval under this section in order to 
prevent the probable failure of a bank or bank holding company 
involved in a proposed acquisition, merger, or consolidation 
transaction, the Board may dispense with the notice 
requirements of this subsection, and if notice is given, the 
Board may request that the views and recommendations of the 
Comptroller of the Currency or the State supervisory authority, 
as the case may be, be submitted immediately in any form or by 
any means acceptable to the Board. If the Board has found 
pursuant to this subsection either that an emergency exists 
requiring expeditious action or that it must act immediately to 
prevent probable failure, the Board may grant or deny any such 
application without a hearing not withstanding any recommended 
disapproval by the appropriate supervisory authority.
 (2) Waiver in Case of Bank in Danger of Closing.--If the 
Board receives a certification described in section 13(f)(8)(D) 
of the Federal Deposit Insurance Act from the appropriate 
Federal or State chartering authority that a bank is in danger 
of closing, the Board may dispense with the notice and hearing 
requirements of paragraph (1) with respect to any application 
received by the Board relating to the acquisition of such bank, 
the bank holding company which controls such bank, or any other 
affiliated bank.
 (c) Factors for Consideration by Board.--
 (1) Competitive factors.--The Board shall not 
 approve--
 (A) any acquisition or merger or consolidation 
 under this section which would result in a monopoly, or 
 which would be in furtherance of any combination or 
 conspiracy to monopolize or to attempt to monopolize 
 the business of banking in any part of the United 
 States, or
 (B) any other proposed acquisition or merger or 
 consolidation under this section whose effect in any 
 section of the country may be substantially to lessen 
 competition, or to tend to create a monopoly, or which 
 in any other manner would be in restraint or trade, 
 unless it finds that the anticompetitive effects of the 
 proposed transaction are clearly outweighed in the 
 public interest by the probable effect of the 
 transaction in meeting the convenience and needs of the 
 community to be served.
 (2) Banking and community factors.--In every case, 
 the Board shall take into consideration the financial 
 and managerial resources and future prospects of the 
 company or companies and the banks concerned, and the 
 convenience and needs of the community to be served.
 (3) Supervisory factors.--The Board shall 
 disapprove any application under this section by any 
 company if--
 (A) the company fails to provide the Board 
 with adequate assurances that the company will 
 make available to the Board such information on 
 the operations or activities of the company, 
 and any affiliate of the company, as the Board 
 determines to be appropriate to determine and 
 enforce compliance with this Act; or
 (B) in the case of an application involving 
 a foreign bank, the foreign bank is not subject 
 to comprehensive supervision or regulation on a 
 consolidated basis by the appropriate 
 authorities in the bank's home country.
 (4) Treatment of certain bank stock loans.--
 Notwithstanding any other provision of law, the Board 
 shall not follow any practice or policy in the 
 consideration of any application for the formation of a 
 one-bank holding company if following such practice or 
 policy would result in the rejection of such 
 application solely because the transaction to form such 
 one-bank holding company involves a bank stock loan 
 which is for a period of not more than twenty-five 
 years. The previous sentence shall not be construed to 
 prohibit the Board from rejecting any application 
 solely because the other financial arrangements are 
 considered unsatisfactory. The Board shall consider 
 transactions involving bank stock loans for the 
 formation of a one-bank holding company having a 
 maturity of twelve years or more on a case by case 
 basis and no such transaction shall be approved if the 
 Board believes the safety or soundness of the bank may 
 be jeopardized.
 (5) Managerial resources.--Consideration of the 
 managerial resources of a company or bank under 
 paragraph (2) shall include consideration of the 
 competence, experience, and integrity of the officers, 
 directors, and principal shareholders of the company or 
 bank.
 (6) Money laundering.--In every case, the Board 
 shall take into consideration the effectiveness of the 
 company or companies in combatting money laundering 
 activities, including in overseas branches.
 (7) Financial stability.--In every case, the Board 
 shall take into consideration the extent to which a 
 proposed acquisition, merger, or consolidation would 
 result in greater or more concentrated risks to the 
 stability of the United States banking or financial 
 system.
 (d) Interstate Banking.--
 (1) Approvals authorized.--
 (A) Acquisition of banks.--The Board may 
 approve an application under this section by a 
 bank holding company that is well capitalized 
 and well managed to acquire control of, or 
 acquire all or substantially all of the assets 
 of, a bank located in a State other than the 
 home State of such bank holding company, 
 without regard to whether such transaction is 
 prohibited under the law of any State.
 (B) Preservation of state age laws.--
 (i) In general.--Notwithstanding 
 subparagraph (A), the Board may not 
 approve an application pursuant to such 
 subparagraph that would have the effect 
 of permitting an out-of-State bank 
 holding company to acquire a bank in a 
 host State that has not been in 
 existence for the minimum period of 
 time, if any, specified in the 
 statutory law of the host State.
 (ii) Special rule for state age 
 laws specifying a period of more than 5 
 years.--Notwithstanding clause (i), the 
 Board may approve, pursuant to 
 subparagraph (A), the acquisition of a 
 bank that has been in existence for at 
 least 5 years without regard to any 
 longer minimum period of time specified 
 in a statutory law of the host State.
 (C) Shell banks.--For purposes of this 
 subsection, a bank that has been chartered 
 solely for the purpose of, and does not open 
 for business prior to, acquiring control of, or 
 acquiring all or substantially all of the 
 assets of, an existing bank shall be deemed to 
 have been in existence for the same period of 
 time as the bank to be acquired.
 (D) Effect on state contingency laws.--No 
 provision of this subsection shall be construed 
 as affecting the applicability of a State law 
 that makes an acquisition of a bank contingent 
 upon a requirement to hold a portion of such 
 bank's assets available for call by a State-
 sponsored housing entity established pursuant 
 to State law, if--
 (i) the State law does not have the 
 effect of discriminating against out-
 of-State banks, out-of-State bank 
 holding companies, or subsidiaries of 
 such banks or bank holding companies;
 (ii) that State law was in effect 
 as of the date of enactment of the 
 Riegle-Neal Interstate Banking and 
 Branching Efficiency Act of 1994;
 (iii) the Federal Deposit Insurance 
 Corporation has not determined that 
 compliance with such State law would 
 result in an unacceptable risk to the 
 Deposit Insurance Fund; and
 (iv) the appropriate Federal 
 banking agency for such bank has not 
 found that compliance with such State 
 law would place the bank in an unsafe 
 or unsound condition.
 (2) Concentration limits.--
 (A) Nationwide concentration limits.--The 
 Board may not approve an application pursuant 
 to paragraph (1)(A) if the applicant (including 
 all insured depository institutions which are 
 affiliates of the applicant) controls, or upon 
 consummation of the acquisition for which such 
 application is filed would control, more than 
 10 percent of the total amount of deposits of 
 insured depository institutions in the United 
 States.
 (B) Statewide concentration limits other 
 than with respect to initial entries.--The 
 Board may not approve an application pursuant 
 to paragraph (1)(A) if--
 (i) immediately before the 
 consummation of the acquisition for 
 which such application is filed, the 
 applicant (including any insured 
 depository institution affiliate of the 
 applicant) controls any insured 
 depository institution or any branch of 
 an insured depository institution in 
 the home State of any bank to be 
 acquired or in any host State in which 
 any such bank maintains a branch; and
 (ii) the applicant (including all 
 insured depository institutions which 
 are affiliates of the applicant), upon 
 consummation of the acquisition, would 
 control 30 percent or more of the total 
 amount of deposits of insured 
 depository institutions in any such 
 State.
 (C) Effectiveness of state deposit caps.--
 No provision of this subsection shall be 
 construed as affecting the authority of any 
 State to limit, by statute, regulation, or 
 order, the percentage of the total amount of 
 deposits of insured depository institutions in 
 the State which may be held or controlled by 
 any bank or bank holding company (including all 
 insured depository institutions which are 
 affiliates of the bank or bank holding company) 
 to the extent the application of such 
 limitation does not discriminate against out-
 of-State banks, out-of-State bank holding 
 companies, or subsidiaries of such banks or 
 holding
 companies.
 (D) Exceptions to subparagraph (b).--The 
 Board may approve an application pursuant to 
 paragraph (1)(A) without regard to the 
 applicability of subparagraph (B) with respect 
 to any State if--
 (i) there is a limitation described 
 in subparagraph (C) in a State statute, 
 regulation, or order which has the 
 effect of permitting a bank or bank 
 holding company (including all insured 
 depository institutions which are 
 affiliates of the bank or bank holding 
 company) to control a greater 
 percentage of total deposits of all 
 insured depository institutions in the 
 State than the percentage permitted 
 under subparagraph (B); or
 (ii) the acquisition is approved by 
 the appropriate State bank supervisor 
 of such State and the standard on which 
 such approval is based does not have 
 the effect of discriminating against 
 out-of-State banks, out-of-State bank 
 holding companies, or subsidiaries of 
 such banks or holding companies.
 (E) Deposit defined.--For purposes of this 
 paragraph, the term ``deposit'' has the same 
 meaning as in section 3(l) of the Federal 
 Deposit Insurance Act.
 (3) Community reinvestment compliance.--In 
 determining whether to approve an application under 
 paragraph (1)(A), the Board shall--
 (A) comply with the responsibilities of the 
 Board regarding such application under section 
 804 of the Community Reinvestment Act of 1977; 
 and
 (B) take into account the applicant's 
 record of compliance with applicable State 
 community reinvestment laws.
 (4) Applicability of antitrust laws.--No provision 
 of this subsection shall be construed as affecting--
 (A) the applicability of the antitrust 
 laws; or
 (B) the applicability, if any, of any State 
 law which is similar to the antitrust laws.
 [(5) Exception for banks in default or in danger of 
 default.--The Board may approve an application pursuant 
 to paragraph (1)(A) which involves--
 [(A) an acquisition of 1 or more banks in 
 default or in danger of default; or
 [(B) an acquisition with respect to which 
 assistance is provided under section 13(c) of 
 the Federal Deposit Insurance Act;
 without regard to subparagraph (B) or (D) of paragraph 
 (1) or paragraph (2) or (3).]
 (5) Exception for banks in default or in danger of 
 default.--
 (A) General exception.--The Board may, 
 without regard to subparagraph (B) or (D) of 
 paragraph (1) or paragraph (3), approve an 
 application pursuant to paragraph (1)(A) if--
 (i) the application is for an 
 acquisition of 1 or more banks in 
 default or in danger of default; or
 (ii) the application is for an 
 acquisition with respect to which 
 assistance is provided under section 
 13(c) of the Federal Deposit Insurance 
 Act.
 (B) Concentration limit exception.--The 
 Board may, without regard to paragraph (2), 
 approve an application pursuant to paragraph 
 (1)(A) if--
 (i) the application is for the 
 acquisition of 1 or more banks in 
 default or in danger of default and the 
 Board determines, based on clear and 
 convincing evidence, that consummation 
 of the proposed acquisition is 
 necessary to prevent significant 
 economic disruption or significant 
 adverse effects on financial stability, 
 and the Corporation has not received 
 any qualified bid from another 
 institution that is not subject to the 
 prohibition in paragraph (2); or
 (ii) the application is for an 
 acquisition with respect to which 
 assistance is provided under section 
 13(c) of the Federal Deposit Insurance 
 Act and the Board determines, based on 
 clear and convincing evidence, that 
 consummation of the proposed 
 acquisition is necessary to prevent 
 significant economic disruption or 
 significant adverse effects on 
 financial stability, and the 
 Corporation has not received any 
 qualified bid from another institution 
 that is not subject to the prohibition 
 in paragraph (2).
 (C) Qualified bid defined.--In this 
 paragraph, the term ``qualified bid'' has the 
 meaning given that term in section 18(c)(13)(C) 
 of the Federal Deposit Insurance Act.
 (e) Every bank that is a holding company and every bank 
that is a subsidiary of such a company shall become and remain 
an insured depository institution as such term is defined in 
section 3 of the Federal Deposit Insurance Act.
 (g) Mutual Bank Holding Company.--
 (1) Establishment.--Notwithstanding any provision 
 of Federal law other than this Act, a savings bank or 
 cooperative bank operating in mutual form may 
 reorganize so as to form a holding company.
 (2) Regulations.--A bank holding company organized 
 as a mutual holding company shall be regulated on 
 terms, and shall be subject to limitations, comparable 
 to those applicable to any other bank holding company.

 interests in nonbanking organizations

 Sec. 4. (a) Except as otherwise provided in this Act, no 
bank holding company shall--
 (1) after the date of enactment of this Act acquire 
 direct or indirect ownership or control of any voting 
 shares of any company which is not a bank, or
 (2) after two years from the date as of which it 
 becomes a bank holding company, or in the case of a 
 company which has been continuously affiliated since 
 May 15, 1955, with a company which was registered under 
 the Investment Company Act of 1940, prior to May 15, 
 1955, in such a manner as to constitute an affiliated 
 company within the meaning of that Act, after December 
 31, 1978, or, in the case of any company which becomes, 
 as a result of the enactment of the Bank Holding 
 Company Act Amendments of 1970, a bank holding company 
 on the date of such enactment, after December 31, 1980, 
 retain direct or indirect ownership or control of any 
 voting shares of any company which is not a bank or 
 bank holding company or engage in any activities other 
 than (A) those of banking or of managing or controlling 
 banks and other subsidiaries authorized under this Act 
 or of furnishing services to or performing services for 
 its subsidiaries, and (B) those permitted under 
 paragraph (8) of subsection (c) of this section subject 
 to all the conditions specified in such paragraph or in 
 any order or regulation issued by the Board under such 
 paragraph: Provided, That a company covered in 1970 may 
 also engage in those activities in which directly or 
 through a subsidiary (i) it was lawfully engaged on 
 June 30, 1968 (or on a date subsequent to June 30, 1968 
 in the case of activities carried on as the result of 
 the acquisition by such company or subsidiary, pursuant 
 to a binding written contract entered into on or before 
 June 30, 1968, of another company engaged in such 
 activities at the time of the acquisition), and (ii) it 
 has been continuously engaged since June 30, 1968 (or 
 such subsequent date). The Board by order, after 
 opportunity for hearing, may terminate the authority 
 conferred by the preceding proviso on any company to 
 engage directly or through a subsidiary in any activity 
 otherwise permitted by that proviso if it determines, 
 having due regard to the purposes of this Act, that 
 such action is necessary to prevent undue concentration 
 of resources, decreased or unfair competition, 
 conflicts of interest, or unsound banking practices; 
 and in the case of any such company controlling a bank 
 having bank assets in excess of $60,000,000 on or after 
 the date of enactment of the Bank Holding Company Act 
 Amendments of 1970 the Board shall determine, within 
 two years after such date (or, if later, within two 
 years after the date on which the bank assets first 
 exceed $60,000,000), whether the authority conferred by 
 the preceding proviso with respect to such company 
 should be terminated as provided in this sentence. 
 Nothing in this paragraph shall be construed to 
 authorize any bank holding company referred to in the 
 preceding proviso, or any subsidiary thereof, to engage 
 in activities authorized by that proviso through the 
 acquisition, pursuant to a contract entered into after 
 June 30, 1968, of any interest in or the assets of a 
 going concern engaged in such activities. Any company 
 which is authorized to engage in any activity pursuant 
 to the preceding proviso or subsection (d) of this 
 section but, as a result of action of the Board, is 
 required to terminate such activity may 
 (notwithstanding any otherwise applicable time limit 
 prescribed in this paragraph) retain the ownership or 
 control of shares in any company carrying on such 
 activity for a period of ten years from the date on 
 which its authority was so terminated by the Board. 
 Notwithstanding any other provision of this paragraph, 
 if any company that became a bank holding company as a 
 result of the enactment of the Competitive Equality 
 Amendments of 1987 acquired, between March 5, 1987, and 
 the date of the enactment of such Amendments, an 
 institution that became a bank as a result of the 
 enactment of such Amendments, that company shall, upon 
 the enactment of such Amendments, immediately come into 
 compliance with the requirements of this Act.
The Board is authorized, upon application by a bank holding 
company, to extend the two-year period referred to in paragraph 
(2) above from time to time as to such bank holding company for 
not more than one year at a time, if, in its judgment, such an 
extension would not be detrimental to the public interest, but 
no such extensions shall in the aggregate exceed three years. 
Notwithstanding any other provision of this Act, the period 
ending December 31, 1980, referred to in paragraph (2) above, 
may be extended by the Board of Governors to December 31, 1984, 
but only for the divestiture by a bank holding company of real 
estate or interests in real estate lawfully acquired for 
investment or development. In making its decision whether to 
grant such extension, the Board shall consider whether the 
company has made a good faith effort to divest such interests 
and whether such extension is necessary to avert substantial 
loss to the company.
 (b) After two years from the date of enactment of this Act, 
no certificate evidencing shares of any bank holding company 
shall bear any statement purporting to represent shares of any 
other company except a bank or a bank holding company, nor 
shall the ownership, sale, or transfer of shares of any bank 
holding company be conditioned in any manner whatsoever upon 
the ownership, sale, or transfer of shares of any other company 
except a bank or a bank holding company.
 (c) The prohibitions in this section shall not apply to (i) 
any company that was on January 4, 1977, both a bank holding 
company and a labor, agricultural, or horticultural 
organization exempt from taxation under section 501 of the 
Internal Revenue Code of 1954, or to any labor, agricultural, 
or horticultural organization to which all or substantially all 
of the assets of such company are hereafter transferred, or 
(ii) a company covered in 1970 more than 85 per centum of the 
voting stock of which was collectively owned on June 30, 1968, 
and continuously thereafter, directly or indirectly, by or for 
members of the same family, or their spouses, who are lineal 
descendants of common ancestors; and such prohibitions shall 
not, with respect to any other bank holding company, apply to--
 (1) shares of any company engaged or to be engaged 
 solely in one or more of the following activities: (A) 
 holding or operating properties used wholly or 
 substantially by any banking subsidiary of such bank 
 holding company in the operations of such banking 
 subsidiary or acquired for such future use; or (B) 
 conducting a safe deposit business; or (C) furnishing 
 services to or performing services for such bank 
 holding company or its banking subsidiaries; or (D) 
 liquidating assets acquired from such bank holding 
 company or its banking subsidiaries or acquired from 
 any other source prior to May 9, 1956, or the date on 
 which such company became a bank holding company, 
 whichever is later;
 (2) shares acquired by a bank holding company or 
 any of its subsidiaries in satisfaction of a debt 
 previously contracted in good faith, but such shares 
 shall be disposed of within a period of two years from 
 the date on which they were acquired, except that the 
 Board is authorized upon application by such bank 
 holding company to extend such period of two years from 
 time to time as to such holding company if, in its 
 judgment, such an extension would not be detrimental to 
 the public interest, and, in the case of a bank holding 
 company which has not disposed of such shares within 5 
 years after the date on which such shares were 
 acquired, the Board may, upon the application of such 
 company, grant additional exemptions if, in the 
 judgment of the Board, such extension would not be 
 detrimental to the public interest and, either the bank 
 holding company has made a good faith attempt to 
 dispose of such shares during such 5-year period, or 
 the disposal of such shares during such 5-year period 
 would have been detrimental to the company, except that 
 the aggregate duration of such extensions shall not 
 extend beyond 10 years after the date on which such 
 shares were acquired;
 (3) shares acquired by such bank holding company 
 from any of its subsidiaries which subsidiary has been 
 requested to dispose of such shares by any Federal or 
 State authority having statutory power to examine such 
 subsidiary, but such bank holding company shall dispose 
 of such shares within a period of two years from the 
 date on which they were acquired;
 (4) shares held or acquired by a bank in good faith 
 in a fiduciary capacity, except where such shares are 
 held under a trust that constitutes a company as 
 defined in section 2(b) and except as provided in 
 paragraphs (2) and (3) of section 2(g);
 (5) shares which are of the kinds and amounts 
 eligible for investment by national banking 
 associations under the provisions of section 5136 of 
 the Revised Statutes;
 (6) shares of any company which do not include more 
 than 5 per centum of the outstanding voting shares of 
 such company;
 (7) shares of an investment company which is not a 
 bank holding company and which is not engaged in any 
 business other than investing in securities, which 
 securities do not include more than 5 per centum of the 
 outstanding voting shares of any company;
 (8) shares of any company the activities of which 
 had been determined by the Board by regulation or order 
 under this paragraph as of the day before the date of 
 the enactment of the Gramm-Leach-Bliley Act, to be so 
 closely related to banking as to be a proper incident 
 thereto (subject to such terms and conditions contained 
 in such regulation or order, unless modified by the 
 Board);
 (9) shares held or activities conducted by any 
 company organized under the laws of a foreign country 
 the greater part of whose business is conducted outside 
 the United States, if the Board by regulation or order 
 determines that, under the circumstances and subject to 
 the conditions set forth in the regulation or order, 
 the exemption would not be substantially at variance 
 with the purposes of this Act and would be in the 
 public interest;
 (10) shares lawfully acquired and owned prior to 
 May 9, 1956, by a bank which is a bank holding company, 
 or by any of its wholly owned subsidiaries;
 (11) shares owned directly or indirectly by a 
 company covered in 1970 in a company which does not 
 engage in any activities other than those in which the 
 bank holding company, or its subsidiaries, may engage 
 by virtue of this section, but nothing in this 
 paragraph authorizes any bank holding company, or 
 subsidiary thereof, to acquire any interest in or the 
 assets of any going concern (except pursuant to a 
 binding written contract entered into before June 30, 
 1968, or pursuant to another provision of this Act) 
 other than one which was a subsidiary on June 30, 1968;
 (12) shares retained or acquired, or activities 
 engaged in, by any company which becomes, as a result 
 of the enactment of the Bank Holding Company Act 
 Amendments of 1970, a bank holding company on the date 
 of such enactment, or by any subsidiary thereof, if 
 such company--
 (A) within the applicable time limits 
 prescribed in subsection (a)(2) of this section 
 (i) ceases to be a bank holding company, or 
 (ii) ceases to retain direct or indirect 
 ownership or control of those shares and to 
 engage in those activities not authorized under 
 this section; and
 (B) complies with such other conditions as 
 the Board may by regulation or order prescribe;
 (13) shares of, or activities conducted by, any 
 company which does no business in the United States 
 except as an incident to its international or foreign 
 business, if the Board by regulation or order 
 determines that, under the circumstances and subject to 
 the conditions set forth in the regulation or order, 
 the exemption would not be substantially at variance 
 with the purposes of this Act and would be in the 
 public interest; or
 (14) shares of any company which is an export 
 trading company whose acquisition (including each 
 acquisition of shares) or formation by a bank holding 
 company has not been disapproved by the Board pursuant 
 to this paragraph, except that such investments, 
 whether direct or indirect, in such shares shall not 
 exceed 5 per centum of the bank holding company's 
 consolidated capital and surplus.
 (A)(i) No bank holding company shall invest 
 in an export trading company under this 
 paragraph unless the Board has been given sixty 
 days' prior written notice of such proposed 
 investment and within such period has not 
 issued a notice disapproving the proposed 
 investment or extending for up to another 
 thirty days the period during which such 
 disapproval may be issued.
 (ii) The period for disapproval may be 
 extended for such additional thirty-day period 
 only if the Board determines that a bank 
 holding company proposing to invest in an 
 export trading company has not furnished all 
 the information required to be submitted or 
 that in the Board's judgment any material 
 information submitted is substantially 
 inaccurate.
 (iii) The notice required to be filed by a 
 bank holding company shall contain such 
 relevant information as the Board shall require 
 by regulation or by specific request in 
 connection with any particular notice.
 (iv) The Board may disapprove any proposed 
 investment only if--
 (I) such disapproval is necessary 
 to prevent unsafe or unsound banking 
 practices, undue concentration of 
 resources, decreased or unfair 
 competition, or conflicts of interest;
 (II) the Board finds that such 
 investment would affect the financial 
 or managerial resources of a bank 
 holding company to an extent which is 
 likely to have a materially adverse 
 effect on the safety and soundness of 
 any subsidiary bank of such bank 
 holding company, or
 (III) the bank holding company 
 fails to furnish the information 
 required under clause (iii).
 (v) Leverage.--The Board may not disapprove 
 any proposed investment solely on the basis of 
 the anticipated or proposed asset-to-equity 
 ratio of the export trading company with 
 respect to which such investment is proposed, 
 unless the anticipated or proposed annual 
 average asset-to-equity ratio is greater than 
 20-to-1.
 (vi) Within three days after a decision to 
 disapprove an investment, the Board shall 
 notify the bank holding company in writing of 
 the disapproval and shall provide a written 
 statement of the basis for the disapproval.
 (vii) A proposed investment may be made 
 prior to the expiration of the disapproval 
 period if the Board issues written notice of 
 its intent not to disapprove the investment.
 (B)(i) The total amount of extensions of 
 credit by a bank holding company which invests 
 in an export trading company, when combined 
 with all such extensions of credit by all the 
 subsidiaries of such bank holding company, to 
 an export trading company shall not exceed at 
 any one time 10 per centum of the bank holding 
 company's consolidated capital and surplus. For 
 purposes of the preceding sentence, an 
 extension of credit shall not be deemed to 
 include any amount invested by a bank holding 
 company in the shares of an export trading 
 company.
 (ii) No provision of any other Federal law 
 in effect on October 1, 1982, relating 
 specifically to collateral requirements shall 
 apply with respect to any such extension of 
 credit.
 (iii) No bank holding company or subsidiary 
 of such company which invests in an export 
 trading company may extend credit to such 
 export trading company or to customers of such 
 export trading company on terms more favorable 
 than those afforded similar borrowers in 
 similar circumstances, and such extension of 
 credit shall not involve more than the normal 
 risk of repayment or present other unfavorable 
 features.
 (C) For purposes of this paragraph, an 
 export trading company--
 (i) may engage in or hold shares of 
 a company engaged in the business of 
 underwriting, selling, or distributing 
 securities in the United States only to 
 the extent that any bank holding 
 company which invests in such export 
 trading company may do so under 
 applicable Federal and State banking 
 laws and regulations; and
 (ii) may not engage in agricultural 
 production activities or in 
 manufacturing, except for such 
 incidental product modification 
 including repackaging, reassembling or 
 extracting byproducts, as is necessary 
 to enable United States goods or 
 services to conform with requirements 
 of a foreign country and to facilitate 
 their sale in foreign countries.
 (D) A bank holding company which invests in 
 an export trading company may be required, by 
 the Board, to terminate its investment or may 
 be made subject to such limitations or 
 conditions as may be imposed by the Board, if 
 the Board determines that the export trading 
 company has taken positions in commodities or 
 commodity contracts, in securities, or in 
 foreign exchange, other than as may be 
 necessary in the course of the export trading 
 company's business operations.
 (E) Notwithstanding any other provision of 
 law, an Edge Act corporation, organized under 
 section 25(a) of the Federal Reserve Act (12 
 U.S.C. 611-631), which is a subsidiary of a 
 bank holding company, or an agreement 
 corporation, operating subject to section 25 of 
 the Federal Reserve Act (12 U.S.C. 601-604(a)), 
 which is a subsidiary of a bank holding 
 company, may invest directly and indirectly in 
 the aggregate up to 5 per centum of its 
 consolidated capital and surplus (25 per centum 
 in the case of a corporation not engaged in 
 banking) in the voting stock of other evidences 
 of ownership in one or more export trading 
 companies.
 (F) For purposes of this paragraph--
 (i) the term ``export trading 
 company'' means a company which does 
 business under the laws of the United 
 States or any State, which is 
 exclusively engaged in activities 
 related to international trade, and 
 which is organized and operated 
 principally for purposes of exporting 
 goods or services produced in the 
 United States or for purposes of 
 facilitating the exportation of goods 
 or services produced in the United 
 States by unaffiliated persons by 
 providing one or more export trade 
 services.
 (ii) the term ``export trade 
 services'' includes, but is not limited 
 to, consulting, international market 
 research, advertising, marketing, 
 insurance (other than acting as 
 principal, agent or broker in the sale 
 of insurance on risks resident or 
 located, or activities performed, in 
 the United States, except for insurance 
 covering the transportation of cargo 
 from any point of origin in the United 
 States to a point of final destination 
 outside the United States), product 
 research and design, legal assistance, 
 transportation, including trade 
 documentation and freight forwarding, 
 communication and processing of foreign 
 orders to and for exporters and foreign 
 purchasers, warehousing, foreign 
 exchange, financing, and taking title 
 to goods, when provided in order to 
 facilitate the export of goods or 
 services produced in the United States;
 (iii) the term ``bank holding 
 company'' shall include a bank which 
 (I) is organized solely to do business 
 with other banks and their officers, 
 directors, or employees; (II) is owned 
 primarily by the banks with which it 
 does business; and (III) does not do 
 business with the general public. No 
 such other bank, owning stock in a bank 
 described in this clause that invests 
 in an export trading company, shall 
 extend credit to an export trading 
 company in an amount exceeding at any 
 one time 10 per centum of such other 
 bank's capital and surplus; and
 (iv) the term ``extension of 
 credit'' shall have the same meaning 
 given such term in the fourth paragraph 
 of section 23A of the Federal Reserve 
 Act.
 (G) Determination of status as export 
 trading company.--
 (i) Time period requirements.--For 
 purposes of determining whether an 
 export trading company is operated 
 principally for the purposes described 
 in subparagraph (F)(i)--
 (I) the operations of such 
 company during the 2-year 
 period beginning on the date 
 such company commences 
 operations shall not be taken 
 into account in making any such 
 determination; and
 (II) not less than 4 
 consecutive years of operations 
 of such company (not including 
 any portion of the period 
 referred to in subclause (I)) 
 shall be taken into account in 
 making any such determination.
 (ii) Export revenue requirements.--
 A company shall not be treated as 
 operated principally for the purposes 
 described in subparagraph (F)(i) 
 unless--
 (I) the revenues of such 
 company from the export, or 
 facilitating the export, of 
 goods or services produced in 
 the United States exceed the 
 revenues of such company from 
 the import, or facilitating the 
 import, into the United States 
 of goods or services produced 
 outside the United States; and
 (II) at least \1/3\ of such 
 company's total revenues are 
 revenues from the export, or 
 facilitating the export, of 
 goods or services produced in 
 the United States by persons 
 not affiliated with such 
 company.
 (H) Inventory.--
 (i) No general limitation.--The 
 Board may not prescribe by regulation 
 any maximum dollar amount limitation on 
 the value of goods which an export 
 trading company may maintain in 
 inventory at any time.
 (ii) Specific limitation by 
 order.--Notwithstanding clause (i), the 
 Board may issue an order establishing a 
 maximum dollar amount limitation on the 
 value of goods which a particular 
 export trading company may maintain in 
 inventory at any time (after such 
 company has been operating for a 
 reasonable period of time) if the Board 
 finds that, under the facts and 
 circumstances, such limitation is 
 necessary to prevent risks that would 
 affect the financial or managerial 
 resources of an investor bank holding 
 company to an extent which would be 
 likely to have a materially adverse 
 effect on the safety and soundness of 
 any subsidiary bank of such bank 
 holding company.
The Board shall include in its annual report to the Congress a 
description and a statement of the reasons for approval of each 
activity approved by it by order or regulation under such 
paragraph during the period covered by the report.
 (d) To the extent that such action would not be 
substantially at variance with the purposes of this Act and 
subject to such conditions as it considers necessary to protect 
the public interest, the Board by order, after opportunity for 
hearing, may grant exemptions from the provisions of this 
section to any bank holding company which controlled one bank 
prior to July 1, 1968, and has not thereafter acquired the 
control of any other bank in order (1) to avoid disrupting 
business relationships that have existed over a long period of 
years without adversely affecting the banks or communities 
involved, or (2) to avoid forced sales of small locally owned 
banks to purchasers not similarly representative of community 
interests, or (3) to allow retention of banks that are so small 
in relation to the holding company's total interests and so 
small in relation to the banking market to be served as to 
minimize the likelihood that the bank's powers to grant or deny 
credit may be influenced by a desire to further the holding 
company's other interests.
 (e) With respect to shares which were not subject to the 
prohibitions of this section as originally enacted by reason of 
any exemption with respect thereto but which were made subject 
to such prohibitions by the subsequent repeal of such 
exemption, no bank holding company shall retain direct or 
indirect ownership or control of such shares after five years 
from the date of the repeal of such exemption, except as 
provided in paragraph (2) of subsection (a). Any bank holding 
company subject to such five-year limitation on the retention 
of nonbanking assets shall endeavor to divest itself of such 
shares promptly and such bank holding company shall report its 
progress in such divestiture to the Board two years after 
repeal of the exemption applicable to it and annually 
thereafter.
 (f) Certain Companies Not Treated as Bank Holding 
Companies.--
 (1) In general.--Except as provided in paragraph 
 (9), any company which--
 (A) on March 5, 1987, controlled an 
 institution which became a bank as a result of 
 the enactment of the Competitive Equality 
 Amendments of 1987; and
 (B) was not a bank holding company on the 
 day before the date of the enactment of the 
 Competitive Equality Amendments of 1987,
 shall not be treated as a bank holding company for 
 purposes of this Act solely by virtue of such company's 
 control of such institution.
 (2) Loss of exemption.--Subject to paragraph (3), a 
 company described in paragraph (1) shall no longer 
 qualify for the exemption provided under that paragraph 
 if--
 (A) such company directly or indirectly--
 (i) acquires control of an 
 additional bank or an insured 
 institution (other than an insured 
 institution described in paragraph (10) 
 or (12) of this subsection) after March 
 5, 1987; or
 (ii) acquires control of more than 
 5 percent of the shares or assets of an 
 additional bank or a savings 
 association other than--
 (I) shares held as a bona 
 fide fiduciary (whether with or 
 without the sole discretion to 
 vote such shares);
 (II) shares held by any 
 person as a bona fide fiduciary 
 solely for the benefit of 
 employees of either the company 
 described in paragraph (1) or 
 any subsidiary of that company 
 and the beneficiaries of those 
 employees;
 (III) shares held 
 temporarily pursuant to an 
 underwriting commitment in the 
 normal course of an 
 underwriting business;
 (IV) shares held in an 
 account solely for trading 
 purposes;
 (V) shares over which no 
 control is held other than 
 control of voting rights 
 acquired in the normal course 
 of a proxy solicitation;
 (VI) loans or other 
 accounts receivable acquired in 
 the normal course of business;
 (VII) shares or assets 
 acquired in securing or 
 collecting a debt previously 
 contracted in good faith, 
 during the 2-year period 
 beginning on the date of such 
 acquisition or for such 
 additional time (not exceeding 
 3 years) as the Board may 
 permit if the Board determines 
 that such an extension will not 
 be detrimental to the public 
 interest;
 (VIII) shares or assets of 
 a savings association described 
 in paragraph (10) or (12) of 
 this subsection;
 (IX) shares of a savings 
 association held by any 
 insurance company, as defined 
 in section 2(a)(17) of the 
 Investment Company Act of 1940, 
 except as provided in paragraph 
 (11);
 (X) shares issued in a 
 qualified stock issuance under 
 section 10(q) of the Home 
 Owners' Loan Act; and
 (XI) assets that are 
 derived from, or incidental to, 
 activities in which 
 institutions described in 
 subparagraph (F) or (H) of 
 section 2(c)(2) are permitted 
 to engage;
except that the aggregate amount of shares held under this 
clause (other than under subclauses (I), (II), (III), (IV), 
(V), and (VIII)) may not exceed 15 percent of all outstanding 
shares or of the voting power of a savings association;
 (B) any bank subsidiary of such company--
 (i) accepts demand deposits or 
 deposits that the depositor may 
 withdraw by check or similar means for 
 payment to third parties; and
 (ii) engages in the business of 
 making commercial loans (except that, 
 for purposes of this clause, loans made 
 in the ordinary course of a credit card 
 operation shall not be treated as 
 commercial loans); or
 (C) after the date of the enactment of the 
 Competitive Equality Amendments of 1987, any 
 bank subsidiary of such company permits any 
 overdraft (including any intraday overdraft), 
 or incurs any such overdraft in the account of 
 the bank at a Federal reserve bank, on behalf 
 of an affiliate, other than an overdraft 
 described in paragraph (3).
 (3) Permissible overdrafts described.--For purposes 
 of paragraph (2)(C), an overdraft is described in this 
 paragraph if--
 (A) such overdraft results from an 
 inadvertent computer or accounting error that 
 is beyond the control of both the bank and the 
 affiliate;
 (B) such overdraft--
 (i) is permitted or incurred on 
 behalf of an affiliate that is 
 monitored by, reports to, and is 
 recognized as a primary dealer by the 
 Federal Reserve Bank of New York; and
 (ii) is fully secured, as required 
 by the Board, by bonds, notes, or other 
 obligations that are direct obligations 
 of the United States or on which the 
 principal and interest are fully 
 guaranteed by the United States or by 
 securities and obligations eligible for 
 settlement on the Federal Reserve book 
 entry system; or
 (C) such overdraft--
 (i) is permitted or incurred by, or 
 on behalf of, an affiliate in 
 connection with an activity that is 
 financial in nature or incidental to a 
 financial activity; and
 (ii) does not cause the bank to 
 violate any provision of section 23A or 
 23B of the Federal Reserve Act, either 
 directly, in the case of a bank that is 
 a member of the Federal Reserve System, 
 or by virtue of section 18(j) of the 
 Federal Deposit Insurance Act, in the 
 case of a bank that is not a member of 
 the Federal Reserve System.
 (4) Divestiture in case of loss of exemption.--If 
 any company described in paragraph (1) fails to qualify 
 for the exemption provided under paragraph (1) by 
 operation of paragraph (2), such exemption shall cease 
 to apply to such company and such company shall divest 
 control of each bank it controls before the end of the 
 180-day period beginning on the date on which the 
 company receives notice from the Board that the company 
 has failed to continue to qualify for such exemption, 
 unless, before the end of such 180-day period, the 
 company has--
 (A) either--
 (i) corrected the condition or 
 ceased the activity that caused the 
 company to fail to continue to qualify 
 for the exemption; or
 (ii) submitted a plan to the Board 
 for approval to cease the activity or 
 correct the condition in a timely 
 manner (which shall not exceed 1 year); 
 and
 (B) implemented procedures that are 
 reasonably adapted to avoid the reoccurrence of 
 such condition or activity.
 (5) Subsection ceases to apply under certain 
 circumstances.--This subsection shall cease to apply to 
 any company described in paragraph (1) if such 
 company--
 (A) registers as a bank holding company 
 under section 5(a) of this Act;
 (B) immediately upon such registration, 
 complies with all of the requirements of this 
 Act, and regulations prescribed by the Board 
 pursuant to this Act, including the nonbanking 
 restrictions of this section; and
 (C) does not, at the time of such 
 registration, control banks in more than one 
 State, the acquisition of which would be 
 prohibited by section 3(d) of this Act if an 
 application for such acquisition by such 
 company were filed under section 3(a) of this 
 Act.
 (6) Information requirement.--Each company 
 described in paragraph (1) shall, within 60 days after 
 the date of enactment of the Competitive Equality 
 Amendments of 1987, provide the Board with the name and 
 address of such company, the name and address of each 
 bank such company controls, and a description of each 
 such bank's activities.
 (7) Examination.--The Board may, from time to time, 
 examine a company described in paragraph (1), or a bank 
 controlled by such company, or require reports under 
 oath from appropriate officers or directors of such 
 company or bank solely for purposes of assuring 
 compliance with the provisions of this subsection and 
 enforcing such compliance.
 (8) Enforcement.--
 (A) In general.--In addition to any other 
 power of the Board, the Board may enforce 
 compliance with the provisions of this Act 
 which are applicable to any company described 
 in paragraph (1), and any bank controlled by 
 such company, under section 8 of the Federal 
 Deposit Insurance Act and such company or bank 
 shall be subject to such section (for such 
 purposes) in the same manner and to the same 
 extent as if such company or bank were a State 
 member insured bank.
 (B) Application of other act.--Any 
 violation of this Act by any company described 
 in paragraph (1), and any bank controlled by 
 such company, may also be treated as a 
 violation of the Federal Deposit Insurance Act 
 for purposes of subparagraph (A).
 (C) No effect on other authority.--No 
 provision of this paragraph shall be construed 
 as limiting any authority of the Comptroller of 
 the Currency or the Federal Deposit Insurance 
 Corporation.
 (9) Tying provisions.--A company described in 
 paragraph (1) shall be--
 (A) treated as a bank holding company for 
 purposes of section 106 of the Bank Holding 
 Company Act Amendments of 1970 and section 
 22(h) of the Federal Reserve Act and any 
 regulation prescribed under any such section; 
 and
 (B) subject to the restrictions of section 
 106 of the Bank Holding Company Act Amendments 
 of 1970, in connection with any transaction 
 involving the products or services of such 
 company or affiliate and those of a bank 
 affiliate, as if such company or affiliate were 
 a bank and such bank were a subsidiary of a 
 bank holding company.
 (10) Exemption unaffected by certain emergency 
 acquisitions.--For purposes of clauses (i) and 
 (ii)(VIII) of paragraph (2)(A), an insured institution 
 is described in this paragraph if--
 (A) the insured institution was acquired 
 (or any shares or assets of such institution 
 were acquired) by a company described in 
 paragraph (1) in an acquisition under section 
 408(m) of the National Housing Act or section 
 13(k) of the Federal Deposit Insurance Act; and
 (B) either--
 (i) the insured institution is 
 located in a State in which such 
 company controlled a bank on March 5, 
 1987; or
 (ii) the insured institution has 
 total assets of $500,000,000 or more at 
 the time of such acquisition.
 (11) Shares held by insurance affiliates.--Shares 
 described in clause (ii)(IX) of paragraph (2)(A) shall 
 not be excluded for purposes of clause (ii) of such 
 paragraph if--
 (A) all shares held under such clause 
 (ii)(IX) by all insurance company affiliates of 
 such savings association in the aggregate 
 exceed 5 percent of all outstanding shares or 
 of the voting power of the savings association; 
 or
 (B) such shares are acquired or retained 
 with a view to acquiring, exercising, or 
 transferring control of the savings 
 association.
 (12) Exemption unaffected by certain other 
 acquisitions.--For purposes of clauses (i) and 
 (ii)(VIII) of paragraph (2)(A), an insured institution 
 is described in this paragraph if the insured 
 institution was acquired (or any shares or assets of 
 such institution were acquired) by a company described 
 in paragraph (1)--
 (A) from the Resolution Trust Corporation, 
 the Federal Deposit Insurance Corporation, or 
 the Director of the Office of Thrift 
 Supervision, in any capacity; or
 (B) in an acquisition in which the insured 
 institution has been found to be in danger of 
 default (as defined in section 3 of the Federal 
 Deposit Insurance Act) by the appropriate 
 Federal or State authority.
 (13) Special rule relating to shares acquired in a 
 qualified stock issuance.--A company described in 
 paragraph (1) that holds shares issued in a qualified 
 stock issuance pursuant to section 10(q) of the Home 
 Owners' Loan Act by any savings association or savings 
 and loan holding company (neither of which is a 
 subsidiary) shall not be deemed to control such savings 
 association or savings and loan holding company solely 
 because such company holds such shares unless--
 (A) the company fails to comply with any 
 requirement or condition imposed by paragraph 
 (2)(A)(ii)(X) or section 10(q) of the Home 
 Owners' Loan Act with respect to such shares; 
 or
 (B) the shares are acquired or retained 
 with a view to acquiring, exercising, or 
 transferring control of the savings association 
 or savings and loan holding company.
 (14) Foreign bank subsidiaries of limited purpose 
 credit card banks.--
 (A) In general.--An institution described 
 in section 2(c)(2)(F) may control a foreign 
 bank if--
 (i) the investment of the 
 institution in the foreign bank meets 
 the requirements of section 25 or 25A 
 of the Federal Reserve Act and the 
 foreign bank qualifies under such 
 sections;
 (ii) the foreign bank does not 
 offer any products or services in the 
 United States; and
 (iii) the activities of the foreign 
 bank are permissible under otherwise 
 applicable law.
 (B) Other limitations inapplicable.--The 
 limitations contained in any clause of section 
 2(c)(2)(F) shall not apply to a foreign bank 
 described in subparagraph (A) that is 
 controlled by an institution described in such 
 section.
 (g) Limitations on Certain Banks.--
 (1) In general.--Notwithstanding any other 
 provision of this section (other than the last sentence 
 of subsection (a)(2)), a bank holding company which 
 controls an institution that became a bank as a result 
 of the enactment of the Competitive Equality Amendments 
 of 1987 may retain control of such institution if such 
 institution does not--
 (A) engage in any activity after the date 
 of the enactment of such Amendments which would 
 have caused such institution to be a bank (as 
 defined in section 2(c), as in effect before 
 such date) if such activities had been engaged 
 in before such date; or
 (B) increase the number of locations from 
 which such institution conducts business after 
 March 5, 1987.
 (2) Limitations cease to apply under certain 
 circumstances.--The limitations contained in paragraph 
 (1) shall cease to apply to a bank described in such 
 paragraph at such time as the acquisition of such bank, 
 by the bank holding company referred to in such 
 paragraph, would not be prohibited under section 3(d) 
 of this Act if--
 (A) an application for such acquisition 
 were filed under section 3(a) of this Act; and
 (B) such bank were treated as an additional 
 bank (under section 3(d)).
 (h) Tying Provisions.--
 (1) Applicable to certain exempt institutions and 
 parent companies.--An institution described in 
 subparagraph (D), (F), (G), or (H) of section 2(c)(2) 
 shall be treated as a bank, and a company that controls 
 such an institution shall be treated as a bank holding 
 company, for purposes of section 106 of the Bank 
 Holding Company Act Amendments of 1970 and section 
 22(h) of the Federal Reserve Act and any regulation 
 prescribed under any such section.
 (2) Applicable with respect to certain 
 transactions.--A company that controls an institution 
 described in subparagraph (D), (F), (G), or (H) of 
 section 2(c)(2) and any of such company's other 
 affiliates, shall be subject to the tying restrictions 
 of section 106 of the Bank Holding Company Act 
 Amendments of 1970 in connection with any transaction 
 involving the products or services of such company or 
 affiliate and those of such institution, as if such 
 company or affiliate were a bank and such institution 
 were a subsidiary of a bank holding company.
 (i) Acquisition of Savings Associations.--
 (1) In general.--The Board may approve an 
 application by any bank holding company under 
 subsection (c)(8) to acquire any savings association in 
 accordance with the requirements and limitations of 
 this section.
 (2) Prohibition on tandem restrictions.--In 
 approving an application by a bank holding company to 
 acquire a savings association, th