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108 STAT. 2160
PUBLIC LAW 103-325—SEPT. 23, 1994
Public Law 103-325
103d Congress
An Act
Sept. 23. 1994
[H.R. 3474]
Riegle
Community
Development
and
Regulatory
Improvement
Act of 1994.
12 u s e 4701
note.
To reduce administrative requirements for insured depository institutions to the
extent consistent with safe and sound banking practices, to facilitate the establishment of community development financial institutions, and for other purposes.
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the "Riegle Community Development and Regulatory Improvement Act of 1994".
(b) TABLE OF CONTENTS.—The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
TITLE I—COMMUNITY DEVELOPMENT AND CONSUMER PROTECTION
Subtitle A—Community Development Banking and Financial Institutions Act
Sec. 101. Short title.
Sec. 102. Findings and purposes.
Sec. 103. Definitions.
Sec. 104. Establishment of National Fund for Community Development Banking.
Sec. 105. Applications for assistance.
Sec. 106. Community partnerships.
Sec. 107. Selection of institutions.
Sec. 108. Assistance provided by the Fund.
Sec. 109. Training.
Sec. 110. Encouragement of private entities.
Sec. 111. Collection and compilation of information.
Sec. 112. Investment of receipts and proceeds.
Sec. 113. Capitalization assistance to enhance liquidity.
Sec. 114. Incentives for depository institution participation.
Sec. 115. Recordkeeping.
Sec. 116. Special provisions with respect to institutions that are supervised by Federal banking agencies.
Sec. 117. Studies and reports; examination and audit.
Sec. 118. Inspector General.
Sec. 119. Enforcement.
Sec. 120. Community Development Revolving Loan Fund for credit unions.
Sec. 121. Authorization of appropriations.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
151.
152.
153.
154.
155.
156.
157.
158.
Subtitle B—Home Ownership and Equity Protection
Short title.
Consumer protections for certain mortgages.
Civil Hability.
Reverse mortgage disclosure.
Regulations.
Applicability.
Federal Reserve study.
Hearings on home equity lending.
TITLE II—SMALL BUSINESS CAPITAL FORMATION
Subtitle A—Small Business Loan Securitization
Sec. 201. Short title.
PUBLIC LAW 103-325—SEPT. 23, 1994
Sec.
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202.
203.
204.
205.
206.
207.
208.
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251.
252.
253.
254.
255.
256.
257.
258.
259.
260.
261.
108 STAT. 2161
Small business related security.
Applicability of margin requirements.
Borrowing in the course oi business.
Small business related securities as collateral.
Investment by depository institutions.
Preemption of State law.
Insured depository institution capital requirements for transfers of small
business obligations.
Sec. 209. Joint study on the impact of additional securities based on pooled obligations.
Sec. 210. Consistent use of financial terminology.
Subtitle B—Small Business Capital Enhancement
Findings and purposes.
Definitions.
Approving States for participation.
Participation agreements.
Terms of participation agreements.
Reports.
Reimbursement by the Fund.
Reimbursement to the Fund.
Regulations.
Authorization of appropriations.
Effective date.
TITLE III—PAPERWORK REDUCTION AND REGULATORY IMPROVEMENT
Sec. 301. Incorporated definitions.
Sec. 302. Administrative consideration of burden with new regulations.
Sec. 303. Streamlining of regulatory requirements.
Sec. 304. Elimination of dupUcative filings.
Sec. 305. Coordinated and unified examinations.
Sec. 306. Eighteen-month examination rule for certain small institutions.
Sec. 307. Call report simplification.
Sec. 308. Repeal of publication requirements.
Sec. 309. Regulatory appeals process, ombudsman, and alternative dispute resolution.
Sec. 310. Electronic filing of currency transaction reports.
Sec. 311. Bank Secrecy Act publication requirements.
Sec. 312. Exemption of business loans from Real Estate Settlement Procedures Act
requirements.
Sec. 313. Flexibility in choosing boards of directors.
Sec. 314. Holding company audit requirements.
Sec. 315. State regulation of real estate appraisals.
Sec. 316. Acceleration of effective date for interaffiliate transactions.
Sec. 317. CoUateralization of public deposits.
Sec. 318. Modification of regulatory provisions.
Sec. 319. Expedited procedures.
Sec. 320. Exemption of certain holding company formations from registration under
the Securities Act of 1933.
Sec. 321. Reduction of post-approval waiting periods for certain acquisitions and
mergers.
Sec. 322. Bankers' banks.
Sec. 323. Bank Service Corporation Act amendment.
Sec. 324. Merger transaction reports.
Sec. 325. Credit card accounts receivable sales.
Sec. 326. Limiting potential liability on foreign accounts.
Sec. 327. GAO reports.
Sec. 328. Study and report on capital standards and their impact on the economy.
Sec. 329. Study on the impact of the payment of interest on reserves.
Sec. 330. Study and report on the consumer credit system.
Sec. 331. Clarification of provisions relating to administrative autonomy.
Sec. 332. Exemption for business accounts.
Sec. 333. Study on check-related fraud.
Sec. 334. Insider lending.
Sec. 335. Revisions of standards.
Sec. 336. Alternative rules for radio advertising.
Sec. 337. Deposit broker registration.
Sec. 338. Amendments to the Depository Institution Management Interlocks Act.
Sec. 339. Adverse information about consumers.
Sec. 340. Simplified disclosure for existing depositors.
Sec. 341. Feasibility study of data bank.
108 STAT. 2162
PUBLIC LAW 103-325—SEPT. 23, 1994
Sec.
Sec.
Sec.
Sec.
Sec.
342.
343.
344.
345.
346.
Sec.
Sec.
Sec.
Sec.
347.
348.
349.
350.
Timely completion of CRA review.
Time limit on agency consideration of completed applications.
Waiver of right of rescission for certain refinancing transactions.
Clarification of RESPA disclosure requirements.
Notice procedures for bank holding companies to seek approval to engage
in certain activities.
Commercial mortgage related securities.
Clarifying amendment relating to data collection.
Guidelines for examinations.
Revising regulatory requirenr ents for transfers of all types of assets with
recourse.
TITLE IV—MONEY LAUNDERING
Sec. 401. Short title.
Sec. 402. Reform of CTR exemption requirements to reduce number and size of reports consistent with effective law enforcement.
Sec. 403. Single designee for reporting of suspicious transactions.
Sec. 404. Improvement of identification of money laundering schemes.
Sec. 405. Negotiable instruments drawn on foreign banks subject to recordkeeping
and reporting requirements.
Sec. 406. Imposition of civil money penalties by appropriate Federal banking agencies.
Sec. 407. Uniform State licensing and regulation of check cashing, currency exchange, and money transmitting businesses.
Sec. 408. Registration of money transmitting businesses to promote effective law
enforcement.
Sec. 409. Uniform Federal regulation of casinos.
Sec. 410. Authority to grant exemptions to States with effective regulation and enforcement.
Sec. 411. Criminal and civil penalties for sti-ucturing domestic and international
transactions.
Sec. 412. GAO study of cashiers'checks.
Sec. 413. Technical amendments and corrections.
TITLE V—NATIONAL FLOOD INSURANCE REFORM
Sec. 501. Short title.
Subtitle A—Definitions
Sec. 511. Flood Disaster Protection Act of 1973.
Sec. 512. National Flood Insurance Act of 1968.
Subtitle B—Compliance and Increased Participation
Sec. 521. Nonwaiver of flood pvirchase requirement for recipients of Federal disaster assistance.
Sec. 522 Expanded flood insurance purchase requirements.
Sec. 523. Escrow of flood insurance payments.
Sec. 524. Placement of flood insurance by lenders.
Sec. 525. Penalties for failure to require flood insurance or notify.
Sec. 526. Fees for determining applicability of flood insurance purchase requirements.
Sec. 527. Notice requirements.
Sec. 528. Standard hazard determination forms.
Sec. 529. Examinations regarding compliance.
Sec. 530. Financial Institutions Examination Council.
Sec. 531. Clerical amendment.
Subtitle C—Ratings and Incentives for Community Floodplain Management
Programs
Sec. 541. Community rating system and incentives for community floodplain management.
Sec. 542. Funding.
Sec.
Sec.
Sec.
Sec.
Sec.
551.
552.
553.
554.
555.
Subtitle D—Mitigation of Flood Risks
Repeal of flooded property purchase and loan program.
Termination of erosion-threatened structures program.
Mitigation assistance program.
EstabUshment of National Flood Mitigation Fund.
Additional coverage for compliance with land use and control measures.
Subtitle E—Task Forces
Sec. 561. Flood Insurance Interagency Task Force.
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2163
Sec. 562. Task Force on Natural and Beneficial Functions of the Floodplain.
Sec.
Sec.
Sec.
Sec.
Sec.
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Sec.
571.
572.
573.
574.
575.
576.
577.
578.
Sec.
Sec.
Sec.
Sec.
Sec.
580.
581.
582.
583.
584.
Subtitle F—Miscellaneous Provisions
Extension of flood insurance program.
Limitation on premium increases.
Maximum flood insurance coverage amounts.
Flood insurance program arrangements with private insurance entities.
Updating of flooa maps.
Technical Mapping Advisory Council.
Evaluation of erosion hazards.
Study of economic effects of charging actuarially based premium rates for
re-FIRM structures,
ective dates of policies.
Agricultural structures.
Implementation review by Director.
Prohibited flood disaster assistance.
Regulations.
Relation to State and local laws.
S
TITLE VI—MISCELLANEOUS PROVISIONS
Sec. 601. Oversight hearings.
Sec. 602. Technical amendments to the Federal banking laws.
TITLE I—COMMUNITY DEVELOPMENT
AND CONSUMER PROTECTION
Subtitle A—Community Development
Banking and Financial Institutions Act
SEC. 101. SHORT TITLE.
This subtitle may be cited as the "Community Development
Banking and Financial Institutions Act of 1994".
SEC. 102. FINDINGS AND PURPOSES.
Community
Development
Banking and
Financial
Institutions Act
of 1994.
12 u s e 4701
note.
12 u s e 4701.
(a) FINDINGS.—^The Congress finds that—
(1) many of the Nation's urban, rural, and Native American
communities face critical social and economic problems arising
in part from the lack of economic growth, people living in
poverty, and the lack of employment and other opportunities;
(2) the restoration and maintenance of the economies of
these communities will require coordinated development strategies, intensive supportive services, and increased access to
equity investments and loans for development activities, including investment in businesses, housing, commercial real estate,
human development, and other activities that promote the longterm economic and social viability of the community; and
(3) community development financial institutions have
proven their ability to identify and respond to community needs
for equity investments, loans, and development services.
(b) PURPOSE.—^The purpose of this subtitle is to create a
Community Development Financial Institutions Fund to promote
economic revitalization and community development through investment in and assistance to community development financial institutions, including enhancing the liquidity of community development
financial institutions.
SEC. 103. DEFINITIONS.
For purposes of this subtitle, the following definitions shall
apply:
12 u s e 4702.
108 STAT. 2164
PUBLIC LAW 103-325—SEPT. 23, 1994
(1) ADMINISTRATOR.—The term "Administrator" means the
Administrator of the Fund appointed under section 104(b).
(2) APPROPRIATE FEDERAL BANKING AGENCY.—^The term
"appropriate Federal banking agency" has the same meaning
as in section 3 of the Federal Deposit Insurance Act, and
also includes the National Credit Union Administration Board
with respect to insured credit unions.
(3) AFFILIATE.—^The term "affiliate" has the same meaning
as in section 2(k) of the Bank Holding Company Act of 1956.
(4) BOARD.—^The term "Board" means the Community
Development Advisory Board established under section 104(d).
(5) COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION.—
(A) IN GENERAL.—^The term "community development
financial institution" means a person (other than an
individual) that—
(i) has a primary mission of promoting community
development;
(ii) serves an investment area or targeted
population;
(iii) provides development services in conjunction
with equity investments or loans, directly or through
a subsidiary or affiliate;
(iv) maintains, through representation on its
governing board or otherwise, accountability to residents of its investment area or targeted population;
and
(v) is not an agency or instrumentality of the
United States, or of any State or political subdivision
of a State.
(B) CONDITIONS
COMPANIES.—
(i)
FOR
CONSOLIDATED
QUALIFICATION
OF
TREATMENT.—A
HOLDING
depository
institution holding company may qualify as a community development financial institution only if the holding company and the subsidiaries and affiliates of the
holding company collectively satisfy the requirements
of subparagraph (A).
(ii) EXCLUSION OF SUBSIDIARY OR AFFILIATE FOR
FAILURE TO MEET CONSOLIDATED TREATMENT RULE.—
No subsidiary or affiliate of a depository institution
holding company may qualify as a community development financial institution if the holding company and
the subsidiaries and affiliates of the holding company
do not collectively meet the requirements of subparagraph (A).
(C) CONDITIONS
FOR SUBSIDIARIES.—No
subsidiary of
an insured depository institution may qualify as a community development financial institution if the insured depository institution and its subsidiaries do not collectively meet
the requirements of subparagraph (A).
(6) COMMUNITY PARTNER.—^The term "community partner"
means a person (other than an individual) that provides loans,
equity investments, or development services, including a depository institution holding company, an insured depository institution, an insured credit union, a nonprofit organization, a State
or local government agency, a quasi-governmental entity, and
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2165
an investment company authorized to operate pursuant to the
Small Business Investment Act of 1958.
(7) COMMUNITY PARTNERSHIP.—^The term "community partnership" means an agreement between a community development financial institution and a community partner to provide
development services, loans, or equity investments, to an investment area or targeted population.
(8) DEPOSITORY INSTITUTION HOLDING COMPANY.—The term
"depository institution holding company" has the same meaning
as in section 3 of the Federal Deposit Insurance Act.
(9) DEVELOPMENT SERVICES.—^The term "development services" means activities that promote community development
and are integral to lending or investment activities, including—
(A) business planning;
(B) financial and credit counseling; and
(C) marketing and management assistance,
(10) FUND.—The term "Fund" means the Community Development Financial Institutions Fund established under section
104(a).
(11) INDIAN RESERVATION.—^The term "Indian reservation"
has the same meaning as in section 4(10) of the Indian Child
Welfare Act of 1978, and shall include land held by incorporated
Native groups, regional corporations, and village corporations,
as defined in or established pursuant to the Alaska Native
Claims Settlement Act, public domain Indian allotments, and
former Indian reservations in the State of Oklahoma.
(12) INDIAN TRIBE.—The term "Indian tribe" means any
Indian tribe, band, pueblo, nation, or other organized group
or community, including any Alaska Native village or regional
or village corporation, as defined in or established pursuant
to the Alaska Native Claims Settlement Act, which is recognized as eligible for the special programs and services provided
by the United States to Indians because of their status as
Indians.
(13) INSURED COMMUNITY DEVELOPMENT FINANCIAL INSTITU-
TION.—The term "insured community development financial
institution" means any community development financial
institution that is an insured depository institution or an
insured credit union.
(14) INSURED CREDIT UNION.—The term "insured credit
union" has the same meaning as in section 101(7) of the Federal
Credit Union Act.
(15) INSURED DEPOSITORY INSTITUTION.—The term "insured
depository institution" has the same meaning as in section
3 of the Federal Deposit Insurance Act.
(16) INVESTMENT AREA.—The term "investment area"
means a geographic area (or areas) including an Indian reservation that—
(A)(i) meets objective criteria of economic distress
developed by the Fund, which may include the percentage
of low-income families or the extent of poverty, the rate
of unemployment or underemployment, rural population
outmigration, lag in population growth, and extent of blight
and disinvestment; and
(ii) has significant unmet needs for loans or equity
investments; or
108 STAT. 2166
PUBLIC LAW 103-325—SEPT. 23, 1994
(B) encompasses or is located in an empowerment zone
or enterprise community designated under section 1391
of the Internal Revenue Code of 1986.
(17) LOW-INCOME.—The term "low-income" means having
an income, adjusted for family size, of not more than—
(A) for metropolitan areas, 80 percent of the area
median income; and
(B) for nonmetropolitan areas, the greater of—
(i) 80 percent of the area median income; or
(ii) 80 percent of the statewide nonmetropolitan
area median income.
(18) STATE.—The term "State" has the same meaning as
in section 3 of the Federal Deposit Insurance Act.
(19) SUBSIDIARY.—The term "subsidiary" has the same
meaning as in section 3 of the Federal Deposit Insurance Act,
except that a community development financial institution that
is a corporation shall not be considered to be a subsidiary
of any insured depository institution or depository institution
holding company that controls less than 25 percent of any
class of the voting shares of such corporation, and does not
otherwise control in any manner the election of a majority
of the directors of the corporation.
(20) TARGETED POPULATION.—The term "targeted population" means individuals, or an identifiable group of individuals, including an Indian tribe, who—
(A) are low-income persons; or
(B) otherwise lack adequate access to loans or equity
investments.
(21) TRAINING PROGRAM.—The term "training program"
means the training program operated by the Fund under section
109.
12 u s e 4703.
District of
Columbia.
SEC. 104. ESTABLISHMENT OF NATIONAL FUND FOR COMMUNITY
DEVELOPMENT BANKING.
(a) ESTABLISHMENT.—
(1) IN GENERAL.—^There is established a corporation to be
known as the Community Development Financial Institutions
Fund that shall have the duties and responsibilities specified
by this subtitle and subtitle B of title II. The Fund shall
have succession until dissolved. The offices of the Fund shall
ije in Washington, D.C. The Fund shall not be affiliated with
or be within any other agency or department of the Federal
Government.
(2) WHOLLY OWNED GOVERNMENT CORPORATION.—The Fund
shall be a wholly owned Government corporation in the executive branch and shall be treated in all respects as an agency
of the United States, except as otherwise provided in this
subtitle.
(b) MANAGEMENT OF FUND.—
(1) APPOINTMENT OF ADMINISTRATOR.—The management of
the Fund shall be vested in an Administrator, who shall be
appointed by the President, by and with the advice and consent
of the Senate. The Administrator shall not engage in any other
business or employment during service as the Administrator.
(2) CHIEF FINANCIAL OFFICER.—The Administrator shall
appoint a chief financial officer, who shall have the authority
and functions of an agency Chief Financial Officer under section
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2167
902 of title 31, United States Code. In the event of a vacancy
in the position of the Administrator or during the absence
or disability of the Administrator, the chief financial officer
shall perform the duties of the position of Administrator.
(3) OTHER OFFICERS AND EMPLOYEES.—The Administrator
may appoint such other officers and employees of the Fund
as the Administrator determines to be necessary or appropriate.
(4) EXPEDITED HIRING.—During the 2-year period beginning
on the date of enactment of this Act, the Administrator may—
(A) appoint and terminate the individuals referred to
in paragraphs (2) and (3) without regard to the civil service
laws and regulations; and
(B) fix the compensation of the individuals referred
to in paragraph (3) without regard to the provisions of
chapter 51 and subchapter III of chapter 53 of title 5,
United States Code, relating to classification of positions
and General Schedule pay rates, except that the rate of
pay for such individuals may not exceed the rate payable
for level V of the Executive Schedule under section 5316
of such title.
(c) GENERAL POWERS.—In carrying out the functions of the
Fund, the Administrator—
(1) shall have all necessary and proper authority to carry
out this subtitle and subtitle B of title II;
(2) shall have the power to adopt, alter, and use a corporate
seal for the Fund, which shall be judicially noticed;
(3) may adopt, amend, and repeal bylaws, rules, and regulations governing the manner in which business of the Fund
may be conducted and such rules and regulations as may
be necessary or appropriate to implement this subtitle and
subtitle B of title II;
(4) may enter into, perform, and enforce such agreements,
contracts, and transactions as may be deemed necessary or
appropriate to the conduct of activities authorized under this
subtitle and subtitle B of title II;
(5) may determine the character of and necessity for
expenditures of the Fund and the manner in which they shall
, be incurred, allowed, and paid;
(6) may utilize or employ the services of personnel of any
agency or instrumentality of the United States with the consent
of the agency or instrumentality concerned on a reimbursable
or nonreimbursable basis; and
(7) may execute all instruments necessary or appropriate
in the exercise of any of the functions of the Fund under
this subtitle and subtitle B of title II and may delegate to
the officers of the Fund such of the powers and responsibilities
of the Administrator as the Administrator deems necessary
or appropriate for the administration of the Fund.
(d) ADVISORY BOARD.—
(1) ESTABLISHMENT.—There is established an advisory
board to the Fund to be known as the Community Development
Advisory Board, which shall be operated in accordance with
the provisions of the Federal Advisory Committee Act, except
that section 14 of that Act does not apply to the Board.
(2) MEMBERSHIP.—The Board shall consist of 15 members,
including—
(A) the Secretary of Agriculture or his or her designee;
108 STAT. 2168
PUBLIC LAW 103-325—SEPT. 23, 1994
(B) the Secretary of Commerce or his or her designee;
(C) the Secretary of Housing and Urban Development
or his or her designee;
(D) the Secretary of the Interior or his or her designee;
(E) the Secretary of the Treasury or his or her designee;
(F) the Administrator of the Small Business Administration or his or her designee; and
(G) 9 private citizens, appointed by the President, who
shall be selected, to the maximum extent practicable, to
provide for national geographic representation and racial,
ethnic, and gender diversity, including—
(i) 2 individuals who are officers of existing community development financial institutions;
(ii) 2 individuals who are officers of insured depository institutions;
(iii) 2 individuals who are officers of national
consumer or public interest organizations;
(iv) 2 individuals who have expertise in community
development; and
(v) 1 individual who has personal experience and
specialized expertise in the unique lending and community development issues confronted by Indian tribes
on Indian reservations.
(3) CHAIRPERSON.—The members of the Board specified
in paragraph (2)(G) shall select, by majority vote, a chairperson
of the Board, who shall serve for a term of 2 years.
(4) BOARD FUNCTION.—It shall be the function of the Board
to advise the Administrator on the policies of the Fund regarding activities under this subtitle. The Board shall not advise
the Administrator on the granting or denial of any particular
application.
(5) TERMS OF PRIVATE MEMBERS.—
(A) IN GENERAL.—Each member of the Board appointed
under paragraph (2)(G) shall serve for a term of 4 years.
(B) VACANCIES.—^Any member appointed to fill a
vacancy occurring prior to the expiration of the term for
which the previous member was appointed shall be
appointed for the remainder of such term. Members may
continue to serve following the expiration of their terms
until a successor is appointed.
(6) MEETINGS.—^The Board shall meet at least annually
and at such other times as requested by the Administrator
or the chairperson. A majority of the members of the Board
shall constitute a quorum.
(7) REIMBURSEMENT FOR EXPENSES.—The members of the
Board may receive reimbursement for travel, per diem, and
other necessary expenses incurred in the performance of their
duties, in accordance with the Federal Advisory Committee
Act.
(8) COSTS AND EXPENSES.—^The Fund shall provide to the
Board all necessary staff and facilities.
(e) CONFORMING AMENDMENTS.—Section 9101(3) of title 31,
United States Code, is amended—
(1) by redesignating subparagraphs (B) through (M) as
subparagraphs (C) through (N), respectively; and
(2) by inserting after subparagraph (A) the following new
subparagraph:
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2169
"(B) the Community Development Financial Institutions Fund;".
(f) GOVERNMENT CORPORATION CONTROL ACT EXEMPTION.—Sec-
tion 9107(b) of title 31, United States Code, shall not apply to
deposits of the Fund made pursuant to section 108.
(g) LIMITATION OF FUND AND FEDERAL LIABILITY.—^The liability
of the Fund and the United States Government arising out of
any investment in a community development financial institution
in accordance with this subtitle shall be limited to the amount
of the investment. The Fund shall be exempt from giny assessments
and other liabilities that may be imposed on controlling or principal
shareholders by any Federal law or the law of any State, Territory,
or the District of Columbia. Nothing in this subsection shall affect
the application of any Federal tax law.
(h) PROHIBITION ON ISSUANCE OF SECURITIES.—^The Fund may
not issue stock, bonds, debentures, notes, or other securities.
(i) COMPENSATION.—Title 5, United States Code, is amended
in section 5313, by adding at the end the following:
"Administrator of the Community Development Financial
Institutions Fund.".
(j) ASSISTED INSTITUTIONS N O T UNITED STATES INSTRUMENTAL-
ITIES.—^A community development financial institution or other
organization that receives assistance pursuant to this subtitle shall
not be deemed to be an agency, department, or instrumentality
of the United States.
(k) TRANSITION PERIOD.—
(1) IN GENERAL.—During the transition period, the Secretary of the Treasury may—
(A) assist in the establishment of the administrative
functions of the Fund listed in paragraph (2); and
(B) hire not more than 6 individuals to serve as employees of the Fund during the transition period.
(2) CONTINUED SERVICE.—Individuals hired in accordance
with paragraph (1)(B) may continue to serve as employees
of the Fund after the transition period.
(3) ADMINISTRATIVE FUNCTIONS.—^The administrative functions referred to in paragraph (1)(A) shall be limited to—
(A) establishing accounting, information, and recordkeeping systems for the Fund; and
(B) procuring office space, equipment, and supplies.
(4) EXPEDITED HIRING.—During the transition period, the
Secretary of the Treasury may—
(A) appoint and terminate the individuals referred to
in paragraph (1)(B) without regard to the civil service
laws and regulations; and
(B) fix the compensation of the individuals referred
to in paragraph (1)(B) without regard to the provisions
of chapter 51 and subchapter III of chapter 53 of title
5, United States Code, relating to classification of positions
and General Schedule pay rates, except that the rate of
pay for such individuals may not exceed the rate payable
for level V of the Executive Schedule under section 5316
of such title.
(5) CERTAIN EMPLOYEES.—During the transition period,
employees of the Department of the Treasury may only comprise less than one-half of the total number of individuals
hired in accordance with paragraph (1)(B).
79-194 O—95—14: QL 3 Part 3
108 STAT. 2170
PUBLIC LAW 103-325—SEPT. 23, 1994
(6) TRANSITION EXPENSES.—Amounts previously appropriated to the Department of the Treasury may be used to
pay obligations and expenses of the Fund incurred under this
section, and such amounts may be reimbursed by the Fund
to the Department of the Treasury from amounts appropriated
to the Fund for fiscal year 1995.
(7) DEFINITION,—For purposes of this subsection, the term
"transition period" means the period beginning on the date
of enactment of this Act and ending on the date on which
the Administrator is appointed.
12 u s e 4704.
SEC. 105. APPUCATIONS FOR ASSISTANCE.
(a) FORM AND PROCEDURES.—^An application for assistance
under this subtitle shall be submitted in such form and in accordance with such procedures as the Fund shall establish.
(b) MINIMUM REQUIREMENTS.—^Except as provided in sections
106 and 113, the Fund shall require an application—
(1) to establish that the applicant is, or will be, a community development financial institution;
(2) to include a comprehensive strategic plan for the
organization that contains—
(A) a business plan of not less than 5 years in duration
that demonstrates that the applicant will be properly managed and will have the capacity to operate as a community
development financial institution that will not be dependent upon assistance from the Fund for continued viability;
(B) an analysis of the needs of the investment area
or targeted population and a strategy for how the applicant
will attempt to meet those needs;
(C) a plan to coordinate use of assistance from the
Fund with existing Federal, State, local, and tribal government assistance programs, and private sector financial
services;
(D) an explanation of how the proposed activities of
the applicant are consistent with existing economic,
community, and housing development plans adopted by
or applicable to an investment area or targeted population;
and
(E) a description of how the applicant will coordinate
with community organizations and financial institutions
which will provide equity investments, loans, secondary
markets, or other services to investment areas or targeted
populations;
(3) to include a detailed description of the applicant's plans
and likely sources of funds to match the amount of assistance
requested from the Fund;
(4) in the case of an applicant that has previously received
assistance under this subtitle, to demonstrate that the
applicant—
(A) has substantially met its performance goals and
otherwise carried out its responsibilities under this subtitle
and the assistance agreement; and
(B) will expand its operations into a new investment
area or serve a new targeted population, offer more products or services, or increase the volume of its business;
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2171
(5) in the case of an applicant with a prior history of
serving investment areas or targeted populations, to demonstrate that the applicant—
(A) has a record of success in serving investment areas
or targeted populations; and
(B) will expand its operations into a new investment
area or to serve a new targeted population, offer more
products or services, or increase the volume of its current
business; and
(6) to include such other information as the Fund deems
appropriate.
(c) PREAPPLICATION OUTREACH PROGRAM.—The Fund shall provide an outreach program to identify and provide information to
potential applicants and may provide technical assistance to potential applicants, but shall not assist in the preparation of any
application.
SEC. 106. COMMUNITY PARTNERSHIPS.
(a) APPLICATION.—^An application for assistance may be filed
jointly by a community development financial institution and a
community partner to carry out a community partnership.
(b) APPLICATION REQUIREMENTS.—The Fund shall require a
community partnership application—
(1) to meet the minimum requirements established for
community development financial institutions under section
105(b), except that the criteria specified in paragraphs (1) and
(2)(A) of section 105(b) shall not apply to the community
partner;
(2) to describe how each coapplicant will participate in
carrying out the community partnership and how the partnership will enhance activities serving the investment area or
targeted population; and
(3) to demonstrate that the community partnership activities are consistent with the strategic plan submitted by the
community development financial institution coapplicant.
(c) SELECTION CRITERIA.—The Fund shall consider a community
partnership application based on—
(1) the community development financial institution
coapplicant—
(A) meeting the minimum selection criteria described
in section 105; and
(B) satisfying the selection criteria of section 107;
(2) the extent to which the community partner coapplicant
will participate in carrying out the partnership;
(3) the extent to which the community partnership will
enhance the likelihood of success of the community development
financial institution coapplicant's strategic plan; and
(4) the extent to which service to the investment area
or targeted population will be better performed by a partnership
as opposed to the individual community development financial
institution coapplicant.
(d) LIMITATION ON DISTRIBUTION OF ASSISTANCE.^Assistance
provided upon approval of an application under this section shall
be distributed only to the community development financial institution coapplicant, and shall not be used to fund any activities carried
out directly by the community partner or an affiliate or subsidiary
thereof.
12 USC 4705.
108 STAT. 2172
PUBLIC LAW 103-325—SEPT. 23, 1994
(e) OTHER REQUIREMENTS AND LIMITATIONS.—^All other requirements and limitations imposed by this subtitle on a community
development financial institution assisted under this subtitle shall
apply (in the manner that the Fund determines to be appropriate)
to assistance provided to carry out community partnerships. The
Fund may establish additional guidelines and restrictions on the
use of Federal funds to carry out community partnerships.
12 u s e 4706.
SEC. 107. SELECTION OF INSTITUTIONS.
(a) SELECTION CRITERIA.—Except as provided in section 113,
the Fund shall, in its sole discretion, select community development
financial institution applicants meeting the requirements of section
105 for assistance based on—
(1) the likelihood of success of the applicant in meeting
the goals of its comprehensive strategic plan;
(2) the experience and background of the management
team;
(3) the extent of need for equity investments, loans, and
development services within the investment areas or targeted
populations;
(4) the extent of economic distress within the investment
areas or the extent of need within the targeted populations,
as those factors are measured by objective criteria;
(5) the extent to which the applicant will concentrate
its activities on serving its investment areas or targeted
populations;
(6) the amount of firm commitments to meet or exceed
the matching requirements and the likely success of the plan
for raising the balance of the match;
(7) the extent to which the matching funds are derived
from private sources;
(8) the extent to which the proposed activities will expand
economic opportunities within the investment areas or the targeted populations;
(9) whether the applicant is, or will become, an insured
community development financial institution;
(10) the extent of support from the investment areas or
targeted populations;
(11) the extent to which the applicant is, or will be, community-owned or community-governed;
(12) the extent to which the applicant will increase its
resources through coordination with other institutions or
participation in a secondary market;
(13) in the case of an applicant with a prior history of
serving investment areas or targeted populations, the extent
of success in serving them; and
(14) other factors deemed to be appropriate by the Fund.
(b) GEOGRAPHIC DIVERSITY.—In selecting applicants for assistance, the Fund shall seek to fund a geographically diverse group
of applicants, which shall include applicants from metropolitan,
nonmetropolitan, and rural areas.
12 u s e 4707.
SEC. 108. ASSISTANCE PROVIDED BY THE FXWD.
(a) FORMS OF ASSISTANCE.—
(1) IN GENERAL.—^The Fund may provide—
(A) financial assistance through equity investments,
deposits, credit union shares, loans, and grants; and
(B) technical assistance—
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2173
(i) directly;
(ii) through grants; or
(iii) by contracting with organizations that possess
expertise in community development finance, without
regard to whether the organizations receive or are
eligible to receive assistance under this subtitle.
(2) EQUITY INVESTMENTS.—
(A) LIMITATION ON EQUITY INVESTMENTS.—The Fund
shall not own more than 50 percent of the equity of a
community development financial institution and may not
control the operations of such institution. The Fund may
hold only transferable, nonvoting equity investments in
the institution. Such equity investments may provide for
convertibility to voting stock upon transfer by the Fund.
(B) FUND DEEMED NOT TO CONTROL.—Notwithstanding
any other provision of law, the Fund shall not be deemed
to control a community development financial institution
by reason of any assistance provided under this subtitle
for the purpose of any other applicable law to the extent
that the Fund complies with subparagraph (A). Nothing
in this subparagraph shall affect the application of any
Federal tax law.
(3) DEPOSITS.—Deposits made pursuant to this section in
an insured community development financial institution shall
not be subject to any requirement for collateral or security.
(4) LIMITATIONS ON OBLIGATIONS.—Direct loan obligations
may be incurred by the Fund only to the extent that appropriations of budget authority to cover their cost, as defined in
section 502(5) of the Congressional Budget Act of 1974, are
made in advance.
(b) U S E S OF FINANCIAL ASSISTANCE.—
(1) IN GENERAL.—Financial assistance made available
under this subtitle may be used by assisted community development financial institutions to serve investment areas or targeted populations by developing or supporting—
(A) commercial facilities that promote revitalization,
community stability, or job creation or retention;
(B) businesses that—
(i) provide jobs for low-income people or are owned
by low-income people; or
(ii) enhance the availability of products and services to low-income people;
(C) community facilities;
(D) the provision of basic financial services;
(E) housing that is principally affordable to low-income
people, except that assistance used to facilitate homeownership shall only be used for services and lending products—
(i) that serve low-income people; and
(ii) that—
(I) are not provided by other lenders in the
area; or
(II) complement the services and lending products provided by other lenders that serve the
investment area or targeted population; and
(F) other businesses and activities deemed appropriate
by the Fund.
108 STAT. 2174
PUBLIC LAW 103-325—SEPT. 23, 1994
(2) LIMITATIONS.—No assistance made available under this
subtitle may be expended by a community development financial institution (or an organization receiving assistance under
section 113) to pay any person to influence or attempt to
influence any agency, elected official, officer, or employee of
a State or local government in connection with the making,
award, extension, continuation, renewal, amendment, or modification of any State or local government contract, grant, loan,
or cooperative agreement (as such terms are defined in section
1352 of title 31, United States Code).
(c) USES OF TECHNICAL ASSISTANCE.—
(1) TYPES OF ACTIVITIES.—^Technical assistance may be used
for activities that enhance the capacity of a community development financial institution, such as training of management
and other personnel and development of programs and investment or loan products.
(2) AVAILABILITY OF TECHNICAL ASSISTANCE.—The Fund
may provide technical assistance, regardless of whether or not
the recipient also receives financial assistance under this
section.
(d) AMOUNT OF ASSISTANCE.—
(1) IN GENERAL.—Except as provided in paragraph (2), the
Fund may provide not more than $5,000,000 of assistance,
in the aggregate, during any 3-year period to any 1 community
development financial institution and its subsidiaries and
affiliates.
(2) EXCEPTION.—^The Fund may provide not more than
$3,750,000 of assistance in addition to the amount specified
in paragraph (1) during the same 3-year period to an existing
community development financial institution that proposes to
establish a subsidiary or affiliate for the purpose of serving
an investment area or targeted population outside of any State
and outside of any metropolitan area presently served by the
institution, if—
(A) the subsidiary or affiliate—
(i) would be a community development financial
institution; and
(ii) independently—
(I) meets the selection criteria described in
section 105; and
(II) satisfies the selection criteria of section
107; and
(B) no other application for assistance to serve the
investment area or targeted population has been submitted
to the Administrator within a reasonable period of time
preceding the date of receipt of the application at issue.
(3) TIMING OF ASSISTANCE.—^Assistance may
be provided
as described in paragraphs (1) and (2) in a lump sum or
over a period of time, as determined by the Fund.
(e) MATCHING REQUIREMENTS.—
(1) IN GENERAL.—^Assistance other than technical assistance shall be matched with funds from sources other than
the Federal Government on the basis of not less than one
dollar for each dollar provided by the Fund. Such matching
funds shall be at least comparable in form and value to assistance provided by the Fund. The Fund shall provide no
assistance (other than technical assistance) until a community
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2175
development financial institution has secured firm commitments for the matching funds required.
(2) EXCEPTION.—In the case of an applicant with severe
constraints on available sources of matching funds, the Fund
may permit an applicant to comply with the matching requirements of paragraph (1) by—
(A) reducing such matching requirement by 50 percent;
or
(B) permitting an applicant to provide matching funds
in a form to be determined at the discretion of the Fund,
if such applicant—
(i) has total assets of less than $100,000;
(ii) serves nonmetropolitan or rural areas; and
(iii) is not requesting more than $25,000 in assistance.
(3) LIMITATION.—^Not more than 25 percent of the total ^
funds disbursed in any fiscal year by the Fund may be matched »^
as authorized under paragraph (2).
(4) CONSTRUCTION OF "FEDERAL GOVERNMENT FUNDS".—
For purposes of this subsection, notwithstanding section
105(a)(9) of the Housing and Community Development Act of
1974, funds provided pursuant to such Act shall be considered
to be Federal Government funds.
(f) TERMS AND CONDITIONS.—
(1) SOUNDNESS OF UNREGULATED INSTITUTIONS.—^The Fund
shall—
(A) ensure, to the maximum extent practicable, that
each community development financial institution (other
than an insured community development financial institution or depository institution holding company) assisted
under this subtitle is financially and managerially sound
and maintains appropriate internal controls;
(B) require such institution to submit, not less than
once during each 18-month period, a statement of financial
condition audited by an independent certified public
accountant as part of the report required by section
115(e)(1); and
(C) require that all assistance granted under this section is used by the community development financial
institution or community development partnership in a
manner consistent with the purposes of this subtitle.
(2) ASSISTANCE AGREEMENT.—
(A) IN GENERAL.—Before providing any assistance
under this subtitle, the Fund and each community development financial institution to be assisted shall enter into
an agreement that requires the institution to comply with
performance goals and abide by other terms and conditions
pertinent to assistance received under this subtitle.
(B) PERFORMANCE GOALS.—Performance goals shall be
negotiated between the Fund and each community development financial institution receiving assistance based upon
the strategic plan submitted pursuant to section 105(b)(2).
Such goals may be modified with the consent of the parties,
or as provided in subparagraph (C). Performance goals
for insured community development financial institutions
shall be determined in consultation with the appropriate
Federal banking agency.
108 STAT. 2176
PUBLIC LAW 103-325—SEPT. 23, 1994
(C) SANCTIONS.—^The agreement shall provide that, in
the event of fraud, mismanagement, noncompliance with
this subtitle, or noncompliance with the terms of the agreement, the Fund, in its discretion, may—
(i) require changes to the performance goals
imposed pursuant to subparagraph (B);
(ii) require changes to the strategic plan submitted
pursuant to section 105(b)(2);
(iii) revoke approval of the application;
(iv) reduce or terminate assistance;
(v) require repayment of assistance;
(vi) bar an applicant from reapplying for assistance
from the Fund; and
(vii) take such other actions as the Fund deems
appropriate.
(D)
CONSULTATION WITH TRIBAL GOVERNMENTS.—In
reviewing the performance of any assisted community
development financial institution, the investment area of
which includes an Indian reservation, or the targeted population of which includes an Indian tribe, the Fund shall
consult with, and seek input from, any appropriate tribal
government.
(g) AUTHORITY T O SELL EQUITY INVESTMENTS AND LOANS.—
The Fund may, at any time, sell its equity investments and loans,
but the Fund shall retain the power to enforce limitations on
assistance entered into in accordance with the requirements of
this subtitle until the performance goals related to the investment
or loan have been met.
(h) No AUTHORITY T O LIMIT SUPERVISION AND REGULATION.—
Nothing in this subtitle shall affect any authority of the appropriate
Federal banking agency to supervise and regulate any institution
or company.
12 u s e 4708.
SEC. 109. TRAINING.
(a) I N GENERAL.—^The Fund may operate a training program
to increase the capacity and expertise of community development
financial institutions and other members of the financial services
industry to undertake community development finance activities.
(b) PROGRAM ACTIVITIES.—The training program shall provide
educational programs to assist community development financial
institutions and other members of the financial services industry
in developing lending and investment products, underwriting and
servicing loans, managing equity investments, and providing development services targeted to areas of economic distress, low-income
persons, and persons who lack adequate access to loans and equity
investments.
(c) PARTICIPATION.—The training program shall be made available to community development financial institutions and other
members of the financial services industry that serve or seek to
serve areas of economic distress, low-income persons, and persons
who lack adequate access to loans and equity investments.
(d) CONTRACTING,—The Fund may ofTer the training program
described in this section directly or through a contract with other
organizations. The Fund may contract to provide the training program through organizations that possess special expertise in
community development, without regard to whether the organizations receive or are eligible to receive assistance under this subtitle.
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2177
(e) COORDINATION.—^The Fund shall coordinate with other
appropriate Federal departments or agencies that operate similar
training programs in order to prevent duplicative efforts.
(D REGULATORY F E E FOR PROVIDING TRAINING SERVICES.—
(1) GENERAL RULE.—^The Fund may, at the discretion of
the Administrator and in accordance with this subsection,
assess and collect regulatory fees solely to cover the costs
of the Fund in providing training services under a training
program operated in accordance with this section.
(2) PERSONS SUBJECT TO FEE.—Fees may be assessed under
paragraph (1) only on persons who participate in the training
program.
(3) LIMITATION ON MANNER OF COLLECTION.—Fees may be
assessed and collected under this subsection only in such manner as may reasonably be expected to result in the collection
of an aggregate amount of fees during any fiscal year which
does not exceed the aggregate costs of the Fund for such year
in providing training services under a training program operated in accordance with this section
(4) LIMITATION ON AMOUNT OF FEE.—The amount of any
fee assessed under this subsection on any person may not
exceed the amount which is reasonably based on the proportion
of the training services provided under a training program
operated in accordance with this section which relate to such
person.
SEC. 110. ENCOURAGEMENT OF PRIVATE ENTITIES.
12 USC 4709.
The Fund may facilitate the organization of corporations in
which the Federal Government has no ownership interest. The
purpose of any such entity shall be to assist community development
financial institutions in a manner that is complementary to the
activities of the Fund under this subtitle. Any such entity shall
be managed exclusively by persons not employed by the Federal
Government or any agency or instrumentality thereof, or by any
State or local government or any agency or instrumentality thereof.
SEC. 111. COLLECTION AND COMPILATION OF INFORMATION.
12 USC 4710.
The Fund shall—
(1) collect and compile information pertinent to community
development financial institutions that will assist in creating,
developing, expanding, and preserving such institutions; and
(2) make such information available to promote the purposes of this subtitle.
SEC, 112. INVESTMENT OF RECEIPTS AND PROCEEDS.
(a) ESTABLISHMENT OF ACCOUNT.—Any dividends on equity
investments and proceeds from the disposition of investments,
deposits, or credit union shares that are received by the Fund
as a result of assistance provided pursuant to section 108 or 113,
and any fees received pursuant to section 109(f) shall be deposited
and accredited to an account of the Fund in the United States
Treasury (hereafter in this section referred to as "the account")
established to carry out the purpose of this subtitle.
(b) INVESTMENTS.—Upon request of the Administrator, the Secretary of the Treasury shall invest amounts deposited in the account
in public debt securities with maturities suitable to the needs
of the Fund, as determined by the Administrator, and bearing
interest at rates determined by the Secretary of the Treasury,
12 USC 4711.
108 STAT. 2178
PUBLIC LAW 103-325—SEPT. 23, 1994
comparable to current market yields on outstanding marketable
obligations of the United States of similar maturities.
(c) AVAILABILITY.—^Amounts deposited into the account and
interest earned on such amounts pursuant to this section shall
be available to the Fund until expended.
12 u s e 4712.
SEC. 113. CAPITALIZATION ASSISTANCE TO ENHANCE UQUIDITY.
(a) ASSISTANCE.—
(1) I N GENERAL.—The Fund may provide assistance for
the purpose of providing capital to organizations to purchase
loans or otherwise enhance the liquidity of community development financial institutions, if—
(A) the primary purpose of such organizations is to
promote community development; and
(B) any assistance received is matched with funds—
(i) from sources other than the Federal Government;
(ii) on the basis of not less than one dollar for
each dollar provided by the Fund; and
(iii) that are comparable in form and value to
the assistance provided by the Fund.
(2) LIMITATION ON OTHER ASSISTANCE.—An organization
that receives assistance under this section may not receive
other financial or technical assistance under this subtitle.
(3) CONSTRUCTION OF FEDERAL GOVERNMENT FUNDS.—For
Records.
purposes of this subsection, notwithstanding section 105(a)(9)
of the Housing and Community Development Act of 1974, funds
provided pursuant to such Act shall be considered to be Federal
Government funds.
(b) SELECTION.—^The selection of organizations to receive assistance under this section shall be at the discretion of the Fund
and in accordance with criteria established by the Fund. In
establishing such criteria, the Fund shall take into account the
criteria contained in sections 105(b) and 107, as appropriate.
(c) AMOUNT OF ASSISTANCE.—The Fund may provide a total
of not more than $5,000,000 of assistance to an organization or
its subsidiaries or affiliates under this section during any 3-year
period. Assistance may be provided in a lump sum or over a period
of time, as determined by the Fund.
(d) AUDIT AND REPORT REQUIREMENTS.—Organizations that
receive assistance from the Fund in accordance with this section
shall—
(1) submit to the Fund, not less than once in every 18month period, financial statements audited by an independent
certified public accountant, as part of the report required by
paragraph (2);
(2) submit an annual report on its activities; and
(3) keep such records as may be necessary to disclose
the manner in which any assistance under this section is used.
(e) LIMITATIONS ON LIABILITY.—
(1) LIABILITY OF FUND.—The liability of the Fund and the
United States Government arising out of the provision of assistance to any organization in accordance with this section shall
be limited to the amount of such assistance. The Fund shall
be exempt from any assessments and any other liabilities that
may be imposed on controlling or principal shareholders by
any Federal law or the law of any State, or territory. Nothing
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2179
in this paragraph shall affect the application of Federal tax
law.
(2) LIABILITY OF GOVERNMENT.—This section does not oblige
the Federal Government, either directly or indirectly, to provide
any funds to any organization assisted pursuant to this section,
or to honor, reimburse, or otherwise guarantee any obligation
or liability of such an organization. This section shall not be
construed to imply that any such organization or any obligations or securities of any such organization are backed by
the full faith and credit of the United States,
(f) U S E OF PROCEEDS.—^Any proceeds from the sale of loans
by an organization assisted under this section shall be used by
the seller for community development purposes.
SEC. 114. INCENTIVES FOR DEPOSITORY INSTITUTION PARTICIPATION.
(a) FUNCTION OF ADMINISTRATOR.—
(1) IN GENERAL.—Of any funds appropriated pursuant to
the authorization in section 121(a), the funds made available
for use in carrying out this section in accordance with section
121(a)(4) shall be administered by the Administrator of the
Fund, in consultation with—
(A) the Federal banking agencies (as defined in section
3 of the Federal Deposit Insurance Act) and the National
Credit Union Administration;
(B) the individuals named pursuant to clauses (ii) and
(iv) of section 104(d)(2)(G); and
(C) any other representatives of insured depository
institutions or other persons as the Administrator may
determine to be appropriate.
(2) APPLICABILITY OF BANK ENTERPRISE ACT OF 1991.—Subject to subsection (b) and the consultation requirement of paragraph (1)—
(A) section 233 of the Bank Enterprise Act of 1991
shall be applicable to the Administrator, for purposes of
this section, in the same manner and to the same extent
that such section is applicable to the Community Enterprise
Assessment Credit Board;
(B) the Administrator shall, for purposes of carrying
out this section and section 233 of the Bank Enterprise
Act of 1991—
(i) have all powers and rights of the Community
Enterprise Assessment Credit Board under section 233
of the Bank Enterprise Act of 1991 to administer and
enforce any provision of such section 233 which is
applicable to the Administrator under this section; and
(ii) shall be subject to the same duties and restrictions imposed on the Community Enterprise Assessment Credit Board; and
(C) the Administrator shall—
(i) have all powers and rights of an appropriate
Federal banking agency under section 233(b)(2) of the
Bank Enterprise Act of 1991 to approve or disapprove
the designation of qualified distressed communities for
purposes of this section and provide information and
assistance with respect to any such designation; and
12 USC 4713.
108 STAT. 2180
PUBLIC LAW 103-325—SEPT. 23, 1994
(ii) shall be subject to the same
on the appropriate Federal banking
such section 233(b)(2).
(3) AWARDS.—^The Administrator shall
amount of assessment credits, and shall make
credits.
(4) REGULATIONS AND GUIDELINES.—The
duties imposed
agencies under
determine the
awards of those
Administrator
may prescribe such regulations and issue such guidelines as
the Administrator determines to be appropriate to carry out
this section.
(5) EXCEPTIONS TO APPLICABILITY.—Notwithstanding paragraphs (1) through (4) of this subsection, subsections (a)(1)
and (e)(2) of section 233 of the Bank Enterprise Act of 1991,
and any other provision of the Federal Deposit Insurance Act
relating to the Bank Enterprise Act of 1991, do not apply
to the Administrator for purposes of this subtitle.
(b) PROVISIONS RELATING TO ADMINISTRATION OF THIS
SECTION.—
(1) N E W LIFELINE ACCOUNTS.—In applying section 233 of
the Bank Enterprise Act of 1991 for purposes of this section,
the Administrator shall treat the provision of new lifeline
accounts by an insured depository institution as an activity
which is qualified to be taken into account under section
233(a)(2)(A) of such Act.
(2) DETERMINATION OF ASSESSMENT CREDIT.—For the purpose of this subtitle, section 233(a)(3) of the Bank Enterprise
Act of 1991 (12 U.S.C. 1834a(a)(3)) shall be appHed by substituting the following text:
"(3) AMOUNT OF ASSESSMENT CREDIT.—The amount of an
assessment credit which may be awarded to an insured depository institution to carry out the qualified activities of the
institution or of the subsidiaries of the institution pursuant
to this section for any semiannual period shall be equal to
the sum of—
"(A) with respect to qualifying activities described in
paragraph (2)(A), the amount which is equal to—
"(i) 5 percent of the sum of the amounts determined under such subparagraph, in the case of an
institution which is not a community development
financial institution; or
"(ii) 15 percent of the sum of the amounts determined under such subparagraph, in the case of an
institution which is a community development financial
institution; and
"(B) with respect to qualifying activities described in
paragraph (2)(C), 15 percent of the amounts determined
under such subparagraph.".
(3) ADJUSTMENT OF PERCENTAGE.—Section 233(a)(5) of the
Bank Enterprise Act of 1991 shall be applied for purposes
of this section by—
(A) substituting "institutions which are community
development financial institutions" for "institutions which
meet the community development organization requirements under section 234"; and
(B) substituting "institutions which are not community
development financial institutions" for "institutions which
do not meet such requirements".
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2181
(4) DESIGNATION OF QDC.—Section 233(b)(2) of the Bank
Enterprise Act of 1991 shall be applied for purposes of this
section without regard to subparagraph (A)(ii) of such section
233(b)(2).
(5) OPERATION ON ANNUAL BASIS.—The Administrator may,
in the Administrator's discretion, apply section 233 of the Bank
Enterprise Act of 1991 for purposes of this section by providing
community enterprise assessment credits with respect to
annual periods rather than semiannual periods.
(6) OUTREACH.—The Administrator shall ensure that
information about the Bank Enterprise Act of 1991 under this
section is widely disseminated to all interested parties.
(7) QUALIFIED ACTIVITIES.—For the purpose of this subtitle,
section 233(a)(2)(A) of the Bank Enterprise Act of 1991 shall
be applied by inserting "of the increase" after "the amount".
(c) TECHNICAL AND CONFORMING AMENDMENTS TO THE BANK
ENTERPRISE ACT OF 1991.—
(1) ASSISTANCE TO CDFI MAY BE TAKEN INTO ACCOUNT AS
QUALIFYING ACTIVITY.—Section 233(a)(2) of the Bank Enterprise
Act of 1991 (12 U.S.C. 1834a(a)(2)) is amended—
(A) in the material preceding subparagraph (A), by
striking "shall be eligible" and inserting "may apply for";
(B) in subparagraph (A), by striking "financial assistance" and inserting "assistance";
(C) by striking "and" at the end of subparagraph (A);
(D) by striking the period at the end of subparagraph
(B) and inserting "; and"; and
(E) by adding at the end the following new subparagraph:
"(C) any increase during the period in the amount
of new equity investments in community development
financial institutions.".
(2) ADDITIONAL ASSISTANCE WHICH MAY BE CONSIDERED AS
QUALIFYING ACTIVITIES.—Section 233(a)(4) of the Bank Enter-
prise Act of 1991 (12 U.S.C. 1834a(a)(4)) is amended—
(A) in the material preceding subparagraph (A), by
striking "financial"; and
(B) by adding at the end the following new subparagraphs:
"(L) Loans made for the purpose of developing or
supporting—
"(i) commercial facilities that enhance revitalization, community stability, or job creation and retention
efforts;
"(ii) business creation and expansion efforts that—
"(I) create or retain jobs for low-income people;
"(II) enhance the availability of products and
services to low-income people; or
"(III) create or retain businesses owned by
low-income people or residents of a targeted area;
"(iii) community facilities that provide benefits to
low-income people or enhance community stability;
"(iv) home ownership opportunities that are affordable to low-income households;
"(v) rental housing that is principally affordable
to low-income households; and
"(vi) other activities deemed appropriate by the
Board.
108 STAT. 2182
PUBLIC LAW 103-325—SEPT. 23, 1994
"(M) The provision of technical assistance to residents
of qualified distressed communities in managing their personal finances through consumer education programs either
sponsored or offered by insured depository institutions.
"(N) The provision of technical assistance and consulting services to newly formed small businesses located in
qualified distressed communities.
"(O) The provision of technical assistance to, or servicing the loans of low- or moderate-income homeowners and
homeowners located in qualified distressed communities.".
(3) RESTRICTION ON ADJUSTMENT OF PERCENTAGES.—Sec-
tion 233(a)(5) of the Bank Enterprise Act of 1991 (12 U.S.C.
1834a(a)(5)) is amended by striking "paragraph (3)" and inserting "paragraph (3)(A)".
(4) CREDIT LIMITED TO ORIGINATIONS BY INSTITUTIONS.—
Section 233(a)(6) of the Bank Enterprise Act of 1991 (12 U.S.C.
1834a(a)(6)) is amended by striking "Investments by any
insured depository institution in loans and securities" and
inserting "Loans, financial assistance, and equity investments
made by any insured depository institution".
(5) QUANTITATIVE ANALYSIS OF TECHNICAL ASSISTANCE.—
Section 233(a) of the Bank Enterprise Act of 1991 (12 U.S.C.
1834a(a)) is amended by adding at the end the following new
paragraph:
"(7) QUANTITATIVE ANALYSIS OF TECHNICAL ASSISTANCE.—
The Board may establish guidelines for analyzing the technical
assistance described in subparagraphs (M), (N), and (O) of
paragraph (4) for the purpose of quantifying the results of
such assistance in determining the amount of any community
assessment credit under this subsection.".
(6) PROHIBITION ON DOUBLE FUNDING FOR SAME ACTIVI-
TIES.—Section 233 of the Bank Enterprise Act of 1991 (12
U.S.C. 1834a) is amended—
(A) by redesignating subsection (g) as subsection (j);
and
(B) by inserting after subsection (f) the following new
subsection:
"(g) PROHIBITION ON DOUBLE FUNDING FOR SAME ACTIVITIES.—
No community development financial institution may receive a
community enterprise assessment credit if such institution, either
directly or through a community partnership—
"(1) has received assistance within the preceding 12-month
period, or has an application for assistance pending, under
section 105 of the Community Development Banking and Financial Institutions Act of 1994; or
"(2) has ever received assistance, under section 108 of
the Community Development Banking and Financial Institutions Act of 1994, for the same activity during the same semiannual period for which the institution seeks a community
enterprise assessment credit under this section.".
(7) ADDITIONAL ADMINISTRATIVE REQUIREMENTS.—Section
233 of the Bank Enterprise Act of 1991 (12 U.S.C. 1834a)
is amended by inserting after subsection (g) (as added by paragraph (6) of this subsection) the following new subsections:
"(h) PRIORITY OF AWARDS.—
"(1) QUALIFYING LOANS AND SERVICES.—
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2183
"(A) IN GENERAL.—If the amount of funds appropriated
for purposes of carrying out this section for any fiscal
year are insufficient to award the amount of assessment
credits for which insured depository institutions have
applied and are eligible under this section, the Board shall,
in awarding community enterprise assessment credits for
qualifying activities under subparagraphs (A) and (B) of
subsection (a)(2) for any semiannual period for which such
appropriation is available, determine which institutions
shall receive an award.
"(B) PRIORITY FOR SUPPORT OF EFFORTS OF CDFI.—
The Board shall give priority to institutions that have
supported the efforts of community development financial
institutions in the qualified distressed community.
"(C) OTHER FACTORS.—The Board may also consider
the following factors:
"(i) DEGREE OF DIFFICULTY.—The degree of difficulty in carrying out the activities that form the
basis for the institution's application.
"(ii) COMMUNITY IMPACT.—The extent to which the
activities that form the basis for the institution's
application have benefited the qualified distressed
community.
"(iii) INNOVATION.—The degree to which the activities that form the basis for the institution's application
have incorporated innovative methods for meeting
community needs.
"(iv) LEVERAGE.—^The leverage ratio between the
dollar amount of the activities that form the basis
for the institution's application and the amount of the
assessment credit calculated in accordance with this
section for such activities.
"(v) SIZE.—^The amount of total assets of the
institution.
"(vi) NEW ENTRY.—Whether the institution had
provided financial services in the designated distressed
community before such semiannual period.
"(vii) N E E D FOR SUBSIDY.—^The degree to which
the qualified activity which forms the basis for the
application needs enhancement through an assessment
credit.
"(viii) EXTENT OF DISTRESS IN COMMUNITY.—The
degree of poverty and unemployment in the designated
distressed community, the proportion of the total population of the community which are low-income families
and unrelated individuals, and the extent of other
adverse economic conditions in such community.
"(2) QUALIFYING INVESTMENTS.—If the amount of funds
appropriated for purposes of carrying out this section for any
fiscal year are insufficient to award the amount of assessment
credits for which insured depository institutions have applied
and are eligible under this section, the Board shall, in awarding
community enterprise assessment credits for qualifying activities under subsection (a)(2)(C) for any semiannual period for
which such appropriation is available, determine which institutions shall receive an award based on the leverage ratio between
the dollar amount of the activities that form the basis for
-=
108 STAT. 2184
PUBLIC LAW 103-325—SEPT. 23, 1994
the institution's application and the amount of the assessment
credit calculated in accordance with this section for such
activities.
"(i) DETERMINATION OF AMOUNT OF ASSESSMENT CREDIT.—Not-
withstanding any other provision of this section, the determination
of the amount of any community enterprise assessment credit under
subsection (a)(3) for any insured depository institution for any semiannual period shall be made solely at the discretion of the Board.
No insured depository institution shall be awarded community
enterprise assessment credits for any semiannual period in excess
of an amount determined by the Board.".
(8) ADDITIONAL DEFINITIONS.—Subsection (j) of section 233
12 use 1834a.
of the Bank Enterprise Act of 1991 (as redesignated by paragraph (6) of this subsection) is amended by adding at the
end the following new paragraphs:
"(4)
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION.—
The term 'community development financial institution' has
the same meaning as in section 103(5) of the Community Development Banking and Financial Institutions Act of 1994.
"(5) AFFILIATE.—^The term 'affiliate' has the same meaning
as in section 2 of the Bank Holding Company Act of 1956.".
12 u s e 4714.
SEC. 115. RECORDKEEPING.
(a) IN GENERAL.—^A community development financial institution receiving assistance from the Fund shall keep such records,
for such periods as may be prescribed by the Fund and necessary
to disclose the manner in which any assistance under this subtitle
is used and to demonstrate compliance with the requirements of
this subtitle.
(b) USER PROFILE INFORMATION.—The Fund shall require each
community development financial institution or other organization
receiving assistance from the Fund to compile such data, as is
determined to be appropriate by the Fund, on the gender, race,
ethnicity, national origin, or other pertinent information concerning
individuals that utilize the services of the assisted institution to
ensure that targeted populations and low-income residents of investment areas are adequately served.
(c) ACCESS TO RECORDS.—^The Fund shall have access on
demand, for the purpose of determining compliance with this subtitle, to any records of a community development financial institution or other organization that receives assistance from the Fund.
(d) REVIEW.—Not less than annually, the Fund shall review
the progress of each assisted community development financial
institution in carrying out its strategic plan, meeting its performance goals, and satisfying the terms and conditions of its assistance
agreement.
(e) REPORTING.—
(1) ANNUAL REPORTS.—^The
Fund shall require each community development financial institution receiving assistance
under this subtitle to submit an annual report to the Fund
on its activities, its financial condition, and its success in meeting performance goals, in satisfying the terms and conditions
of its assistance agreement, and in complying with other
requirements of this subtitle, in such form and manner as
the Fund shall specify.
(2) AVAILABILITY OF REPORTS.—The Fund, after deleting
or redacting any material as appropriate to protect privacy
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2185
or proprietary interests, shall make such reports submitted
under paragraph (1) available for public inspection.
SEC. 116. SPECIAL PROVISIONS WITH RESPECT TO INSTITUTIONS 12 USC 4715.
THAT ARE SUPERVISED BY FEDERAL BANKING AGENCIES.
(a) CONSULTATION WITH APPROPRIATE AGENCIES.—^The Fund
shall consult with and consider the views of the appropriate Federal
banking agency prior to providing assistance under this subtitle
to—
(1) an insured community development financial institution;
(2) any community development financial institution that
is examined by or subject to the reporting requirements of
an appropriate Federal banking agency; or
(3) any community development financial institution that
has as its community partner an institution that is examined
by or subject to the reporting requirements of an appropriate
Federal banking agency.
(b) REQUESTS FOR INFORMATION, REPORTS, OR RECORDS.—
(1) IN GENERAL.—Except as provided in paragraph (4), notwithstanding any other provisions of this subtitle, prior to
directly requesting information from or imposing reporting or
recordkeeping requirements on an insured community development financial institution or other institution that is examined
by or subject to the reporting requirements of an appropriate
Federal banking agency, the Fund shall consult with the appropriate Federal banking agency to determine if the information
requested is available from or may be obtained by such agency
in the form, format, or detail required by the Fund.
(2) TIMING OF RESPONSE FROM APPROPRIATE FEDERAL BANK-
ING AGENCY.—If the information, reports, or records requested
by the Fund pursuant to paragraph (1) are not provided by
the appropriate Federal banking agency in less than 15 calendar days after the date on which the material is requested,
the Fund may request the information from or impose the
recordkeeping or reporting requirements directly on such
institutions with notice to the appropriate Federal banking
agency.
(3) ELIMINATION OF DUPLICATIVE INFORMATION AND REPORT-
ING REQUIREMENTS.—^The Fund shall use any information provided the appropriate Federal banking agency under this
section to the extent practicable to eliminate duplicative
requests for information and reports from, and recordkeeping
by an insured community development financial institution or
other institution that is examined by or subject to the reporting
requirements of an appropriate Federal banking agency.
(4) EXCEPTION.—Notwithstanding paragraphs (1) and (2),
the Fund may require an insured community development
financial institution or other institution that is examined by
or subject to the reporting requirements of an appropriate
Federal banking agency to provide information with respect
to the institution's implementation of its strategic plan or
compliance with the terms of its assistance agreement under
this subtitle, after providing notice to the appropriate Federal
banking agency.
(c) EXCLUSION FOR EXAMINATION REPORTS.—^Nothing in this
section shall be construed to permit the Fund to require an insured
108 STAT. 2186
PUBLIC LAW 103-325—SEPT. 23, 1994
community development financial institution or other institution
that is examined by or subject to the reporting requirements of
an appropriate Federal banking agency, to obtain, maintain, or
furnish an examination report of any appropriate Federal banking
agency or records contained in or related to such a report.
(d) SHARING OF INFORMATION.—The Fund and the appropriate
Federal banking agency shall promptly notify each other of material
concerns about an insured community development financial institution or other institution that is examined by or subject to the
reporting requirements of an appropriate Federal banking agency,
and share appropriate information relating to such concerns.
(e) DISCLOSURE PROHIBITED.—Neither the Fund nor the appropriate Federal banking agency shall disclose confidential information obtained pursuant to this section from any party without
the written consent of that party.
(f) PRIVILEGE MAINTAINED.—The Fund, the appropriate Federal
banking agency, and any other party providing information under
this section shall not be deemed to have waived any privilege
applicable to any information or data, or any portion thereof, by
providing such information or data to the other party or by permitting such data or information, or any copies or portions thereof,
to be used by the other party.
(g) EXCEPTIONS.—^Nothing in this section shall authorize the
Fund or the appropriate Federal banking agency to withhold
information from the Congress or prevent it from complying with
a request for information from a Federal department or agency
in compliance with applicable law.
(h) SANCTIONS.—
(1) NOTIFICATION.—^The Fund shall notify the appropriate
Federal banking agency before imposing any sanction pursuant
to the authority in section 108(f)(2)(C) on an insured community
development financial institution or other institution that is
examined by or subject to the reporting requirements of that
agency.
(2) EXCEPTIONS.—^The Fund shall not impose a sanction
referred to in paragraph (1) if the appropriate Federal banking
agency, in writing, not later than 30 calendar days after receiving notice from the Fund—
(A) objects to the proposed sanction;
(B) determines that the sanction would—
(i) have a material adverse effect on the safety
and soundness of the institution; or
(ii) impede or interfere with an enforcement action
against that institution by that agency;
(C) proposes a comparable alternative action; and
(D) specifically explains—
(i) the basis for the determination under subparagraph (B) and, if appropriate, provides documentation
to support the determination; and
(ii) how the alternative action suggested pursuant
to subparagraph (C) would be as effective as the sanction proposed by the Fund in securing compliance with
this subtitle and deterring future noncompliance.
(i) SAFETY AND SOUNDNESS CONSIDERATIONS.—The Fund and
each appropriate Federal banking agency shall cooperate and
respond to requests from each other and from other appropriate
Federal banking agencies in a manner that ensures the safety
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2187
and soundness of the insured community development financial
institution or other institution that is examined by or subject to
the reporting requirements of an appropriate Federal banking
agency.
SEC. 117. STUDIES AND REPORTS; EXAMINATION AND AUDIT.
(a) ANNUAL REPORT BY THE FUND.—The Fund shall conduct
an annual evaluation of the activities carried out by the Fund
and the community development financial institutions and other
organizations assisted pursuant to this subtitle, and shall submit
a report of its findings to the President and the Congress not
later than 120 days after the end of each fiscal year of the Fund.
The report shall include financial statements audited in accordance
with subsection (f).
(b) OPTIONAL STUDIES.—The Fund may conduct such studies
as the Fund determines necessary to further the purpose of this
subtitle and to facilitate investment in distressed communities.
The findings of any studies conducted pursuant to this subsection
shall be included in the report required by subsection (a).
(c) NATIVE AMERICAN LENDING STUDY.—
(1) IN GENERAL.—^The Fund shall conduct a study on lending and investment practices on Indian reservations and other
land held in trust by the United States. Such study shall—
(A) identify barriers to private financing on such lands;
and
(B) identify the impact of such barriers on access to
capital and credit for Native American populations.
(2) REPORT.—Not later than 12 months after the date on
which the Administrator is appointed, the Fund shall submit
a report to the President and the Congress that—
(A) contains the findings of the study conducted under
paragraph (1);
(B) recommends any necessary statutory and regulatory changes to existing Federal programs; and
(C) makes policy recommendations for community
development financial institutions, insured depository
institutions, secondary market institutions, and other private sector capital institutions to better serve such
populations.
(d) INVESTMENT, GTOVERNANCE, AND ROLE OF FUND.—Thirty
months after the appointment and qualification of the Administrator, the Comptroller General of the United States shall submit
to the President and the Congress a study evaluating the structure,
governance, and performance of the Fund.
(e) CONSULTATION.—In the conduct of the studies required
under this section, the Fund shall consult, as appropriate, with
the Comptroller of the Currency, the Federal Deposit Insurance
Corporation, the Board of Governors of the Federal Reserve System,
the Federal Housing Finance Board, the Farm Credit Administration, the Director of the Office of Thrift Supervision, the National
Credit Union Administration Board, Indian tribal governments,
community reinvestment organizations, civil rights organizations,
consumer organizations, financial organizations, and such representatives of agencies or other persons, at the discretion of the
Fund.
(f) EXAMINATION AND AUDIT.—The financial statements of the '
Fund shall be audited in accordance with section 9105 of title
12 USC 4716.
108 STAT. 2188
PUBLIC LAW 103-325—SEPT. 23, 1994
31, United States Code, except that audits required by section
9105(a) of such title shall be performed annually.
SEC. 118. INSPECTOR GENERAL.
5 use app. 11
"°^-
12 u s e 4717.
(a) ESTABLISHMENT.—Section 11 of the Inspector General Act
of 1978 (5 U.S.C. App. 11) is amended—
(1) in paragraph (1), by inserting "; the Administrator
of the Community Development Financial Institutions Fund;"
before "and the chief; and
(2) in paragraph (2), by inserting "the Community Development Financial Institutions Fund," after "the Agency for International Development,".
(b) AUTHORIZATION OF APPROPRIATIONS.—^There are authorized
to be appropriated such sums as may be necessary for the operation
of the Office of Inspector General established by the amendments
made by subsection (a).
SEC. 119. ENFORCEMENT.
(a) REGULATIONS.—
(1) IN GENERAL.—^Not later than 180 days after the appointment and qualification of the Administrator, the Fund shall
. promulgate such regulations as may be necessary to carry
out this subtitle.
(2) REGULATIONS REQUIRED.—^The regulations promulgated
under paragraph (1) shall include regulations applicable to
community development financial institutions that are not
insured depository institutions to—
(A) prevent conflicts of interest on the part of directors,
officers, and employees of community development financial
institutions as the Fund determines to be appropriate;
and
(B) establish such standards with respect to loans by
a community development financial institution to any director, officer, or employee of such institution as the Fund
determines to be appropriate, including loan amount
limitations.
(b) ADMINISTRATIVE ENFORCEMENT.—The provisions of this subtitle, and regulations prescribed and agreements entered into under
this subtitle, shall be enforced under section 8 of the Federal
Deposit Insurance Act by the appropriate Federal banking agency,
in the case of an insured community development financial institution. A violation of this subtitle, or any regulation prescribed under
or any agreement entered into under this subtitle, shall be treated
as a violation of the Federal Deposit Insurance Act.
(c) CRIMINAL PROVISION.—Section 657 of title 18, United States
Code, is amended by inserting "or any community development
financial institution receiving financial assistance under the Riegle
Community Development and Regulatory Improvement Act of
1994," after "small business investment company,".
SEC. 120. COMMUNITY DEVELOPMENT REVOLVING LOAN FUND FOR
CREDIT UNIONS.
(a) REPEAL.—Section 120 of the Federal Credit Union Act (12
U.S.C. 1766) is amended by striking subsection (k).
(b) REVOLVING LOAN FUND.—^The Federal Credit Union Act
(12 U.S.C. 1751 et seq.) is amended by inserting after section
129 the following new section:
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2189
"SEC. 130. COMMUNITY DEVELOPMENT REVOLVING LOAN FUND FOR 12 USC 1772c-l.
CREDIT UNIONS.
"(a) I N GENERAL.—The Board may exercise the authority
granted to it by the Community Development Credit Union Revolving Loan Fund Transfer Act, including any additional appropriation
made or earnings accrued, subject only to this section and to regulations prescribed by the Board.
"(b) INVESTMENT.—^The Board may invest any idle Fund moneys
in United States Treasury securities. Any interest accrued on such
securities shall become a part of the Fund.
"(c) LOANS.—^The Board may require that any loans made from
the Fund be matched by increased shares in the borrower credit
union.
"(d) INTEREST.—Interest earned by the Fund may be allocated
by the Board for technical assistance to community development
credit unions, subject to an appropriations Act.
"(e) DEFINITION.—^As used in this section, the term 'Fund' means
the Community Development Credit Union Revolving Loan Fund.".
SEC. 121. AUTHORIZATION OF APPROPRIATIONS.
12 USC 4718.
(a) FUND AUTHORIZATION.—
(1) I N GENERAL.—^To carry out this subtitle, there are
authorized to be appropriated to the Fund, to remain available
until expended—
(A) $60,000,000 for fiscal year 1995;
(B) $104,000,000 for fiscal year 1996;
(C) $107,000,000 for fiscal year 1997; and
(D) $111,000,000 for fiscal year 1998;
or such greater sums as may be necessary to carry out this
subtitle.
(2) ADMINISTRATIVE EXPENSES.—
(A) IN GENERAL.—Of amounts authorized to be appropriated to the Fund pursuant to this section, not more
than $5,550,000 may be used by the Fund in each fiscal
year to pay the administrative costs and expenses of the
Fund. Costs associated with the training program established under section 109 and the technical assistance program established under section 108 shall not be considered
to be administrative expenses for purposes of this
paragraph.
(B) CALCULATIONS.—^The amounts referred to in paragraphs (3) and (4) shall be calculated after subtracting
the amount referred to in subparagraph (A) of this paragraph from the total amount appropriated to the Fund
in accordance with paragraph (1) in any fiscal year.
(3) CAPITALIZATION ASSISTANCE.—Not more than 5 percent
of the amounts authorized to be appropriated under paragraph
(1) may be used as provided in section 113.
(4) AVAILABILITY FOR FUNDING SECTION 114.—33^3 percent
of the amounts appropriated to the Fund for any fiscal year
pursuant to the authorization in paragraph (1) shall be available for use in carrying out section 114.
(5)
SUPPORT
OF COMMUNITY
DEVELOPMENT
FINANCIAL
INSTITUTIONS.—^The Administrator shall allocate funds authorized under this section, to the maximum extent practicable,
for the support of community development financial
institutions.
108 STAT. 2190
PUBLIC LAW 103-325—SEPT. 23, 1994
(b) COMMUNITY DEVELOPMENT CREDIT UNION REVOLVING LOAN
FUND.—There are authorized to be appropriated for the purposes
of the Community Development Credit Union Revolving Loan
Fund—
(1) $4,000,000 for fiscal year 1995;
(2) $2,000,000 for fiscal year 1996;
(3) $2,000,000 for fiscal year 1997; and
(4) $2,000,000 for fiscal year 1998.
(c) BUDGETARY TREATMENT.—^Amounts authorized to be appropriated under this section shall be subject to discretionary spending
caps, as provided in section 601 of the Congressional Budget Act
of 1974, and therefore shall reduce by an equal amount funds
made available for other discretionary spending programs.
Home
Ownership
and Equity
Protection Act
of 1994.
15 u s e 1601
note.
Subtitle B—Home Ownership and Equity
Protection
SEC. 151. SHORT TITLE.
This subtitle may be cited as the "Home Ownership and Equity
Protection Act of 1994".
SEC. 152. CONSUMER PROTECTIONS FOR CERTAIN MORTGAGES.
(a) MORTGAGE DEFINITION.—Section 103 of the Truth in Lending Act (15 U.S.C. 1602) is amended by adding at the end the
following new subsection:
"(aa)(l) A mortgage referred to in this subsection means a
consumer credit transaction that is secured by the consumer's principal dwelling, other than a residential mortgage trsinsaction, a
reverse mortgage transaction, or a transaction under an open end
credit plan, if—
"(A) the annual percentage rate at consummation of the
transaction will exceed by more than 10 percentage points
the yield on Treasury securities having comparable periods
of maturity on the fifteenth day of the month immediately
preceding the month in which the application for the extension
of credit is received by the creditor; or
"(B) the total points and fees payable by the consumer
at or before closing will exceed the greater of—
"(i) 8 percent of the total loan amount; or
"(ii) $400.
"(2)(A) After the 2-year period beginning on the effective date
of the regulations promulgated under section 155 of the Riegle
Community Development and Regulatory Improvement Act of 1994,
and no more frequently than biennially after the first increase
or decrease under this subparagraph, the Board may by regulation
increase or decrease the number of percentage points specified
in paragraph (1)(A), if the Board determines that the increase
or decrease is—
"(i) consistent with the consumer protections against abusive lending provided by the amendments made by subtitle
B of title I of the Riegle Community Development and Regulatory Improvement Act of 1994; and
"(ii) warranted by the need for credit.
"(B) An increase or decrease under subparagraph (A) may not
result in the number of percentage points referred to in subparagraph (A) being—
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2191
"(i) less that 8 percentage points; or
"(ii) greater than 12 percentage points.
"(C) In determining whether to increase or decrease the number
of percentage points referred to in subparagraph (A), the Board
shall consult with representatives of consumers, including lowincome consumers, and lenders.
"(3) The amount specified in paragraph (l)(B)(ii) shall be
adjusted annually on January 1 by the annual percentage change
in the Consumer Price Index, as reported on June 1 of the year
preceding such adjustment.
"(4) For purposes of paragraph (1)(B), points and fees shall
include—
"(A) all items included in the finance charge, except interest
or the time-price differential;
"(B) all compensation paid to mortgage brokers;
"(C) each of the charges listed in section 106(e) (except
an escrow for future payment of taxes), unless—
"(i) the charge is reasonable;
"(ii) the creditor receives no direct or indirect compensation; and
"(iii) the charge is paid to a third party unaffiliated
with the creditor; and
"(D) such other charges as the Board determines to be
appropriate.
"(5) This subsection shall not be construed to limit the rate
of interest or the finance charge that a person may charge a
consumer for any extension of credit.".
(b) MATERIAL DISCLOSURES.—Section 103(u) of the Truth in
Lending Act (15 U.S.C. 1602(u)) is amended—
(1) by striking "and the due dates" and inserting "the
due dates"; and
(2) by inserting before the period ", and the disclosures
required by section 129(a)".
(c) DEFINITION OF CREDITOR CLARIFIED.—Section 103(f) of the
Truth in Lending Act (15 U.S.C. 1602(f)) is amended by adding
at the end the following: "Any person who originates 2 or more
mortgages referred to in subsection (aa) in any 12-month period
or any person who originates 1 or more such mortgages through
a mortgage broker shall be considered to be a creditor for purposes
of this title.".
(d) DISCLOSURES REQUIRED AND CERTAIN TERMS PROHIBITED.—
The Truth in Lending Act (15 U.S.C. 1601 et seq.) is amended
by inserting after section 128 the following new section:
"SEC. 129. REQUIREMENTS FOR CERTAIN MORTGAGES.
"(a) DISCLOSURES.—
"(1) SPECIFIC DISCLOSURES.—In
addition to other disclosures required under this title, for each mortgage referred
to in section 103(aa), the creditor shall provide the following
disclosures in conspicuous type size:
"(A) Tou are not required to complete this agreement
merely because you have received these disclosures or have
signed a loan application.'.
"(B) 'If you obtain this loan, the lender will have a
mortgage on your home. You could lose your home, and
any money you have put into it, if you do not meet your
obligations under the loan.'.
15 USC 1639.
108 STAT. 2192
PUBLIC LAW 103-325—SEPT. 23, 1994
"(2) ANNUAL PERCENTAGE RATE.—In addition to the disclo-
sures required under paragraph (1), the creditor shall disclose—
"(A) in the case of a credit transaction with a fixed
rate of interest, the annual percentage rate and the amount
of the regular monthly pajrment; or
"(B) in the case of any other credit transaction, the
annual percentage rate of the loan, the amount of the
regular monthly payment, a statement that the interest
rate and monthly payment may increase, and the amount
of the maximum monthly payment, based on the maximum
interest rate allowed pursuant to section 1204 of the
Competitive Equality Banking Act of 1987.
"(b) TIME OF DISCLOSURES.—
.
"(1) I N GENERAL.—^The disclosures required by this section
shall be given not less than 3 business days prior to consummation of the transaction.
"(2) N E W DISCLOSURES REQUIRED.—
"(A) ll* GENERAL.—^After providing the disclosures
required by this section, a creditor may not change the
terms of the extension of credit if such changes make
the disclosures inaccurate, unless new disclosures are provided that meet the requirements of this section.
"(B) TELEPHONE DISCLOSURE.—A creditor may provide
new disclosures pursuant to subparagraph (A) by telephone,
if—
"(i) the chahge is initiated by the consumer; and
"(ii) at the consummation of the transaction under
which the credit is extended—
"(I) the creditor provides to the consumer the
new disclosures, in writing; and
"(II) the creditor and consumer certify in writing that the new disclosures were provided by
telephone, by not later than 3 days prior to the
date of consummation of the transaction.
"(3) MODiFlCATlONS.^The Board may, if it finds that such
action is necessary to permit homeowners to meet bona fide
personal financial emergencies, prescribe regulations authorizing the modification or waiver of rights created under this
subsection, to the extent and under the circumstances set forth
in those regulations.
"(c) No PREPAYMENT PENALTY.—
"(1) IN GENERAL.—
"(A) LIMITATION ON TERMS.—^A mortgage referred to
in section 103(aa) may not contain terms under which
a consumer must pay a prepayment penalty for paying
all or part of the principal before the date on which the
principal is due.
"(B) CONSTRUCTION.—For purposes of this subsection,
any method of computing a refund of unearned scheduled
interest is a prepayment penalty if it is less favorable
to the consumer than the actuarial method (as that term
is defined in section 933(d) of the Housing and Community
Development Act of 1992).
"(2) EXCEPTION.—Notwithstanding paragraph (1), a mortgage referred to in section 103(aa) may contain a prepayment
penalty (including terms calculating a refund by a method
that is not prohibited under section 933(b) of the Housing
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2193
and Community Development Act of 1992 for the transaction
in question) if—
"(A) at the time the mortgage is consummated—
"(i) the consumer is not liable for an amount of
monthly indebtedness payments (including the amount
of credit extended or to be extended under the transaction) that is greater than 50 percent of the monthly
gross income of the consumer; and
"(ii) the income and expenses of the consumer are
verified by a financial statement signed by the
consumer, by a credit report, and in the case of employment income, by payment records or by verification
from the employer of the consumer (which verification
may be in the form of a copy of a pay stub or other
payment record supplied by the consumer);
"(B) the penalty applies only to a prepayment made
with amounts obtained hy the consumer by means other
than a refinancing by the creditor under the mortgage,
or an affiliate of that creditor;
"(C) the penalty does not apply after the end of the
5-year period beginning on the date on which the mortgage
is consummated; and
"(D) the penalty is not prohibited under other
applicable law.
"(d) LIMITATIONS AFTER DEFAULT.—A mortgage referred to in
section 103(aa) may not provide for an interest rate applicable
after default that is higher than the interest rate that applies
before default. If the date of maturity of a mortgage referred to
in subsection 103(aa) is accelerated due to default and the consumer
is entitled to a rebate of interest, that rebate shall be computed
by any method that is not less favorable than the actuarial method
(as that term is defined in section 933(d) of the Housing and
Community Development Act of 1992).
"(e) No BALLOON PAYMENTS.—^A mortgage referred to in section
103(aa) having a term of less than 5 years may not include terms
under which the aggregate amount of the regular periodic payments
would not fully amortize the outstanding principal balance.
"(f) No NEGATIVE AMORTIZATION.—A mortgage referred to in
section 103(aa) may not include terms under which the outstanding
principal balance will increase at any time over the course of
the loan because the regular periodic payments do not cover the
full amount of interest due.
"(g) No PREPAID PAYMENTS.—^A mortgage referred to in section
103(aa) may not include terms under which more than 2 periodic
payments required under the loan are consolidated and paid in
advance from the loan proceeds provided to the consumer.
"(h) PROHIBITION ON EXTENDING CREDIT WITHOUT REGARD TO
PAYMENT ABILITY OF CONSUMER.—^A creditor shall not engage in
a pattern or practice of extending credit to consumers under mortgages referred to in section 103(aa) based on the consumers' collateral without regard to the consumers' repayment ability, including
the consumers' current and expected income, current obligations,
and employment.
"(i) REQUIREMENTS FOR PAYMENTS UNDER HOME IMPROVEMENT
CONTRACTS.—^A creditor shall not make a payment to a contractor
under a home improvement contract from amounts extended as
credit under a mortgage referred to in section 103(aa), other than—
108 STAT. 2194
PUBLIC LAW 103-325—SEPT. 23, 1994
"(1) in the form of an instrument that is payable to the
consumer or jointly to the consumer and the contractor; or
"(2) at the election of the consumer, by a third party
escrow agent in accordance with terms established in a written
agreement signed by the consumer, the creditor, and the contractor before the date of payment.
"(j) CONSEQUENCE OF FAILURE T O COMPLY.—Any mortgage that
contains a provision prohibited by this section shall be deemed
a failure to deliver the material disclosures required under this
title, for the purpose of section 125.
"(k) DEFINITION.—For purposes of this section, the term 'affiliate' has the same meaning as in section 2(k) of the Bank Holding
Company Act of 1956.
"(1) DISCRETIONARY REGULATORY AUTHORITY OF BOARD.—
"(1) EXEMPTIONS.—The Board may, by regulation or order,
exempt specific mortgage products or categories of mortgages
from any or all of the prohibitions specified in subsections
(c) through (i), if the Board finds that the exemption—
"(A) is in the interest of the borrowing public; and
"(B) will apply only to products that maintain and
strengthen home ownership and equity protection.
"(2) PROHIBITIONS.—The Board, by regulation or order,
shall prohibit acts or practices in connection with—
"(A) mortgage loans that the Board finds to be unfair,
deceptive, or designed to evade the provisions of this section; and
"(B) refinancing of mortgage loans that the Board finds
to be associated with abusive lending practices, or that
are otherwise not in the interest of the borrower.".
(e) CONFORMING AMENDMENTS.—
(1) TABLE OF SECTIONS.—The table of sections at the begin-
ning of chapter 2 of the Truth in Lending Act is amended
by striking the item relating to section 129 and inserting the
following:
"129. Requirements for certain mortgages.".
15 use 1604.
15 use 1610.
(2) TRUTH IN LENDING ACT.—The Truth in Lending Act
(15 U.S.C. 1601 et seq.) is amended—
(A) in the second sentence of section 105(a), by striking
"These" and inserting "Except in the case of a mortgage
referred to in section 103(aa), these";
(B) in section 111(a)(2), by inserting before the period
the following: ", and such State-required disclosure may
not be made in lieu of the disclosures applicable to certain
mortgages under section 129"; and
(C) in section 111(b)—
(i) by striking "This" and inserting "Except as provided in section 129, this"; and
(ii) by adding at the end the following: "The provisions of section 129 do not annul, alter, or affect the
applicability of the laws of any State or exempt any
person subject to the provisions of section 129 from
complying with the laws of any State, with respect
to the requirements for mortgages referred to in section
103(aa), except to the extent that those State laws
are inconsistent with any provisions of section 129,
and then only to the extent of the inconsistency.".
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2195
SEC. 153. CIVIL LIABILITY.
(a) DAMAGES.—Section 130(a) of the Truth in Lending Act (15
U.S.C. 1640(a)) is amended—
(1) by striking "and" at the end of paragraph (2)(B);
(2) by striking the period at the end of paragraph (3)
and inserting "; and"; and
(3) by inserting after paragraph (3) the following new
paragraph:
(4) in the case of a failure to comply with any requirement
under section 129, an amount equal to the sum of all finance
charges and fees paid by the consumer, unless the creditor
demonstrates that the failure to comply is not material.".
(b) STATE ATTORNEY GENERAL ENFORCEMENT.—Section 130(e)
of the Truth in Lending Act (15 U.S.C. 1640(e)) is amended by
adding at the end the following: "An action to enforce a violation
of section 129 may also be brought by the appropriate State attorney
general in any appropriate United States district court, or any
other court of competent jurisdiction, not later than 3 years after
the date on which the violation occurs. The State attorney general
shall provide prior written notice of any such civil action to the
Federal agency responsible for enforcement under section 108 and
shall provide the agency with a copy of the complaint. If prior
notice is not feasible, the State attorney general shall provide
notice to such agency immediately upon instituting the action.
The Federal agency may—
"(1) intervene in the action;
"(2) upon intervening—
"(A) remove the action to the appropriate United States
district court, if it was not originally brought there; and
"(B) be heard on all matters arising in the action;
and
"(3) file a petition for appeal.".
(c) ASSIGNEE LIABILITY.—Section 131 of the Truth in Lending
Act (15 U.S.C. 1641) is amended by adding at the end the following
new subsection:
"(d) RIGHTS UPON ASSIGNMENT OF CERTAIN MORTGAGES.—
"(1) I N GENERAL.—^Any person who purchases or is otherwise assigned a mortgage referred to in section 103(aa) shall
be subject to all claims and defenses with respect to that
mortgage that the consumer could assert against the creditor
of the mortgage, unless the purchaser or assignee demonstrates,
by a preponderance of the evidence, that a reasonable person
exercising ordinary due diligence, could not determine, based
on the documentation required by this title, the itemization
of the amount financed, and other disclosure of disbursements
that the mortgage was a mortgage referred to in section 103(aa).
The preceding sentence does not affect rights of a consumer
under subsection (a), (b), or (c) of this section or any other
provision of this title.
"(2) LIMITATION ON DAMAGES.—Notwithstanding any other
provision of law, relief provided as a result of any action made
permissible by paragraph (1) may not exceed—
"(A) with respect to actions based upon a violation
of this title, the amount specified in section 130; and
"(B) with respect to all other causes of action, the
sum of—
"(i) the amount of all remaining indebtedness; and
108 STAT. 2196
PUBLIC LAW 103-325—SEPT. 23, 1994
"(ii) the total amount paid by the consumer in
connection with the transaction.
"(3) OFFSET.—^The amount of damages that may be awarded
under paragraph (2)(B) shall be reduced by the amount of
any damages awarded under paragraph (2)(A).
"(4) NOTICE.—^Any person who sells or otherwise assigns
a mortgage referred to in section 103(aa) shall include a prominent notice of the potential liability under this subsection as
determined by the Board.".
SEC. 154. REVERSE MORTGAGE DISCLOSURE.
(a) DEFINITION OF REVERSE MORTGAGE.—Section 103 of
the
Truth in Lending Act (15 U.S.C. 1602) is amended by adding
at the end the following new subsection:
"(bb) The term 'reverse mortgage transaction' means a
nonrecourse transaction in which a mortgage, deed of trust, or
equivalent consensual security interest is created against the
consumer's principal dwelling—
"(1) securing one or more advances; and
"(2) with respect to which the payment of any principal,
interest, and shared appreciation or equity is due and payable
(other than in the case of default) only ^ e r —
"(A) the transfer of the dwelling;
"(B) the consumer ceases to occupy the dwelling as
a principal dwelling; or
"(C) the death of the consumer.".
(b) DISCLOSURE.—Chapter 2 of title I of the Truth in Lending
Act (15 U.S.C. 1631 et seq.) is amended by adding at the end
the following new section:
15USC1648.
"SEC. 138. REVERSE MORTGAGES.
"(a) IN GENERAL.—In addition to the disclosures required under
this title, for each reverse mortgage, the creditor shall, not less
than 3 days prior to consummation of the transaction, disclose
to the consumer in conspicuous type a good faith estimate of the
projected total cost of the mortgage to the consumer expressed
as a table of annual interest rates. Each annual interest rate
shall be based on a projected total future credit extension balance
under a projected appreciation rate for the dwelling and a term
for the mortgage. The disclosure shall include—
"(1) statements of the annual interest rates for not less
than 3 projected appreciation rates and not less than 3 credit
transaction periods, as determined by the Board, including—
"(A) a short-term reverse mortgage;
"(B) a term equaling the actuarial life expectancy of
the consumer; and
"(C) such longer term as the Board deems appropriate;
and
"(2) a statement that the consumer is not obligated to
complete the reverse mortgage transaction merely because the
consumer has received the disclosure required under this section or has signed an application for the reverse mortgage.
"(b) PROJECTED TOTAL COST.—In determining the projected
total cost of the mortgage to be disclosed to the consumer under
subsection (a), the creditor shall take into account—
"(1) any shared appreciation or equity that the lender will,
by contract, be entitled to receive;
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2197
"(2) all costs and charges to the consumer, including the
costs of any associated annuity that the consumer elects or
is required to purchase as part of the reverse mortgage transaction;
"(3) all payments to and for the benefit of the consumer,
including, in tne case in which an associated annuity is purchased (whether or not required by the lender as a condition
of making the reverse mortgage), the annuity pa3m[ients
received by the consumer and financed from the proceeds of
the loan, instead of the proceeds used to finance the annuity;
and
"(4) any limitation on the liability of the consumer under
reverse mortgage transactions (such as nonrecourse limits and
equity conservation agreements).".
(c) HOME EQUITY PLAN EXEMPTION.—Section 137(b) of the
Truth in Lending Act (15 U.S.C. 1647(b)) is amended by adding
at the end the following:
"This subsection does not apply to reverse mortgage transactions.".
(d) TABLE OF SECTIONS.—^The table of sections at the beginning
of chapter 2 of the Truth in Lending Act is amended by inserting
after the item relating to section 137 the following:
"138. Reverse mortgages.".
SEC. 155. REGULATIONS.
Not later than 180 days after the date of enactment of this
Act, the Board of Governors of the Federal Reserve System shall
issue such regulations as may be necessary to carry out this subtitle,
and such regulations shall become effective on the date on which
disclosure regulations are required to become effective under section
105(d) of the Truth in Lending Act.
SEC. 156. APPLICABILITY.
This subtitle, and the amendments made by this subtitle, shall
apply to every mortgage referred to in section 103(aa) of the Truth
in Lending Act (as added by section 152(a) of this Act) consummated
on or after the date on which regulations issued under section
155 become effective.
SEC. 157. F E D E R A L RESERVE STUDY.
15 u s e 1602
note.
15 u s e 1602
note.
15 u s e 1601
note.
During the period beginning 180 days after the date of enact- Reports.
ment of this Act and ending 2 years after that date of enactment,
the Board of Governors of the Federal Reserve System shall conduct
a study and submit to the Congress a report, including recommendations for any appropriate legislation, regarding—
(1) whether a consumer engaging in an open end credit
transaction (as defined in section 103 of the Truth in Lending
Act) secured by the consumer's principal dwelling is provided
adequate protections under Federal law, including section 127A
of the Truth in Lending Act; and
(2) whether a more appropriate interest rate index exists
for purposes of subparagraph (A) of section 103(aa)(l) of the
Truth in Lending Act (as added by section 152(a) of this Act)
than the yield on Treasury securities referred to in that
subparagraph.
SEC. 158. HEARINGS ON HOME EQUITY LENDING.
(a) HEARINGS.—^Not less than once during the 3-year period
beginning on the date of enactment of this Act, and regularly
15 u s e 1601
note.
108 STAT. 2198
,
PUBLIC LAW 103-325—SEPT. 23, 1994
thereafter, the Board of Governors of the Federal Reserve System,
in consultation with the Consumer Advisory Council of the Board,
shall conduct a public hearing to examine the home equity loan
market and the adequacy of existing regulatory and legislative
provisions and the provisions of this subtitle in protecting the
interests of consumers, and low-income consumers in particular.
(b) PARTICIPATION.—In conducting hearings required by subsection (a), the Board of Governors of the Federal Reserve System
shall solicit participation from consumers, representatives of
consumers, lenders, and other interested parties.
TITLE II—SMALL BUSINESS CAPITAL
FORMATION
Small Business
Loan
Securitization
and Secondary
Market
Enhancement
Act of 1994
15 use 78a note.
Subtitle A—Small Business Loan
Securitization
SEC. 201. SHORT TITLE.
rpj^jg subtitle may be cited as the "Small Business Loan
Securitization and Secondary Market Enhancement Act of 1994".
SEC. 202. SMALL BUSINESS RELATED SECURITY.
Section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C.
78c(a)) is amended by adding at the end the following new
paragraph:
"(53)(A) The term 'small business related security' means
a security that is rated in 1 of the 4 highest rating categories
by at least 1 nationally recognized statistical rating organization, and either—
"(i) represents an interest in 1 or more promissory
notes or leases of personal property evidencing the obligation of a small business concern and originated by an
insured depository institution, insured credit union, insurance company, or similar institution which is supervised
and examined by a Federal or State authority, or a finance
company or leasing company; or
"(ii) is secured by an interest in 1 or more promissory
notes or leases of personal property (with or without
recourse to the issuer or lessee) and provides for payments
of principal in relation to payments, or reasonable projections of payments, on notes or leases described in clause
(i).
"(B) For purposes of this paragraph—
"(i) an 'interest in a promissory note or a lease of
personal propertj^ includes ownership rights, certificates
of interest or participation in such notes or leases, and
rights designed to assure servicing of such notes or leases,
or the receipt or timely receipt of amounts payable under
such notes or leases;
"(ii) the term 'small business concern' means a business
that meets the criteria for a small business concern established by the Small Business Administration under section
3(a) of the Small Business Act;
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2199
"(iii) the term 'insured depository institution' has the
same meaning as in section 3 of the Federal Deposit Insurance Act; and
"(iv) the term 'insured credit union' has the same megming as in section 101 of the Federal Credit Union Act.".
SEC. 203. APPLICABILITY OF MARGIN REQUIREMENTS.
Section 7(g) of the Securities Exchange Act of 1934 (15 U.S.C.
78g(g)) is amended by inserting "or a small business related security" after "mortgage related security".
SEC. 204. BORROWING IN THE COURSE OF BUSINESS.
Section 8(a) of the Securities Exchange Act of 1934 (15 U.S.C.
78h(a)) is amended in the last sentence by inserting "or a small
business related security" sifter "mortgage related security".
SEC. 205. SMALL BUSINESS RELATED SECURITIES AS COLLATERAL.
Clause (ii) of section 11(d)(1) of the Securities Exchange Act
of 1934 (15 U.S.C. 78k(d)(l)) is amended by inserting "or any
small business related security" after "mortgage related security".
SEC. 206. INVESTMENT BY DEPOSITORY INSTITUTIONS.
(a) HOME OWNERS' LOAN ACT AMENDMENT.—Section
5(c)(1)
of the Home Owners' Loan Act (12 U.S.C. 1464(c)(1)) is amended
by adding at the end the following new subparagraph:
"(S)
SMALL BUSINESS RELATED SECURITIES.—Invest-
ments in small business related securities (as defined in
section 3(a)(53) of the Securities Exchange Act of 1934),
subject to such regulations as the Director may prescribe,
including regulations concerning the minimum size of the
issue (at the time of the initial distribution), the minimum
aggregate sales price, or both.".
(b) CREDIT UNIONS.—Section 107(15) of the Federal Credit
Union Act (12 U.S.C. 1757(15)) is amended—
(1) in subparagraph (A), by striking "or" at the end;
(2) in subparagraph (B), by inserting "or" at the end; and
(3) by adding at the end the following new subparagraph:
"(C) are small business related securities (as defined
in section 3(a)(53) of the Securities Exchange Act of 1934),
subject to such regulations as the Board may prescribe,
including regulations prescribing the minimum size of the
issue (at the time of the initial distribution), the minimum
aggregate sales price, or both;".
(c) NATIONAL BANKING ASSOCIATIONS.—Section 5136 of the
Revised Statutes (12 U.S.C. 24) is amended in the last sentence
in the first full paragraph of paragraph Seventh, by striking "or
(B) are mortgage related securities" and inserting the following:
"(B) are small business related securities (as defined in section
3(a)(53) of the Securities Exchange Act of 1934); or (C) are mortgage
related securities".
SEC. 207. PREEMPTION OF STATE LAW.
(a) I N GENERAL.—Section 106(a)(1) of the Secondary Mortgage
Market Enhancement Act of 1984 (15 U.S.C. 77r-1(a)(1)) is
amended—
(1) by striking "or" at the end of subparagraph (B);
(2) by redesignating subparagraph (C) as subparagraph
(D); and
108 STAT. 2200
PUBLIC LAW 103-325—SEPT. 23, 1994
(3) by inserting after subparagraph (B) the following new
subparagraph:
"(C) small business related securities (as defined in
section 3(a)(53) of the Securities Exchange Act of 1934),
or .
(b) OBLIGATIONS OF THE UNITED STATES.—Section 106(a)(2)
of the Secondary Mortgage Market Enhancement Act of 1984 (15
U.S.C. 77r-1(a)(2)) is amended—
(1) by striking "or" at the end of subparagraph (B);
(2) by redesignating subparagraph (C) as subparagraph
(D); and
(3) by inserting after subparagraph (B) the following new
subparagraph:
"(C) small business related securities (as defined in
section 3(a)(53) of the Securities Exchange Act of 1934),
or .
(c) PREEMPTION OF STATE LAWS.—Section 106(c) of the Second-
ary Mortgage Market Enhancement Act of 1984 (15 U.S.C. 77r1(c)) is amended—
(1) in the first sentence, by striking "or that" and inserting
", that"; and
(2) by inserting ", or that are small business related securities (as defined in section 3(a)(53) of the Securities Exchange
Act of 1934)" before "shall be exempt".
(d) IMPLEMENTATION.—Section 106 of the Secondary Mortgage
Market Enhancement Act of 1984 (15 U.S.C. 77r-l) is amended
by adding at the end the following new subsection:
"(d) IMPLEMENTATION.—
"(1) LIMITATION.—The provisions of subsections (a) and (b)
concerning small business related securities shall not apply
with respect to a particular person, trust, corporation, partnership, association, business trust, or business entity or class
thereof in any State that, prior to the expiration of 7 years
after the date of enactment of this subsection, enacts a statute
that specifically refers to this section and either prohibits or
provides for a more limited authority to purchase, hold, or
invest in such small business related securities by any person,
trust, corporation, partnership, association, business trust, or
business entity or class thereof than is provided in this section.
The enactment by any State of any statute of the type described
in the preceding sentence shall not affect the validity of any
contractual commitment to purchase, hold, or invest that was
made prior to such enactment, and shall not require the sale
or other disposition of any small business related securities
acquired prior to the date of such enactment.
"(2)
STATE
REGISTRATION
OR QUALIFICATION
REQUIRE-
MENTS.—^Any State may, not later than 7 years after the date
of enactment of this subsection, enact a statute that specifically
refers to this section and requires registration or qualification
of any small business related securities on terms that differ
from those applicable to any obligation issued by the United
States.".
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2201
SEC. 208. INSURED DEPOSITORY INSTITUTION CAPITAL REQUIREMENTS FOR TRANSFERS OF SMALL BUSINESS OBLIGATIONS.
(a) ACCOUNTING PRINCIPLES.—^The accounting principles
applicable to the transfer of a small business loan or a lease
of personal property with recourse contained in reports or statements required to be filed with Federal banking agencies by a
qualified insured depository institution shall be consistent with
generally accepted accounting principles.
(b) CAPITAL AND RESERVE REQUIREMENTS.—^With respect to
the transfer of a small business loan or lease of personal property
with recourse that is a sale under generally accepted accounting
principles, each qualified insured depository institution shall—
(1) establish and maintain a reserve equal to an amount
sufficient to meet the reasonable estimated liability of the
institution under the recourse arrangement; and
(2) include, for purposes of applicable capital standards
and other capital measures, only the amount of the retained
recourse in the risk-weighted assets of the institution.
(c)
QUALIFIED INSTITUTIONS CRITERIA.—An
insured depository
institution is a qualified insured depository institution for purposes
of this section if, without regard to the accounting principles or
capital requirements referred to in subsections (a) and (b), the
institution is—
(1) well capitalized; or
(2) with the approval, by regulation or order, of the appropriate Federal banking agency, adequately capitalized.
(d)
AGGREGATE AMOUNT OF RECOURSE.—The
total outstanding
amount of recourse retained by a qualified insured depository
institution with respect to transfers of small business loans and
leases of personal property under subsections (a) and (b) shall
not exceed—
(1) 15 percent of the risk-based capital of the institution;
or
(2) such greater amount, as established by the appropriate
Federal banking agency by regulation or order.
(e) INSTITUTIONS THAT CEASE T O B E QUALIFIED OR EXCEED
AGGREGATE LIMITS.—If £in insured depository institution ceases
to be a qualified insured depository institution or exceeds the limits
under subsection (d), this section shall remain applicable to any
transfers of small business loans or leases of personal property
that occurred during the time that the institution was qualified
and did not exceed such limit.
(f)
PROMPT CORRECTIVE ACTION NOT AFFECTED.—The
capital
of an insured depository institution shall be computed without
regard to this section in determining whether the institution is
adequately
capitalized,
undercapitalized,
significantly
undercapitalized, or critically undercapitalized under section 38
of the Federal Deposit Insurance Act.
(g) REGULATIONS REQUIRED.—Not later than 180 days after
the date of enactment of this Act each appropriate Federal banking
agency shall promulgate final regulations implementing this section.
(h) ALTERNATIVE SYSTEM PERMITTED.—
(1) I N GENERAL.—At the discretion of the appropriate Federal banking agency, this section shall not apply if the regulations of the agency provide that the aggregate amount of capital
and reserves required with respect to the transfer of small
12 USC 1835.
108 STAT. 2202
PUBLIC LAW 103-325—SEPT. 23, 1994
business loans and leases of personal property with recourse
does not exceed the aggregate amount of capital and reserves
that would be required under subsection (b).
(2) EXISTING TRANSACTIONS NOT AFFECTED.—Notwithstand-
ing paragraph (1), this section shall remain in effect with
respect to transfers of small business loans and leases of personal property with recourse by qualified insured depository
institutions occurring before the effective date of regulations
referred to in paragraph (1).
(i) DEFINITIONS.—For purposes of this section—
(1) the term "adequately capitalized" has the same meaning
as in section 38(b) of the Federal Deposit Insurance Act;
(2) the term "appropriate Federal banking agency" has
the same meaning as in section 3 of the Federal Deposit Insurance Act;
(3) the term "capital standards" has the same meaning
as in section 38(c) of the Federal Deposit Insurance Act;
(4) the term "Federal banking agencies" has the same
meaning as in section 3 of the Federal Deposit Insurance Act;
(5) the term "insured depository institution" has the same
meaning as in section 3 of the Federal Deposit Insurance Act;
(6) the term "other capital measures" has the meaning
as in section 38(c) of the Federal Deposit Insurance Act;
(7) the term "recourse" has the meaning given to such
term under generally accepted accounting principles;
(8) the term "small business" means a business that meets
the criteria for a small business concern established by the
Small Business Administration under section 3(a) of the Small
Business Act; and
(9) the term "well capitalized" has the same meaning as
in section 38(b) of the Federal Deposit Insurance Act.
15 u s e 78b note.
SEC. 209. JOINT STUDY ON THE IMPACT OF ADDITIONAL SECURITIES
BASED ON POOLED OBLIGATIONS.
(a) JOINT STUDY REQUIRED.—The Board and the Commission
shall conduct a joint study of the impact of the provisions of this
subtitle (including the amendments made by this subtitle) on the
credit and securities markets. Such study shall evaluate—
(1) the impact of the provisions of this subtitle on the
availability of credit for business and commercial enterprises
in general, and the availability of credit in particular for—
(A) businesses in low- and moderate-income areas;
(B) businesses owned by women and minorities;
(C) community development efforts;
(D) community development financial institutions;
(E) businesses in different geographical regions; and
(F) a diversity of t3rpes of businesses;
(2) the structure and operation of the markets that develop
for small business related securities and commercial mortgage
related securities, including the types of entities (such as pension funds and insurance companies) that are significant purchasers of such securities, the extent to which such entities
are sophisticated investors, the use of credit enhancements
in obtaining investment-grade ratings, any conflicts of interest
that arise in such markets, and any adverse effects of such
markets on commercial real estate ventures, pension funds,
or pension fund beneficiaries;
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2203
(3) the extent to which the provisions of this subtitle with
regard to margin requirements, the number of eligible investment rating categories, preemption of State law, and the treatment of such securities as government securities for the purpose
of State investment limitations, affect the structure and operation of such markets; and
(4) in view of the findings made pursuant to paragraphs
(2) and (3), any additional suitability or disclosure requirements
or other investor protections that should be required.
(b) REPORTS.—
(1) IN GENERAL.—^The Board and the Commission shall
submit to the Congress a report on the results of the study
required by subsection (a) before the end of-—
(A) the 2-year period beginning on the date of enactment of this Act;
(B) the 4-year period beginning on such date of enactment; and
(C) the 6-year period beginning on such date of
enactment.
(2) CONTENTS OF REPORT.—Each report required under
paragraph (1) shall contain or be accompanied by such recommendations for administrative or legislative action as the
Board and the Commission consider appropriate and may
include recommendations regarding the need to develop a system for reporting additional information concerning investments by the entities described in subsection (a)(2).
(c) DEFINITIONS.—^As used in this section—
(1) the term "Board" means the Board of Governors of
the Federal Reserve System; and
(2) the term "Commission" means the Securities and
Exchange Commission.
SEC. 210. CONSISTENT USE OF FINANCIAL TERMINOLOGY.
12 USC 3305
Not later than 2 years after the date of enactment of this Reports.
Act, the Financial Institutions Examination Council shall report
to the Congress on its recommendations for the use of consistent
financial terminology by depository institutions for small business
loans or leases of personal property which are sold for the creation
of small business related securities (as defined in section 3(a)(53)(A)
of the Securities Exchange Act of 1934).
Subtitle B—Small Business Capital
Enhancement
SEC. 251. FINDINGS AND PURPOSES.
(a) FINDINGS.—The Congress finds that—
(1) small business concerns are a vital part of the economy,
accounting for the majority of new jobs, new products, and
new services created in the United States;
(2) adequate access to debt capital is a critical component
for small business development, productivity, expcinsion, and
success in the United States;
(3) commercial banks are the most important suppliers
of debt capital to small business concerns in the United States;
12 USC 4741.
108 STAT. 2204
PUBLIC LAW 103-325—SEPT. 23, 1994
(4) commercial banks and other depository institutions have
various incentives to minimize their risk in financing small
business concerns;
(5) as a result of such incentives, many small business
concerns with economically sound financing needs are unable
to obtain access to needed debt capital;
(6) the small business capital access programs implemented
by certain States are a flexible and efficient tool to assist
financial institutions in providing access to needed debt capital
for many small business concerns in a manner consistent with
safety and soundness regulations;
(7) a small business capital access program would complement other programs which assist small business concerns
in obtaining access to capital; and
(8) Federal policy can stimulate and accelerate efforts by
States to implement small business capital access programs
by providing an incentive to States, while leaving the
administration of such programs to each participating State.
(b) PURPOSES.—By encouraging States to implement administratively efficient capital access programs that encourage commercial banks and other depository institutions to provide access to
debt capital for a broad portfolio of small business concerns, and
thereby promote a more efficient and effective debt market, the
purposes of this subtitle are—
(1) to promote economic opportunity and growth;
(2) to create jobs;
(3) to promote economic efficiency;
(4) to enhance productivity; and
,, ,
(5) to spur innovation.
12 u s e 4742.
SEC. 252. DEFINITIONS.
For purposes of this subtitle—
(1) the term "Fund" means the Community Development
Financial Institutions Fund established under section 104;
(2) the term "appropriate Federal banking agency"—
(A) has the same meaning as in section 3 of the Federal
Deposit Insurance Act; and
(B) includes the National Credit Union Administration
Board in the case of any credit union the deposits of which
are insured in accordance with the Federal Credit Union
Act;
(3) the term "early loan" means a loan enrolled at a time
when the aggregate covered amount of loans previously enrolled
under the Program by a particular participating financial
institution is less than $5,000,000;
(4) the term "enrolled loan" means a loan made by a
participating financial institution that is enrolled by a participating State in accordance with this subtitle;
(5) the term "financial institution" means any federally
chartered or State-chartered commercial bank, savings association, savings bank, or credit union;
(6) the term "participating financial institution" means any
financial institution that has entered into a participation agreement with a participating State in accordance with section
254;
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2205
(7) the term "participating State" means any State that
has been approved for participation in the Program in accordance with section 253;
(8) the term "passive real estate ownership" means ownership of real estate for the purpose of deriving income from
speculation, trade, or rental, except that such term shall not
include—
(A) the ownership of that portion of real estate being
used or intended to be used for the operation of the business
of the owner of the real estate (other than the business
of passive ownership of real estate); or
(B) the ownership of real estate for the purpose of
construction or renovation, until the completion of the
construction or renovation phase;
(9) the term "Program" means the Small Business Capital
Enhancement Program established under this subtitle;
(10) the term "reserve fund" means a fund, established
by a participating State, earmarked for a particular participating financial institution, for the purposes of—
(A) depositing all required premium charges paid by
the participating financial institution and by each borrower
receiving a loan under the Program from a participating
financial institution;
(B) depositing contributions made by the participating
State; and
(C) covering losses on enrolled loans by disbursing
accumulated funds; and
(11) the term "State" means—
(A) a State of the United States;
(B) the District of Columbia;
(C) any political subdivision of a State of the United
States, which subdivision has a population in excess of
the population of the least populated State of the United
States; and
(D) any other political subdivision of a State of the
United States that the Fund determines has the capacity
to participate in the program.
SEC. 253. APPROVING STATES FOR PARTICIPATION.
(a) APPLICATION.—^Any State may apply to the Fund for
approval to be a participating State under the Program and to
be eligible for reimbursement by the Fund pursuant to section
257.
(b) APPROVAL CRITERIA.—The Fund shall approve a State to
be a participating State, if—
(1) a specific department or agency of the State has been
designated to implement the Program;
(2) all legal actions necessary to enable such designated
department or agency to implement the Program have been
accomplished;
(3) funds in the amount of at least $1 for every 2 people
residing in the State (as of the last decennial census for which
data have been released) are available and have been legally
committed to contributions by the State to reserve funds, with
such funds being available without time limit and without
requiring additional legal action, except that such requirements
shall not be construed to limit the authority of the State to
"'-'•'
12 USC 4743.
108 STAT. 2206
PUBLIC LAW 103-325—SEPT. 23, 1994
take action at a later time that results in the termination
of its obligation to enroll loans and make contributions to
reserve funds;
(4) the State has prescribed a form of participation agreement to be entered into between it and each participating
financial institution that is consistent with the requirements
and purposes of this subtitle; and
(5) the State and the Fund have executed a reimbursement
agreement that conforms to the requirements of this subtitle.
(c) EXISTING STATE PROGRAMS.—
(1) IN GENERAL.—^A State that is not a participating State,
but that has its own capital access program providing portfolio
insurance for business loans (based on a separate loss reserve
fund for each financial institution), may apply at any time
to the Fund to be approved to be a participating State. The
Fund shall approve such State to be a participating State,
and to be eligible for reimbursements by the Fund pursuant
to section 257, if the State—
(A) satisfies the requirements of subsections (a) and
(b); and
(B) certifies that each affected financial institution has
satisfied the requirements of section 254.
(2) APPLICABLE TERMS OF PARTICIPATION.—
(A) STATUS OF INSTITUTIONS.—If a State is approved
(d)
for participation under paragraph (1), each financial
institution with a participation agreement in effect with
the participating State shall immediately be considered
a participating financial institution. Reimbursements may
be made under section 237 in connection with all contributions made to the reserve fund by the State in connection
with lending that occurs on or after the date on which
the Fund approves the State for participation,
(B) EFFECTIVE DATE OF PARTICIPATION.—If an amended
participation agreement that conforms with section 255
is required in order to secure participation approval by
the Fund, contributions subject to reimbursement under
section 257 shall include only those contributions made
to a reserve fund with respect to loans enrolled on or
after the date that an amended participation agreement
between the participating State and the participating financial institution becomes effective.
(C) U S E OF ACCUMULATED RESERVE FUNDS.—^A State
that is approved for participation in accordance with this
subsection may continue to implement the program utilizing the reserve funds accumulated under the State
program.
PRIOR APPROPRIATIONS REQUIREMENT.—The
Fund shall not
approve a State for participation in the Program until at least
$50,000,000 has been appropriated to the Fund (subject to an appropriations Act), without fiscal year limitation, for the purpose of
making reimbursements pursuant to section 257 and otherwise
carrying out this subtitle.
(e) AMENDMENTS TO AGREEMENTS.—If a State that has been
approved to be a participating State wishes to amend its form
of participation agreement and continue to be a participating State,
such State shall submit such amendment for review by the Fund
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2207
in accordance with subsection (b)(4). Any such amendment shall
become effective only after it has been approved by the Fund.
SEC. 254. PARTICIPATION AGREEMENTS.
12 USC 4744.
(a) IN GENERAL.—^A participating State may enter into a participation agreement with any financial institution determined by the
participating State, after consultation with the appropriate Federal
banking agency, to have sufficient commercial lending experience
and financial and managerial capacity to participate in the Program.
The determination by the State shall not be reviewable by the
Fund.
(b) PARTICIPATING FINANCIAL INSTITUTIONS.—Upon entering
into the participation agreement with the participating State, the
financial institution shall become a participating financial institution eligible to enroll loans under the Program.
SEC. 255. TERMS OF PARTICIPATION AGREEMENTS.
(a) IN GENERAL.—The participation agreement to be entered
into by a participating State and a participating financial institution
shall include all provisions required by this section, and shall not
include any provisions inconsistent with the provisions of this
section.
(b) ESTABLISHMENT OF SEPARATE RESERVE FUNDS.—A separate
reserve fund shall be established by the participating State for
each participating financial institution. All funds credited to a
reserve fund shall be the exclusive property of the participating
State. Each reserve fund shall be an administrative account for
the purposes of—
(1) receiving all required premium charges to be paid by
the borrower and participating financial institution and contributions by the participating State; and
(2) disbursing funds, either to cover losses sustained by
the participating financial institution in connection with loans
made under the Program, or as contemplated by subsections
(d) and (r).
(c) INVESTMENT AUTHORITY.—Subject to applicable State law,
the participating State may invest, or cause to be invested, funds
held in a reserve fund by establishing a deposit account at the
participating financial institution in the name of the participating
State. In the event that funds in the reserve fund are not deposited
in such an account, such funds shall be invested in a form that
the participating State determines is safe and liquid.
(d) EARNED INCOME AND INTEREST.—Interest or income earned
on the funds credited to a reserve fund shall be deemed to be
part of the reserve fund, except that a participating State may,
as further specified in the participation agreement, provide authority for the participating State to withdraw some or all of such
interest or income earned.
(e) LOAN TERMS AND CONDITIONS.—
(1) IN GENERAL.—^A loan to be filed for enrollment under
the Program may be made with such interest rate, fees, and
other terms and conditions as agreed upon by the participating
financial institution and the borrower, consistent with
applicable law.
(2) LINES OF CREDIT.—If a loan to be filed for enrollment
is in the form of a line of credit, the amount of the loan
shall be considered to be the maximum amount that can be
drawn by the borrower against the line of credit.
12 USC 4745.
108 STAT. 2208
PUBLIC LAW 103-325—SEPT. 23, 1994
(f) ENROLLMENT PROCESS.—
(1) FILING.—
(A) IN GENERAL.—^A participating financial institution
shall file each loan made under the Program for enrollment
by completing and submitting to the participating State
a form prescribed by the participating State.
(B) FORM.—The form referred to in subparagraph (A)
shall include a representation by the participating financial
institution that it has complied with the participation
agreement in enrolling the loan with the State.
(C) PREMIUM CHARGES.—^Accompanying the completed
form shall be the nonrefundable premium charges paid
by the borrower and the participating financial institution,
or evidence that such premium charges have been deposited
into the deposit account containing the reserve fund, if
applicable.
(D) SUBMISSION.—The participation agreement shall
require that the items required by this subsection shall
be submitted to the participating State by the participating
financial institutions not later than 10 calendar days after
a loan is made.
(2) ENROLLMENT BY STATE.—Upon receipt by the participat-
ing State of the filing submitted in accordance with paragraph
(1), the participating State shall promptly enroll the loan and
make a matching contribution to the reserve fund in accordance
with subsection (j)> unless the information submitted indicates
that the participating financial institution has not complied
with the participation agreement in enrolling the loan.
(g) COVERAGE AMOUNT.—In filing a loan for enrollment under
the Program, the participating financial institution may specify
an amount to be covered under the Program that is less than
the full amount of the loan.
(h) PREMIUM CHARGES.—
(1) MINIMUM AND MAXIMUM AMOUNTS.—The
premium
charges payable to the reserve fund by the borrower and the
participating financial institution shall be prescribed by the
participating financial institution, within minimum and maximum limits set forth in the participation agreement. The
participation agreement shall establish minimum and maximum limits whereby the sum of the premium charges paid
in connection with a loan by the borrower and the participating
financial institution is not less than 3 percent nor more than
7 percent of the amount of the loan covered under the Program.
(2) ALLOCATION OF PREMIUM CHARGES.—The participation
agreement shall specify terms for allocating premium charges
between the borrower and the participating financial institution. However, if the participating financial institution is
required to pay any of the premium charges, the participation
agreement shall authorize the participating financial institution
to recover from the borrower the cost of the payment of the
participating financial institution, in any manner on which
the participating financial institution and the borrower agree.
(i) RESTRICTIONS.—
(1) ACTIONS PROHIBITED.—Except as provided in subsection
(h) and paragraph (2) of this subsection, the participating State
may not—
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2209
(A) impose any restrictions or requirements, relating
to the interest rate, fees, collateral, or other business terms
and conditions of the loan; or
(B) condition enrollment of a loan in the Program
on the review by the State of the risk or creditworthiness
of a loan.
(2) EFFECT ON OTHER LAW.—Nothing in this subtitle shall
affect the applicability of any other law to the conduct by
a participating financial institution of its business.
(j) STATE CONTRIBUTIONS.—In enrolling a loan under the Program, the participating State shall contribute to the reserve fund
an amount, as provided for in the participation agreement, which
shall not be less than the sum of the amount of premium charges
paid by the borrower and the participating financial institution.
(k) ELEMENTS OF CLAIMS.—
(1) FILING.—If a participating financial institution charges
off all or part of an enrolled loan, such participating financial
institution may file a claim for reimbursement with the participating State by submitting a form that—
(A) includes the representation by the participating
financial institution that it is filing the claim in accordance
with the terms of the applicable participation agreement;
and
(B) contains such other information as may be required
,,,
by the participating State.
(2) TIMING.—^Any claim filed under paragraph (1) shall
be filed contemporaneously with the action of the participating
financial institution to charge off all or part of an enrolled
loan. The participating financial institution shall determine
when and how much to charge off on an enrolled loan, in
a manner consistent with its usual method for making such
determinations on business loans that are not enrolled loans
under this subtitle.
(1) ELEMENTS OF CLAIMS.—^A claim filed by a participating
financial institution may include the amount of principal charged
off, not to exceed the covered amount of the loan. Such claim
may also include accrued interest and out-of-pocket expenses, if
and to the extent provided for under the participation agreement.
(m) PAYMENT OF CLAIMS.—
(1) IN GENERA!..—Except as provided in subsection (n) and
paragraph (2) of this subsection, upon receipt of a claim filed
in accordance with this section and the participation agreement,
the participating State shall promptly pay to the participating
financial institution, from funds in the reserve fund, the full
amount of the claim as submitted.
(2) INSUFFICIENT RESERVE FUNDS.—If there are insufficient
funds in the reserve fund to cover the entire amount of a
claim of a participating financial institution, the participating
State shall pay to the participating financial institution an
amount equal to the current balance in the reserve fund. If
the enrolled loan for which the claim has been filed—
(A) is not an early loan, such payment shall be deemed
fully to satisfy the claim, and the participating financial
institution shall have no other or further right to receive
any amount from the reserve fund with respect to such
claim; or
108 STAT. 2210
PUBLIC LAW 103-325—SEPT. 23, 1994
f
(B) is an early loan, such payment shall not be deemed
fully to satisfy the claim of the participating financial
institution, and at such time as the remaining balance
of the claim does not exceed 75 percent of the balance
in the reserve fund, the participating State shall, upon
the request of the participating financial institution, pay
any remaining amount of the claim.
(n) DENIAL OF CLAIMS.—^A participating State may deny a
claim if a representation or warranty made by the participating
financial institution to the participating State at the time that
the loan was filed for enrollment or at the time that the claim
was submitted was known by the participating financial institution
to be false.
(o) SUBSEQUENT RECOVERY OF CLAIM AMOUNT.—If, subsequent
to payment of a claim by the participating State, a participating
financial institution recovers from a borrower any amount for which
payment of the claim was made, the participating financial institution shall promptly pay to the participating State for deposit into
the reserve fund the amount recovered, less any expenses incurred
by the institution in collection of such amount.
(p) PARTICIPATION AGREEMENT TERMS.—
(1) IN GENERAL.—In connection with the filing of a loan
for enrollment in the Program, the participation agreement—
(A) shall require the participating financial institution
to obtain an assurance from each borrower that—
(i) the proceeds of the loan will be used for a
business purpose;
(ii) the loan will not be used to finance passive
real estate ownership; and
(iii) the borrower is not—
(I) an executive officer, director, or principal
shareholder of the participating financial institution;
(II) a member of the immediate family of an
executive officer, director, or principal shareholder
of the participating financial institution; or
(III) a related interest of any such executive
officer, director, principal shareholder, or member
of the immediate family;
(B) shall require the participating financial institution
to provide assurances to the participating State that the
loan has not been made in order to place under the protection of the Program prior debt that is not covered under
the Program and that is or was owed by the borrower
to the participating financial institution or to an affiliate
of the participating financial institution;
(C) may provide that if—
(i) a participating financial institution makes a
loan to a borrower that is a refinancing of a loan
previously made to the borrower by the participating
financial institution or an affiliate of the participating
financial institution;
(ii) such prior loan was not enrolled in the Program; and
(iii) additional or new financing is extended by
the participating financial institution as part of the
refinancing.
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2211
the participating financial institution may file the loan
for enrollment, with the amount to be covered under the
Program not to exceed the amount of any additional or
new financing; and
(D) may include additional restrictions on the eligibility
of loans or borrowers that are not inconsistent with the
provisions and purposes of this subtitle.
(2) DEFINITIONS.—For purposes of this subsection, the
terms "executive officer", "director", "principal shareholder",
"immediate family", and "related interest" refer to the same
relationship to a participating financial institution as the relationship described in part 215 of title 12 of the Code of Federal
Regulations, or any successor to such part.
(q) TERMINATION CLAUSE.—In each participation agreement,
the participating State shall reserve for itself the ability to terminate its obligation to enroll loans under the Program. Any such
termination shall be prospective only, and shall not apply to
amounts of lo£ins enrolled under the Program prior to such
termination.
(r) ALLOWABLE WITHDRAWALS FROM FUND.—The participation
agreement may provide that, if, for any consecutive period of not
less than 24 months, the aggregate outstanding balance of all
enrolled loans for a participating financial institution is continually
less than the outstanding balance in the reserve fund for that
participating financial institution, the participating State, in its
discretion, may withdraw an amount from the reserve fund to
bring the balance in the reserve fund down to the outstanding
balance of all such enrolled loans.
(s) GRANDFATHERED PROVISION.—
(1) SPECIAL TREATMENT OF PREMIUM CHARGES.—^Notwith-
standing subsection (b) or (d), the participation agreement,
if explicitly authorized by a statute enacted by the State before
the date of enactment of this Act, may allow a participating
financial institution to treat the premium charges paid by the
participating financial institution and the borrower into the
reserve fund, and interest or income earned on funds in the
reserve fund that are deemed to be attributable to such premium charges, as assets of the participating financial institution for accounting purposes, subject to withdrawal by the
participating financial institution only—
(A) for the pajmient of claims approved by the participating State in accordance with this section; and
(B) upon the participating financial institution's withdrawal from authority to make new loans under the
Program.
(2)
PAYMENT OF POST-WITHDRAWAL CLAIMS.—^After
any
withdrawal of assets from the reserve fund pursuant to paragraph (1)(B), any future claims filed by the participating financial institution on loans remaining in its capital access program
portfolio shall only be paid from funds remaining in the reserve
fund to the extent that, in the aggregate, such claims exceed
the sum of the amount of such withdrawn assets, and interest
on that amount, imputed at the same rate as income would
have accrued had the amount not been withdrawn.
(3) CONDITIONS FOR TERMINATING SPECIAL AUTHORITY.—
If the Fund determines that the inclusion in a participation
agreement of the provisions authorized by this subsection is
108 STAT. 2212
PUBLIC LAW 103-325—SEPT. 23, 1994
resulting in the enrollment of loans under the Program that
are likely to have been made without assistance provided under
this subtitle, the Fund may notify the participating State that
henceforth, the Fund will only make reimbursements to the
State under section 257 with respect to a loan if the participation agreement between the participating State and each
participating financial institution has been amended to conform
with this section, without exercise of the special authority
granted by this subsection.
12 u s e 4746.
SEC. 256. REPORTS.
(a) RESERVE FUNDS REPORT.—On or before the last day of
each calendar quarter, a participating State shall submit to the
Fund a report of contributions to reserve funds made by the participating State during the previous calendar quarter. If the participating State has made contributions to one or more reserve funds
during the previous quarter, the report shall—
(1) indicate the total amount of such contributions;
(2) indicate the amount of contributions which is subject
to reimbursement, which shall be equal to the total amount
of contributions, unless one of the limitations contained in
section 257 is applicable;
(3) if one of the limitations in section 257 is applicable,
provide documentation of the applicability of such limitation
for each loan for which the limitation applies; and
(4) include a certification by the participating State that—
(A) the information provided in accordance with paragraphs (1), (2), and (3) is accurate;
(B) funds in an amount meeting the minimum requirements of section 253(b)(3) continue to be available and
legally committed to contributions by the State to reserve
funds, less any amount that has been contributed by the
State to reserve funds subsequent to the State being
approved for participation in the Program;
(C) there has been no unapproved amendment to any
participation agreement or the form of participation agreements; and
(D) the participating State is otherwise implementing
the Program in accordance with this subtitle and regulations issued pursuant to section 259.
(b) ANNUAL DATA.—Not later than March 31 of each year,
each participating State shall submit to the Fund annual data
indicating the number of borrowers financed under the Program,
the total amount of covered loans, and breakdowns by industry
type, loan size, annual sales, and number of employees of the
borrowers financed.
(c) FORM.—^The reports and data filed pursuant to subsections
(a) and (b) shall be in such form as the Fund may require.
12 u s e 4747.
SEC. 257. REIMBURSEMENT BY THE FUND.
(a) REIMBURSEMENTS.—Not later than 30 calendar days after
receiving a report filed in compliance with section 256, the Fund
shall reimburse the participating State in an amount equal to
50 percent of the amount of contributions by the participating
State to the reserve funds that are subject to reimbursement by
the Fund pursuant to section 256 and this section. The Fund
shall reimburse participating States, as it receives reports pursuant
to section 256(a), until available funds are expended.
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2213
(b) SIZE OF ASSISTED BORROWER.—The Fund shall not provide
any reimbursement to a participating State with respect to an
enrolled loan made to a borrower that has 500 or more employees
at the time that the loan is enrolled in the Program.
(c) THREE-YEAR MAXIMUM.—^The amount of reimbursement to
be provided by the Fund to a participating State over any 3year period in connection with loans made to any single borrower
or any group of borrowers among which a common enterprise exists
shall not exceed $75,000. For purposes of this subsection, "common
enterprise" shall have the same meaning as in part 32 of title
12 of the Code of Federal Regulations, or any successor to that
part.
(d) LOANS TOTALING LESS THAN $2,000,000.—In connection
with a loan in which the covered amount of the loan plus the
covered amount of all previous loans enrolled by a participating
financial institution does not exceed $2,000,000, the amount of
reimbursement by the Fund to the participating State shall not
exceed the lesser of—
(1) 75 percent of the sum of the premium charges paid
to the reserve fund by the borrower and the participating
financial institution; or
(2) 5.25 percent of the covered amount of the loan.
(e) LOANS TOTALING MORE THAN $2,000,000.—In connection
with a loan in which the sum of the covered amounts of all previous
loans enrolled by the participating financial institution in the Program equals or exceeds $2,000,000, the amount of reimbursement
to be provided by the Fund to the participating State shall not
exceed the lesser of—
(1) 50 percent of the sum of the premium charges paid
by the borrower and the participating financial institution;
or
(2) 3.5 percent of the covered amount of the loan.
(f) OTHER AMOUNTS.—In connection with the enrollment of
a loan that will cause the aggregate covered amount of all enrolled
loans to exceed $2,000,000, the amount of reimbursement by the
Fund to the participating State shall be determined—
(1) by applying subsection (d) to the portion of the loan,
which when added to the aggregate covered amount of all
previously enrolled loans equals $2,000,000; and
(2) by applying subsection (e) to the balance of the loan.
SEC. 258. REIMBURSEMENT TO THE FUND.
(a) IN GENERAL.—If a participating State withdraws funds from
a reserve fund pursuant to terms of the participation agreement
permitted by subsection (d) or (r) of section 255, such participating
State shall, not later than 15 calendar days after such withdrawal,
submit to the Fund an amount computed by multiplying the amount
withdrawn by the appropriate factor, as determined under subsection (b).
(b) FACTOR.—^The appropriate factor shall be obtained by dividing the total amount of contributions that have been made by
the participating State to all reserve funds which were subject
to reimbursement—
(1) by 2; and
(2) by the total amount of contributions made by the participating State to all reserve funds, including if applicable, contributions that have been made by the State prior to becoming
12 USC 4748.
108 STAT. 2214
12 use 4749.
PUBLIC LAW 103-325—SEPT. 23, 1994
a participating State if the State continued its own capital
access program in accordance with section 253(b).
(c) U S E OF REIMBURSEMENTS.—The Fund may use funds
reimbursed pursuant to this section to make reimbursements under
section 257.
SEC. 259. REGULATIONS.
The Fund shall promulgate appropriate regulations to implement this subtitle.
12 use 4750.
SEC. 260. AUTHORIZATION OF APPROPRIATIONS.
(a) AMOUNT.—^There are authorized to be appropriated to the
Fund $50,000,000 to carry out this subtitle.
(b) BUDGETARY TREATMENT.—^The amount authorized to be
appropriated under subsection (a) shall be subject to discretionary
spending caps, as provided in section 601 of the Congressional
Budget Act of 1974, and therefore shall reduce by an equal amount
funds made available for other discretionary spending programs.
12 use 4741
SEC. 261. EFFECTIVE DATE.
This subtitle shall become effective on January 6, 1996.
TITLE III—PAPERWORK REDUCTION
AND REGULATORY IMPROVEMENT
12 use 4801.
SEC. 301. INCORPORATED DEFINITIONS.
Unless otherwise specifically provided in this title, for purposes
of this title—
(1) the terms "appropriate Federal banking agency", "Federal banking agencies", "insured depository institution", and
"State bank supervisor" have the same meanings as in section
3 of the Federal Deposit Insurance Act; and
(2) the term "insured credit union" has the same meaning
as in section 101 of the Federal Credit Union Act.
12 use 4802.
SEC. 302. ADMINISTRATIVE CONSIDERATION OF BURDEN WITH NEW
REGULATIONS.
(a) AGENCY CONSIDERATIONS.—In determining the effective date
and administrative compliance requirements for new regulations
that impose additional reporting, disclosure, or other requirements
on insured depository institutions, each Federal banking agency
shall consider, consistent with the principles of safety and soundness and the public interest—
(1) any administrative burdens that such regulations would
place on depository institutions, including small depository
institutions and customers of depository institutions; and
(2) the benefits of such regulations.
(b) ADEQUATE TRANSITION PERIOD FOR NEW REGULATIONS.—
Effective date.
(1) IN GENERAL.—New regulations and amendments to
regulations prescribed by a Federal banking agency which
impose additional reporting, disclosures, or other new requirements on insured depository institutions shall take effect on
the first day of a calendar quarter which begins on or after
the date on which the regulations are published in final form,
unless—
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2215
(A) the agency determines, for good cause published
with the regulation, that the regulation should become
effective before such time;
(B) the regulation is issued by the Board of Grovernors
of the Federal Reserve System in connection with the
implementation of monetary policy; or
(C) the regulation is required to take effect on a date
other than the date determined under this paragraph
pursuant to any other Act of Congress.
(2) EARLY COMPLIANCE.—^Any person who is subject to a
regulation described in paragraph (1) may comply with the
regulation before the effective date of the regulation.
SEC. 303. STREAMLINING OF REGULATORY REQUIREMENTS.
12 USC 4803.
(a) REVIEW OF REGULATIONS; REGULATORY UNIFORMITY.—Dur-
ing the 2-year period beginning on the date of enactment of this
Act, each Federal banking agency shall, consistent with the principles of safety and soundness, statutory law and policy, and the
public interest—
(1) conduct a review of the regulations and written policies ,
of that agency to—
(A) streamline and modify those regulations and policies in order to improve efficiency, reduce unnecessary
costs, and eliminate unwarranted constraints on credit
availability;
• (B) remove inconsistencies and outmoded and duplicative requirements; and
(C) with respect to regulations prescribed pursuant
to section 18(o) of the Federal Deposit Insurance Act, consider the impact that such standards have on the availability of credit for small business, residential, and agricultural
purposes, and on low- and moderate-income communities;
(2) work jointly with the other Federal banking agencies
to make uniform all regulations and guidelines implementing
common statutory or supervisory policies; and
(3) submit a joint report to the Congress at the end of Reports,
such 2-year period detailing the progress of the agencies in
carrying out this subsection.
(b) REVIEW OF DISCLOSURES.—The Board of Governors of the
Federal Reserve System, in consultation with the consumer advisory •
council to such Board, consumers, representatives of consumers,
lenders, and other interested persons, shall—
(1) review the regulations and written policies of the Board
with respect to disclosures pursuant to the Truth in Lending
Act with regard to variable-rate mortgages in order to simplify
the disclosures, if necessary, and make the disclosures more
meaningful and comprehensible to consumers;
(2) implement any necessary regulatory changes, consistent
with applicable law; and
(3) not later than 2 years after completion of the review Reports,
required by paragraph (1), submit a report to the Congress
on the results of its actions taken in accordance with this
subsection and any recommended legislative actions.
SEC. 304. ELIMINATION OF DUPUCATIVE FILINGS.
The Federal banking agencies shall work jointly—
12 USC 4804.
108 STAT. 2216
PUBLIC LAW 103-325—SEPT. 23, 1994
(1) to eliminate, to the extent practicable, duplicative or
otherwise unnecessary requests for information in connection
with applications or notices to the agencies; and
(2) to harmonize, to the extent practicable, any inconsistent
publication and public notice requirements.
SEC. 305. COORDINATED AND UNIFIED EXAMINATIONS.
(a) IN GENERAL.—Section 10(d) of the Federal Deposit Insurance Act (12 U.S.C. 1820(d)) is amended by adding at the end
the following new paragraphs:
"(6) COORDINATED EXAMINATIONS.—^To minimize the disrup-
tive effects of examinations on the operations of insured depository institutions—
"(A) each appropriate Federal banking agency shall,
to the extent practicable and consistent with principles
of safety and soundness and the public interest—
"(i) coordinate examinations to be conducted by
that agency at an insured depository institution and
its affiliates;
"(ii) coordinate with the other appropriate Federal
banking agencies in the conduct of such examinations;
"(iii) work to coordinate with the appropriate State
bank supervisor—
"(I) the conduct of all examinations made
pursuant to this subsection; and
"(II) the number, types, and frequency of
reports required to be submitted to such agencies
and supervisors by insured depository institutions,
and the type and amount of information required
to be included in such reports; and
"(iv) use copies of reports of examinations of
insured depository institutions made by any other Federal banking agency or appropriate State bank supervisor to eliminate duplicative requests for information;
and
"(B) not later than 2 years after the date of enactment
of the Riegle Community Development and Regulatory
Improvement Act of 1994, the Federal banking agencies
shall jointly establish and implement a system for determining which one of the Federal banking agencies shall
be the lead agency responsible for managing a unified
examination of each insured depository institution and its
affiliates, as required by this subsection.
-
'
"(7)
SEPARATE EXAMINATIONS PERMITTED.—Notwithstand-
ing paragraph (6), each appropriate Federal banking agency
may conduct a separate examination in an emergency or under
other exigent circumstances, or when the agency believes that
a violation of law may have occurred.
"(8) REPORT.—^At the time the system provided for in paragraph (6) is established, the Federal banking agencies shall
submit a joint report describing the system 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. Thereafter, the Federal banking
agencies shall annually submit a joint report to the Committee
on Banking, Housing, and Urban Affairs of the Senate and
the Committee on Banking, Finance and Urban Affairs of the
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2217
House of Representatives regarding the progress of the agencies
in implementing the system and indicating areas in which
enhancements to the system, including legislature improvements, would be appropriate.".
(b) STATE ACCESS TO FEDERAL AGENCY REPORTS.—The first
sentence of section 7(a)(2)(A) of the Federal Deposit Insurance Act
(12 U.S.C. 1817(a)(2)(A)) is amended by inserting "and, with respect
to any State depository institution, any appropriate State bank
supervisor for such institution," after 'The Corporation".
SEC. 306. EIGHTEEN-MONTH EXAMINATION
SMALL INSTITUTIONS.
RULE
FOR CERTAIN
(a) IN GENERAL.—Section 10(d)(4) of the Federal Deposit Insurance Act (12 U.S.C. 1820(d)(4)) is amended—
(1) in subparagraph (A), by striking "$100,000,000" and
inserting "$250,000,000";
(2) in subparagraph (C), by striking "and its composite
condition was found to be outstanding; and" and inserting
"and its composite condition—
"(i) was found to be outstanding; or
"(ii) was found to be outstanding or good, in the
case of an insured depository institution that has total
assets of not more than $100,000,000;";
(3) by redesignating subparagraph (D) as subparagraph
(E); and
(4) by inserting after subparagraph (C) the following new
subparagraph:
"(D) the insured institution is not currently subject
to a formal enforcement proceeding or order by the Corporation or the appropriate Federal banking agency; and".
(b) AGENCY DISCRETION T O RAISE ASSET LIMIT.—Section 10(d)
of the Federal Deposit Insurance Act (12 U.S.C. 1820(d)) is amended
by adding at the end the following new paragraph:
"(8) AGENCIES AUTHORIZED TO INCREASE MAXIMUM ASSET
AMOUNT OF INSTITUTIONS FOR CERTAIN PURPOSES.—^At any time
after the end of the 2-year period beginning on the date of
enactment of the Riegle Community Development and Regulatory Improvement Act of 1994, the appropriate Federal
banking agency, in the agency's discretion, may increase the
maximum amount limitation contained in paragraph (4)(C)(ii),
by regulation, from $100,000,000 to an amount not to exceed
$175,000,000 for purposes of such paragraph, if the agency
determines that the greater amount would be consistent with
the principles of safety and soundness for insured depository
institutions.".
SEC. 307. CALL REPORT SIMPLIFICATION.
(a) MODERNIZATION OF CALL REPORT FILING AND DISCLOSURE
SYSTEM.—In order to reduce the administrative requirements
pertaining to bank reports of condition, savings association financial
reports, and bank holding company consolidated and parent-only
financial statements, and to improve the timeliness of such reports
and statements, the Federal banking agencies shall—
(1) work jointly to develop a system under which—
(A) insured depository institutions and their affiliates
may file such reports and statements electronically; and
12 USC 4805.
108 STAT. 2218
PUBLIC LAW 103-325—SEPT. 23, 1994
(B) the Federal banking agencies may make such
reports and statements available to the public electronically; and
(2) not later than 1 year after the date of enactment of
this Act, report to the Congress and make recommendations
for legislation that would enhance efficiency for filers and users
of such reports and statements.
(b) UNIFORM REPORTS AND SIMPLIFICATION OF INSTRUCTIONS.—
The Federal banking agencies shall, consistent with the principles
of safety and soundness, work jointly—
(1) to adopt a single form for the filing of core information
required to be submitted under Federal law to all such agencies
in the reports and statements referred to in subsection (a);
and
(2) to simplify instructions accompanying such reports and
statements and to provide an index to the instructions that
is adequate to meet the needs of both filers and users.
(c) REVIEW OF CALL REPORT SCHEDULE.—Each Federal banking
agency shall—
(1) review the information required by schedules
supplementing the core information referred to in subsection
(b); and
(2) eliminate requirements that are not warranted for reasons of safety and soundness or other public purposes.
SEC. 308. REPEAL OF PUBLICATION REQUIREMENTS.
(a) REVISED STATUTES.—Section 5211 of the Revised Statutes
(12 U.S.C. 161) is amended—
(1) in the 5th sentence of subsection (a), by striking ";
and the statement of resources" and all that follows through
"as may be required by the Comptroller"; and
(2) in subsection (c), by striking the 4th sentence.
(b) FDIA.—Section 7(a)(1) of the Federal Deposit Insurance
Act (12 U.S.C. 1817(a)(1)) is amended by striking the 4th sentence.
(c) FEDERAL RESERVE ACT.—Section 9 of the Federal Reserve
Act (12 U.S.C. 324) is amended in the last sentence of the 6th
undesignated paragraph, by striking "and shall be published" and
all that follows through the end of the sentence and inserting
a period.
12 u s e 4806.
Public notice.
SEC. 309. REGULATORY APPEALS PROCESS, OMBUDSMAN, AND
ALTERNATIVE DISPUTE RESOLUTION.
(a) IN GENERAL.—Not later than 180 days after the date of
enactment of this Act, each appropriate Federal banking agency
and the National Credit Union Administration Board shall establish
an independent intra-agency appellate process. The process shall
be available to review material supervisory determinations made
at insured depository institutions or at insured credit unions that
the agency supervises.
(b) REVIEW PROCESS.—In establishing the independent appellate process under subsection (a), each agency shall ensure that—
(1) any appeal of a material supervisory determination
by an insured depository institution or insured credit union
is heard and decided expeditiously; and
(2) appropriate safeguards exist for protecting the appellant
from retaliation by agency examiners.
(c) COMMENT PERIOD.—^Not later than 90 days after the date
of enactment of this Act, each appropriate Federal banking agency
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2219
and the National Credit Union Administration Board shall provide
public notice and opportunity for comment on proposed guidelines
for the establishment of an appellate process under this section.
(d) AGENCY OMBUDSMAN.—
(1) ESTABLISHMENT REQUIRED.—Not
later than 180 days
after the date of enactment of this Act, each Federal banking
agency and the National Credit Union Administration Board
shall appoint an ombudsman.
(2) DUTIES OF OMBUDSMAN.—The ombudsman appointed
in accordance with paragraph (1) for any agency shall—
(A) act as a liaison between the agency and any affected
person with respect to any problem such party may have
in dealing with the agency resulting from the regulatory
activities of the agency; and
(B) assure that safeguards exist to encourage complainants to come forward and preserve confidentiality.
(e) ALTERNATIVE DISPUTE RESOLUTION PILOT PROGRAM.—
(1) IN GENERAL.—Not later than 18 months after the date
of enactment of this Act, each Federal banking agency and
the National Credit Union Administration Board shall develop
and implement a pilot program for using alternative means
of dispute resolution of issues in controversy (hereafter in this
section referred to as the "alternative dispute resolution program") that is consistent with the requirements of subchapter
IV of chapter 5 of title 5, United States Code, if the parties
to the dispute, including the agency, agree to such proceeding.
(2) STANDARDS.—P^ alternative dispute resolution pilot
program developed under paragraph (1) shall—
(A) be fair to all interested parties to a dispute;
(B) resolve disputes expeditiously; and
(C) be less costly than traditional means of dispute
resolution, including litigation.
(3) INDEPENDENT EVALUATION.—Not later than 18 months Reports,
after the date on which a pilot program is implemented under
paragraph (1), the Administrative Conference of the United
States shall submit to the Congress a report containing—
(A) an evaluation of that pilot program;
(B) the extent to which the pilot programs meet the
standards established under paragraph (2);
(C) the extent to which parties to disputes were offered
alternative means of dispute resolution and the frequency
with which the parties, including the agencies, accepted
or declined to use such means; and
(D) any recommendations of the Conference to improve
the alternative dispute resolution procedures of the Federal
banking agencies and the National Credit Union Administration Board.
(4) IMPLEMENTATION OF PROGRAM.—At any time after
completion of the evaluation under paragraph (3)(A), any Federal banking agency and the National Credit Union Administration Board may implement an alternative dispute resolution
program throughout the agency, taking into account the results
of that evaluation.
(5) COORDINATION WITH EXISTING AGENCY ADR PROGRAMS.—
(A) EVALUATION REQUIRED.—If any Federal banking
agency or the National Credit Union Administration maintains an alternative dispute resolution program as of the
108 STAT. 2220
PUBLIC LAW 103-325—SEPT. 23, 1994
date of enactment of this Act under any other provision
of law, the Administrative Conference of the United States
shall include such program in the evaluation conducted
under paragraph (3)(A).
(B) MULTIPLE ADR PROGRAMS.—No provision of this
section shall be construed as precluding any Federal banking agency or the National Credit Union Administration
Board from establishing more than 1 alternative means
of dispute resolution.
if) DEFINITIONS.—For purposes of this section, the following
definitions shall apply:
(1) MATERIAL SUPERVISORY DETERMINATIONS.—The term
"material supervisory determinations"—
(A) includes determinations relating to—
(i) examination ratings;
(ii) the adequacy of loan loss reserve provisions;
and
(iii) loan classifications on loans that are significant to an institution; and
(B) does not include a determination by a Federal
banking agency or the National Credit Union Administration Board to appoint a conservator or receiver for an
insured depository institution or a liquidating agent for
an insured credit union, as the case may be, or a decision
to take action pursuant to section 38 of the Federal Deposit
Insurance Act or section 212 of the Federal Credit Union
Act, as appropriate.
(2) INDEPENDENT APPELLATE PROCESS.—The
term
"independent appellate process" means a review by an agency
official who does not directly or indirectly report to the agency
official who made the material supervisory determination under
review.
(3)
ALTERNATIVE MEANS OF DISPUTE RESOLUTION.—The
term "alternative means of dispute resolution" has the meaning
given to such term in section 571 of title 5, United States
Code.
(4) ISSUES IN CONTROVERSY.—The term "issues in controversy" means—
(A) any final agency decision involving any claim
against an insured depository institution or insured credit
union for which the agency has been appointed conservator
or receiver or for which a liquidating agent has been
appointed, as the case may be;
(B) Einy final action taken by an agency in the agency's
capacity as conservator or receiver for an insured depository
institution or by the liquidating agent appointed for an
insured credit union; and
(C) any other issue for which the appropriate Federal
banking agency or the National Credit Union Administration Board determines that alternative means of dispute
resolution would be appropriate.
(g) EFFECT ON OTHER AUTHORITY.—^Nothing in this section
shall affect the authority of an appropriate Federal banking agency
or the National Credit Union Administration Board to take enforcement or supervisory action.
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2221
SEC. 310. ELECTRONIC FILING OF CURRENCY TRANSACTION REPORTS.
Section 123 of Public Law 91-508 (12 U.S.C. 1953) is amended
by adding at the end the following new subsection:
"(c) ACCEPTANCE OF AUTOMATED RECORDS.—The Secretary shall
permit an uninsured bank or financial institution to retain or
maintain records referred to in subsection (a) in electronic or automated form, subject to terms and conditions established by the
Secretary.".
SEC. 311. BANK SECRECY ACT PUBLICATION REQUIREMENTS.
(a) IN GENERAL.—Subchapter II of chapter 53 of title 31, United
States Code, is amended by adding at the end the following new
section:
"SEC. 5329. STAFF COMMENTARIES.
"The Secretary shall—
"(1) publish all written rulings interpreting this subchapter;
and
"(2) annually issue a st£iff commentary on the regulations
issued under this subchapter.".
(b) CONFORMING AMENDMENT.—The table of sections for chapter
53 of title 31, United States Code, is amended by inserting after
the item relating to section 5328 the following new item:
"5329. Staff commentaries.".
SEC. 312. EXEMPTION OF BUSINESS LOANS FROM REAL ESTATE
SETTLEMENT PROCEDURES ACT REQUIREMENTS.
The Real Estate Settlement Procedures Act of 1974 (12 U.S.C.
2601 et seq.) is amended by inserting after section 6 the following
new section:
"SEC. 7. EXEMPTED TRANSACTIONS.
"This Act does not apply to credit transactions involving extensions of credit—
"(1) primarily for business, commercial, or agricultural purposes; or
"(2) to government or governmental agencies or instrumentalities.".
SEC. 313. FLEXIBILITY IN CHOOSING BOARDS OF DIRECTORS.
Section 5146 of the Revised Statutes (12 U.S.C. 72) is amended
in the 1st sentence, by striking "two thirds" and inserting "a majority".
SEC. 314. HOLDING COMPANY AUDIT REQUIREMENTS.
(a) IN GENERAL.—Section 36(i) of the Federal Deposit Insurance
Act (12 U.S.C. 1831m(i)) is amended—
(1) by redesignating paragraph (1) as subparagraph (A)
and indenting appropriately;
(2) by striking "Except with respect" and inserting the
following:
"(1) IN GENERAL.—Except with respect"; and
(3) by striking paragraph (2) and inserting the following:
"(B) the institution—
"(i) has total assets, as of the beginning of such
fiscal year, of less than $5,000,000,000; or
"(ii) has—
12 USC 2606.
108 STAT. 2222
PUBLIC LAW 103-325—SEPT. 23, 1994
"(I) total assets, as of the beginning of such
fiscal year, of $5,000,000,000, or more; and
"(11) a CAMEL composite rating of 1 or 2
under the Uniform Financial Institutions Rating
System (or an equivalent rating by any such
agency under a comparable rating system) as of
the most recent examination of such institution
by the Corporation or the appropriate Federal
banking agency.
"(2) LARGE INSTITUTIONS.—For purposes of this subsection,
in the case of an insured depository institution described in
paragraph (l)(B)(ii) that the Corporation determines to be a
large institution, the audit committee of the holding company
of such an institution shall not include any large customers
of the institution.
"(3) APPLICABILITY BASED ON RISK TO FUND.—The appropriate Federal banking agency may require an institution with
total assets in excess of $9,000,000,000 to comply with this
section, notwithstanding the exemption provided by this subsection, if it determines that such exemption would create
a significant risk to the affected deposit insurance fund if
applied to that institution.".
(b) WRITTEN NOTICE OF REQUIREMENT FOR AUDIT OF QUAR-
TERLY REPORTS.—Section 36(g)(2) of the Federal Deposit Insurance
Act (12 U.S.C. 1831m(g)(2)) is amended by adding at the end
the following new subparagraph:
"(D) NOTICE TO INSTITUTION.—The Corporation shall
promptly notify an insured depository institution, in writing, of a determination pursuant to subparagraph (A) to
require a review of such institution's quarterly financial
reports.".
SEC. 315. STATE REGULATION OF REAL ESTATE APPRAISALS.
Section 1122 of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989 (12 U.S.C. 3351) is amended—
(1) by redesignating subsections (b) through (e) as subsections (c) through (f), respectively;
(2) by inserting after subsection (a) the following new
subsection:
"(b) RECIPROCITY.—^The Appraisal Subcommittee shall encourage the States to develop reciprocity agreements that readily authorize appraisers who are licensed or certified in one State (and who
are in good standing with their State appraiser certifying or licensing agency) to perform appraisals in other States."; and
(3) in subsection (a)—
(A) by redesignating paragraphs (1) through (3) as
subparagraphs (A) through (C);
(B) by striking "A State" and inserting the following:
"(1) IN GENERAL.—A State"; and
(C) by adding at the end the following new paragraph:
"(2) F E E S FOR TEMPORARY PRACTICE.—^A State appraiser
certifying or licensing agency shall not impose excessive fees
or burdensome requirements, as determined by the Appraisal
Subcommittee, for temporary practice under this subsection.".
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2223
SEC. 316. ACCELERATION OF EFFECTIVE DATE FOR INTERAFFILIATE
TRANSACTIONS.
(a) HOME OWNERS' LOAN ACT AMENDMENT.—Section 11(a)(2)
of the Home Owners' Loan Act (12 U.S.C. 1468(a)(2)) is amended
by adding at the end the following new subparagraph:
"(C) TRANSITION RULE FOR WELL CAPITALIZED SAVINGS
ASSOCIATIONS.—
"(i) I N GENERAL.—^A savings association that is
well capitalized (as defined in section 38 of the Federal
Deposit Insurance Act), as determined without including goodwill in calculating core capital, shall be treated
as a bank for purposes of section 23A(d)(l) and section
23B of the Federal Reserve Act.
"(ii) LIABILITY OF COMMONLY CONTROLLED DEPOSITORY INSTITUTIONS.—^Any savings association that
engages under clause (i) in a transaction that would
not otherwise be permissible under this subsection,
and any affiliated insured bank that is commonly controlled (as defined in section 5(e)(9) of the Federal
Deposit Insurance Act), shall be subject to subsection
(e) of section 5 of the Federal Deposit Insurance Act
as if paragraph (6) of that subsection did not apply.".
(b) REPEAL PROVISION.—Effective on January 1, 1995, subpara- Effective date,
graph (C) of section 11(a)(2) of the Home Owners' Loan Act (12 ^^ USC 1468
U.S.C. 1468(a)(2)) (as added by subsection (a) of this section) is note.
repealed.
SEC. 317. COLLATERALIZATION OF PUBLIC DEPOSITS.
Section 13(e) of the Federal Deposit Insurance Act (12 U.S.C.
1823(e)) is amended—
(1) by redesignating paragraphs (1) through (4) as subparagraphs (A) through (D), respectively, and indent appropriately;
(2) by striking "No agreement" and inserting the following:
"(1) IN GENERAL.—No agreement"; and
(3) by adding at the end the following new paragraph:
"(2) PUBLIC DEPOSITS.—^An agreement to provide for the
lawful collateralization of deposits of a Federal, State, or local
governmental entity or of any depositor referred to in section
11(a)(2) shall not be deemed to be invalid pursuant to paragraph (1)(B) solely because such agreement was not executed
contemporaneously with the acquisition of the collateral or
with any changes in the collateral made in accordance with
such agreement.".
SEC. 318. MODIFICATION OF REGULATORY PROVISIONS.
(a) IN GENERAL.—Section 39(b) of the Federal Deposit Insurance
Act (12 U.S.C. 1831p-l(b), as added by section 132(a) of the Federal
Deposit Insurance Corporation Improvement Act of 1991) is
amended to read as follows:
"(b) ASSET QUALITY, EARNINGS, AND STOCK VALUATION STAND-
ARDS.—Each appropriate Federal banking agency shall prescribe
standards, by regulation or guideline, for all insured depository
institutions relating to asset quality, earnings, and stock valuation
that the agency determines to be appropriate.".
(b) ESTABLISHING STANDARDS.—Section 39(d) of the Federal
Deposit Insurance Act (12 U.S.C. 183Ip-1(d), as added by section
108 STAT. 2224
PUBLIC LAW 103-325—SEPT. 23, 1994
132(a) of the Federal Deposit InsurEince Corporation Improvement
Act of 1991) is amended—
(1) in the subsection heading, by striking "BY REGULATION";
and
(2) in paragraph (1)—
(A) in the 1st sentence, by inserting "or guideline"
before the period; and
(B) in the 2d sentence, by inserting "or guidelines"
after "Such regulations".
(c) HOLDING COMPANIES EXCLUDED FROM SCOPE OF STAND-
12 use I83ip-i
^°^-
ARDS.—Section 39 of the Federsd Deposit Insurance Act (12 U.S.C.
1831p-l, as added by section 132(a) of the Federal Deposit Insurance Corporation Improvement Act of 1991) is amended—
(1) in subsections (a), by striking "and depository institution
holding companies"; and
(2) in subsection (e)—
(A) by striking "or company" each place such term
appears;
(B) in paragraphs (1)(A) and (2), by striking "or depository institution holding company";
(C) in paragraph (1)(A)—
(i) by striking "or (b) the agency shall require"
-^
and inserting the following: "or (b>—
'
"(i) if such standard is prescribed by regulation
of the agency, the agency shall require"; and
(ii) by striking the period at the end and inserting
the following:"; and
"(ii) if such standard is prescribed by guideline,
the agency may require the institution to submit a
plan described in clause (i)."; and
(D) in paragraph (l)(C)(i), by striking "and companies".
(d) EFFECTIVE DATE.—The amendments made by this section
shall be construed to have the same effective date as section 39
of the Federal Deposit Insurance Act, as provided in section 132(c)
of the Federal Deposit Insurance Corporation Improvement Act
of 1991.
SEC. 319. EXPEDITED PROCEDURES.
(a) AMENDMENTS TO THE BANK HOLDING COMPANY ACT.—The
2d sentence of section 3(a) of the Bank Holding Company Act
of 1956 (12 U.S.C. 1842(a)) is amended—
(1) by striking "or (B)" and inserting "(B)"; and
(2) by inserting before the period the following: "; 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
PUBLIC LAW 103-325—SEPT. 23, 1994
-
108 STAT. 2225
"(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.".
(b) AMENDMENTS TO THE FEDERAL DEPOSIT INSURANCE ACT.—
Section 5(d)(3) of the Federal Deposit Insurance Act (12 U.S.C.
1815(d)(3)) is amended—
(1) by striking subparagraph (A) and inserting the following:
"(A) CONVERSIONS ALLOWED.—Notwithstanding paragraph (2)(A), and subject to the requirements of this paragraph, any insured depository institution may participate
in a transaction described in clause (ii), (iii), or (iv) of
paragraph (2)(B) with the prior written approval of the
responsible agency under section 18(c)(2).";
(2) in subparagraph (E)—
(A) in clause (i), by striking "(and, in the event the
acquiring, assuming, or resulting depository institution is
a Bank Insurance Fund member which is a subsidiary
of a bank holding company, the Board)";
(B) in clause (ii), by striking "or Board"; and
(C) in clause (iv)—
(i) by striking ", and the appropriate Federal banking agency for any depository institution holding
company,";
(ii) by striking "each"; and
(iii) by striking ", and any depository institution
holding company which controls such institution,";
(3) in subparagraph (F)—
(A) by striking "The Board" and all that follows through
"a Bank" and inserting "A Bank"; and
(B) by striking "unless the Board determines that"
and inserting "may not be the acquiring, assuming, or
resulting depository institution in a transaction under
subparagraph (A) unless"; and
(4) by striking subparagraph (K).
SEC. 320. EXEMPTION OF CERTAIN HOLDING COMPANY FORMATIONS
FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933.
Section 3(a) of the Securities Act of 1933 (15 U.S.C. 77c(a))
is amended by adding at the end the following new paragraph:
"(12) Any equity security issued in connection with the
acquisition by a holding company of a bank under section
3(a) of the Bank Holding Company Act of 1956 or a savings
association under section 10(e) of the Home Owners' Loan Act,
if—
"(A) the acquisition occurs solely as part of a reorganization in which security holders exchange their shares
108 STAT. 2226
PUBLIC LAW 103-325—SEPT. 23, 1994
of a bank or savings association for shares of a newly
formed holding company with no significant assets other
than securities of the bank or savings association and
the existing subsidiaries of the bank or savings association;
"(B) the security holders receive, after that reorganization, substantially the same proportional share interests
in the holding company as they held in the bank or savings
association, except for nominal chsinges in shareholders'
interests resulting from lawful elimination of fractional
interests and the exercise of dissenting shareholders' rights
under State or Federal law;
"(C) the rights and interests of security holders in
the holding company are substantially the same as those
in the bank or savings association prior to the transaction,
other than as may be required by law; and
"(D) the holding company nas substantially the same
assets and liabilities, on a consolidated basis, as the bank
or savings association had prior to the transaction.
For purposes of this paragraph, the term 'savings association'
means a savings association (as defined in section 3(b) of the
Federal Deposit Insurance Act) the deposits of which are
insured by the Federal Deposit Insurance Corporation.".
SEC. 321. REDUCTION OF POST-APPROVAL WAITING PERIODS FOR
CERTAIN ACQUISITIONS AND MERGERS.
(a) ACQUISITIONS.—Section 11(b)(1) of the Bank Holding Company Act of 1956 (12 U.S.C. 1849(b)(1)) is amended by inserting
before the period at the end of the 4th sentence the following:
"or, if the Board 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
Board with the concurrence of the Attorney General, but in no
event less than 15 calendar days after the date of approval".
(b) MERGERS.—Section 18(c)(6) of the Federal Deposit Insurance
Act (12 U.S.C. 1828(c)(6)) is amended by inserting before the period
at the end of the last sentence the following: "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".
SEC. 322. BANKERS' BANKS.
(a) OWNERSHIP BY BANKERS' BANKS.—
(1) SECTION 5X36.—Paragraph Seventh of section 5136 of
the Revised Statutes (12 U.S.C. 24) is amended in the 5th
proviso—
(A) by inserting "or depository institution holding
companies (as defined in section 3 of the Federal Deposit
Insurance Act)" after "(except to the extent directors'
qualifying shares are required by law) by depository institutions"; and
(B) by striking "services for other depository institutions and their officers, directors and employees" and
inserting the following: "services to or for other depository
institutions, their holding companies, and the officers,
directors, and employees of such institutions and companies, and in providing correspondent banking services at
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2227
the request of other depository institutions or their holding
companies (also referred to as a 'banker's bank')".
(2) SECTION 5169.—Section 5169(b)(1) of the Revised Statutes (12 U.S.C. 27(b)(1)) is amended—
(A) by inserting "or depository institution holding
companies" after "(except to the extent directors' qualifying
shares are required by law) by other depository institutions"; and
(B) by striking "services for other depository institutions ana their officers, directors and employees" and
inserting the following: "services to or for other depository
institutions, their holding companies, and the officers,
directors, and employees of such institutions and companies, and in providing correspondent banking services at
the request of other depository institutions or their holding
companies (also referred to as a 'banker's bank')".
(b) OWNERSHIP BY SAVINGS ASSOCIATIONS.—Section 5(c)(4) of
the Home Owners' Loan Act (12 U.S.C. 1464(c)(4)) is amended
by adding at the end the following new subparagraph:
"(E) BANKERS' BANKS.—^A Federal savings association
may purchase for its own account shares of stock of a
bankers' bank, described in Paragraph Seventh of section
5136 of the Revised Statutes or in section 5169(b) of the
Revised Statutes, on the same terms and conditions as
a national bank may purchase such shares.".
(c) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) BANK HOLDING COMPANY ACT.—Section 3(e) of the Bank
Holding Company Act of 1956 (12 U.S.C. 1842(e)) is amended
by striking the 2d sentence.
(2) MANAGEMENT INTERLOCKS ACT.—Section 202(3)(D) of
the Depository Institution Management Interlocks Act (12
U.S.C, 3201(3)(D)) is amended by striking "the voting securities" the first place such term appears and all that follows
through the end of the subparagraph and inserting "and is
a bankers' bank, described in Paragraph Seventh of section
5136 of the Revised Statutes; or".
(d) LENDING LIMIT FOR LOANS SECURED BY SECURITIES.—Sec-
tion ll(m) of the Federal Reserve Act (12 U.S.C. 248(m)) is amended
by striking "10 percentum" each place such term appears and
inserting "15 percent".
SEC. 323. BANK SERVICE CORPORATION ACT AMENDMENT.
Section 5 of the Bank Service Corporation Act (12 U.S.C. 1865)
is amended—
(1) in subsection (a), by striking "the prior approval o f
and inserting "prior notice, as determined by"; and
(2) in subsection (c), by inserting "or whether to approve
or disapprove any notice" after "approval".
SEC. 324. MERGER TRANSACTION REPORTS.
Section 18(c)(4) of the Federal Deposit Insurance Act (12 U.S.C.
1828(c)(4)) is amended by adding at the end the following: "Notwithstanding the preceding sentence, a banking agency shall not be
required to file a report requested by the responsible agency under
this paragraph if such banking agency advises the responsible
agency by the applicable date under the preceding sentence that
the report is not necessary because none of the effects described
in paragraph (5) are likely to occur as a result of the transaction.".
108 STAT. 2228
PUBLIC LAW 103-325—SEPT. 23, 1994
SEC. 325. CREDIT CARD ACCOUNTS RECEIVABLE SALES.
Section 11(e) of the Federal Deposit Insurance Act (12 U.S.C.
1821(e)) is amended by adding at the end the following new
paragraphs:
"(14) SELLING CREDIT CARD ACCOUNTS RECEIVABLE.—
"(A) NOTIFICATION REQUIRED.—An undercapitalized
insured depository institution (as defined in section 38)
shall notify the Corporation in writing before entering into
an agreement to sell credit card accounts receivable.
"(B) WAIVER BY CORPORATION.—The Corporation may
at any time, in its sole discretion and upon such terms
as it may prescribe, waive its right to repudiate an agreement to sell credit card accounts receivable if the Corporation—
"(i) determines that the waiver is in the best
interests of the deposit insurance fund; and
"(ii) provides a written waiver to the selling
institution.
"(C) EFFECT OF WAIVER ON SUCCESSORS.—
"(i) IN GENERAL.—If, under subparagraph (B), the
Corporation has waived its right to repudiate an agreement to sell credit card accounts receivable—
"(I) any provision of the agreement that
restricts solicitation of a credit card customer of
the selling institution, or the use of a credit card
customer list of the institution, shall bind any
receiver or conservator of the institution; and
"(II) the Corporation shall require any acquirer
of the selling institution, or of substantially all
of the selling institution's assets or liabilities, to
agree to be bound by a provision described in
subclause (I) as if the acquirer were the selling
institution,
"(ii) EXCEPTION.—Clause (i)(II) does not—
"(I) restrict the acquirer's authority to offer
any product or service to any person identified
without using a list of the selling institution's customers in violation of the agreement;
"(II) require the acquirer to restrict any
preexisting relationship between the acquirer and
a customer; or
"(III) apply to any transaction in which the
acquirer acquires only insured deposits.
"(D) WAIVER NOT ACTIONABLE.—The Corporation shall
not, in any capacity, be liable to any person for damages
resulting from the waiver of or failure to waive the Corporation's right under this section to repudiate any contract
or lease, including an agreement to sell credit card accounts
receivable. No court shall issue any order affecting any
such waiver or failure to waive.
"(E) OTHER AUTHORITY NOT AFFECTED.—This paragraph does not limit any other authority of the Corporation
to waive the Corporation's right to repudiate an agreement
or lease under this section.
"(15) CERTAIN CREDIT CARD CUSTOMER LISTS PROTECTED.—
"(A) IN GENERAL.—If any insured depository institution
sells credit card accounts receivable under an agreement
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2229
negotiated at arm's length that provides for the sale of
the institution's credit card customer list, the Corporation
shall prohibit any party to a transaction with respect to
the institution under this section or section 13 from using
the list, except as permitted under the agreement.
"(B) FRAUDULENT TRANSACTIONS EXCLUDED.—Subpara-
graph (A) does not limit the Corporation's authority to
repudiate any agreement entered into with the intent to
hinder, delay, or defraud the institution, the institution's
creditors, or the Corporation.".
SEC. 326. LIMITING POTENTIAL LIABILITY ON FOREIGN ACCOUNTS.
12 USC 633.
(a) AMENDMENT TO THE FEDERAL RESERVE ACT.—^The Federal
Reserve Act (12 U.S.C. 221 et seq.) is amended by inserting after
section 25B the following new section:
"SEC. 25C. POTENTIAL LIABILITY ON FOREIGN ACCOUNTS.
"(a) EXCEPTIONS FROM REPAYMENT REQUIREMENT.—^A member
bank shall not be required to repay any deposit made at a foreign
branch of the bank if the branch cannot repay the deposit due
to—
"(1) an act of war, insurrection, or civil strife; or
"(2) an action by a foreign government or instrumentality
(whether de jure or de facto) in the country in which the
branch is located;
unless the member bank has expressly agreed in writing to repay
the deposit under those circumstances.
"(b) REGULATIONS.—The Board and the Comptroller of the Currency may jointly prescribe such regulations as they deem necessary
to implement this section.".
(b) CONFORMING AMENDMENTS TO THE FEDERAL
INSURANCE ACT.—
DEPOSIT
(1) IN GENERAL.—Section 18 of the Federal Deposit Insurance Act (12 U.S.C. 1828) is amended by inserting after subsection (p) the following new subsection:
"(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.".
(2) CONFORMING AMENDMENT.—Subparagraph (A) of section
3(1)(5) of the Federal Deposit Insurance Act (12 U.S.C.
1813(1)(5)) is amended to read as follows:
"(A) any obligation of a depository institution which
is carried on the books and records of an office of such
bank or savings association located outside of any State,
unless—
"(i) such obligation would be a deposit if it were
carried on the books and records of the depository
institution, and would be payable at, an office located
in any State; and
"(ii) the contract evidencing the obligation provides
by express terms, and not by implication, for payment
at an office of the depository institution located in
any State; and".
(c) EXISTING CLAIMS NOT AFFECTED.—Section 25C of the Federal Reserve Act (as added by subsection (a)) shall not be applied
retroactively and shall not be construed to affect or apply to any
claim or cause of action addressed by that section arising from
12 use 633 note,
108 STAT. 2230
PUBLIC LAW 103-325—SEPT. 23, 1994
events or circumstances that occurred before the date of enactment
of this Act.
SEC. 327. GAO REPORTS.
Section 102(b)(1) of the Federal Deposit Insurance Corporation
Improvement Act of 1991 (12 U.S.C. 1825 note) is amended to
read as follows:
"(1) QUARTERLY REPORTING.—Not later than 90 days after
the end of any calendar quarter in which the Federal Deposit
Insurance Corporation (hereafter in this section referred to
as the 'Corporation') has any obligations pursuant to section
14 of the Federal Deposit Insurance Act outstanding, the
Comptroller General of the United States shall submit a report
on the Corporation's compliance at the end of that quarter
with section 15(c) of the Federal Deposit Insurance Act 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. Such report shall be
included in the Comptroller General's audit report for that
year, as required by section 17 of the Federal Deposit Insurance
Act.".
12 u s e 4801
note.
SEC. 328. STUDY AND REPORT ON CAPITAL STANDARDS AND THEIR
IMPACT ON THE ECONOMY.
(a) IN GENERAL.—^The Secretary of the Treasury, in consultation
with the Federal banking agencies, shall conduct a study of the
effect that the implementation of risk-based capital standards for
depository institutions, including the Basle international capital
standards, is having on—
(1) the safety and soundness of insured depository institutions;
(2) the availability of credit, particularly to individuals
and small businesses; and
(3) economic growth.
(b) REPORT.—
(1) IN GENERAL.—Before the end of the 1-year period beginning on the date of enactment of this Act, the Secretary of
the Treasury shall submit a report to the Congress on the
findings and conclusions of the Secretary with respect to the
study conducted under subsection (a).
(2) RECOMMENDATIONS.—^The report shall contain any recommendations with respect to capital standards that the Secretary of the Treasury may determine to be appropriate.
Reports.
12 u s e 4801
note.
SEC. 329. STUDY ON THE IMPACT OF THE PAYMENT OF INTEREST
ON RESERVES.
(a) FEDERAL RESERVE STUDY.—Not later than 180 days after
the date of enactment of this Act, the Board of Governors of the
Federal Reserve System, in consultation with the Federal Deposit
Insurance Corporation and the National Credit Union Administration Board, shall conduct a study and report to the Congress on—
(1) the necessity, for monetary policy purposes, of continuing to require insured depository institutions to maintain sterile
reserves;
(2) the appropriateness of paying a market rate of interest
to insured depository institutions on sterile reserves or, in
the alternative, providing for payment of such interest into
the appropriate deposit insurance fund;
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2231
(3) the monetary impact that the failure to pay interest
on sterile reserves has had on insured depository institutions,
including an estimate of the total dollar amount of interest
and the potential income lost by insured depository institutions;
and
(4) the impact that the failure to pay interest on sterile
reserves has had on the ability of the banking industry to
compete with nonbanking providers of financial services and
with foreign banks.
(b) BUDGETARY IMPACT STUDY.—Not later than 180 days after
the date of enactment of this Act, the Director of the Office of
Management and Budget and the Director of the Congressional
Budget Office, in consultation with the Committees on the Budget
of the Senate and the House of Representatives, shall jointly conduct
a study and report to the Congress on the budgetary impact of—
(1) paying a market rate of interest to insured depository
institutions on sterile reserves; and
(2) paying such interest into the respective deposit insurance funds.
SEC. 330. STUDY AND REPORT ON THE CONSUMER CREDIT SYSTEM.
(a) STUDY.—The Secretary of the Treasury, in consultation
with the Board of Governors of the Federal Reserve System, the
Administrator of the Small Business Administration, the Secretary
of Housing and Urban Development, and the other Federal banking
agencies, shall conduct a study of the process, including any Federal
laws, by which credit is made available for consumers and small
businesses in order to identify procedures, including any Federal
laws, which have the effect of—
(1) reducing the amount of credit available for such purposes or the number of persons eligible for such credit;
(2) increasing the level of consumer inconvenience, cost,
and time delays in connection with the extension of consumer
and small business credit without corresponding benefit with
respect to the protection of consumers or small businesses
or the safety and soundness of insured depository institutions;
and
(3) increasing costs and burdens on insured depository
institutions, insured credit unions, and other lenders without
corresponding benefit with respect to the protection of consumers or small business concerns or to the safety and soundness
of insured institutions.
(b) REPORT.—
(1) IN GENERAL.—^Not later than 1 year after the date
of enactment of this Act, the Secretary of the Treasury shall
submit a report to the Congress on the findings and conclusions
of the Secretary with respect to the study conducted under
subsection (a).
(2) RECOMMENDATIONS.—The report required by paragraph
(1) shall contain any recommendations for administrative action
or statutory changes that the Secretary of the Treasury may
determine to be appropriate.
(c) PUBLIC PARTICIPATION.—In conducting the study required
by subsection (a), comments shall be solicited from consumers,
representatives of consumers, insured depository institutions,
insured credit unions, other lenders, and other interested parties.
12 USC 4801
108 STAT. 2232
PUBLIC LAW 103-325—SEPT. 23, 1994
SEC. 331. CLARIFICATION OF PROVISIONS RELATING TO ADMINISTRATIVE AUTONOMY.
(a) PUBLIC LAW 93-495.—Section 111 of Public Law 93-495
(12 U.S.C. 250) is amended by inserting "the Comptroller of the
Currency," after "Federal Deposit Insurance Corporation,".
(b) REVISED STATUTES.—
(1) SECTION 5240.—The third paragraph of section 5240
of the Revised Statutes (12 U.S.C. 482) is amended by inserting
"or section 301(0(1) of title 31, United States Code," after
"provisions of this section".
(2) SECTION 324.—Section 324 of the Revised Statutes (12
U.S.C. 1) is amended by adding at the end the following:
"The Comptroller of the Currency shall have the same authority
over matters within the jurisdiction of the Comptroller as the
Director of the Office of Thrift Supervision has over matters
within the Director's jurisdiction under section 3(b)(3) of the
Home Owners' Loan Act. The Secretary of the Treasury may
not delay or prevent the issuance of any rule or the promulgation of any regulation by the Comptroller of the Currency.".
(3) SECTION 5239.—Section 5239 of the Revised Statutes
(12 U.S.C. 93) is amended by adding at the end the following
new subsection:
"(d) AUTHORITY.—^The Comptroller of the Currency may act
in the Comptroller's own name and through the Comptroller's own
attorneys in enforcing any provision of this title, regulations thereunder, or any other law or regulation, or in any action, suit, or
proceeding to which the Comptroller of the Currency is a party.".
(c) AMENDMENTS TO THE HOME OWNERS' LOAN ACT.—Section
3(b) of the Home Owners' Loan Act (12 U.S.C. 1462a(b)) is
amended—
(1) in paragraph (3), by striking "unless otherwise provided
by law" and inserting "(including agency enforcement actions)
unless otherwise specifically provided by law"; and
(2) by adding at the end the following new paragraph:
"(4) BANKING AGENCY RULEMAKING.—The Secretary of the
Treasury may not delay or prevent the issuance of any rule
or the promulgation of any regulation by the Director.".
(d) AMENDMENT TO THE FEDERAL RESERVE ACT.—Section 11
of the Federal Reserve Act (12 U.S.C. 248) is amended by adding
at the end the following new subsection:
"(p) AUTHORITY.—^The Board may act in its own name and
through its own attorneys in enforcing any provision of this title,
regulations promulgated hereunder, or any other law or regulation,
or in any action, suit, or proceeding to which the Board is a
party and which involves the Board's regulation or supervision
of any bank, bank holding company (as defined in section 2 of
the Bank Holding Company Act of 1956), or other entity, or the
administration of its operations.".
(e) AMENDMENT TO THE FEDERAL DEPOSIT INSURANCE ACT.—
Section 9(a) of the Federal Deposit Insurance Act (12 U.S.C. 1819(a))
is amended in paragraph Fourth, by inserting "by and through
its own attorneys," after "complain and defend,".
SEC. 332. EXEMPTION FOR BUSINESS ACCOUNTS.
Section 274(1) of the Truth in Savings Act (12 U.S.C. 4313(1))
is amended to read as follows:
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2233
"(1) ACCOUNT.—The term 'account' means any account
intended for use by and generally used by consumers primarily
for personal, family, or household purposes that is offered by
a depository institution into which a consumer deposits funds,
including demand accounts, time accounts, negotiable order
of withdrawal accounts, and share draft accounts.".
SEC. 333. STUDY ON CHECK-RELATED FRAUD.
(a) STUDY.—The Board of Governors of the Federal Reserve
System (hereafter in this section referred to as the "Board") shall
conduct a study on the advisability of extending the 1-businessday period specified in section 603(b)(1) of the Expedited Funds
Availability Act, regarding availability of funds deposited by local
checks, to 2 business days.
(b) CONSIDERATIONS.—In conducting the study under subsection
(a), the Board shall consider—
(1) whether there is a pattern of significant increases in
check-related losses at depository institutions attributable to
the provisions of the Expedited Funds Availability Act; and
(2) whether extension of the time period referred to in
subsection (a) is necessary to diminish the volume of any such
check-related losses.
(c) REPORT TO THE CONGRESS.—Not later than 2 years after
the date of enactment of this Act, the Board shall submit a report
to the Congress concerning the results of the study conducted
under this section and including any recommendations for legislative action.
SEC. 334. CVSIDER LENDING.
(a) LOANS TO EXECUTIVE OFFICERS BY MEMBER BANKS.—Section
22(g)(2) of the Federal Reserve Act (12 U.S.C. 375a(2)) is amended
by striking "With the specific prior approval of its board of directors,
a member" and inserting "A member".
AND
(b) EXTENSIONS OF CREDIT TO EXECUTIVE OFFICERS, DIRECTORS,
PRINCIPAL SHAREHOLDERS OF MEMBER BANKS.—Section
22(h)(8) of the Federal Reserve Act (12 U.S.C. 375b(8)) is amended—
(1) by striking "MEMBER BANK.—FOR" and inserting the
following: "MEMBER BANK.—
"(A) IN GENERAL.—For"; and
(2) by adding at the end the following:
"(B) EXCEI^ION.—The Board may, by regulation, make
exceptions to subparagraph (A), except as that subparagraph makes applicable paragraph (2), for an executive
officer or director of a subsidiary of a company that controls
the member bank, if that executive officer or director does
not have authority to participate, and does not participate,
in major policymaking functions of the member bank.".
SEC. 335. REVISIONS OF STANDARDS.
Section 305(b)(1) of the Federal Deposit Insurance Corporation
Improvement Act of 1991 (12 U.S.C. 1828 note) is amended—
(1) in subparagraph (A), by striking "and" at the end;
(2) in subparagraph (B), by striking the period at the
end and inserting "; and"; and
(3) by adding at the end the following new subparagraph:
"(C) take into account the size and activities of the
institutions and do not cause undue reporting burdens.".
12 USC 4801
108 STAT. 2234
PUBLIC LAW 103-325—SEPT. 23, 1994
SEC. 336. ALTERNATIVE RULES FOR RADIO ADVERTISING.
(a) AMENDMENT TO THE TRUTH IN LENDING ACT.—Section 184
of the Truth in Lending Act (15 U.S.C. 1667c) is amended—
(1) by redesignating subsection (b) as subsection (c); and
(2) by inserting after subsection (a) the following new
subsection:
"(b) RADIO ADVERTISEMENTS.—
"(1) I N GENERAL.—^An advertisement by radio broadcast
to aid, promote, or assist, directly or indirectly, any consumer
lease shall be deemed to be in compliance with the requirements
of subsection (a) if such advertisement clearly and conspicuously—
"(A) states the information required by paragraphs
(1) and (2) of subsection (a);
"(B) states the number, amounts, due dates or periods
of scheduled payments, and the total of such payments
under the lease;
"(C) includes—
"(i) a referral to—
"(I) a toll-free telephone number established
in accordance with paragraph (2) that may be used
by consumers to obtain the information required
under subsection (a); or
"(II) a written advertisement that—
"(aa) appears in a publication in general
circulation in the community served by the
radio station on which such advertisement is
broadcast during the period beginning 3 days
before any such broadcast and ending 10 days
after such broadcast; and
"(bb) includes the information required to
be disclosed under subsection (a); and
"(ii) the name and dates of any publication referred
to in clause (i)(II); and
"(D) includes any other information which the Board
determines necessary to carry out this chapter.
"(2) ESTABLISHMENT OF TOLL-FREE NUMBER.—
"(A) I N GENERAL.—In the case of a radio broadcast
advertisement described in paragraph (1) that includes a
referral to a toll-free telephone number, the lessor who
offers the consumer lease shall—
"(i) establish such a toll-free telephone number
not later than the date on which the advertisement
including the referral is broadcast;
"(ii) maintain such telephone number for a period
of not less than 10 days, beginning on the date of
any such broadcast; and
"(iii) provide the information required under subsection (a) with respect to the lease to any person
who calls such number.
"(B) FORM OF INFORMATION.—^The information required
to be provided under subparagraph (A)(iii) shall be provided
verbally or, if requested by the consumer, in written form.
"(3) No EFFECT ON OTHER LAW.—Nothing in this subsection
shall affect the requirements of Federal law as such requirements apply to advertisement by any medium other than radio
broadcast.".
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2235
(b) STUDY OF ADVERTISING RULES.—Not later than 365 days ^®P°^^.,C«„
after the date of enactment of this Act, the Board of Governors H^^ ^^^^'^
of the Federal Reserve System shall submit a report to the Congress note.
on—
(1) the current rules applicable to credit advertising;
(2) how such rules could be modified to increase consumer
benefit and decrease creditor costs; and
(3) how such rules could be modified, if at all, for radio
advertisements without diminishing consumer protection.
SEC. 337. DEPOSIT BROKER REGISTRATION.
Section 29(g)(3) of the Federal Deposit Insurance Act (12 U.S.C.
1831flg)(3)) is amended—
(1) by inserting "that is not well capitalized (as defined
in section 38)" after "includes any insured depository institution";
(2) by striking "of any insured depository" and inserting
"of such";
(3) by striking "(with respect to such deposits)"; and
(4) by striking "having the same type of charter".
SEC. 338. AMENDMENTS TO THE DEPOSITORY INSTITUTION MANAGEMENT INTERLOCKS ACT.
(a) MANAGEMENT EXEMPTION.—Section 206 of the Depository
Institution Management Interlocks Act (12 U.S.C. 3205) is
amended—
(1) in subsections (a) and (b), by striking "15 years after
the date of enactment of this title" each place it appears and
inserting ", subject to the requirements of subsection (c), 20
years after the date of enactment of this title"; and
(2) by adding at the end the following new subsection:
"(c) REVIEW OF EXISTING MANAGEMENT INTERLOCKS.—Upon the
timely filing of a submission by a person petitioning to serve as
a management official in more than 1 position pursuant to subsection (a) or (b), each appropriate Federal depository institutions
regulatory agency shall, not later than 6 months after the date
of enactment of this Act—
"(1) review, on a case-by-case basis, the circumstances
under which such person has served as a management official
under the provisions of subsection (a) or (b); and
"(2) permit the management official to continue to serve
in such position only if—
"(A) such person has provided a resolution from the
boards of directors of each affected depository institution,
depository holding company, or company described in subsection (b), certifying to the appropriate Federal depository
institutions regulatory agency for each of the institutions
involved that there is no other qualified candidate from
the community described in paragraph (1) or (2) of section
203 who—
"(i) possesses the level of expertise necessary for
such service with respect to the affected depository
institution, depository holding company, or company
described in subsection (b); and
"(ii) is willing to serve as a management official
at the affected depository institution, depository holding company, or company described in subsection (b);
ami
108 STAT. 2236
PUBLIC LAW 103-325—SEPT. 23, 1994
"(B) the appropriate Federal depository institutions
regulatory agency determines that continuation of service
by the management official does not produce an anticompetitive effect with respect to each affected depository
institution, depository holding company, or company
described in subsection (b).".
(b) AMENDMENTS TO SECTION 209.—Section 209 of the Depository Institution Management Interlocks Act (12 U.S.C. 3207) is
amended—
(1) by striking "Rules" and inserting "(a) I N GENERAL.—
Rules";
(2) by striking ", including rules or regulations which permit service by a management official which would otherwise
be prohibited by section 203 or section 204,"; and
(3) by adding at the end the following new subsections:
"(b) REGULATORY STANDARDS.—An appropriate Federal depository institution regulatory agency may permit, on a case-by-case
basis, service by a management official which would otherwise
be prohibited by section 203 or 204 only if—
"(1) the board of directors of the affected depository institution, depository institution holding company, or company
described in section 206(b), provides a resolution to the appropriate Federal depository institutions regulatory agency certifying that there is no other candidate from the community
described in paragraph (1) or (2) of section 203 who—
"(A) possesses the level of expertise necessary for such
service with respect to the affected depository institution,
depository institution holding company, or company
described in section 206(b) and is not prohibited from service under section 203 or 204; and
"(B) is willing to serve as a management official at
the affected depository institution, depository institution
holding company, or company described in section 206(b);
and
"(2) the appropriate Federal depository institutions regulatory agency determines that—
"(A) the management official is critical to the safe
and sound operations of the affected depository institution,
depository institution holding company, or company
described in section 206(b);
"(B) continuation of service by the management official
does not produce an anticompetitive effect with respect
to the affected depository institution, depository institution
holding company, or company described in section 206(b);
and
"(C) the management official meets such additional
requirements as the agency may impose.
"(c) LIMITED EXCEPTION FOR MANAGEMENT OFFICIAL CONSIGNMENT PROGRAM.—
"(1) IN GENERAL.—Notwithstanding the requirements of
subsection (b), an appropriate Federal depository institutions
regulatory agency may establish a program to permit, on a
case-by-case basis, service by a management official which
would otherwise be prohibited by section 203 or 204, for a
period of not more than 2 years, if the agency determines
that such service would—
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2237
"(A) improve the provision of credit to low- and moderate-income areas;
"(B) increase the competitive position of minority- and '
woman-owned institutions; or
"(C) strengthen the management of newly chartered .
institutions that are in an unsafe or unsound condition.
"(2) EXTENSION OF SERVICE PERIOD.—The appropriate Federal depository institutions regulatory agency may extend the
2-year period referred to in paragraph (1) for one additional
period of not more than 2 years, subject to making a new <
determination described in subparagraphs (A) through (C) of
paragraph (1).".
SEC. 339, ADVERSE INFORMATION ABOUT CONSUMERS.
""""^^Section 609(a) of the Fair Credit Reporting Act (15 U.S.C.
1681g(a)) is amended by adding at the end the following new
paragraph:
"(4) The dates, original payees, and amounts of any checks
upon which is based any adverse characterization of the '
consumer, included in the file at the time of the disclosure.".
SEC. 340. SIMPLIFIED DISCLOSURE FOR EXISTING DEPOSITORS.
(a) IN GENERAL.—Section 43(b)(3) of the Federal Deposit Insurance Act (12 U.S.C. 1831t(b)(3)) is amended to read as follows:
"(3) ACKNOWLEDGEMENT OF DISCLOSURE.—
"(A) NEW DEPOSITORS.—^With respect to any depositor
who was not a depositor at the depository institution before
June 19, 1994, receive any deposit for the account of such
depositor only if the depositor has signed a written
acknowledgement that—
"(i) the institution is not federally insured; and
"(ii) if the institution fails, the Federal Government
does not guarantee that the depositor will get back
the depositor's money.
"(B) CURRENT DEPOSITORS.—Receive any deposit after
the effective date of this paragraph for the account of
any depositor who was a depositor before June 19, 1994,
only if—
"(i) the depositor has signed a written acknowledgement described in subparagraph (A); or
"(ii) the institution has complied with the provisions of subparagraph (C) which are applicable as of
the date of the deposit.
"(C) ALTERNATIVE PROVISION OF NOTICE TO CURRENT
DEPOSITORS.—
"(i) IN GENERAL.—Transmit to each depositor who
was a depositor before June 19, 1994, and has not
signed a written acknowledgement described in
subparagraph (A)—
"(I) a card containing the information
described in clauses (i) and (ii) of subparagraph
(A), and a line for the signature of the depositor;
and
"(II) accompanying materials requesting the
depositor to sign the card, and return the signed
card to the institution.
"(ii) MANNER AND TIMING OF NOTICE.—
108 STAT. 2238
PUBLIC LAW 103-325—SEPT. 23, 1994
"(I) FIRST NOTICE.—Make the
transmission
described in clause (i) via first class mail not later
than September 12, 1994.
"(11) SECOND NOTICE.—Make a second trans-
mission described in clause (i) via first class mail
not less than 30 days and not more than 45 days
after a transmission to the depositor in accordance
with subclause (I), if the institution has not, by
the date of such mailing, received from the depositor a card referred to in clause (i) which has been
signed by the depositor.
"(Ill) THIRD NOTICE.—Make a third
12 u s e 1831t
note.
12 u s e 4801
note.
Reports.
trans-
mission described in clause (i) via first class mail
not less than 30 days and not more than 45 days
after a transmission to the depositor in accordance
with subclause (II), if the institution has not, by
the date of such mailing, received from the depositor a card referred to in clause (i) which has been
signed by the depositor.".
(b) EFFECTIVE DATE.—Section 43(b)(3) of the Federal Deposit
Insurance Act, as amended by subsection (a), shall take effect
in accordance with section 151(a)(2)(D) of the Federal Deposit Insurance Corporation Improvement Act of 1991.
SEC. 341. FEASIBILITY STUDY OF DATA BANK.
(a) IN GENERAL.—Not later than 18 months after the date
of enactment of this Act, the Federal Financial Institutions Examination Council shall—
(1) study the feasibility, including the costs and benefits
to insured depository institutions, of establishing and maintaining a data bank for reports submitted by any depository institution to a Federal banking agency; and
(2) report the results of such study to the Congress.
(b) ADDITIONAL FACTORS.—The study required under subsection
(a) shall consider the feasibility of—
(1) permitting depository institutions to file reports directly
with the data bank; and
(2) permitting Federal banking agencies. State bank supervisors, and the public to obtain access to any appropriate report
on file with the data bank which such agency or supervisor
or the public is otherwise authorized to receive.
12 u s e 4801
note.
SEC. 342. TIMELY COMPLETION OF CRA REVIEW.
12 u s e 4807.
SEC. 343. TIME LIMIT ON AGENCY CONSIDERATION OF COMPLETED
APPLICATIONS.
The comprehensive regulatory review of the Community
Reinvestment Act of 1977 that, as of the date of enactment of
this Act, is being conducted by the Federal banking agencies, shall
be completed at the earliest practicable time.
(a) IN GENERAL.—Each Federal banking agency shall take final
action on any application to the agency before the end of the
1-year period beginning on the date on which a completed application is received by the agency.
(b) WAIVER BY APPLICANT AUTHORIZED.—^Any person submitting
an application to a Federal banking agency may waive the
applicability of subsection (a) with respect to such application at
any time.
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2239
SEC. 344. WAIVER OF RIGHT OF RESCISSION FOR CERTAIN REFINANCING TRANSACTIONS.
12 USC 4801
note.
Not later than 6 months after the date of enactment of this
Act, the Board of Governors of the Federal Reserve System, in
consultation with the consumer advisory council to such Board,
consumers, representatives of consumers, lenders, and other
interested parties, shall submit recommendations to the Congress
regarding whether a waiver or modification, at the option of a
consumer, of the right of rescission under section 125 of the Truth
in Lending Act with respect to transactions which constitute a
refinancing or consolidation (with no new advances) of the principal
balance then due, and any accrued and unpaid finance charges
of an existing extension of credit by a different creditor secured
by an interest in the same property, would benefit consumers.
SEC. 345. CLARIFICATION OF RESPA DISCLOSURE REQUIREMENTS.
Section 6(a)(1)(B) of the Real Estate Settlement Procedures
Act of 1974 (12 U.S.C. 2605(a)( 1)(B)) is amended—
(1) by striking "(B) for each of the most recent" and inserting "(B) at the choice of the person making a federally related
mortgage loan—
"(i) for each of the most recent";
(2) by redesignating clauses (i) and (ii) as subclauses (I)
and (II), respectively, and indenting appropriately;
(3) by striking "and" at the end of subclause (II) (as redesignated by paragraph (2)) and inserting "or"; and
(4) by inserting after clause (i) (as redesignated by paragraph (1)) the following new clause:
"(ii) a statement that the person making the loan
has previously assigned, sold, or transferred the servicing of federally related mortgage loans; and".
SEC. 346. NOTICE PROCEDURES FOR BANK HOLDING COMPANIES TO
SEEK APPROVAL TO ENGAGE IN CERTAIN ACTIVITIES.
Section 4 of the Bank Holding Company Act of 1956 (12 U.S.C.
1843) is amended—
(1) by adding at the end the following new subsection:
"(j) NOTICE PROCEDURES FOR NONBANKING ACTIVITIES.—
"(1) GENERAL NOTICE PROCEDURE.—
"(A) NOTICE REQUIREMENT.—NO bank holding company
may engage in any nonbanking activity or acquire or retain
ownership or control of the shares of a company engaged
in activities based on subsection (c)(8) or (a)(2) without
providing the Board with written notice of the proposed
transaction or activity at least 60 days before the transaction or activity is proposed to occur or commence.
"(B) CONTENTS OF NOTICE.—The notice submitted to Regulations,
the Board shall contain such information as the Board
shall prescribe by regulation or by specific request in
connection with a particular notice.
"(C) PROCEDURE FOR AGENCY ACTION.—
"(i) NOTICE OF DISAPPROVAL.—Any notice filed
under this subsection shall be deemed to be approved
by the Board unless, before the end of the 60-day
period beginning on the date the Board receives a
complete notice under subparagraph (A), the Board
108 STAT. 2240
PUBLIC LAW 103-325—SEPT. 23, 1994
issues an order disapproving the transaction or activity
and setting forth the reasons for disapproval.
"(ii) EXTENSION OF PERIOD.—The Board may
extend the 60-day period referred to in clause (i) for
an additional 30 days. The Board may further extend
the period with the agreement of the bank holding
company submitting the notice pursuant to this
subsection.
"(iii) DETERMINATION OF PERIOD IN CASE OF PUBLIC
HEARING.—In the event a hearing is requested or the
Board determines that a hearing is warranted, the
Board may extend the notice period provided in this
subsection for such time as is reasonably necessary
to conduct a hearing and to evaluate the hearing
record. Such extension shall not exceed the 91-day
period beginning on the date that the hearing record
is complete.
"(D) APPROVAL BEFORE END OF PERIOD.—
"(i) IN GENERAL.—^Any transaction or activity may
commence before the expiration of any period for disapproval established under this paragraph if the Board
issues a written notice of approval.
"(ii) SHORTER PERIODS BY REGULATION.—The Board
may prescribe regulations which provide for a shorter
notice period with respect to particular activities or
transactions.
"(E) EXTENSION OF PERIOD.—In the case of any notice
to engage in, or to acquire or retain ownership or control
of shares of any company engaged in, any activity pursuant
to subsection (c)(8) or (a)(2) that has not been previously
approved by regulation, the Board may extend the notice
period under this subsection for an additional 90 days.
The Board may further extend the period with the agreement of the bank holding company submitting the notice
pursuant to this subsection.
"(2) GENERAL STANDARDS FOR REVIEW.—
"(A) CRITERIA.—In connection with a notice under this
subsection, the Board shall consider whether performance
of the activity by a bank holding company or a subsidiary
of such company can reasonably be expected to produce
benefits to the public, such as greater convenience,
increased competition, or gains in efficiency, that outweigh
possible adverse effects, such as undue concentration of
resources, decreased or unfair competition, conflicts of
interests, or unsound banking practices.
"(B) GROUNDS FOR DISAPPROVAL.—The Board may deny
any proposed transaction or activity for which notice has
been submitted pursuant to this subsection if the bank
holding company submitting such notice neglects, fails, or
refuses to furnish the Board all the information required
by the Board.
"(C) CONDITIONAL ACTION.—Nothing in this subsection
limits the authority of the Board to impose conditions in
connection with an action under this section."; and
(2) in subsection (c), by striking the penultimate sentence.
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2241
SEC. 347. COMMERCIAL MORTGAGE RELATED SECURITIES.
(a) IN GENERAL.—Section 3(a)(41)(A)(i) of the Securities
Exchange Act of 1934 (15 U.S.C. 78c(a)(41)(A)(i)) is amended—
(1) by striking "or on a residential" and inserting "on a
residential"; and
(2) by inserting before the semicolon ", or on one or more
parcels of real estate upon which is located one or more commercial structures".
(b) AMENDMENT TO THE REVISED STATUTES.—Paragraph Seventh of section 5136 of the Revised Statutes (12 U.S.C. 24) is
amended in the twelfth sentence, by striking "(15 U.S.C.
78c(a)(41))), subject to such regulations" and inserting "(15 U.S.C.
78c(a)(41)). The exception provided for the securities described in
subparagraphs (A), (B), and (C) shall be subject to such regulations".
(c) REGULATIONS.—Not later than 1 year after the date of 12 use 24 note.
enactment of this Act, the Comptroller of the Currency shall promulgate final regulations, in accordance with the thirteenth sentence
of Paragraph Seventh of section 5136 of the Revised Statutes (as
amended by subsection (b)), to carry out the amendments made
by this section.
(d) EFFECTIVE DATE.—^The amendments made by this section 12 use 24 note,
shall become effective upon the date of promulgation of final regulations under subsection (c).
(e) STATE OPT OUT.—^Notwithstanding the amendments made 15 use 78c note,
by this section, a note that is directly secured by a first lien
on one or more parcels of real estate upon which is located one
or more commercial structures shall not be considered to be a
mortgage related security under section 3(a)(41) of the Securities
Exchange Act of 1934 in any State that, prior to the expiration
of 7 years after the date of enactment of this Act, enacts a statute
that specifically refers to this section and either prohibits or provides for a more limited authority to purchase, hold, or invest
in such securities by any person, trust, corporation, partnership,
association, business trust, or business entity or class thereof than
is provided by the amendments made by this subsection. The enactment by any State of any statute of the type described in the
preceding sentence shall not affect the validity of any contractual
commitment to purchase, hold, or invest that was made prior thereto, and shall not require the sale or other disposition of any securities acquired prior thereto.
SEC. 348. CLARIFYING AMENDMENT RELATING TO DATA COLLECTION.
Section 7(a)(9) of the Federal Deposit Insurance Act (12 U.S.C.
1817(a)(9)) is amended by adding at the end the following: "In
prescribing reporting and other requirements for the collection of
actual and accurate information pursuant to this paragraph, the
Corporation shall minimize the regulatory burden imposed upon
insured depository institutions that are well capitalized (as defined
in section 38) while taking into account the benefit of the information to the Corporation, including the use of the information to
enable the Corporation to more accurately determine the total
amount of insured deposits in each insured depository institution
for purposes of compliance with this Act.".
108 STAT. 2242
PUBLIC LAW 103-325—SEPT. 23, 1994
SEC. 349. GUIDELINES FOR EXAMINATIONS.
(a) ADEQUACY OF STATE EXAMINATIONS.—Section 10(d)
of
the
Federal Deposit Insurance Act (12 U.S.C. 1820(d)) is amended by
adding at the end the following new paragraph:
"(9)
12 use 1820
"°*®
12 use 4808.
STANDARDS FOR DETERMINING ADEQUACY OF STATE
EXAMINATIONS.—^The Federal Financial Institutions Examination Council shall issue guidelines establishing standards to
be used at the discretion of the appropriate Federal banking
agency for purposes of making a determination under paragraph (3).".
(b) EFFECTIVE DATE OF INITIAL GUIDELINES.—The initial guidelines required to be issued pursuant to the amendment made by
subsection (a) shall become effective not later than 1 year after
the date of enactment of this Act.
SEC. 350. REVISING REGULATORY REQUIREMENTS FOR TRANSFERS
OF ALL TYPES OF ASSETS WITH RECOURSE.
(a) REVIEW AND REVISION OF REGULATIONS.—
(1) IN GENERAL.—During the 180-day period beginning on
the date of enactment of this Act, each appropriate Federal
banking agency shall, consistent with the principles of safety
and soundness and the public interest—
(A) review the agency's regulations and written policies
relating to transfers of assets with recourse by insured
depository institutions; and
(B) in consultation with the other Federal banking
agencies, promulgate regulations that better reflect the
exposure of an insured depository institution to credit risk
from transfers of assets with recourse.
(2) REGULATIONS REQUIRED.—Before the
end
of the
180-
day period beginning on the date of enactment of this Act,
each appropriate Federal banking agency shall prescribe the
regulations developed pursuant to paragraph (1)(B).
(b) REGULATIONS REQUIRED.—
(1) IN GENERAL.—^After the end of the 180-day period beginning on the date of enactment of this Act, the amount of
risk-based capital required to be maintained, under regulations
prescribed by the appropriate Federal banking agency, by any
insured depository institution with respect to assets transferred
with recourse by such institution may not exceed the maximum
amount of recourse for which such institution is contractually
liable under the recourse agreement.
(2) EXCEPTION FOR SAFETY AND SOUNDNESS.—The appropriate Federal banking agency may require any insured depository institution to maintain risk-based capital in an amount
greater than the amount determined under paragraph (1), if
the agency determines, by regulation or order, that such higher
amount is necessary for safety and soundness reasons.
(c) COORDINATION WITH SECTION 208(b).—This section shall
not be construed as superseding the applicability of section 208(b).
(d) DEFINITIONS.—For purposes of this section, the terms
"appropriate Federal banking agency", "Federal banking agency",
and "insured depository institution" have the same meanings as
in section 3 of the Federal Deposit Insurance Act.
108 STAT. 2243
PUBLIC LAW 103-325—SEPT. 23, 1994
TITLE IV—MONEY LAUNDERING
SEC. 401. SHORT TITLE.
This title may be cited as the "Money Laundering Suppression
Act of 1994".
Money
Laundering
Suppression Act
of 1994.
31 u s e 5301
note.
SEC. 402. REFORM OF CTR EXEMPTION REQUIREMENTS TO REDUCE
NUMBER AND SIZE OF REPORTS CONSISTENT WITH EFFECTIVE LAW ENFORCEMENT.
(a) IN GENERAL.—Section 5313 of title 31, United States Code,
is amended by adding at the end the following new subsections:
"(d) MANDATORY EXEMPTIONS FROM
MENTS.—
REPORTING
REQUIRE-
"(1) IN GENERAL.—The Secretary of the Treasury shall
exempt, pursuant to section 5318(a)(6), a depository institution
from the reporting requirements of subsection (a) with respect
to transactions between the depository institution and the following categories of entities:
"(A) Another depository institution.
"(B) A department or agency of the United States,
any State, or any political subdivision of any State.
"(C) Any entity established under the laws of the
United States, any State, or any political subdivision of
any State, or under an interstate compact between 2 or
more States, which exercises governmental authority on
behalf of the United States or any such State or political
subdivision.
"(D) Any business or category of business the reports
on which have little or no value for law enforcement purposes.
"(2) NOTICE OF EXEMPTION.—The Secretary of the Treasury Federal
shall publish in the Federal Register at such times as the Register,
publication.
Secretary determines to be appropriate (but not less frequently
than once each year) a list of all the entities whose transactions
with a depository institution are exempt under this subsection
from the reporting requirements of subsection (a).
"(e) DISCRETIONARY EXEMPTIONS FROM REPORTING REQUIREMENTS.—
"(1) IN GENERAL.—The Secretary of the Treasury may
exempt, pursuant to section 5318(a)(6), a depository institution
from the reporting requirements of subsection (a) with respect
to transactions between the depository institution and a qualified business customer of the institution on the basis of information submitted to the Secretary by the institution in accordance
with procedures which the Secretary shall establish.
"(2) QUALIFIED BUSINESS CUSTOMER DEFINED.—For purposes of this subsection, the term 'qualified business customer'
means a business which—
"(A) maintains a transaction account (as defined in
section 19(b)( 1)(C) of the Federal Reserve Act) at the depository institution;
"(B) frequently engages in transactions with the
depository institution which are subject to the reporting
requirements of subsection (a); and
"(C) meets criteria which the Secretary determines are
sufficient to ensure that the purposes of this subchapter
108 STAT. 2244
Regulations.
PUBLIC LAW 103-325—SEPT. 23, 1994
are carried out without requiring a report with respect
to such transactions.
"(3) CRITERIA FOR EXEMPTION.—The Secretary of the Treasury shall establish, by regulation, the criteria for granting
and maintaining an exemption under paragraph (1).
"(4) GUIDELINES.—
Regulations.
"(A) IN GENERAL.—The Secretary of the Treasury shall
establish guidelines for depository institutions to follow
in selecting customers for an exemption under this
subsection.
"(B) CONTENTS.—^The guidelines may include a description of the types of businesses or an itemization of specific
businesses for which no exemption will be granted under
this subsection to any depository institution.
"(5) ANNUAL REVIEW.—The Secretary of the Treasury shall
prescribe regulations requiring each depository institution to—
"(A) review, at least once each year, the qualified business customers of such institution with respect to whom
an exemption has been granted under this subsection; and
"(B) upon the completion of such review, resubmit
information about such customers, with such modifications
as the institution determines to be appropriate, to the
Secretary for the Secretary's approval.
"(6) 2-YEAR PHASE-IN PROVISION.—During the 2-year period
beginning on the date of enactment of the Money Laundering
Suppression Act of 1994, this subsection shall be applied by
the Secretary on the basis of such criteria as the Secretary
determines to be appropriate to achieve an orderly implementation of the requirements of this subsection.
"(f) PROVISIONS APPLICABLE TO MANDATORY AND DISCRETIONARY
EXEMPTIONS.—
"(1) LIMITATION ON LIABILITY OF DEPOSITORY INSTITU-
TIONS.—No depository institution shall be subject to any penalty
which may be imposed under this subchapter for the failure
of the institution to file a report with respect to a transaction
with a customer for whom an exemption has been granted
under subsection (d) or (e) unless the institution—
"(A) knowingly files false or incomplete information
to the Secretary with respect to the transaction or the
customer engaging in the transaction; or
"(B) has reason to believe at the time the exemption
is granted or the transaction is entered into that the customer or the transaction does not meet the criteria established for granting such exemption.
"(2) COORDINATION WITH OTHER PROVISIONS.—^Any exemp-
tion granted by the Secretary of the Treasury under section
5318(a) in accordance with this section, and any transaction
which is subject to such exemption, shall be subject to any
other provision of law applicable to such exemption, including—
"(A) the authority of the Secretary, under section
5318(a)(6), to revoke such exemption at any time; and
"(B) any requirement to report, or any authority to
require a report on, any possible violation of any law or
regulation or any suspected criminal activity.
"(g) DEPOSITORY INSTITUTION DEFINED.—For purposes of this
section, the term 'depository institution'—
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2245
"(1) has the meaning given to such term in section
19(b)(1)(A) of the Federal Reserve Act; and
"(2) includes—
"(A) any branch, agency, or commercial lending company (as such terms are defined in section Kb) of the
International Banking Act of 1978);
"(B) any corporation chartered under section 25A of
the Federal Reserve Act; and
"(C) any corporation having an agreement or undertaking with the Board of Governors of the Federal Reserve
System under section 25 of the Federal Reserve Act.".
(b) REPORT REDUCTION GOAL; REPORTS.—
3I u s e 5313
(1) IN GENERAL.—In implementing the amendment made ^°^by subsection (a), the Secretary of the Treasury shall seek
to reduce, within a reasonable period of time, the number
of reports required to be filed in the aggregate by depository
institutions pursuant to section 5313(a) of title 31, United
States Code, by at least 30 percent of the number filed during
the year preceding the date of enactment of this Act.
(2) INTERIM REPORT.—^The Secretary of the Treasury shall
submit a report to the Congress not later than the end of
the 180-day period beginning on the date of enactment of this
Act on the progress made by the Secretary in implementing
the amendment made by subsection (a).
(3) ANNUAL REPORT.—The Secretary of the Treasury shall
submit an annual report to the Congress after the end of
each of the first 5 calendar years which begin after the date
of enactment of this Act on the extent to which the Secretary
has reduced the overall number of currency transaction reports
filed with the Secretary pursuant to section 5313(a) of title
31, United States Code, consistent with the purposes of such
section and effective law enforcement.
(c) STREAMLINED C U R R E N C Y TRANSACTION R E P O R T S . — T h e Sec-
retary of the Treasury shall take such action as may be appropriate
toil) redesign the format of reports required to be filed under
section 5313(a) of title 31, United States Code, by any financial
institution (as defined in section 5312(a)(2) of such title) to
eliminate the need to report information which has little or
no value for law enforcement purposes; and
(2) reduce the time and effort required to prepare such
report for filing by any such financial institution under such
section.
SEC. 403. SINGLE DESIGNEE FOR REPORTING OF SUSPICIOUS TRANSACTIONS.
(a) I N GENERAL.—Section 5318(g) of title 31, United States
Code, is amended by adding at the end the following new paragraph:
"(4) SINGLE
TRANSACTIONS.—
DESIGNEE
FOR
REPORTING
SUSPICIOUS
"(A) I N GENERAL.—In requiring reports under paragraph (1) of suspicious transactions, the Secretary of the
Treasury shall designate, to the extent practicable and
appropriate, a single officer or agency of the United States
to whom such reports shall be made.
"(B) DUTY OF DESIGNEE.—^The officer or agency of the
United States designated by the Secretary of the Treasury
3i u s e 5313
^°^-
108 STAT. 2246
PUBLIC LAW 103-325—SEPT. 23, 1994
pursuant to subparagraph (A) shall refer any report of
a suspicious transaction to any appropriate law enforcement or supervisory agency.
"(C) COORDINATION WITH OTHER REPORTING REQUIRE-
MENTS.—Subparagraph (A) shall not be construed as
precluding any supervisory agency for any financial institution from requiring the financial institution to submit any
information or report to the agency or another agency
pursuant to any other applicable provision of law.".
31 u s e 5318
"°**-
(b) REPORTS.—
(1) REPORTS REQUIRED.—The Secretary of the Treasury
shall submit an annual report to the Congress at the times
required under paragraph (2) on the number of suspicious
transactions reported to the officer or agency designated under
section 5318(g)(4)(A) of title 31, United States Code, during
the period covered by the report and the disposition of such
reports.
(2)
TIME
FOR SUBMITTING
REPORTS.—The
1st
report
required under paragraph (1) shall be filed before the end
of the 1-year period beginning on the date of enactment of
the Money Laundering Suppression Act of 1994 and each subsequent report shall be filed within 90 days after the end of
each of the 5 calendar years which begin after such date of
enactment.
31 use 5318
(c) DESIGNATION REQUIRED T O B E MADE EXPEDITIOUSLY.—The
"°*®-
initial designation of an officer or agency of the United States
pursuant to the amendment made by subsection (a) shall be made
before the end of the 180-day period beginning on the date of
enactment of this Act.
31 use 5318
note.
SEC. 404. IMPROVEMENT OF IDENTIFICATION OF MONEY LAUNDERING
SCHEMES.
(a) ENHANCED TRAINING, EXAMINATIONS, AND REFERRALS BY
BANKING AGENCIES.—Before the end of the 6-month period begin-
ning on the date of enactment of this Act, each appropriate Federal
banking agency shall, in consultation with the Secretary of the
Treasury and other appropriate law enforcement agencies—
(1) review and enhance training and examination procedures to improve the identification of money laundering
schemes involving depository institutions; and
(2) review and enhance procedures for referring cases to
any appropriate law enforcement agency.
(b) IMPROVED REPORTING OF CRIMINAL SCHEMES BY LAW
ENFORCEMENT AGENCIES.—^The Secretary of the Treasury and each
appropriate law enforcement agency shall provide, on a regular
basis, information regarding money laundering schemes and activities involving depository institutions to each appropriate Federal
banking agency in order to enhance each agency's ability to examine
for and identify money laundering activity.
(c) REPORT TO CONGRESS.—^The Financial Institutions Examination Council shall submit a report on the progress made in carrying
out subsection (a) and the usefulness of information received pursuant to subsection (b) to the Congress by the end of the 1-year
period beginning on the date of enactment of this Act.
(d) DEFINITION.—For purposes of this section, the term "appropriate Federal banking agency" has the same meaning as in section
3 of the Federal Deposit Insurance Act.
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2247
SEC. 405. NEGOTIABLE INSTRUMENTS DRAWN ON FOREIGN BANKS
SUBJECT TO RECORDKEEPING AND REPORTING REQUIREMENTS.
Section 5312(a)(3) of title 31, United States Code, is amended—
(1) by striking "and" at the end of subparagraph (A);
(2) by striking the period at the end of subparagraph (B)
and inserting "; and"; and
(3) by adding at the end the following new subparagraph: Regulations.
"(C) as the Secretary of the Treasury shall provide
by regulation for purposes of section 5316, checks, drafts,
notes, money orders, and other similar instruments which
are drawn on or by a foreign financial institution and
are not in bearer form.".
SEC. 406. IMPOSITION OF CIVIL MONEY PENALTIES BY APPROPRIATE
FEDERAL BANKING AGENCIES.
Section 5321 of title 31, United States Code, is amended by
adding at the end the following new subsection:
"(e) DELEGATION OF ASSESSMENT AUTHORITY TO BANKING
AGENCIES.—
"(1) IN GENERAL.—The Secretary of the Treasury shall delegate, in accordance with section 5318(a)(1) and subject to such
terms and conditions as the Secretary may impose in accordance
with paragraph (3), any authority of the Secretary to assess
a civil money penalty under this section on depository institutions (as defined in section 3 of the Federal Deposit Insurance
Act) to the appropriate Federal banking agencies (as defined
in such section 3).
"(2) AUTHORITY OF AGENCIES.—Subject to any term or
condition imposed by the Secretary of the Treasury under
paragraph (3), the provisions of this section shall apply to
an appropriate Federal banking agency to which is delegated
any authority of the Secretary under this section in the same .
manner such provisions apply to the Secretary.
"(3) TERMS AND CONDITIONS.—
"(A) IN GENERAL.—The Secretary of the Treasury shall
prescribe by regulation the terms and conditions which
shall apply to any delegation under paragraph (1).
"(B) MAXIMUM DOLLAR AMOUNT.—The terms and conditions authorized under subparagraph (A) may include, in
the Secretary's sole discretion, a limitation on the amount
of any civil penalty which may be assessed by an appropriate Federal banking agency pursuant to a delegation
under paragraph (1).".
SEC. 407. UNIFORM STATE UCENSING AND REGULATION OF CHECK
CASHING, CURRENCY EXCHANGE, AND MONEY TRANSMITTING BUSINESSES.
(a)
UNIFORM
LAWS AND ENFORCEMENT.—For
purposes
of
preventing money laundering and protecting the pajnnent system
from fraud and abuse, it is the sense of the Congress that the
several States should—
(1) establish uniform laws for licensing and regulating
businesses which—
(A) provide check cashing, currency exchange, or money
transmitting or remittance services, or issue or redeem
31 USC 5311
"o^
108 STAT. 2248 ^
PUBLIC LAW 103-325—SEPT. 23, 1994
money orders, travelers' checks, and other similar
instruments; and
(B) are not depository institutions (as defined in section
5313(g) of title 31, United States Code); and
(2) provide sufficient resources to the appropriate State
agency to enforce such laws and regulations prescribed pursuant to such laws,
(b) MODEL STATUTE.—It is the sense of the Congress that
the several States should develop, through the auspices of the
National Conference of Commissioners on Uniform State Laws,
the American Law Institute, or such other forum as the States
may determine to be appropriate, a model statute to carry out
the goals described in subsection (a) which would include the
following:
(1) LICENSING REQUIREMENTS.—^A requirement that any
business described in subsection (a)(1) be licensed and regulated
by an appropriate State agency in order to engage in any
such activity within the State.
(2) LICENSING STANDARDS.—A requirement that—
(A) in order for any business described in subsection
(a)(1) to be licensed in the State, the appropriate State
agency shall review and approve—
(i) the business record and the capital adequacy
of the business seeking the license; and
(ii) the competence, experience, integrity, and
financial ability of any individual who—
(I) is a director, officer, or supervisory
employee of such business; or
(II) owns or controls such business; and
(B) any record, on the part of any business seeking
the license or any person referred to in subparagraph
(A)(ii), of—
(i) any criminal activity;
(ii) any fraud or other act of personal dishonesty;
(iii) any act, omission, or practice which constitutes
a breach of a fiduciary duty; or
(iv) any suspension or removal, by any agency
or department of the United States or any State, from
participation in the conduct of any federally or State
licensed or regulated business,
may be grounds for the denial of any such license by
the appropriate State agency.
(3) REPORTING REQUIREMENTS.—^A requirement that any
business described in subsection (a)(1)—
(A) disclose to the appropriate State agency the fees
charged to consumers for services described in subsection
(a)(1)(A); and
(B) conspicuously disclose to the public, at each location
of such business, the fees charged to consumers for such
services.
(4)
PROCEDURES TO ENSURE COMPLIANCE WITH FEDERAL
CASH TRANSACTION REPORTING REQUIREMENTS.—^A civil or criminal penalty for operating any business referred to in paragraph
(1) without establishing and complying with appropriate procedures to ensure compliance with subchapter II of chapter 53
of title 31, United States Code (relating to records and reports
on monetary instruments transactions).
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2249
(5) CRIMINAL PENALTIES FOR OPERATION OF BUSINESS WITH-
OUT A LICENSE.—^A criminal penalty for operating any business
referred to in paragraph (1) without a license within the State
after the end of an appropriate transition period beginning
on the date of enactment of such model statute by the State.
(c) STUDY REQUIRED.—^The Secretary of the Treasury shall conduct a study of—
(1) the progress made by the several States in developing
and enacting a model statute which—
(A) meets the requirements of subsection (b); and
(B) furthers the goals of—
(i) preventing money laundering by businesses
which are required to be licensed under any such statute; and
(ii) protecting the payment system, including the
receipt, payment, collection, and clearing of checks,
from fraud and abuse by such businesses; and
(2) the adequacy of—
(A) the activity of the several States in enforcing the
requirements of such statute; and
(B) the resources made available to the appropriate
State agencies for such enforcement activity.
(d) REPORT REQUIRED.—Not later than the end of the 3-year
period beginning on the date of enactment of this Act and not
later than the end of each of the first two 1-year periods beginning
after the end of such 3-year period, the Secretary of the Treasury
shall submit a report to the Congress containing the findings and
recommendations of the Secretary in connection with the study
under subsection (c), together with such recommendations for legislative and administrative action as the Secretary may determine
to be appropriate.
(e) RECOMMENDATIONS IN CASES OF INADEQUATE REGULATION
AND ENFORCEMENT BY STATES.—If the Secretary of the Treasury
determines that any State has been unable to—
(1) enact a statute which meets the requirements described
in subsection (b);
(2) undertake adequate activity to enforce such statute;
or
(3) make adequate resources available to the appropriate
State agency for such enforcement activity,
the report submitted pursuant to subsection (d) shall contain recommendations of the Secretary which are designed to facilitate
the enactment and enforcement by the State of such a statute.
(f) FEDERAL FUNDING STUDY.—
(1) STUDY REQUIRED.—The Secretary of the Treasury shall
conduct a study to identify possible available sources of Federal
funding to cover costs which will be incurred by the States
in carrying out the purposes of this section.
(2) REPORT.—^The Secretary of the Treasury shall submit
a report to the Congress on the study conducted pursuant
to paragraph (1) not later than the end of the 18-month period
beginning on the date of enactment of this Act.
SEC. 408. REGISTRATION OF MONEY TRANSMITTING BUSINESSES TO
PROMOTE EFFECTIVE LAW ENFORCEMENT.
(a) FINDINGS AND PURPOSES.—
3i use 5330
(1) FINDINGS.—The Congress hereby finds the following: "°*®-
108 STAT. 2250
PUBLIC LAW 103-325—SEPT. 23, 1994
(A) Money transmitting businesses are subject to the
recordkeeping and reporting requirements of subchapter
II of chapter 53 of title 31, United States Code.
(B) Money transmitting businesses are largely unregulated businesses and are frequently used in sophisticated
schemes to—
(i) transfer large amounts of money which are
the proceeds of unlawful enterprises; and
(ii) evade the requirements of such subchapter II,
the Internal Revenue Code of 1986, and other laws
of the United States.
(C) Information on the identity of money transmitting
businesses and the names of the persons who own or control, or are officers or employees of, a money transmitting
business would have a high degree of usefulness in criminal, tax, or regulatory investigations and proceedings.
(2) PURPOSE.—It is the purpose of this section to establish
a registration requirement for businesses engaged in providing
check cashing, currency exchange, or money transmitting or
remittance services, or issuing or redeeming money orders,
travelers' checks, and other similar instruments to assist the
Secretary of the Treasury, the Attorney General, and other
supervisory and law enforcement agencies to effectively enforce
the criminal, tax, and regulatory laws and prevent such money
transmitting businesses from engaging in illegal activities,
(b) IN GENERAL.—Subchapter II of chapter 53 of title 31, United
States Code, is amended by adding at the end the following new
section:
31 use 5330.
«*§ 5330. R e g i s t r a t i o n of money t r a n s m i t t i n g b u s i n e s s e s
"(a)
REGISTRATION
REQUIRED.—
WITH
SECRETARY
OF
THE
TREASURY
"(1) IN GENERAL.—^Any person who owns or controls a
money transmitting business shall register the business
(whether or not the business is licensed as a money transmitting business in any State) with the Secretary of the Treasury
not later than the end of the 180-day period beginning on
the later of—
"(A) the date of enactment of the Money Laundering
Suppression Act of 1994; or
"(B) the date on which the business is established.
Regulations.
"(2) FORM AND MANNER OF REGISTRATION.—Subject t o t h e
requirements of subsection (b), the Secretary of the Treasury
shall prescribe, by regulation, the form and manner for registering a money transmitting business pursuant to paragraph (1).
"(3) BUSINESSES REMAIN SUBJECT TO STATE LAW.—This section shall not be construed as superseding any requirement
of State law relating to money transmitting businesses operating in such State.
"(4) FALSE AND INCOMPLETE INFORMATION.—The filing of
false or materially incomplete information in connection with
the registration of a money transmitting business shall be
considered as a failure to comply with the requirements of
this subchapter.
"(b) CONTENTS OF REGISTRATION.—The registration of a money
transmitting business under subsection (a) shall include the following information:
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2251
"(1) The name and location of the business.
"(2) The name and address of each person who—
"(A) owns or controls the business;
"(B) is a director or officer of the business; or
"(C) otherwise participates in the conduct of the affairs
of the business.
"(3) The name and address of any depository institution
at which the business maintains a transaction account (as
defined in section 19(b)(1)(C) of the Federal Reserve Act).
"(4) An estimate of the volume of business in the coming
year (which shall be reported annually to the Secretary).
"(5) Such other information as the Secretary of the Treasury may require.
Reports.
"(c) AGENTS OF MONEY TRANSMITTING BUSINESSES.—
"(1) MAINTENANCE OF LISTS OF AGENTS OF MONEY TRANSMIT-
TING BUSINESSES.—Pursuant to regulations which the Secretary Regulations.
of the Treasury shall prescribe, each money transmitting business shall—
"(A) maintain a list containing the names and
addresses of all persons authorized to act as an agent
for such business in connection with activities described
in subsection (d)(1)(A) and such other information about
such agents as the Secretary may require; and
"(B) make the list and other information available on
request to any appropriate law enforcement agency.
"(2) TREATMENT OF AGENT AS MONEY TRANSMITTING BUSI-
NESS.—^The Secretary of the Treasury shall prescribe regula- Regulations.
tions establishing, on the basis of such criteria as the Secretary
determines to be appropriate, a threshold point for treating
an agent of a money transmitting business as a money
transmitting business for purposes of this section.
"(d) DEFINITIONS.—For purposes of this section, the following
definitions shall apply:
"(1) MONEY TRANSMITTING BUSINESS.—The term 'money
transmitting business' means any business other than the
United States Postal Service which—
"(A) provides check cashing, currency exchange, or
money transmitting or remittance services, or issues or
redeems money orders, travelers' checks, and other similar
instruments;
"(B) is required to file reports under section 5313;
and
"(C) is not a depository institution (as defined in section
5313(g)).
"(2) MONEY TRANSMITTING SERVICE.—The term 'money
transmitting service' includes accepting currency or funds
denominated in the currency of any country and transmitting
the currency or funds, or the value of the currency or funds,
by any means through a financial agency or institution, a
Federal reserve bank or other facility of the Board of Governors
of the Federal Reserve System, or an electronic funds transfer
network.
"(e) CIVIL PENALTY FOR FAILURE T O COMPLY WITH REGISTRATION REQUIREMENTS.—
"(1) IN GENERAL.—^Any person who fails to comply with
any requirement of this section or any regulation prescribed
108 STAT. 2252
PUBLIC LAW 103-325—SEPT. 23, 1994
under this section shall be liable to the United States for
a civil penalty of $5,000 for each such violation.
"(2)
CONTINUING
VIOLATION.—Each
day
a
violation
described in paragraph (1) continues shall constitute a separate
violation for purposes of such paragraph.
"(3) ASSESSMENTS.—^Any penalty imposed under this subsection shall be assessed and collected by the Secretary of
the Treasury in the manner provided in section 5321 and
any such assessment shall be subject to the provisions of such
section.".
(c) CRIMINAL PENALTY FOR FAILURE To COMPLY WITH REGISTRATION REQUIREMENTS.—Section 1960(b)(1) of title 18, United
States Code, is amended to read as follows:
"(1) the term 'illegal money transmitting business' means
a money trsinsmitting business which affects interstate or foreign commerce in any manner or degree and—
"(A) is intentionally operated without an appropriate
money transmitting license in a State where such operation
is punishable as a misdemeanor or a felony under State
law; or
"(B) fails to comply with the money transmitting business registration requirements under section 5330 of title
31, United States Code, or regulations prescribed under
such section;".
(d) CLERICAL AMENDMENT.—The table of sections for chapter
53 of title 31, United States Code, is amended by inserting after
the item relating to section 5329 (as added by section 311) the
following new item:
"5330. Registration of money transmitting businesses.".
SEC. 409. UNIFORM FEDERAL REGULATION OF CASINOS.
Section 5312(a)(2) of title 31, United States Code, is amended—
(1) by redesignating subparagraphs (X) and (Y) as subparagraphs (Y) and (Z), respectively; and
(2) by inserting after subparagraph (W) the following new
subparagraph:
"(X) a casino, gambling casino, or gaming establishment with an annual gaming revenue of more than
$1,000,000 which—
"(i) is licensed as a casino, gambling casino, or
gaming establishment under the laws of any State
or any political subdivision of any State; or
"(ii) is an Indian gaming operation conducted
under or pursuant to the Indian Gaming Regulatory
Act other than an operation which is limited to class
I gaming (as defined in section 4(6) of such Act);".
SEC. 410. AUTHORITY TO GRANT EXEMPTIONS TO STATES WITH EFFECTIVE REGULATION AND ENFORCEMENT.
(a) IN GENERAL.—Section 5318(a) of title 31, United States
Code, is amended—
(1) by striking "and" at the end of paragraph (4);
(2) by redesignating paragraph (5) as paragraph (6); and
(3) by inserting after paragraph (4) the following new
paragraph:
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2253
"(5) exempt from the requirements of this subchapter any
class of transactions within any State if the Secretary determines that—
"(A) under the laws of such State, that class of transactions is subject to requirements substantially similar to
those imposed under this subchapter; and
"(B) there is adequate provision for the enforcement
of such requirements; and".
(b) TECHNICAL AND CONFORMING AMENDMENT.—The penultimate sentence of section 5318(a)(6) of title 31, United States
Code (as so redesignated by the amendment made by subsection
(a) of this section) is amended by inserting "under this paragraph
or paragraph (5)" after "exemption".
SEC. 411. CRIMINAL AND CIVIL PENALTIES FOR STRUCTURING DOMESTIC AND INTERNATIONAL TRANSACTIONS.
(a) CRIMINAL PENALTY.—Section 5324 of title 31, United States
Code, is amended by adding at the end the following new subsection:
"(c) CRIMINAL PENALTY.—
"(1) I N GENERAL.—^Whoever violates this section shall be
fined in accordance with title 18, United States Code, imprisoned for not more than 5 years, or both.
"(2) ENHANCED PENALTY FOR AGGRAVATED CASES.—Whoever
violates this section while violating another law of the United
States or as part of a pattern of any illegal activity involving
more than $100,000 in a 12-month period shall be fined twice
the amount provided in subsection (b)(3) or (c)(3) (as the case
may be) of section 3571 of title 18, United States Code, imprisoned for not more than 10 years, or both.".
(b)
AMENDMENT
RELATING
TO CIVIL
PENALTY.—Section
5321(a)(4)(A) of title 31, United States Code, is amended by striking
"willfully".
(c) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) Subsections (a) and (b) of section 5322 of title 31,
United States Code, are amended by inserting "or 5324" after
"section 5315" each place such term appears.
(2) The following sections are each amended by striking
"section 5322 of title 31" and inserting "section 5322 or 5324
of title 31" each place such term appears in such sections:
(A) Sections 8(g)(l)(A)(ii), 8(w)(l)(B), and ll(c)(5)(M)
of the Federal Deposit Insurance Act.
(B) Sections 131(a)(2), 206(h)(1)(C), 206(i)(l)(A)(ii), and
206(v)( 1)(B) of the Federal Credit Union Act.
(C) Section 5239(d)(1)(B) of the Revised Statutes of
the United States (as redesignated by section 413(b)(2)
of this Act).
(D) Section 5(w)(l)(B) of the Home Owners' Loan Act.
(E) Sections 984(a), 986(a), and 1956(g) (the first place
it appears) of title 18, United States Code.
SEC. 412. GAO STUDY OF CASHIERS' CHECKS.
(a) STUDY REQUIRED.—The Comptroller General of the United
States shall conduct a study to—
(1) determine the extent to which the practice of issuing
of cashiers' checks by financial institutions is vulnerable to
money laundering schemes;
12USC1818,
^^^^•
12 use I772d,
l"^^^12 use 93.
12 use 1464.
108 STAT. 2254
PUBLIC LAW 103-325—SEPT. 23, 1994
(2) determine the extent to which additional recordkeeping
requirements should be imposed on financial institutions which
issue cashiers' checks; and
(3) analyze such other factors relating to the use and regulation of cashiers' checks as the Comptroller General determines
to be appropriate.
(b) REPORT REQUIRED.—Before the end of the 6-month period
beginning on the date of enactment of this Act, the Comptroller
General shall submit a report to the Congress containing—
(1) the findings and conclusions of the Comptroller General
in connection with the study conducted pursuant to subsection
(a); and
(2) such recommendations for legislative and administrative
action as the Comptroller General may determine to be
appropriate.
SEC. 413. TECHNICAL AMENDMENTS AND CORRECTIONS.
(a) TITLE 31, U.S.C, AMENDMENTS.—
31 use 5318.
12 use 93.
(1) Section 5321(a)(5)(A) of title 31, United States Code,
is amended by inserting "any violation o f after "causing".
(2) Section 5324(a) of title 31, United States Code, is
amended—
(A) by striking "section 5313(a), section 5325, or the
regulations issued thereunder or section 5325 or regulations prescribed under such section 5325" each place such
term appears and inserting "section 5313(a) or 5325 or
any regulation prescribed under any such section"; and
(B) by striking "with respect to such transaction".
(b) AMENDMENTS RELATING TO TITLE 31, U.S.C.—
(1) Effective as of the date of enactment of the AnnunzioWylie Anti-Money Laundering Act, section 1517(b) of such Act
is amended by striking "5314" and inserting "5318".
(2) Section 5239 of the Revised Statutes of the United
States is amended by redesignating the 2d subsection (c) (as
added by section 1502(a) of the Annunzio-Wylie Anti-Money
Laundering Act) as subsection (d).
(c) TITLE 18, U.S.C, AMENDMENTS.—
(1) Section 1956 of title 18, United States Code, is
amended—
(A) in subsection (a)(2)—
(i) by inserting "not more than" before "$500,000";
and
(ii) by striking "transfer." each place such term
appears and inserting "transfer";
(B) in subsection (b)—
(i) by inserting "or (a)(3)" after "(a)( 1)"; and
(ii) by striking "transfer." and inserting "transfer";
(C) in subsection (c)(7)(B)(iii), by inserting a close
parenthesis after "1978";
(D) in subsection (c)(7)(D), by striking "section 9(c)
of the Food Stamp Act of 1977" and inserting "section
15 of the Food Stamp Act of 1977";
(E) in subsection (c)(7)(E), by striking the period which
follows a period;
(F) in subsection (e), by striking "Evironmental" and
inserting "Environmental"; and
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2255
(G) by redesignating subsection (g), the second place
it appears, as subsection (h).
(2) Section 1957(f)(1) of title 18, United States Code, is
amended by striking the comma which follows a comma.
(d) REPEAL OF OBSOLETE TECHNICAL CORRECTION TO SECTION
1956 OF TITLE 18, U.S.C—Section 3557(2)(E) of Public Law 101647 is repealed, effective on the date of enactment of such Public
Law.
18 USC 1956
and note.
TITLE V—NATIONAL FLOOD INSURANCE
REFORM
National Flood
Insurance
Reform Act of
1994.
SEC. 501. SHORT TITLE.
42 USC 4001
This title may be cited as the "National Flood Insurance Reform
Act of 1994".
Subtitle A—^Definitions
SEC. 511. FLOOD DISASTER PROTECTION ACT OF 1973.
(a) IN GENERAL.—Section 3(a) of the Flood Disaster Protection
Act of 1973 (42 U.S.C. 4003(a)) is amended—
(1) by striking paragraph (5) and inserting the following
new paragraph:
"(5) 'Federal entity for lending regulation' means the Board
of Governors of the Federal Reserve System, the Federal
Deposit Insurance Corporation, the Comptroller of the Currency, the Office of Thrift Supervision, the National Credit
Union Administration, and the Farm Credit Administration,
and with respect to a particular regulated lending institution
means the entity primarily responsible for the supervision of
the institution;";
(2) in paragraph (6), by striking the period at the end
and inserting a semicolon; and
(3) by inserting after paragraph (6) the following new paragraphs:
"(7) 'Federal agency lender' means a Federal agency that
makes direct loans secured by improved real estate or a mobile
home, to the extent such agency acts in such capacity;
"(8) the term 'improved real estate' means real estate upon
which a building is located;
"(9) 'lender' means a regulated lending institution or Federal agency lender;
"(10) 'regulated lending institution' means any bank,
savings and loan association, credit union, farm credit bank,
Federal land bank association, production credit association,
or similar institution subject to the supervision of a Federal
entity for lending regulation; and
"(11) 'servicer' means the person responsible for receiving
any scheduled periodic payments from a borrower pursuant
to the terms of a loan, including amounts for taxes, insurance
premiums, and other charges with respect to the property securing the loan, and making the payments of principal and interest
and such other payments with respect to the amounts received
from the borrower as may be required pursuant to the terms
of the loan.".
108 STAT. 2256
Regulations.
PUBLIC LAW 103-325—SEPT. 23, 1994
(b) CONFORMING AMENDMENT.—Section 202(b) of the Flood
Disaster Protection Act of 1973 (42 U.S.C. 4106(b)) is amended
by striking "Federal instrumentality described in such section shall
by regulation require the institutions" and inserting "Federal entity
for lending regulation shall by regulation require the regulated
lending institutions described in such section, and each Federal
agency lender shall issue regulations requiring the Federal agency
lender,".
SEC. 512. NATIONAL FLOOD INSURANCE ACT OF 1968.
(a) I N GENERAL.—Section 1370(a) of the National Flood Insurance Act of 1968 (42 U.S.C. 4121(a)) is amended—
(1) in paragraph (5), by striking "and" at the end;
(2) in paragraph (6), by striking the period at the end
and inserting a semicolon; and
(3) by inserting after paragraph (6) the following new
paragraphs:
"(7) the term 'repetitive loss structure' means a structure
covered by a contract for flood insurance under this title that
has incurred flood-related damage on 2 occasions during a
10-year period ending on the date of the event for which a
second claim is made, in which the cost of repair, on the
average, equaled or exceeded 25 percent of the value of the
structure at the time of each such flood event;
"(8) the term 'Federal agency lender' means a Federal
agency that makes direct loans secured by improved real estate
or a mobile home, to the extent such agency acts in such
capacity;
"(9) the term 'Federal entity for lending regulation' means
the Board of Governors of the Federal Reserve System, the
Federal Deposit Insurance Corporation, the Comptroller of the
Currency, the Office of Thrift Supervision, the National Credit
Union Administration, and the Farm Credit Administration,
and with respect to a particular regulated lending institution
means the entity primarily responsible for the supervision of
the institution;
"(10) the term 'improved real estate' means real estate
upon which a building is located;
"(11) the term 'lender' means a regulated lending institution or Federal agency lender;
"(12) the term 'natural and beneficial floodplain functions'
means—
"(A) the functions associated with the natural or relatively undisturbed floodplain that (i) moderate flooding,
retain flood waters, reduce erosion and sedimentation, and
mitigate the effect of waves and storm surge from storms,
and (ii) reduce flood related damage; and
"(B) ancillary beneficial functions, including maintenance of water quality and recharge of ground water, that
reduce flood related damage;
"(13) the term 'regulated lending institution' means any
bank, savings and loan association, credit union, farm credit
bank. Federal land bank association, production credit association, or similar institution subject to the supervision of a
Federal entity for lending regulation; and
"(14) the term 'servicer' means the person responsible for
receiving any scheduled periodic pa3mients from a borrower
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2257
pursuant to the terms of a loan, including amounts for taxes,
insurance premiums, and other charges with respect to the
property securing the loan, and making the payments of principal and interest and such other payments with respect to
the amounts received from the borrower as may be required
pursuant to the terms of the loan.".
(b) CONFORMING AMENDMENT.—Section 1322(d) of the National
Flood Insurance Act of 1968 (42 U.S.C. 4029(d)) is amended by
striking "federally supervised, approved, regulated or insured financial institution" and inserting "regulated lending institution or
Federal agency lender".
Subtitle B—Compliance and Increased
Participation
Loans.
Real property.
SEC. 521. NONWAIVER OF FLOOD PURCHASE REQUIREMENT FOR
RECIPIENTS OF FEDERAL DISASTER ASSISTANCE.
Section 311(b) of the Robert T. Stafford Disaster Relief and
Emergency Assistance Act (42 U.S.C. 5154(b)) is amended by adding
at the end the following new sentence: "The requirements of this
subsection may not be waived under section 301.".
SEC. 522. EXPANDED FLOOD INSURANCE PURCHASE REQUIREMENTS.
(a) IN GENERAL.—Section 102(b) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a(b)) is amended to read as follows:
"(b) REQUIREMENT FOR MORTGAGE LOANS.—
"(1) REGULATED LENDING INSTITUTIONS.—Each
Federal
entity for lending regulation (after consultation and coordination with the Financial Institutions Examination Council established under the Federal Financial Institutions Examination
Council Act of 1974) shall by regulation direct regulated lending
institutions not to make, increase, extend, or renew any loan
secured by improved real estate or a mobile home located
or to be located in an area that has been identified by the
Director as an area having special flood hazards and in which
flood insurance has been made available under the National
Flood Insurance Act of 1968, unless the building or mobile
home and any personal property securing such loan is covered
for the term of the loan by flood insurance in an amount
at least equal to the outstanding principal balance of the loan
or the maximum limit of coverage made available under the
Act with respect to the particular type of property, whichever
is less.
"(2) FEDERAL AGENCY LENDERS.—A Federal agency lender
may not make, increase, extend, or renew any loan secured
by improved real estate or a mobile home located or to be
located in an area that has been identified by the Director
as an area having special flood hazards and in which flood
insurance has been made available under the National Flood
Insurance Act of 1968, unless the building or mobile home
and any personal property securing such loan is covered for
the term of the loan by flood insurance in the amount provided
in paragraph (1). Each Federal agency lender shall issue any Regulations.
regulations necessary to cany out this paragraph. Such regulations shall be consistent with and substantially identical to
the regulations issued under paragraph (1).
108 STAT. 2258
PUBLIC LAW 103-325—SEPT. 23, 1994
"(3) GOVERNMENT-SPONSORED ENTERPRISES FOR HOUSING.—
The Federal National Mortgage Association and the Federal
Home Loan Mortgage Corporation shall implement procedures
reasonably designed to ensure that, for any loan that is—
"(A) secured by improved real estate or a mobile home
located in an area that has been identified, at the time
of the origination of the loan or at any time during the
term of the loan, by the Director as an area having special
flood hazards and in which flood insurance is available
under the National Flood Insurance Act of 1968, and
"(B) purchased by such entity,
the building or mobile home and any personal property securing
the loan is covered for the term of the loan by flood insurance
in the amount provided in paragraph (1).
"(4) APPLICABILITY.—
"(A) EXISTING
COVERAGE.—Except
as
provided
in
subparagraph (B), paragraph (1) shall apply on the date
of enactment of the Riegle Community Development and
Regulatory Improvement Act of 1994.
"(B) NEW COVERAGE.—Paragraphs (2) and (3) shall
apply only with respect to any loan made, increased,
extended, or renewed after the expiration of the 1-year
period beginning on the date of enactment of the Riegle
Community Development and Regulatory Improvement Act
of 1994. Paragraph (1) shall apply with respect to any
loan made, increased, extended, or renewed by any lender
supervised by the Farm Credit Administration only after
the expiration of the period under this subparagraph.
"(C) CONTINUED EFFECT OF REGULATIONS.—^Notwith-
standing any other provision of this subsection, the regulations to carry out paragraph (1), as in effect immediately
before the date of enactment of the Riegle Community
Development and Regulatory Improvement Act of 1994,
shall continue to apply until the regulations issued to carry
out paragraph (1) as amended by section 522(a) of such
Act take effect.",
(b) EXEMPTION FOR SMALL LOANS.—Section 102(c) of the Flood
Disaster Protection Act of 1973 (42 U.S.C. 4012a(c)) is amended—
(1) by striking "(c) Notwithstanding" and inserting the
following:
"(c) EXCEPTIONS TO PURCHASE REQUIREMENTS.—
"(1) STATE-OWNED PROPERTY.—Notwithstanding"; and
(2) by adding at the end the following new paragraph:
"(2) SMALL LOANS.—Notwithstanding any other provision
of this section, subsections (a) and (b) shall not apply to any
loan having—
"(A) an original outstanding principal balance of $5,000
or less; and
"(B) a repa3anent term of 1 year or less.".
SEC. 523. ESCROW OF FLOOD INSURANCE PAYMENTS.
Section 102 of the Flood Disaster Protection Act of 1973 (42
U.S.C. 4012a) is amended by adding at the end the following new
subsection:
"(d) ESCROW OF FLOOD INSURANCE PAYMENTS.—
"(1) REGULATED LENDING INSTITUTIONS.—Each
Federal
entity for lending regulation (after consultation and coordina-
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2259
tion with the Financial Institutions Examination Council) shall
by regulation require that, if a regulated lending institution
requires the escrowing of taxes, insurance premiums, fees, or
any other charges for a loan secured by residential improved
real estate or a mobile home, then all premiums and fees
for flood insurance under the National Flood Insurance Act
of 1968 for the real estate or mobile home shall be paid to
the regulated lending institution or other servicer for the loan
in a manner sufficient to make payments as due for the duration of the loan. Upon receipt of the premiums, the regulated
lending institution or servicer of the loan shall deposit the
premiums in an escrow account on behalf of the borrower.
Upon receipt of a notice from the Director or the provider
of the insurance that insurance premiums are due, the regulated lending institution or servicer shall pay from the escrow
account to the provider of the insurance the amount of insurance premiums owed.
"(2) FEDERAL AGENCY LENDERS.—Each Federal agency Regulations,
lender shall by regulation require and provide for escrow and
payment of any flood insurance premiums and fees relating
to residential improved real estate and mobile homes securing
loans made by the Federal agency lender under the circumstances and in the manner provided under paragraph (1).
Any regulations issued under this paragraph shall be consistent
with and substantially identical to the regulations issued under
paragraph (1).
"(3) APPLICABILITY OF RESPA.—Escrow accounts established
pursuant to this subsection shall be subject to the provisions
of section 10 of the Real Estate Settlement Procedures Act
of 1974.
"(4) DEFINITION.—For purposes of this subsection, the term
'residential improved real estate' means improved real estate
for which the improvement is a residential building.
"(5) APPLICABILITY.—^This subsection shall apply only with
respect to any loan made, increased, extended, or renewed
after the expiration of the 1-year period beginning on the date
of enactment of the Riegle Community Development and Regulatory Improvement Act of 1994.".
SEC. 524. PLACEMENT OF FLOOD INSURANCE BY LENDERS.
Section 102 of the Flood Disaster Protection Act of 1973 (42
U.S.C. 4012a), as amended by the preceding provisions of this
title, is further amended by adding at the end the following new
subsection:
"(e) PLACEMENT OF FLOOD INSURANCE BY LENDER.—
"(1) NOTIFICATION TO BORROWER OF LACK OF COVERAGE.—
If, at the time of origination or at any time during the term
of a loan secured by improved real estate or by a mobile
home located in an area that has been identified by the Director
(at the time of the origination of the loan or at any time
during the term of the loan) as an area having special flood
hazards and in which flood insurance is available under the
National Flood Insurance Act of 1968, the lender or servicer
for the loan determines that the building or mobile home and
any personal property securing the loan is not covered by
flood insurance or is covered by such insurance in an amount
less than the amount required for the property pursuant to
108 STAT. 2260
PUBLIC LAW 103-325—SEPT. 23, 1994
paragraph (1), (2), or (3) of subsection (b), the lender or servicer
shall notify the borrower under the loan that the borrower
should obtain, at the borrower's expense, an amount of flood
insurance for the building or mobile home and such personal
property that is not less than the amount under subsection
(b)(1), for the term of the loan.
"(2) PURCHASE OF COVERAGE ON BEHALF OF BORROWER.—
If the borrower fails to purchase such flood insurance within
45 days after notification under paragraph (1), the lender or
servicer for the loan shall purchase the insurance on behalf
of the borrower and may charge the borrower for the cost
of premiums and fees incurred by the lender or servicer for
the loan in purchasing the insurance.
"(3) REVIEW OF
PURCHASE.—
DETERMINATION REGARDING
REQUIRED-
"(A) IN GENERAL.—The borrower and lender for a loan
secured by improved real estate or a mobile home may
jointly request the Director to review a determination of
whether the building or mobile home is located in an area
having special flood hazards. Such request shall be supported by technical information relating to the improved
real estate or mobile home. Not later than 45 days after
the Director receives the request, the Director shall review
the determination and provide to the borrower and the
lender with a letter stating whether or not the building
or mobile home is in an area having special flood hazards.
The determination of the Director shall be final.
"(B) EFFECT OF DETERMINATION.—Any person to whom
a borrower provides a letter issued by the Director pursuant
to subparagraph (A), stating that the building or mobile
home securing the loan of the borrower is not in an area
having special flood hazards, shall have no obligation under
this title to require the purchase of flood insurance for
such building or mobile home during the period determined
by the Director, which shall be specified in the letter and
shall begin on the date on which such letter is provided.
"(C)
EFFECT OF FAILURE TO RESPOND.—If a request
under subparagraph (A) is made in connection with the
origination of a loan and the Director fails to provide a
letter under subparagraph (A) before the later of (i) the
expiration of the 45-day period under such subparagraph,
or (ii) the closing of the loan, no person shall have an
obligation under this title to require the purchase of flood
insurance for the building or mobile home securing the
loan until such letter is provided.
"(4) APPLICABILITY.—This subsection shall apply to all loans
outstanding on or after the date of enactment of the Riegle
Community Development and Regulatory Improvement Act of
1994.".
SEC. 525. PENALTIES FOR FAILURE TO REQUIRE FLOOD INSURANCE
OR NOTIFY.
Section 102 of the Flood Disaster Protection Act of 1973 (42
U.S.C. 4012a), as amended by the preceding provisions of this
title, is further amended by adding at the end the following new
subsections:
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2261
"(f) CIVIL MONETARY PENALTIES FOR FAILURE T O REQUIRE
FLOOD INSURANCE OR NOTIFY.—
"(1) CIVIL MONETARY PENALTIES AGAINST REGULATED LEND-
ERS.—^Any regulated lending institution that is found to have
a pattern or practice of committing violations under paragraph
(2) shall be assessed a civil penalty by the appropriate Federal
entity for lending regulation in the amount provided under
paragraph (5).
"(2) LENDER VIOLATIONS.—The violations referred to in
paragraph (1) shall include—
"(A) making, increasing, extending, or renewing loans
in violation of—
"(i) the regulations issued pursuant to subsection
(b) of this section;
"(ii) the escrow requirements under subsection (d)
of this section; or
"(iii) the notice requirements under section 1364
of the National Flood Insurance Act of 1968; or
"(B) failure to provide notice or purchase flood insurance coverage in violation of subsection (e) of this section.
"(3) CIVIL MONETARY PENALTIES AGAINST GSE'S.—
"(A) IN GENERAL.—If the Federal National Mortgage
Association or the Federal Home Loan Mortgage Corporation is found by the Director of the Office of Federal Housing Enterprise Oversight of the Department of Housing
and Urban Development to have a pattern or practice
of purchasing loans in violation of the procedures established pursuant to subsection (b)(3), the Director of such
Office shall assess a civil penalty against such enterprise
in the amount provided under paragraph (5) of this
subsection.
"(B) DEFINITION.—For purposes of this subsection, the
term 'enterprise' means the Federal National Mortgage
Association or the Federal Home Loan Mortgage
Corporation.
"(4) NOTICE AND HEARING.—^A penalty under this subsection
may be issued only after notice and an opportunity for a hearing
on the record.
"(5) AMOUNT.—^A civil monetary penalty under this subsection may not exceed $350 for each violation under paragraph
(2) or paragraph (3). The total amount of penalties assessed
under this suijsection against any single regulated lending
institution or enterprise during any calendar year may not
exceed $100,000.
"(6) LENDER COMPLIANCE.—Notwithstanding any State or
local law, for purposes of this subsection, any regulated lending
institution that purchases flood insurance or renews a contract
for flood insurance on behalf of or as an agent of a borrower
of a loan for which flood insurance is required shall be considered to have complied with the regulations issued under
subsection (b).
"(7) EFFECT OF TRANSFER ON LIABILITY.—^Any sale or other
transfer of a loan by a regulated lending institution that has
committed a violation under paragraph (1), that occurs subsequent to the violation, shall not affect the liability of the
transferring lender with respect to any penalty under this
subsection. A lender shall not be liable for any violations relat-
108 STAT. 2262
PUBLIC LAW 103-325—SEPT. 23, 1994
ing to a loan committed by another regulated lending institution
that previously held the loan.
"(8) DEPOSIT OF PENALTIES.—^Any penalties collected under
this subsection shall be paid into the National Flood Mitigation
Fund under section 1367 of the National Flood Insurance Act
of 1968.
"(9) ADDITIONAL PENALTIES.—Any penalty under this subsection shall be in addition to any civil remedy or criminal
penalty otherwise available.
"(10) STATUTE OF LIMITATIONS.^NO penalty may be
imposed under this subsection after the expiration of the 4year period beginning on the date of the occurrence of the
violation for which the penalty is authorized under this
subsection.
"(g) OTHER ACTIONS T O REMEDY PATTERN OF NONCOMPLI-ANCE.—
"(1) AUTHORITY OF FEDERAL ENTITIES FOR LENDING REGULA-
TION.—^A Federal entity for lending regulation may require
a regulated lending institution to take such remedial actions
as are necessary to ensure that the regulated lending institution
complies with the requirements of the national flood insurance
program if the Federal agency for lending regulation makes
a determination under paragraph (2) regarding the regulated
lending institution.
"(2)
DETERMINATION
OF VIOLATIONS.—A
determination
under this paragraph shall be a finding that—
"(A) the regulated lending institution has engaged in
a pattern and practice of noncompliance in violation of
the regulations issued pursuant to subsection (b), (d), or
(e) or the notice requirements under section 1364 of the
National Flood Insurance Act of 1968; and
"(B) the regulated lending institution has not demonstrated measurable improvement in compliance despite
the assessment of civil monetary penalties under subsection
(f).".
SEC. 526. FEES FOR DETERMINING APPUCABILITY OF FLOOD INSURANCE P U R C H A S E REQUIREMENTS.
Section 102 of the Flood Disaster Protection Act of 1973 (42
U.S.C. 4012a) as amended by the preceding provisions of this title,
is further amended by adding at the end the following new subsection:
"(h) F E E FOR DETERMINING LOCATION.—^Notwithstanding any
other Federal or State law, any person who makes a loan secured
by improved real estate or a mobile home or any servicer for
such a loan may charge a reasonable fee for the costs of determining
whether the building or mobile home securing the loan is located
in an area having special flood hazards, but only in accordance
with the following requirements:
"(1) BORROWER FEE.—^The borrower under such a loan may
be charged the fee, but only if the determination—
"(A) is made pursuant to the making, increasing,
extending, or renewing of the loan that is initiated by
the borrower;
"(B) is made pursuant to a revision or updating under
section 1360(f) of the floodplain areas and flood-risk zones
or publication of a notice or compendia under subsection
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2263
(h) or (i) of section 1360 that affects the area in which
the improved real estate or mobile home securing the loan
is located or that, in the determination of the Director,
may reasonably be considered to require a determination
under this subsection; or
"(C) results in the purchase of flood insurance coverage
pursuant to the requirement under subsection (e)(2).
"(2)
PURCHASER OR TRANSFEREE FEE.—The purchaser or
transferee of such a loan may be charged the fee in the case
ofsale or transfer of the loan."
SEC. 527. NOTICE REQUIREMENTS.
Section 1364 of the National Flood Insurance Act of 1968 (42
U.S.C. 4104a) is amended to read as follows:
NOTICE REQUIREMENTS
"SEC. 1364. (a) NOTIFICATION OF SPECIAL FLOOD HAZARDS.—
"(1) REGULATED LENDING INSTITUTIONS.—Each Federal
entity for lending regulation (after consultation and coordination with the Financial Institutions Examination Council) shall
by regulation require regulated lending institutions, as a condition of making, increasing, extending, or renewing any loan
secured by improved real estate or a mobile home that the
regulated lending institution determines is located or is to
be located in an area that has been identified by the Director
under this title or the Flood Disaster Protection Act of 1973
as an area having special flood hazards, to notify the purchaser
or lessee (or obtain satisfactory assurances that the seller or
lessor has notified the purchaser or lessee) and the servicer
of the loan of such special flood hazards, in writing, a reasonable
period in advance of the signing of the purchase agreement,
lease, or other documents involved in the transaction. The Records.
regulations shall also require that the regulated lending institution retain a record of the receipt of the notices by the purchaser
or lessee and the servicer.
"(2) FEDERAL AGENCY LENDERS.—Each Federal agency Regulations.
lender shall by regulation require notification in the manner
provided under paragraph (1) with respect to any loan that
is made by the Federal agency lender and secured by improved
real estate or a mobile home located or to be located in an
area that has been identified by the Director under this title
or the Flood Disaster Protection Act of 1973 as an area having
special flood hazards. Any regulations issued under this paragraph shall be consistent with and substantially identical to
the regulations issued under paragraph (1).
"(3) CONTENTS OF NOTICE.—^Written notification required
under this subsection shall include—
"(A) a warning, in a form to be established by the
Director, stating that the building on the improved real
estate securing the loan is located, or the mobile home
securing the loan is or is to be located, in an area having
special flood hazards;
"(B) a description of the flood insurance purchase
requirements under section 102(b) of the Flood Disaster
Protection Act of 1973;
108 STAT. 2264
PUBLIC LAW 103-325—SEPT. 23, 1994
"(C) a statement that flood insurance coverage may
be purchased under the national flood insurance program
and is also available from private insurers; and
"(D) any other information that the Director considers
necessary to carry out the purposes of the national flood
insurance program.
"(b) NOTIFICATION OF CHANGE OF SERVICER.—
Regulations.
Regulations.
"(1) LENDING INSTITUTIONS.—Each Federal entity for lending regulation (after consultation and coordination with the
Financial Institutions Examination Council) shall by regulation
require regulated lending institutions, in connection with the
making, increasing, extending, renewing, selling, or transferring any loan described in subsection (a)(1), to notify the Director (or the designee of the Director) in writing during the
term of the loan of the servicer of the loan. Such institutions
shall also notify the Director (or such designee) of any change
in the servicer of the loan, not later than 60 days after the
effective date of such change. The regulations under this subsection shall provide that upon any change in the servicing
of a loan, the duty to provide notification under this subsection
shall transfer to the transferee servicer of the loan.
«(2) FEDERAL AGENCY LENDERS.—Each Federal agency
lender shall by regulation provide for notification in the manner
provided under paragraph (1) with respect to any loan described
in subsection (a)(1) that is made by the Federal agency lender.
Any regulations issued under this paragraph shall be consistent
with and substantially identical to the regulations issued under
paragraph (1) of this subsection.
"(c) NOTIFICATION OF EXPIRATION OF INSURANCE.—The Director
(or the designee of the Director) shall, not less than 45 days before
the expiration of any contract for flood insurance under this title,
issue notice of such expiration by first class mail to the owner
of the property covered by the contract, the servicer of any loan
secured by the property covered by the contract, and (if known
to the Director) the owner of the loan.".
SEC. 528. STANDARD HAZARD DETERMINATION FORMS.
Chapter III of the National Flood Insurance Act of 1968 (42
U.S.C. 4101 et seq.) is amended by adding at the end the following
new section:
"STANDARD HAZARD DETERMINATION FORMS
42 use 4104b.
Regulations.
"SEC. 1365. (a) DEVELOPMENT.—The Director, in consultation
with representatives of the mortgage and lending industry, the
Federal entities for lending regulation, the Federal agency lenders,
and any other appropriate individuals, shall develop a standard
form for determining, in the case of a loan secured by improved
real estate or a mobile home, whether the building or mobile home
is located in an area identified by the Director as an area having
special flood hazards and in which flood insurance under this title
is available. The form shall be established by regulations issued
not later than 270 days after the date of enactment of the Riegle
Community Development and Regulatory Improvement Act of 1994.
"(b) DESIGN AND CONTENTS.—
*'
"(1) PURPOSE.—^The form under subsection (a) shall be
designed to facilitate compliance with the flood insurance purchase requirements of this title.
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2265
"(2) CONTENTS.—^The form shall require identification of
the type of flood-risk zone in which the building or mobile
home is located, the complete map and panel numbers for
the improved real estate or property on which the mobile home
is located, the community identification number and community
participation status (for purposes of the national flood insurance
program) of the community in which the improved real estate
or such property is located, and the date of the map used
for the determination, with respect to flood hazard information
on file with the Director. If the building or mobile home is
not located in an area having special flood hazards the form
shall require a statement to such effect and shall indicate
the complete map and panel numbers of the improved real
estate or property on which the mobile home is located. If
the complete map and panel numbers are not available because
the building or mobile home is not located in a community
that is participating in the national flood insurance program
or because no map exists for the relevant area, the form shall
require a statement to such effect. The form shall provide
for inclusion or attachment of any relevant documents indicating revisions or amendments to maps.
"(c) REQUIRED USE.—^The Federal entities for lending regulation Regulations,
shall by regulation require the use of the form under this section
by regulated lending institutions. Each Federal agency lender shall
by regulation provide for the use of the form with respect to any
loan made by such Federal agency lender. The Federal National
Mortgage Association and the Federal Home Loan Mortgage Corporation and the Government National Mortgage Association shall
require the use of the form with respect to any loan purchased
by such entities. A lender or other person may comply with the
requirement under this subsection by using the form in a printed,
computerized, or electronic manner.
"(d) GUARANTEES REGARDING INFORMATION.—In providing
information regarding special flood hazards on the form developed
under this section, any lender (or other person required to use
the form) who makes, increases, extends, or renews a loan secured
by improved real estate or a mobile home may provide for the
acquisition or determination of such information to be made by
a person other than such lender (or other person), only to the
extent such person guarantees the accuracy of the information.
"(e)
RELIANCE ON PREVIOUS DETERMINATION.—Any
person
increasing, extending, renewing, or purchasing a loan secured by
improved real estate or a mobile home may rely on a previous
determination of whether the building or mobile home is located
in an area having special flood hazards (and shall not be liable
for any error in such previous determination), if the previous determination was made not more than 7 years before the date of
the transaction and the basis for the previous determination has
been set forth on a form under this section, unless—
"(1) map revisions or updates pursuant to section 1360(f)
after such previous determination have resulted in the building
or mobile home being located in an area having special flood
hazards; or
"(2) the person contacts the Director to determine when
the most recent map revisions or updates affecting such property occurred and such revisions and updates have occurred
after such previous determination.
79-194 O—95—17 : QL3Part3
108 STAT. 2266
Regulations.
PUBLIC LAW 103-325—SEPT. 23, 1994
"(0 EFFECTIVE DATE.—^The regulations under this section
requiring use of the form established pursuant to this section shall
be issued together with the regulations required under subsection
(a) and shall take effect upon the expiration of the 180-day period
beginning on such issuance.".
SEC. 529. EXAMINATIONS REGARDING COMPLIANCE.
(a) AMENDMENT TO FEDERAL DEPOSIT INSURANCE ACT.—Section
10 of the Federal Deposit Insurance Act (12 U.S.C. 1820) is amended
by adding at the end the following new subsection:
"(i) FLOOD INSURANCE COMPLIANCE BY INSURED DEPOSITORY
INSTITUTIONS.—
"(1) EXAMINATIONS.—The appropriate Federal banking
agency shall, during each scheduled on-site examination
required by this section, determine whether the insured depository institution is complying with the requirements of the
national flood insurance program.
"(2) REPORT.—
"(A) REQUIREMENT.—^Not later than 1 year after the
date of enactment of the Riegle Community Development
and Regulatory Improvement Act of 1994 and biennially
thereafter for the next 4 years, each appropriate Federal
banking agency shall submit a report to the Congress on
compliance by insured depository institutions with the
requirements of the national flood insurance program.
"(B) CONTENTS.—Each report submitted under this
paragraph shall include a description of the methods used
to determine compliance, the number of institutions examined during the reporting year, a listing and total number
of institutions found not to be in compliance, actions taken
to correct incidents of noncompliance, and an analysis of
compliance, including a discussion of any trends, patterns,
and problems, and recommendations regarding reasonable
actions to improve the efficiency of the examinations processes.".
(b) AMENDMENT TO FEDERAL CREDIT UNION ACT.—Section 204
of the Federal Credit Union Act (12 U.S.C. 1784) is amended
by adding at the end the following new subsection:
"(e) FLOOD
UNIONS.—
INSURANCE
COMPLIANCE
BY INSURED
CREDIT
"(1) EXAMINATION.—The Board shall, during each examination conducted under this section, determine whether the
insured credit union is complying with the requirements of
the national flood insurance program.
"(2) REPORT.—
J
"(A) REQUIREMENT.—Not later than 1 year after the
date of enactment of the Riegle Community Development
and Regulatory Improvement Act of 1994 and biennially
thereafter for the next 4 years, the Board shall submit
a report to the Congress on compliance by insured credit
unions with the requirements of the national flood insurance program.
"(B) CONTENTS.—^The report shall include a description
of the methods used to determine compliance, the number
of insured credit unions examined during the reporting
year, a listing and total number of insured credit unions
found not to be in compliance, actions taken to correct
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2267
incidents of noncompliance, and an analysis of compliance,
including a discussion of any trends, patterns, and problems, and recommendations regarding reasonable actions
to improve the efficiency of the examinations processes.".
(c) AMENDMENT TO FEDERAL HOUSING ENTERPRISES FINANCIAL
SAFETY AND SOUNDNESS ACT OF 1992.—Section 1319B(a) of the
Federal Housing Enterprises Financial Safety and Soundness Act
of 1992 (12 U.S.C. 4521(a)) is amended—
(1) in paragraph (2), by striking "and" at the end;
(2) in paragraph (3), by striking the period at the end
and inserting "; and"; and
(3) by adding at the end the following new paragraph:
"(4) a description of—
"(A) whether the procedures established by each enterprise pursuant to section 102(b)(3) of the Flood Disaster
Protection Act of 1973 are adequate and being complied
with, and
"(B) the results and conclusions of any examination,
'"•'- as determined necessary by the Director, to determine the
compliance of the enterprises with the requirements of
section 102(b)(3) of such Act, which shall include a description of the methods used to determine compliance and
the types sind sources of deficiencies (if any), and identify
any corrective measures that have been taken to remedy
any such deficiencies,
except that the information described in this paragraph shall
be included only in each of the first, third, and fifth annual
reports under this subsection required to be submitted after
the expiration of the 1-year period beginning on the date of
enactment of the Riegle Community Development and Regulatory Improvement Act of 1994.".
SEC. 530. FINANCIAL INSTITUTIONS EXAMINATION COUNCIL.
Section 1006 of the Federal Financial Institutions Examination
Council Act of 1978 (12 U.S.C. 3305) is amended by adding at
the end the following new subsection:
"(g) FLOOD INSURANCE.—The Council shall consult with and
assist the Federal entities for lending regulation, as such term
is defined in section 1370(a) of the National Flood Insurance Act
of 1968, in developing and coordinating uniform standards and
requirements for use by regulated lending institutions under the
national flood insurance program.".
SEC. 531. CLERICAL AMENDMENT.
Section 102 of the Flood Disaster Protection Act of 1973 (42
U.S.C. 4012a) is amended by striking the section heading and
inserting the following new section heading:
108 STAT. 2268
PUBLIC LAW 103-325—SEPT. 23, 1994
"FLOOD INSURANCE PURCHASE AND COMPLIANCE REQUIREMENTS AND
ESCROW ACCOUNTS".
Subtitle C—Ratings and Incentives for
Community Floodplain Management Programs
SEC. 541. COMMUNITY RATING SYSTEM AND INCENTIVES FOR COMMUNITY FLOODPLAIN MANAGEMENT.
Section 1315 of the National Flood Insurance Act of 1968 (42
U.S.C. 4022) is amended—
(1) by striking "After December" and inserting the
following:
"(a) REQUIREMENT FOR PARTICIPATION IN FLOOD INSURANCE
PROGRAM.—
"(1) IN GENERAL.—After December"; and
(2) by adding at the end the following new subsection:
"(b) COMMUNITY RATING SYSTEM AND INCENTIVES FOR COMMUNITY FLOODPLAIN MANAGEMENT.—
"(1) AUTHORITY AND GOALS.—The Director shall carry out
a community rating system program, under which communities
participate voluntarily—
"(A) to provide incentives for measures that reduce
the risk of flood or erosion damage that exceed the criteria
set forth in section 1361 and evaluate such measures;
"(B) to encourage adoption of more effective measures
that protect natural and beneficial floodplain functions;
"(C) to encourage floodplain and erosion management;
and
"(D) to promote the reduction of Federal flood insurance
losses.
"(2) INCENTIVES.—^The program shall provide incentives in
the form of credits on premium rates for flood insurance coverage in communities that the Director determines have
adopted and enforced measures that reduce the risk of flood
and erosion damage that exceed the criteria set forth in section
1361. In providing incentives under this paragraph, the Director
may provide for credits to flood insurance premium rates in
communities that the Director determines have implemented
measures that protect natural and beneficial floodplain
functions.
"(3) CREDITS.—^The credits on premium rates for flood
insurance coverage shall be based on the estimated reduction
in flood and erosion damage risks resulting from the measures
adopted by the community under this program. If a community
has received mitigation assistance under section 1366, the credits shall be phased in a manner, determined by the Director,
to recover the amount of such assistance provided for the
community.
"(4) REPORTS.—Not later than 2 years after the date of
enactment of the Riegle Community Development and Regulatory Improvement Act of 1994 and not less than every 2
years thereafter, the Director shall submit a report to the
Congress regarding the program under this subsection. Each
report shall include an analysis of the cost-effectiveness of
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2269
the program, any other accompHshments or shortcomings of
the program, and any recommendations of the Director for
legislation regarding the program.".
SEC. 542. FUNDING.
Section 1310(a) of the National Flood Insurance Act of 1968
(42 U.S.C. 4017(a)) is amended—
(1) in paragraph (4), by striking "and" at the end;
(2) in paragraph (5), by striking the period at the end
and inserting a semicolon; and
(3) by adding after paragraph (5) the following new
paragraph:
"(6) for carrying out the program under section 1315(b);".
Subtitle D—Mitigation of Flood Risks
SEC. 551. REPEAL OF FLOODED PROPERTY PURCHASE AND LOAN
PROGRAM.
(a) REPEAL.—Section 1362 of the National Flood Insurance
Act of 1968 (42 U.S.C. 4103) is hereby repealed.
(b) TRANSITION PHASE.—^Notwithstanding subsection (a), during
the 1-year period beginning on the date of enactment of this Act,
the Director of the Federal Emergency Management Agency may
enter into loan and purchase commitments as provided under section 1362 of the National Flood Insurance Act of 1968 (as in effect
immediately before the enactment of this Act).
(c) SAVINGS PROVISION.—Notwithstanding subsection (a), the 42USC4103
Director shall take any action necessary to comply with any pur- ^°^chase or loan commitment entered into before the expiration of
the period referred to in subsection (b) pursuant to authority under
section 1362 of the National Flood Insurance Act of 1968 or subsection (b).
SEC. 552. TERMINATION OF EROSION-THREATENED STRUCTURES
PROGRAM.
(a) IN GENERAL.—Section 1306 of the National Flood Insurance
Act of 1968 (42 U.S.C. 4013) is amended by striking subsection
(0.
(b) TRANSITION PHASE.—^Notwithstanding subsection (a), during 42 use 4013
the 1-year period beginning on the date of enactment of this Act, "°^the Director of the Federal Emergency Management Agency may
pay amounts under flood insurance contracts for demolition or
relocation of structures as provided in section 1306(c) of the
National Flood Insurance Act of 1968 (as in effect immediately
before the enactment of this Act).
(c) SAVINGS PROVISION.—Notwithstanding subsection (a), the 42USC4013
Director shall take any action necessary to msike payments under ^°^flood insurance contracts pursuant to any commitments made before
the expiration of the period referred to in subsection (b) pursuant
to the authority under section 1306(c) of the National Flood Insurance Act of 1968 or subsection (b).
(d)
REPEAL OF FINDINGS PROVISION.—Section
1302
of
the
National Flood Insurance Act of 1968 (42 U.S.C. 4001) is amended
by striking subsection (g).
108 STAT. 2270
PUBLIC LAW 103-325—SEPT. 23, 1994
SEC. 553. MITIGATION ASSISTANCE PROGRAM.
(a) IN GENERAL,—Chapter III of the National Flood Insurance
Act of 1968 (42 U.S.C. 4101 et seq.), as amended by the preceding
provisions of this title, is further amended by adding at the end
the following new section:
"MITIGATION ASSISTANCE
42 use 4104c.
"SEC. 1366. (a) AUTHORITY.—The Director shall carry out a
program to provide financial assistance to States and communities,
using amounts made available from the National Flood Mitigation
Fund under section 1367, for planning and carrying out activities
designed to reduce the risk of flood damage to structures covered
under contracts for flood insurance under this title. Such financial
assistance shall be made available to States and communities in
the form of grants under subsection (b) for planning assistance
and in the form of grants under this section for carrying out
mitigation activities.
"(b) PLANNING ASSISTANCE GRANTS.—
"(1) IN GENERAL.—^The Director may make grants under
this subsection to States and communities to assist in developing mitigation plans under subsection (c).
"(2) FUNDING.—Of any amounts made available from the
National Flood Mitigation Fund for use under this section
in any fiscal year, the Director may use not more than
$1,500,000 to provide planning assistance grants under this
subsection.
"(3) LIMITATIONS.—
"(A) TIMING.—^A grant under this subsection may be
awarded to a State or community not more than once
every 5 years and each grant may cover a period of 1
to 3 years.
"(B) SINGLE GRANTEE AMOUNT.—A grant for planning
assistance may not exceed—
"(i) $150,000, to any State; or
"(ii) $50,000, to any community.
"(C) CUMULATIVE STATE GRANT AMOUNT.—The sum
of
the amounts of grants made under this subsection in any
fiscal year to any one State and all communities located
in such State may not exceed $300,000.
"(c) ELIGIBILITY
FOR MITIGATION ASSISTANCE.—To
be eligible
to receive financial assistance under this section for mitigation
activities, a State or community shall develop, and have approved
by the Director, a flood risk mitigation plan (in this section referred
to as a 'mitigation plan'), that describes the mitigation activities
to be carried out with assistance provided under this section, is
consistent with the criteria established by the Director under section
1361, and provides protection against flood losses to structures
for which contracts for flood insurance are available under this
title. The mitigation plan shall be consistent with a comprehensive
strategy for mitigation activities for the area affected by the mitigation plan, that has been adopted by the State or community following a public hearing.
"(d) NOTIFICATION OF APPROVAL AND GRANT AWARD.—
"(1) IN GENERAL.—The Director shall notify a State or
community submitting a mitigation plan of the approval or
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2271
disapproval of the plan not later than 120 days after submission
of the plan.
"(2) NOTIFICATION OF DISAPPROVAL.—If the Director does
not approve a mitigation plan submitted under this subsection,
the Director shall notify, in writing, the State or community
submitting the plan of the reasons for such disapproval.
"(e) ELIGIBLE MITIGATION ACTIVITIES.—
"(1) U S E OF AMOUNTS.—^Amounts provided under this section (other than under subsection (b)) may be used only for
mitigation activities specified in a mitigation plan approved
by the Director under subsection (d). The Director shall provide
assistance under this section to the extent amounts are available in the National Flood Mitigation Fund pursuant to
appropriation Acts, subject only to the absence of approvable
mitigation plans.
"(2) DETERMINATION OF ELIGIBLE PLANS.—The Director may
approve only mitigation plans that specify mitigation activities
that the Director determines are technically feasible and costeffective and only such plans that propose activities that are
cost-beneficial to the National Flood Mitigation Fund.
"(3) STANDARD FOR APPROVAL.—The Director shall approve
mitigation plans meeting the requirements for approval under
paragraph (1) that will be most cost-beneficial to the National
Flood Mitigation Fund.
"(4) PRIORITY.—^The Director shall make every effort to
provide mitigation assistance under this section for mitigation
plans proposing activities for repetitive loss structures and
structures that have incurred substantial damage.
"(5) ELIGIBLE ACTIVITIES.—The Director shall determine
whether mitigation activities described in a mitigation plan
submitted under subsection (d) comply with the requirements
under paragraph (1). Such activities may include—
"(A) demolition or relocation of any structure located
on land that is along the shore of a lake or other body
of water and is certified by an appropriate State or local
land use authority to be subject to imminent collapse or
subsidence as a result of erosion or flooding;
"(B) elevation, relocation, demolition, or floodproofing
of structures (including public structures) located in areas
having special flood hazards or other areas of flood risk;
"(C) acquisition by States and communities of properties (including public properties) located in areas having
special flood hazards or other areas of flood risk and properties substantially damaged by flood, for public use, as
the Director determines is consistent with sound land
management and use in such area;
"(D) minor physical mitigation efforts that do not duplicate the flood prevention activities of other Federal agencies
and that lessen the frequency or severity of flooding and
decrease predicted flood damages, which shall not include
major flood control projects such as dikes, levees, seawalls,
groins, and jetties unless the Director specifically determines in approving a mitigation plan that such activities
are the most cost-effective mitigation activities for the
National Flood Mitigation Fund;
"(E) beach nourishment activities;
108 STAT. 2272
PUBLIC LAW 103-325—SEPT. 23, 1994
"(F) the provision of technical assistance by States
to communities and individuals to conduct eligible mitigation activities;
"(G) other activities that the Director considers appropriate and specifies in regulation; and
"(H) other mitigation activities not described in subparagraphs (A) through (F) or the regulations issued under
subparagraph (G), that are described in the mitigation
plan of a State or community.
"(f) LIMITATIONS ON AMOUNT OF ASSISTANCE.—
"(1) AMOUNT.—^The sum of the amounts of mitigation assistance provided under this section during any 5-year period may
not exceed—
"(A) $10,000,000, to any State; or
"(B) $3,300,000, to any community.
"(2) GEOGRAPHIC.—^The sum of the amounts of mitigation
assistance provided under this section during any 5-year period
to any one State and all communities located in such State
may not exceed $20,000,000.
"(3) WAIVER.—^The Director may waive the dollar amount
limitations under paragraphs (1) and (2) for any State or
community for £my 5-year period during which a major disaster
or emergency declared by the President (pursuant to the Robert
T. Stafford Disaster Relief and Emergency Assistance Act) as
a result of flood conditions is in effect with respect to areas
in the State or community.
"(g) MATCHING REQUIREMENT.—
"(1) IN GENERAL.—^The Director may not provide mitigation
assistance under this section to a State or community in an
amount exceeding 3 times the amount that the State or community certifies, as the Director shall require, that the State
or community will contribute from non-Federal funds to develop
a mitigation plan under subsection (c) and to carry out mitigation activities under the approved mitigation plan. In no case
shall any in-kind contribution by any State or community
exceed one-half of the amount of non-Federal funds contributed
by the State or community.
"(2) NON-FEDERAL FUNDS.—For purposes of this subsection,
the term 'non-Federal funds' includes State or local agency
funds, in-kind contributions, any salary paid to staff to carry
out the mitigation activities of the recipient, the value of the
time and services contributed by volunteers to carry out such
activities (at a rate determined by the Director), and the value
of any donated material or building and the value of any
lease on a building.
"(h) OVERSIGHT OF MITIGATION PLANS.—The Director shall conduct oversight of recipients of mitigation assistance under this
section to ensure that the assistance is used in compliance with
the approved mitigation plans of the recipients and that matching
funds certified under subsection (g) are used in accordance with
such certification,
"(i) RECAPTURE.—
"(1) NONCOMPLIANCE WITH PLAN.—If
the Director determines that a State or community that has received mitigation
assistance under this section has not carried out the mitigation
activities as set forth in the mitigation plan, the Director shall
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2273
recapture any unexpended amounts and deposit the amounts
in the National Flood Mitigation Fund under section 1367.
"(2) FAILURE TO PROVIDE MATCHING FUNDS.—If the Director
determines that a State or community that has received mitigation assistance under this section has not provided matching
funds in the amount certified under subsection (g), the Director
shall recapture any unexpended amounts of mitigation assistance exceeding 3 times the amount of such matching funds
actually provided and deposit the amounts in the National
Flood Mitigation Fund under section 1367.
"(j) REPORTS.—Not later than 1 year after the date of enactment
of the Riegle Community Development and Regulatory Improvement
Act of 1994 and biennially thereafter, the Director shall submit
a report to the Congress describing the status of mitigation activities
carried out with assistance provided under this section.
"(k) DEFINITION OF COMMUNITY.—For purposes of this section,
the term 'community' means—
"(1) a political subdivision that (A) has zoning and building
code jurisdiction over a particular area having special flood
hazards, and (B) is participating in the national flood insurance
program; or
"(2) a political subdivision of a State, or other authority,
that is designated to develop and administer a mitigation plan
by political subdivisions, all of which meet the requirements
of paragraph (1).".
(b) REGULATIONS.—Not later than 6 months after the date 42USC4i04c
of enactment of this Act, the Director of the Federal Emergency "°**Management Agency shall issue regulations to carry out section
1366 of the National Flood Insurance Act of 1968, as added by
subsection (a).
SEC. 554. ESTABLISHMENT OF NATIONAL FLOOD MITIGATION FUND.
(a) IN GENERAL.—Chapter III of the National Flood Insurance
Act of 1968 (42 U.S.C. 4101 et seq.), as amended by the preceding
provisions of this title, is further amended by adding at the end
the following new section:
"NATIONAL FLOOD MITIGATION FUND
"SEC. 1367. (a) ESTABLISHMENT AND AVAILABILITY.—The Director shall establish in the Treasury of the United States a fund
to be known as the National Flood Mitigation Fund, which shall
be credited with amounts described in subsection (b) and shall
be available, to the extent provided in appropriation Acts, for providing assistance under section 1366.
"(b) CREDITS.—The National Flood Mitigation Fund shall be
credited with—
"(1) amounts from the National Flood Insurance Fund,
in amounts not exceeding—
"(A) $10,000,000 in the fiscal year ending September
30, 1994;
"(B) $15,000,000 in the fiscal year ending September 30, 1995;
"(C) $20,000,000 in the fiscal year ending September
30, 1996; and
"(D) $20,000,000 in each fiscal year thereafter;
"(2) any penalties collected under section 102(f) of the Flood
Disaster Protection Act of 1973; and
12 use 4i04d
"°^-
108 STAT. 2274
PUBLIC LAW 103-325—SEPT. 23, 1994
"(3) any amounts recaptured under section 1366(i).
"(c) INVESTMENT.—If the Director determines that the amounts
in the National Flood Mitigation Fund are in excess of amounts
needed under subsection (a), the Director may invest any excess
amounts the Director determines advisable in interest-bearing
obligations issued or guaranteed by the United States.
"(d) REPORT.—^The Director shall submit a report to the Congress not later than the expiration of the 1-year period beginning
on the date of enactment of this Act and not less than once during
each successive 2-year period thereafter. The report shall describe
the status of the Fund and any activities carried out with amounts
from the Fund.".
(b)
NATIONAL
FLOOD
INSURANCE
FUND
AS
SEPARATE
ACCOUNT.—Section 1310(a) of the Nationed Flood Insurance Act
of 1968 (42 U.S.C. 4017(a)) is amended—
(1) in the matter preceding paragraph (1)—
(A) by striking "is authorized to" and inserting "shall";
and
(B) by inserting after "which shall be" the following:
"an account separate from any other accounts or funds
available to the Director and shall be"; and
(2) by adding after paragraph (6) (as added by the preceding
provisions of this title) the following new paragraph:
"(7) for transfers to the National Flood Mitigation Fund,
but only to the extent provided in section 1367(b)(1); and".
SEC. 555. ADDITIONAL COVERAGE FOR COMPLIANCE WITH LAND USE
AND CONTROL MEASURES.
(a) IN GENERAL.—Section 1304 of the National Flood Insurance
Act of 1968 (42 U.S.C. 4011) is amended—
(1) by redesignating subsection (b) as subsection (c); and
(2) by inserting after subsection (a) the following new subsection:
"(b) ADDITIONAL COVERAGE FOR COMPLIANCE WITH LAND U S E
42 use 4011
^°^-
AND CONTROL MEASURES.—^The national flood insurance program
established pursuant to subsection (a) shall enable the purchase
of insurance to cover the cost of compliance with land use and
control measures established under section 1361 for—
"(1) properties that are repetitive loss structures;
"(2) properties that have flood damage in which the cost
of repairs equals or exceeds 50 percent of the value of the
structure at the time of the flood event; and
"(3) properties that have sustained flood damage on multiple occasions, if the Director determines that it is cost-effective
and in the best interests of the National Flood Insurance Fund
to require compliance with the land use and control measures.
The Director shall impose a surcharge on each insured of not
more than $75 per policy to provide cost of compliance coverage
in accordance with the provisions of this subsection.".
(b) APPLICABILITY.—^The provisions of subsection (a) shall apply
only to properties that sustain flood-related damage after the date
of enactment of this Act.
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2275
Subtitle E—Task Forces
SEC. 561. FLOOD INSURANCE INTERAGENCY TASK FORCE.
(a) ESTABLISHMENT.—^There is hereby established an interagency task force to be known as the Flood Insurance Task Force
(in this section referred to as the "Task Force").
(b) MEMBERSHIP.—
(1) IN GENERAL.—The Task Force shall be composed of
10 members, who shall be the designees of—
(A) the Federal Insurance Administrator;
(B) the Federal Housing Commissioner;
(C) the Secretary of Veterans Affairs;
(D) the Administrator of the Farmers Home
Administration;
(E) the Administrator of the Small Business
Administration;
(F) the Chairman of the Board of Directors of the
Farm Credit Administration;
(G) a designee of the Financial Institutions Examination Council;
(H) the Director of the Office of Federal Housing Enterprise Oversight;
(I) the chairman of the Board of Directors of the
Federal Home Loan Mortgage Corporation; and
(J) the chairman of the Board of Directors of the
Federal National Mortgage Association.
(2) QUALIFICATIONS.—Members of the Task Force shall be
designated for membership on the Task Force by reason of
demonstrated knowledge and competence regarding the
national flood insurance program.
(c) DUTIES.—^The Task Force shall carry out the following
duties:
(1)
RECOMMENDATIONS OF STANDARDIZED
ENFORCEMENT
PROCEDURES.—Make recommendations to the head of each Federal agency and enterprise referred to under subsection (b)(1)
regarding establishment or adoption of standardized enforcement procedures among such agencies and corporations responsible for enforcing compliance with the requirements under
the national flood insurance program to ensure fullest possible
compliance with such requirements.
(2) STUDY OF COMPLIANCE ASSISTANCE.—Conduct a study
of the extent to which Federal agencies and the secondary
mortgage market can provide assistance in ensuring compliance
with the requirements under the national flood insurance program and submit to the Congress a report describing the study
and any conclusions.
(3) STUDY OF COMPLIANCE MODEL.—Conduct a study of
the extent to which existing programs of Federal agencies and
corporations for compliance with the requirements under the
national flood insurance program can serve as a model for
other Federal agencies responsible for enforcing compliance,
and submit to the Congress a report describing the study and
any conclusions.
(4) RECOMMENDATIONS FOR ENFORCEMENT AND COMPLIANCE
PROCEDURES.—Develop recommendations regarding enforce-
42 USC 4011
108 STAT. 2276
PUBLIC LAW 103-325—SEPT. 23, 1994
ment and compliance procedures, based on the studies and
findings of the Task Force, and publish such recommendations.
(5) STUDY OF DETERMINATION FEES.—Conduct a study of—
(A) the reasonableness of fees charged pursuant to
102(h) of the Flood Disaster Protection Act of 1973 for
costs of determining whether the property securing a loan
is located in an area having special flood hazards; and
(B) whether the fees charged pursuant to such section
by lenders and servicers are greater than the amounts
paid by such lenders and servicers to persons actually
conducting such determinations and the extent to which
the fees exceed such amounts.
(d) NONCOMPENSATION.—Members of the Task Force shall
receive no additional pay by reason of their service on the Task
Force.
(e) CHAIRPERSON.—The members of the Task Force shall elect
one member as chairperson of the Task Force.
if) MEETINGS AND ACTION.—The Task Force shall meet at the
call of the chairman or a majority of the members of the Task
Force and may take action by a vote of the majority of the members.
The Federal Insurance Administrator shall coordinate and call the
initial meeting of the Task Force.
(g) OFFICERS.—^The chairperson of the Task Force may appoint
any officers to carry out the duties of the Task Force under subsection (c).
(h) STAFF OF FEDERAL AGENCIES.—^Upon request of the chairperson of the Task Force, the head of any of the Federal agencies
and entities referred to under subsection (b)(1) may detail, on
a nonreimbursable basis, any of the personnel of such agency to
the Task Force to assist the Task Force in carrying out its duties
under this section.
(i) POWERS.—In carrying out this section, the Task Force may
hold hearings, sit and act at times and places, take testimony,
receive evidence and assistance, provide information, and conduct
research as the Task Force considers appropriate,
(j) TERMINATION,—^The Task Force shall terminate upon the
expiration of the 24-month period beginning upon the designation
of the last member to be designated under subsection (b)(1),
42 u s e 4102
note.
SEC. 562. TASK FORCE ON NATURAL AND BENEFICLVL FUNCTIONS
OF THE FLOODPLAIN.
(a) ESTABLISHMENT,—There is hereby established an interagency task force to be known as the Task Force on Natural
and Beneficial Functions of the Floodplain (in this section referred
to as the "Task Force").
(b) MEMBERSHIP,—^The Task Force shall be composed of 5 members, who shall be the designees of—
(1) the Under Secretary of Commerce for Ocegms and
Atmosphere;
(2) the Director of the United States Fish and Wildlife
Service;
(3) the Administrator of the Environmental Protection
Agency;
(4) the Secretary of the Army, acting through the Chief
of Engineers; and
(5) the Director of the Federal Emergency Management
Agency,
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2277
(c) DUTIES.—The Task Force shall—
(1) conduct a study to—
(A) identify the natural and beneficial fiinctions of
the floodplain that reduce flood-related losses; £ind
(B) develop recommendations on how to reduce flood
losses by protecting the natural and beneficial functions
of the floodplain; and
(2) make the information and recommendations under subparagraphs (A) and (B) publicly available.
(d) NONCOMPENSATION.—^Members of the Task Force shall
receive no additional pay by reason of their service on the Task
Force.
(e) CHAIRPERSON.—^The members of the Task Force shall elect
one member as chairperson of the Task Force.
(f) MEETINGS AND ACTION.—The Task Force shall meet at the
call of the chairperson or a majority of the members of the Task
Force and may take action by a vote of the majority of the members.
The Federal Insurance Administrator shall coordinate and call the
initial meeting of the Task Force.
(g) OFFICERS.—^The chairperson of the Task Force may appoint
any officers to carry out the duties of the Task Force under subsection (c).
(h) STAFF OF FEDERAL AoENCiES.^Upon request of the chairperson of the Task Force, the head of any of the Federal agencies
and entities referred to under subsection (b) may detail, on a
nonreimbursable basis, any of the personnel of such agency to
the Task Force to assist the Task Force in carrying out its duties
under this section.
(i) POWERS.—In carrying out this section, the Task Force may
hold hearings, sit and act at times and places, take testimony,
receive evidence and assistance, provide information, and conduct .
research as the Task Force considers appropriate.
(j) TERMINATION.—The Task Force shall terminate upon the
expiration of the 24-month period beginning upon the designation
of the last member to be designated under subsection (b).
Subtitle F—Miscellaneous Provisions
SEC. 571. EXTENSION OF FLOOD INSURANCE PROGRAM.
(a) IN GENERAL.—Section 1319 of the National Flood Insurance
Act of 1968 (42 U.S.C. 4026) is amended by striking "September 30, 1995" and inserting "September 30, 1996".
(b) EMERGENCY IMPLEMENTATION.—Section 1336(a) of the
National Flood Insurance Act of 1968 (42 U.S.C. 4056(a)) is
amended by striking "September 30, 1995" and inserting "September 30, 1996".
SEC. 572. LIMITATION ON PREMIUM INCREASES.
(a)
PROPERTY-SPECIFIC
LIMITATION.—Section
1308
of
the
National Flood Insurance Act of 1968 (42 U.S.C. 4013(b)) is 42USC4015.
amended—
(1) in subsection (c), by striking "Notwithstanding any other
provision of this title" and inserting "Subject only to the limitation under subsection (e)"; and
(2) by inserting after subsection (d) the following new subsection:
108 STAT. 2278
PUBLIC LAW 103-325—SEPT. 23, 1994
"(e) ANNUAL LIMITATION ON PREMIUM INCREASES.—^Notwith-
standing any other provision of this title, the chargeable risk premium rates for flood insurance under this title for any properties
within any single risk classification may not be increased by an
amount that would result in the average of such rate increases
for properties within the risk classification during any 12-month
period exceeding 10 percent of the average of the risk premium
rates for properties within the risk classification upon the
commencement of such 12-month period.".
(b) REPEAL OF PROGRAM-WIDE LIMITATION.—Subsection (d) of
section 541 of the Housing and Community Development Act of
1987 (42 U.S.C. 4015 note) is hereby repealed.
SEC. 573. MAXIMUM FLOOD INSURANCE COVERAGE AMOUNTS.
(a) IN GENERAL.—Section 1306(b) of the National Flood Insurance Act of 1968 (42 U.S.C. 4013(b)) is amended as follows:
(1) RESIDENTIAL PROPERTY.—In paragraph (2), by striking
"an amount of $150,000 under the provisions of this clause"
and inserting the following: "a total amount (including such
Hmits specified in paragraph (l)(A)(i)) of $250,000".
(2) RESIDENTIAL PROPERTY CONTENTS.—In paragraph (3),
by striking "an amount of $50,000 under the provisions of
this clause" and inserting the following: "a total amount (including such limits specified in paragraph (l)(A)(ii)) of $100,000".
(3) NONRESIDENTIAL PROPERTY AND CONTENTS.—By striking
paragraph (4) and inserting the following new paragraph:
"(4) in the case of any nonresidential property, including
churches, for which the risk premium rate is determined in
accordance with the provisions of section 1307(a)(1), additional
flood insurance in excess of the limits specified in subparagraphs (B) and (C) of paragraph (1) shall be made available
to every insured upon renewal and every applicant for insurance, in respect to any single structure, up to a total amount
(including such limit specified in subparagraph (B) or (C) of
paragraph (1), as applicable) of $500,000 for each structure
and $500,000 for any contents related to each structure; and".
(b) REMOVAL OF CEILING ON COVERAGE REQUIRED.—Section
1306(b) of the National Flood Insurance Act of 1968 (42 U.S.C.
4013(b)) is amended—
(1) in paragraph (5), by striking "; and" at the end and
inserting a period; and
(2) by striking paragraph (6).
SEC. 574. FLOOD INSURANCE PROGRAM ARRANGEMENTS WITH PRIVATE I N S U R A N C E ENTITIES.
Section 1345(b) of the National Flood Insurance Act of 1968
(42 U.S.C. 4081(b)) is amended by striking the period at the end
and inserting the following: "and without regard to the provisions
of the Federal Advisory Committee Act (5 U.S.C. App.).".
SEC. 575. U P D A T I N G OF FLOOD MAPS.
Section 1360 of the National Flood Insurance Act of 1968 (42
U.S.C. 4101) is amended by adding at the end the following new
subsections:
"(e) REVIEW OF FLOOD MAPS.—Once during each 5-year period
(the 1st such period beginning on the date of enactment of the
Riegle Community Development and Regulatory Improvement Act
of 1994) or more often as the Director determines necessary, the
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2279
Director shall assess the need to revise and update all floodplain
areas and flood risk zones identified, delineated, or established
under this section, based on an analysis of all natural hazards
affecting flood risks.
"(f) UPDATING FLOOD MAPS.—^The Director shall revise and
update any floodplain areas and flood-risk zones—
"(1) upon the determination of the Director, according to
the assessment under subsection (e), that revision and updating
are necessary for the areas and zones; or
"(2) upon the request from any State or local government
stating that specific floodplain areas or flood-risk zones in the
State or locality need revision or updating, if sufficient technical
data justifying the request is submitted and the unit of government making the request agrees to provide funds in an amount
determined by the Director, but which may not exceed 50
percent of the cost of carrying out the requested revision or
update.
"(g) AVAILABILITY OF FLOOD MAPS.—^To promote compliance
with the requirements of this title, the Director shall make flood
insurance rate maps and related information available free of charge
to the Federal entities for lending regulation, Federal agency lenders, State agencies directly responsible for coordinating the national
flood insurance program, and appropriate representatives of communities participating in the national flood insurance program, and
at a reasonable cost to all other persons. Any receipts resulting
from this subsection shall be deposited in the National Hood Insurance Fund, pursuant to section 1310(b)(6).
"(h) NOTIFICATION OF FLOOD MAP CHANGES.—The Director shall
cause notice to be published in the Federal Register (or shall provide
notice by another comparable method) of any change to flood insurance map panels and any change to flood insurance map panels
issued in the form of a letter of map amendment or a letter of
map revision. Such notice shall be published or otherwise provided
not later than 30 days after the map change or revision becomes
effective. Notice by any method other than publication in the Federal Register shall include all pertinent information, provide for
regular and frequent distribution, and be at least as accessible
to map users as notice in the Federal Register. All notices under
this subsection shall include information on how to obtain copies
of the changes or revisions.
"(i) COMPENDIA OF FLOOD MAP CHANGES.—Every 6 months,
the Director shall publish separately in their entirety within a
compendium, all changes and revisions to flood insurance map
panels and all letters of map amendment and letters of map revision
for which notice was published in the Federal Register or otherwise
provided during the preceding 6 months. The Director shall make
such compendia available, free of charge, to Federal entities for
lending regulation. Federal agency lenders, and States and communities participating in the national flood insurance program pursuant to section 1310 and at cost to all other parties. Any receipts
resulting from this subsection shall be deposited in the National
Flood Insurance Fund, pursuant to section 1310(b)(6).
"(j) PROVISION OF INFORMATION.—In the implementation of revisions to and updates of flood insurance rate maps, the Director
shall share information, to the extent appropriate, with the Under
Secretary of Commerce for Oceans and Atmosphere and representatives from State coastal zone management programs.".
Federal
Register,
publication.
Public
information.
108 STAT. 2280
42 u s e 4101
PUBLIC LAW 103-325—SEPT. 23, 1994
SEC. 576. TECHNICAL MAPPDVG ADVISORY COUNCIL.
(a) ESTABLISHMENT.—There is established a council to be known
as the Technical Mapping Advisory Council (in this section referred
to as the "Council").
(b) MEMBERSHIP.—
Reports.
(1) IN GENERAL.—^The Council shall consist of the Director
of the Federal Emergency Management Agency (in this section
referred to as the "Director"), or the Director's designee, and
10 additional members to be appointed by the Director or
the designee of the Director, who shall be—
(A) the Under Secretary of Commerce for Oceans and
Atmosphere (or his or her designee);
(B) a member of recognized surveying and mapping
professional associations and organizations;
(C) a member of recognized professional engineering
associations and organizations;
(D) a member of recognized professional associations
or organizations representing flood hazard determination
firms;
(E) a representative of the United States Geologic
Survey;
(F) a representative of State geologic survey programs;
(G) a representative of State national flood insurance
coordination offices;
(H) a representative of a regulated lending institution;
(I) a representative of the Federal Home Loan Mortgage Corporation; and
(J) a representative of the Federal National Mortgage
Association.
(2) QUALIFICATIONS.—Members of the Council shall be
appointed based on their demonstrated knowledge and competence regarding surveying, cartography, remote sensing,
geographic information systems, or the technical aspects of
preparing and using flood insurance rate maps.
(c) DUTIES.—The Council shall—
(1) make recommendations to the Director on how to
improve in a cost-effective manner the accuracy, general quality, ease of use, and distribution and dissemination of flood
insurance rate maps;
(2) recommend to the Director mapping standards and
guidelines for flood insurance rate maps; and
(3) submit an annual report to the Director that contains—
(A) a description of the activities of the Council;
(B) an evaluation of the status and performance of
flood insurance rate maps and mapping activities to revise
and update flood insurance rate maps, as established
pursuant to the amendment made by section 675; and
(C) a summary of recommendations made by the Council to the Director.
(d) CHAIRPERSON.—^The members of the Council shall elect 1
member to serve as the chairperson of the Council (in this section
referred to as the "Chairperson").
(e) COORDINATION.—To ensure that the Council's recommendations are consistent to the maximum extent practicable with
national digital spatial data collection and management standards,
, the Chairperson shall consult with the Chairperson of the Federal
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2281
Geographic Data Committee (established pursuant to 0MB Circular
A-16).
(f) COMPENSATION.—Members of the Council shall receive no
additional compensation by reason of their service on the Council.
(g) MEETINGS AND ACTIONS.—
(1) I N GENERAL.—The Council shall meet not less than
twice each year at the request of the Chairperson or a majority
of its members and may take action by a vote of the majority
of the members.
(2) INITIAL MEETING.—^The Director, or a person designated
by the Director, shall request and coordinate the initial meeting
of the Council.
(h) OFFICERS.—^The Chairperson may appoint officers to assist
in carrying out the duties of the Council under subsection (c).
(i) STAFF O F FEMA.—Upon the request of the Chairperson,
the Director may detail, on a nonreimbursable basis, personnel
of the Federal Emergency Management Agency to assist the Council
in carrying out its duties.
(j) POWERS.—In carrying out this section, the Council may
hold hearings, receive evidence and assistance, provide information,
and conduct research as it considers appropriate.
(k) TERMINATION.—^The Council shall terminate 5 years after
the date on which all members of the Council have been appointed
under subsection (b)(1).
SEC. 577. EVALUATION OF EROSION HAZARDS.
(a) REPORT REQUIREMENT.—The Director of the Federal Emergency Management Agency (in this section referred to as the "Director") shall submit a report under this section to the Congress
that—
(1) lists all communities that are likely to be identified
as having erosion hazard areas;
(2) estimates the amount of flood insurance claims under
the national flood insurance program that are attributable to
erosion;
(3) states the amount of flood insurance claims under such
program that are attributable to claims under section 1306(c)
of the National Flood Insurance Act of 1968;
(4) assesses the full economic impact of erosion on the
National Flood Insurance Fund; and
(5) determines the costs and benefits of expenditures necessary from the National Flood Insurance Fund to complete
mapping of erosion hazard areas.
(b) ESTIMATE OF FLOOD CLAIMS.—In developing the estimate
under subsection (a)(2)—
(1) the Director may map a statistically valid and representative number of communities with erosion hazard areas
throughout the United States, including coastal. Great Lakes,
and, if technologically feasible, riverine areas; and
(2) the Director shall take into consideration the efforts
of State and local governments to assess, measure, and reduce
erosion hazards.
(c) ECONOMIC IMPACT.—
(1) IN GENERAL.—^The assessment under subsection (a)(4)
shall assess the economic impact of—
(A) erosion on communities listed pursuant to subsection (a)(1);
42 USC 4001
108 STAT. 2282
PUBLIC LAW 103-325—SEPT. 23, 1994
(B) the denial of flood insurance for all structures
in communities listed pursuant to subsection (a)(1);
(C) the denial of flood insurance for structures that
are newly constructed in whole in communities listed
pursuant to subsection (a)(1);
(D) the establishment of (i) actuarial rates for existing
structures in communities listed pursuant to subsection
/
(a)( 1), and (ii) actuarial rates for such structures in connection with the denial of flood insurance as described in
subparagraph (C);
(E) the establishment of actuarial rates for structures
newly constructed in whole in erosion hazard areas in
communities listed pursuant to subsection (a)(1);
(F) the denial of flood insurance pursuant to existing
requirements for coverage under the national flood insurance program;
(G) erosion hazard assessment, measurement, and
management activities undertaken by State and local
governments, including building restrictions, beach
nourishment, construction of sea walls and levees, and
other activities that reduce the risk of damage due to
erosion; and
(H) the mapping and identifying of communities (or
subdivisions thereof) having erosion hazard areas.
(2) SCOPE.—In assessing the economic impact of the activities under subparagraphs (A) through (H) of paragraph (1),
the assessment under subsection (a)(4) shall address such
impact on all significant economic factors, including the impact
on—
(A) the value of residential and commercial properties
in communities with erosion hazards;
(B) community tax revenues due to potential changes
in property values or commercial activity;
(C) employment, including the potential loss or gain
of existing and new jobs in the community;
(D) existing businesses and future economic development;
(E) the estimated cost of Federal and State disaster
assistance to flood victims; and
(F) the mapping and identifying of communities (or
subdivisions thereof) having erosion hazard areas.
(3) PREPARATION.—^The assessment required under subsection (a)(4) shall be conducted by a private independent entity
selected by the Director. The private entity shall consult with
a statistically valid and representative number of communities
listed pursuant to subsection (a)(1) in conducting the
assessment.
(d) COSTS AND BENEFITS OF MAPPING.—^The determination
under subsection (a)(5) shall—
(1) determine the costs and benefits of mapping erosion
hazard areas, based upon the Director's estimate of the actual
and prospective amount of flood insurance claims attributable
to erosion;
(2) if the Director determines that the savings to the
National Flood Insurance Fund will exceed the cost of mapping
erosion hazard areas, further assess whether using flood insurance premiums for costs of mapping erosion hazard areas is
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2283
cost-beneficial compared to alternative uses of such amounts,
including—
(A) fiinding the mitigation assistance program under
section 1366 of the National Flood Insurance Act of 1968
(as added by section 553 of this Act);
(B) funding the program under section 1304(b) of the
National Flood Insurance Act of 1968 (as added by section
555(a) of this Act) that provides additional coverage under
the national flood insurance program for compliance with
land use and control measures; and
(C) reviewing, revising, and updating flood insurance
rate maps under subsections (e) and (f) of section 1360
of the National Flood Insurance Act of 1968 (as added
by the amendment made by section 575 of this Act);
(3) if the Director determines under subsection (b)(1) that
mapping of riverine areas for erosion hazard areas is technologically feasible, determine the costs and benefits of conducting
the mapping of erosion hazards in riverine areas (A) separately
from the mapping of other erosion hazard areas, and (B)
together with the mapping of other such areas;
(4) if the Director determines that the savings to the
National Flood Insurance Fund will exceed the cost of mapping
erosion hazard areas in riverine areas, assess whether using
flood insurance premiums for costs of mapping erosion hazard
areas in riverine areas is cost-beneficial compared to alternative
uses of such amounts, including the uses under subparagraphs
(A) through (C) of paragraph (2); and
(5) determine the costs and benefits of mapping erosion,
other than those directly related to the financial condition
of the National Flood Insurance Program, and the costs of
not mapping erosion.
(e) DEFINITION.—For purposes of this section, the term "erosion
hazard area" means, based on erosion rate information and other
historical data available, an area where erosion or avulsion is
likely to result in damage to or loss of buildings and infrastructure
within a 60-year period.
(f) CONSULTATION.—In preparing the report under this section,
the Director shall consult with—
(1) representatives from State coastal zone management
programs approved under section 306 of the Coastal Zone
Management Act of 1972;
(2) the Administrator of the National Oceanic and
Atmospheric Administration; and
(3) any other persons, officials, or entities that the Director
considers appropriate.
(g) SUBMISSION.— The Director shall submit the report to the Reports.
Congress as soon as practicable, but not later than 2 years after
the date of enactment of this Act.
(h) AVAILABILITY OF NATIONAL FLOOD INSURANCE FUND.—Sec-
tion 1310(a) of the National Flood Insurance Act of 1968 (42 U.S.C.
4017(a)) is amended—
(1) in the matter preceding paragraph (1), by inserting
"(except as otherwise provided in this section)" after "without
fiscal year limitation"; and
(2) by inserting after paragraph (7) (as added by the preceding provisions of this title) the following new paragraph:
108 STAT. 2284
PUBLIC LAW 103-325—SEPT. 23, 1994
"(8) for costs of preparing the report under section 577
of the Riegle Community Development and Regulatory Improvement Act of 1994, except that the fund shall be available
for the purpose under this paragraph in an amount not to
exceed an aggregate of $5,000,000 over the 2-year period beginning on the date of enactment of the Riegle Community Development and Regulatory Improvement Act of 1994.".
42 u s e 4014
note.
SEC. 578. STUDY OF ECONOMIC EFFECTS OF CHARGING ACTUARIALLY
BASED PREMIUM RATES FOR PRE-FIRM STRUCTURES.
(a) STUDY.—The Director of the Federal Emergency Management Agency (in this section referred to as the "Director") shall
conduct a study of the economic effects that would result from
increasing premium rates for flood insurance coverage made available under the national flood insurance program for pre-FIRM
structures to the full actuarial risk based premium rate determined
under section 1307(a)(1) of the National Flood Insurance Act of
1968 for the area in which the property is located. In conducting
the study, the Director shall—
(1) determine each area that would be subject to such
increased premium rates; and
(2) for each such area, determine—
(A) the amount by which premium rates would be
increased;
(B) the number and types of properties affected and
the number and types of properties covered by flood insurance under this title likely to cancel such insurance if
the rate increases were made;
(C) the effects that the increased premium rates would
have on land values and property taxes; and
(D) any other effects that the increased premium rates
would have on the economy and homeowners.
(b) DEFINITION OF P R E - F I R M STRUCTURE.—For purposes of subsection (a), the term "pre-FIRM structure" means a structure that
was not constructed or substantially improved after the later of—
(1) December 31, 1974; or
(2) the effective date of the initial rate map published
by the Director under section 1360(a)(2) of the National Flood
Insurance Act of 1968 for the area in which such structure
is located.
(c) REPORT.—^The Director shall submit a report to the Congress
describing and explaining the findings of the study conducted under
this section. The report shall be submitted not later than 12 months
after the date of enactment of this Act.
SEC. 579. EFFECTIVE DATES OF POLICIES.
(a) 30-DAY DELAY.—Section 1306 of the National Flood Insur-
ance Act of 1968 (42 U.S.C. 4013), as amended by the preceding
provisions of this title, is further amended by adding at the end
the following new subsection:
"(c) EFFECTIVE DATE OF POLICIES.—
"(1) WAITING PERIOD.—Except as provided in paragraph
(2), coverage under a new contract for flood insurance coverage
under this title entered into after the date of enactment of
the Riegle Community Development and Regulatory Improvement Act of 1994, and any modification to coverage under
an existing flood insurance contract made after such date,
shall become effective upon the expiration of the 30-day period
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2285
beginning on the date that all obligations for such coverage
(including completion of the application and pa3rnient of any
initial premiums owed) are satisfactorily completed.
"(2) EXCEPTION.—The provisions of paragraph (1) shall not
apply to—
"(A) the initial purchase of flood insurance coverage
under this title when the purchase of insurance is in
connection with the making, increasing, extension, or
renewal of a loan; or
"(B) the initial purchase of flood insurance coverage
pursuant to a revision or updating of floodplain areas or
flood-risk zones under section 1360(f), if such purchase
occurs during the 1-year period beginning upon publication
of notice of the revision or updating under section 1360(h).".
(b) STUDY.—The Director of the Federal Emergency Management Agency shall conduct a study to determine the appropriateness
of existing requirements regarding the effective date and time of
coverage under flood insurance contracts obtained through the
national flood insurance program. In conducting the study, the Reports.
Director shall determine whether any delay between the time of
purchase of flood insurance coverage and the time of initial effectiveness of the coverage should differ for various classes of properties
(based upon the type of property, location of the property, or any
other factors related to the property) or for various circumstances
under which such insurance was purchased. Not later than the
expiration of the 6-month period beginning on the date of enactment
of this Act, the Director shall submit to the Congress a report
on the results of the study.
SEC. 580. AGRICULTURAL STRUCTURES.
Section 1315(a) of the National Flood Insurance Act of 1968
(42 U.S.C. 4022(a)), as amended by the preceding provisions of
this title, is further amended by adding at the end the following
new paragraph:
"(2) AGRICULTURAL STRUCTURES.—
"(A) ACTIVITY RESTRICTIONS.—^Notwithstanding
any
other provision of law, the adequate land use and control
measures required to be adopted in an area (or subdivision
thereof) pursuant to paragraph (1) may provide, at the
discretion of the appropriate State or local authority, for
the repair and restoration to predamaged conditions of
an agricultural structure that—
"(i) is a repetitive loss structure; or
"(ii) has incurred flood-related damage to the
extent that the cost of restoring the structure to its
predamaged condition would equal or exceed 50 percent
of the market value of the structure before the damage
occurred.
"(B) PREMIUM RATES AND COVERAGE.—TO the extent
applicable, an agricultural structure repaired or restored
pursuant to subparagraph (A) shall pay chargeable premium rates established under section 1308 at the estimated
risk premium rates under section 1307(a)(1). If resources
are available, the Director shall provide technical assistance and counseling, upon request of the owner of the
structure, regarding wet flood-proofing and other flood damage reduction measures for agricultural structures. The
108 STAT. 2286
PUBLIC LAW 103-325—SEPT. 23, 1994
Director shall not be required to make flood insurance
coverage available for such an agricultural structure unless
the structure is wet flood-proofed through permanent or
contingent measures appliea to the structure or its contents
that prevent or provide resistance to damage from flooding
by allowing flood waters to pass through the structure,
as determined by the Director.
"(C) PROHIBITION ON DISASTER RELIEF.—Notwithstand-
ing any other provision of law, any agricultural structure
repaired or restored pursuant to subparagraph (A) shall
not be eligible for disaster relief assistance under any program administered by the Director or any other Federal
agency.
"(D) DEFINITIONS.—For purposes of this paragraph—
"(i) the term 'agricultural structure' means any
structure used exclusively in connection with the
production, harvesting, storage, raising, or drying of
agricultural commodities; and
"(ii) the term 'agricultural commodities' means
agricultural commodities and livestock.".
SEC. 581. IMPLEMENTATION REVIEW BY DIRECTOR.
Reports.
42 u s e 5154a.
Section 1320 of the National Flood Insurance Act of 1968 (42
U.S.C. 4027) is amended—
(1) by striking "The Director" and inserting "(a) I N GENERAL.—The Director"; and
(2) by adding at the end the following new subsection:
«(b) EFFECTS OF FLOOD INSURANCE PROGRAM.—The Director
shall include, as part of the biennial report submitted under subsection (a), a chapter reporting on the effects on the flood insurance
program observed through implementation of requirements under
the Riegle Community Development and Regulatory Improvement
Act of 1994.".
SEC. 582. PROmBITED FLOOD DISASTER ASSISTANCE.
(a) GENERAL PROHIBITION.—^Notwithstanding any other provi-
sion of law, no Federal disaster relief assistance made available
in a flood disaster area may be used to make a payment (including
any loan assistance payment) to a person for repair, replacement,
or restoration for damage to any personal, residential, or commercial
property if that person at any time has received flood disaster
assistance that was conditional on the person first having obtained
flood insurance under applicable Federal law and subsequently
having failed to obtain and maintain flood insurance as required
under applicable Federal law on such property.
(b) TRANSFER OF PROPERTY.—
(1) DUTY TO NOTIFY.—In the event of the transfer of any
property described in paragraph (3), the transferor shall, not
later than the date on which such transfer occurs, notify the
transferee in writing of the requirements to—
(A) obtain flood insurance in accordance with
applicable Federal law with respect to such property, if
the property is not so insured as of the date on which
the property is transferred; and
(B) maintain flood insurance in accordance with
applicable Federal law with respect to such property.
Such written notification shall be contained in documents
evidencing the transfer of ownership of the property.
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2287
(2) FAILURE TO NOTIFY.—If a transferor described in paragraph (1) fails to make a notification in accordance with such
paragraph and, subsequent to the transfer of the property—
(A) the transferee fails to obtain or maintain flood
insurance in accordance with applicable Federal law with
respect to the property,
(B) the property is damaged by a flood disaster, and
(C) Federal disaster relief assistance is provided for
the repair, replacement, or restoration of the property as
a result of such damage,
the transferor shall be required to reimburse the Federal
Government in an amount equal to the amount of the Federal
disaster relief assistance provided with respect to the property.
(3) PROPERTY DESCRIBED.—For purposes of paragraph (1),
a property is described in this paragraph if it is personal,
commercial, or residential property for which Federal disaster
relief assistance made available in a flood disaster area has
been provided, prior to the date on which the property is
transferred, for repair, replacement, or restoration of the property, if such assistance was conditioned upon obtaining flood
insurance in accordance with applicable Federal law with
respect to such property.
(c) AMENDMENT TO THE FLOOD DISASTER PROTECTION ACT OF
1973.—Section 102(a) of the Flood Disaster Protection Act of 1973
(42 U.S.C. 4012a(a)) is amended—
(1) by striking ", during the anticipated economic or useful
life of the proiect,"; and
(2) by adding at the end the following: "The requirement
of maintaining flood insurance shall apply during the life of
the property, regardless of transfer of ownership of such property.".
(d) DEFINITION.—For purposes of this section, the term "flood
disaster area" means an area v/ith respect to which—
(1) the Secretary of Agriculture finds, or has found, to
have been substantially affected by a natural disaster in the
United States pursuant to section 321(a) of the Consolidated
Farm and Rural Development Act (7 U.S.C. 1961(a)); or
(2) the President declares, or has declared, the existence
of a major disaster or emergency pursuant to the Robert T.
Stafford Disaster Relief ana Emergency Assistance Act (42
U.S.C. 5121 et seq.),, as a result of flood conditions existing
in or affecting that area.
(e) EFFECTIVE DATE.—This section and the amendments made
by this section shall apply to disasters declared after the date
of enactment of this Act.
SEC. 583. REGULATIONS.
42 USC 4001
The Director of the Federal Emergency Management Agency
and any appropriate Federal agency may each issue any regulations
necessary to carry out the applicable provisions of this title and
the applicable amendments made by this title.
SEC. 584. RELATION TO STATE AND LOCAL LAWS.
This title and the amendments made by this title may not
be construed to preempt, annul, alter, amend, or exempt any person
from compliance with any law, ordinance, or regulation of any
State or local government with respect to land use, management,
or control.
42 USC 4001
108 STAT. 2288
PUBLIC LAW 103-325—SEPT. 23, 1994
TITLE VI—GENERAL PROVISIONS
SEC. 601. OVERSIGHT HEARINGS.
George J.
Mitchell.
Bob Dole.
Robert B. Fiske,
Jr.
It is the sense of the Senate that—
(a) Congress has a constitutional obhgation to conduct oversight of matters relating to the operations of the Government,
including matters related to any governmental investigations
which may, from time to time, be undertaken.
(b) The Majority Leader and the Republican Leader should
meet and determine the appropriate timetable, procedures, and
forum for appropriate Congressional oversight, including hearings on all matters related to "Madison Guaranty Savings and
Loan Association ('MGS&L'), Whitewater Development Corporation and Capital Management Services Inc. ('CMS').".
(c) No witness called to testify at these hearings shall
be granted immunity under sections 6002 and 6005 of title
18, United States Code, over the objection of Special Counsel
Robert B. Fiske, Jr.
(d) The hearings should be structured and sequenced in
such a manner that in the judgment of the Leaders they would
not interfere with the ongoing investigation of Special Counsel
Robert B. Fiske, Jr.
SEC. 602. TECHNICAL AMENDMENTS TO THE FEDERAL BANKING LAWS.
12 u s e 1813.
12 u s e 1815.
12 u s e 1817.
(a) FEDERAL DEPOSIT INSURANCE ACT AMENDMENTS.—^The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) is amended—
(1) in section 3—
(A) in subsection (i)(l), by striking "(ll)(h)" and inserting "(ll)(m)";
(B) in subsection (1)(4), by striking "bank's or" and
inserting "a bank's or a"; and
(C) in subsection (q)(2)(E), by striking "Depository
Institutions Supervisory Act" and inserting "Financial
Institutions Supervisory Act of 1966";
(2) in section 5(b)(5), by striking the semicolon at the
end and inserting a comma;
(3) in section 5(e)(4), by redesignating clauses (i) and (ii)
as subparagraphs (A) and (B) respectively, and indenting
appropriately;
(4) in section 7(a)(3), by striking "Chairman of the" before
"Director of the Office of Thrift Supervision";
(5) in section 7(b)(3)(C), by striking the first period at
the end;
(6) in section 7(j)(2)(A), in the third sentence—
(A) by striking "this section (j)(2)" and inserting "this
paragraph"; and
(B) by striking "this subsection (j)(2)" and inserting
"this paragraph";
(7) in section 7(j)(7)(A), by striking "monoplize" and inserting "monopolize";
(8) in section 7(1)(7), by striking "the ratio of the value
o f and inserting "the ratio of";
(9) in section 7(m)(5)(A) by striking "savings association
institution" and inserting "such institution";
(10) in section 7(m)(7), by inserting "the" before "Federal";
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2289
(11) in section 8(a)(3), by striking "subparagraph (B) of 12USC1818.
this subsection" and inserting "paragraph (2)(B)";
(12) in section 8(a)(7)—
(A) by inserting a comma after "Board of Directors";
and
(B) by striking "the period the period" and inserting
"the period";
(13) in section 8(b)(4), by striking "subparagraph (3)" and
inserting "paragraph (3)";
(14) in section 8(c)(2), by striking "injuction" and inserting
"injunction";
(15) in section 8(g)(2), by striking "depository institution"
each place such term appears and inserting "bank";
(16) in section 8(o)-—
(A) in the second sentence, by striking "subsection
(b)" and inserting "subsection (d)"; and
(B) by striking "board of directors" each place such
term appears and inserting "Board of Directors";
(17) in section 8(p), by striking "banking" each place such
term appears and inserting "depository";
(18) in section 8(r)(2), by striking "therof and inserting
"thereof;
(19) in section 10(b)(1), by striking "claim" and inserting 12 USC 1820.
"claims";
(20) in section 10(b)(2)(B), by adding "and" at the end;
(21) in the section heading for paragraph (4) of section 12 USC 1821.
11(a), by striking "PROVISIONS" and inserting "PROVISIONS";
(22) in section ll(d)(2)(B)(iii), by striking "is" and inserting
"are";
(23) in section ll(d)(8)(B)(ii), by inserting "provide" before
"a statement";
(24) in section ll(d)(14)(B), by striking "statute of limitation" and inserting "statute of limitations";
(25) in section ll(d)(16)(B)(iv), by striking "dispositions"
and inserting "disposition";
(26) in section ll(e)(8)(D)(v)(I), by inserting a closing parenthesis after "1934";
(27) in section ll(e)(12)(B), by striking "directors or officers"
and inserting "director's or officer's";
(28) in section 11(f)(3)(A), by striking "TO" in the heading
and inserting "WITH";
(29) in the second sentence of section ll(i)(3)(A), by striking
"other claimant or category or claimants" and inserting "other
claimant or category of claimants";
(30) in section ll(n)(4)(E)(i), by adding "and" at the end;
(31) in section ll(n)(12)(A), by striking "subparagraphs"
and inserting "subparagraph";
(32) in the second sentence of section ll(q)(l), by striking
"decided" and inserting "held";
(33) in section ll(u)(3)(B), by striking "subsection (c)(9)"
and inserting "section 40(p)";
(34) in section 13(c)( 1)(B)—
(A) by striking "a in default insured bank" and inserting "an insured bank in default"; and
(B) by striking "such in default insured bank" and
inserting "such insured bank";
(35) in section 13(c)(2)(A)—
12 USC 1823.
108 STAT. 2290
12 u s e 1S23.
PUBLIC LAW 103-325—SEPT. 23, 1994
(A) by striking "with an insured institution" and inserting "with another insured depository institution"; and
(B) by striking "by an insured institution" and inserting
"by another insured depository institution";
(36) in section 13(f)(2)(B)(i), by striking "the in default
insured bank" and inserting "the insured bank in default";
(37) in section 13(f)(2)(E)(iii), by striking "of o f and inserting "of;
(38) in section 13(f)(3), )y striking "eLOSiNG" in the heading
and inserting "DEFAULT";
(39) in section 13(f)(6)(A), by striking "bank that has in
default" and inserting "bank that is in default";
(40) in section 13(f)(6)(B)(i), by striking the semicolon at
the end and inserting a period;
(41) in section 13(f)(7)—
(A) in subparagraph (A), by striking "or" at the end;
and
(B) in subparagraph (B), by striking the period at
the end and inserting "; or";
(42) in section 13(f)( 12)(A), by striking "is less than" and
inserting "are less than";
12 u s e 1825.
(43) in section 15(c)(1), by striking "OBLIGATIONS LIABILITIES" in the heading and inserting "OBLIGATIONS, GUARANTEES,
AND LIABILITIES";
12 u s e 1828.
(44) in section 18(b), by striking ", if such bank shall
deposit" and inserting "if the insured depository institution
deposits";
(45) in section 18(c)(1)(B), by inserting "or" at the end;
(46) in section 18(c)(4), by striking "other two banking
agencies" each place such term appears and inserting "other
Federal banking agencies";
(47) in section 18(c)(6), by striking "other two banking
agencies" and inserting "other Federal banking agencies";
(48) in section 18(c)(9), by striking "with the following
information:" and inserting "with—";
(49) in section 18(f)—
(A) by striking "such bank" and inserting "such insured
depository institution"; and
(B) by striking "the bank" and inserting "the insured
depository institution";
(50) in section 18(k)(4)(A)(ii)(II), by striking "or" at the
end;
(51) in section 20(a)(3), by inserting "or" at the end;
(52) in section 21(c), by striking "the bank" and inserting
"the insured depository institution";
(53) in section 21(d)(2), by striking "the bank" and inserting
"the insured depository institution";
(54) in section 21(e), by striking "the bank" and inserting
"the insured depository institution";
(55) in section 25(a), by striking "the bank" each place
it appears and inserting "the insured depository institution,
insured branch, or bank";
(56) in section 28(c)(2)(A)(i) by striking ", or" and inserting
";or";
(57) in section 28(d)(4)(C), by striking "subparagraphs" and
inserting "subparagraph";
12 u s e 1829a.
12 u s e 1829b.
12 u s e 1831b.
12 u s e 1831e.
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2291
(58) in section 28(e)(4), by striking "any other" and inserting "and any other";
(59) in section 30(e)(1)(A), by striking "venders" and inserting "the vendors";
(60) in section 31(b)(1), by striking "Board of Directors"
and inserting "board of directors";
(61) in section 33(c)(1), by striking the comma at the end
and inserting a semicolon;
(62) in section 34(a)( l)(A)(iii)—
(A) by striking "sections" and inserting "section"; and
(B) by striking "and" and inserting "or";
(63) in section 34(a)(2), by adding a period at the end;
(64) in section 38(f)(6), by striking "Commisssion" and
inserting "Commission";
(65) in section 40(c)(4)(A), by striking "subsections
(p)(12)(B) and (C)" and inserting "subparagraphs (B) and (C)
of subsection (p)(12)"; and
(66) in section 40(d)(8)(A), by striking "meeting" and inserting "meeting the".
(b)
FEDERAL HOME LOAN BANK ACT.—Section 21A of
12 USC I831e.
12 USC 1831g.
12 USC 1831h.
12 USC 1831j.
12 USC 1831k.
i2USCl83lo.
l2USC183lq.
the
Federal Home Loan Bank Act (12 U.S.C. 1441a) is amended—
(1) in subsection (a)(ll), by striking "a United States District Court" and inserting "a United States district court";
(2) in subsection (b)(ll)(B)(iii), by striking the comma after
"chapter 5";
(3) in subsection (b)(ll)(E)(iv)(II), by striking "knowledgable" and inserting "knowledgeable";
(4) in subsection (b)(ll)(G), by inserting "ADVISORY PERSONNEL.—" before "The Corporation shall";
(5) in subsection (r)(4), by striking "subsection.—" and
inserting "subsection, the following definitions shall apply:";
(6) in subsection (s)(2), by striking "subsection—" and
inserting "subsection, the following definitions shall apply:";
and
(7) in subsection (u)(5), by striking "subsection—" and
inserting "subsection, the following definitions shall apply:",
(c) RESOLUTION TRUST CORPORATION COMPLETION ACT.—Sec-
tion 21(a) of the Resolution Trust Corporation Completion Act (107
Stat. 2406) is amended—
12 USC 183lj.
(1) by striking "33(a)" and inserting "33";
(2) by striking "1831j(a)" and inserting "1831J";
(3) in paragraph (1), by striking "paragraph (1)" and inserting "subsection (a)(1)"; and
(4) in paragraph (2), by striking "paragraph (2)" and inserting "subsection (a)(2)".
(d) FEDERAL RESERVE ACT.—Section 7(a) of the Federal Reserve
Act (12 U.S.C. 289) is amended—
(1) in paragraph (1)(B), by inserting "(A)" after "subparagraph"; and
(2) in paragraph (2), by striking "subparagraph (A)" and
inserting "paragraph (1)(A)".
(e) REPEAL OF PROVISIONS IN THE REVISED STATUTES.—The
following sections
(1) Section
(2) Section
(3) Section
(4) Section
of the Revised
5170 (12 U.S.C.
5203 (12 U.S.C.
5206 (12 U.S.C.
5196 (12 U.S.C.
Statutes are hereby repealed:
28).
87).
88).
89).
108 STAT. 2292
PUBLIC LAW 103-325—SEPT. 23, 1994
5) Section 5158 (12 U.S.C. 102).
6) Section 5159 (12 U.S.C. 101a).
7) Section 5172 (12 U.S.C. 104).
8) Section 5173 (12 U.S.C. 107).
9) Section 5174 (12 U.S.C. 108).
10) Section 5182 (12 U.S.C. 109).
11) Section 5183 (12 U.S.C. 110).
12) Section 5195 (12 U.S.C. 123).
13) Section 5184 (12 U.S.C. 124).
14) Section 5226 (12 U.S.C. 131).
15) Section 5227 (12 U.S.C. 132).
16) Section 5228 (12 U.S.C. 133).
17) Section 5229 (12 U.S.C. 134).
18) Section 5230 (12 U.S.C. 137).
19) Section 5231 (12 U.S.C. 138).
20) Section 5232 (12 U.S.C. 135).
21) Section 5233 (12 U.S.C. 136).
22) Section 5185 (12 U.S.C. 151).
23) Section 5186 (12 U.S.C. 152).
24) Section 5160 (12 U.S.C. 168).
25) Section 5161 (12 U.S.C. 169).
26) Section 5162 (12 U.S.C. 170).
27) Section 5163 (12 U.S.C. 171).
28) Section 5164 (12 U.S.C. 172).
29) Section 5165 (12 U.S.C. 173).
30) Section 5166 (12 U.S.C. 174).
31) Section 5167 (12 U.S.C. 175).
32) Section 5222 (12 U.S.C. 183).
33) Section 5223 (12 U.S.C. 184).
34) Section 5224 (12 U.S.C. 185).
35) Section 5225 (12 U.S.C. 186).
36) Section 5237 (12 U.S.C. 195).
(f)
REPEAL
OF OTHER
OBSOLETE
PROVISIONS
IN
BANKING
LAWS.—^The following provisions of law are hereby repealed:
1) Section 26 of the Federal Deposit Insurance Act (12
U.S.C. 1831c).
2) Section 12 of the Act entitled "An Act To define and
fix the standard of value, to maintain the parity of all forms
of money issued or coined by the United States, to refund
the public debt, and for other purposes." and approved March
14, 1900 (12 U.S.C. 101).
(3) Section 3 of the Act entitled "An Act To amend the
laws relating to the denominations of circulating notes by
national banks and to permit the issuance of notes of small
denominations, and for other purposes." and approved October
5, 1917 (12 U.S.C. 103).
(4) The following sections of the Act entitled "An Act fixing
the amount of United States notes, providing for a redistribution of the national-bank currency, and for other purposes."
and approved June 20, 1874:
(A) Section 5 (12 U.S.C. 105).
(B) Section 3 (12 U.S.C. 121).
(C) Section 8 (12 U.S.C. 126).
(D) Section 4 (12 U.S.C. 176).
(5) The following sections of the Act entitled "An Act to
enable national-banking associations to extend their corporate
existence, and for other purposes." and approved July 12, 1882:
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2293
(A) Section 8 (12 U.S.C. 177).
(B) Section 9 (12 U.S.C. 178).
(6) The Act entitled "An Act to amend the national bank
act in providing for the redemption of national bank notes
stolen from or lost by banks of issue." and approved July
28, 1892 (12 U.S.C. 125).
(7) The Act entitled "An Act authorizing the conversion
of national gold banks." and approved February 14, 1880 (12
U.S.C. 153).
(g) AMENDMENTS TO OTHER LAWS.—
(1) The 8th paragraph of the 4th undesignated paragraph
of section 4 of the Federal Reserve Act (12 U.S.C. 341) is
amended by striking "Comptroller of the Currency" and inserting "Secretary of the Treasury".
(2) Section 11(d) of the Federal Reserve Act (12 U.S.C.
248(d)) is amended—
(A) by striking "bureau under the charge of the
Comptroller of the Currency" and inserting "Secretary of
the Treasury"; and
(B) by striking "Comptroller" and inserting "Secretary
of the Treasury".
(3) The 1st sentence of the 8th undesignated paragraph
of section 16 of the Federal Reserve Act (12 U.S.C. 418) is
amended by striking "the Comptroller of the Currency shall
under the direction of the Secretary of the Treasury," and
inserting "the Secretary of the Treasury shall".
(4) The 9th undesignated paragraph of section 16 of the
Federal Reserve Act (12 U.S.C. 419) is amended to read as
follows:
"When such notes have been prepared, the notes shall
be delivered to the Board of Governors of the Federal Reserve
System subject to the order of the Secretary of the Treasury
for the delivery of such notes in accordance with this Act.".
(5) The 10th undesignated paragraph of section 16 of the
Federal Reserve Act (12 U.S.C. 420) is amended—
(A) by striking "Comptroller of the Currency" and
inserting "Secretary of the Treasury"; and
(B) by striking "Federal Reserve Board" and inserting
"Board of Grovernors of the Federal Reserve System".
(6) The 11th undesignated paragraph of section 16 of the
Federal Reserve Act (12 U.S.C. 421) is amended to read as
follows:
"The Secretary of the Treasury may examine the plates,
|
dies, bed pieces, and other material used in the printing of
|
Federal Reserve notes and issue regulations relating to such
examinations.".
(7) The 6th undesignated paragraph of section 18 of the
Federal Reserve Act (38 Stat. 269) is amended—
12 USC 445.
(A) by striking "Comptroller of the Currency" each
place it appears and inserting "Secretary of the Treasury";
and
(B) in the 7th sentence, by striking "Comptroller" and
inserting "Secretary of the Treasury".
(8) The Act entitled "An Act to provide for the redemption
of national-bank notes, Federal Reserve bank notes, and Federal Reserve notes which cannot be identified as to the bank
of issue." and approved June 13, 1933, is amended—
108 STAT. 2294
12 use 106.
PUBLIC LAW 103-325—SEPT. 23, 1994
(A) in the 1st section (12 U.S.C. 121a)—
(i) by striking "whenever any national-bank notes,
Federal Reserve bank notes," and inserting "whenever
any Federal Reserve bank notes"; and
(ii) by striking ", and the notes, other than Federal
Reserve notes, so redeemed shall be forwarded to the
Comptroller of the Currency for cancellation and
destruction"; and
(B) in section 2 (12 U.S.C. 122a)—
(i) by striking "National-bank notes and"; and
(ii) by striking "national-bank notes and".
(9) The 1st section of the Act entitled "An Act making
appropriations for sundry civil expenses of the Government
for the fiscal year ending June thirtieth, eighteen hundred
and seventy-six, and for other purposes." and approved March
3, 1875, is amended in the 1st paragraph which appears under
the heading "NATIONAL CURRENCY" by striking "Secretary of
the Treasury: Provided, That" and all that follows through
the period and inserting "Secretary of the Treasury.".
(10) The Act entitled "An Act to simplify the accounts
of the Treasurer of the United States, and for other purposes."
and approved October 10, 1940 (12 U.S.C. 177a) is amended
by striking all after the enacting clause and inserting the
following: "That the cost of transporting and redeeming
outstanding national bank notes and Federal Reserve bank
notes as may be presented to the Treasurer of the United
States for redemption shall be paid from the regular annual
appropriation for the Department of the Treasury.".
(11) Section 5234 of the Revised Statutes (12 U.S.C. 192)
is amended by striking "has refused to pay its circulating
notes as therein mentioned, and".
(12) Section 5236 of the Revised Statutes (12 U.S.C. 194)
is amended by striking ", after full provision has been first
made for refunding to the United States any deficiency in
redeeming the notes of such association".
(13) Section 5238 of the Revised Statutes (12 U.S.C. 196)
is amended by striking the 1st sentence.
(14) Section 5119(b)(2) of title 31, United States Code,
is amended by adding at the end the following: "The Secretary
shall not be required to reissue United States currency notes
upon redemption.".
(h) AMENDMENTS TO OUTDATED DIVIDEND PROVISIONS.—
(1) WITHDRAWAL OF CAPITAL.—Section 5204 of the Revised
Statutes (12 U.S.C. 56) is amended—
(A) in the 2d sentence, by striking "net profits then
on hand, deducting therefrom its losses and bad debts"
and inserting "undivided profits, subject to other applicable
provisions of law"; and
(B) by striking the 3d sentence.
(2)
DECLARATION OF DIVIDENDS.—Section
5199
of
the
Revised Statutes (12 U.S.C. 60) is amended—
(A) in the 1st sentence, by striking "net profits of
the association" and inserting "undivided profits of the
association, subject to the limitations in subsection (b),";
(B) by striking "net profits" each subsequent place
such term appears and inserting "net income"; and
(C) by striking subsection (c).
PUBLIC LAW 103-325—SEPT. 23, 1994
108 STAT. 2295
(i) CLERICAL AMENDMENTS.—
(1) The table of sections for chapter 1 of title LXII of
the Revised Statutes of the United States is amended—
(A) by inserting after the item relating to section 5156
the following new item:
"5156A. Mergers, consolidations, and other acquisitions authorized.";
and
(B) by striking the items relating to sections 5141
and 5151.
(2) The table of sections for chapter 2 of title LXII of
the Revised Statutes of the United States is amended by striking the item relating to each of the following sections:
(A) Section 5158.
(B) Section 5159.
(C) Section 5160.
(D) Section 5161.
(E) Section 5162.
(F) Section 5163.
(G) Section 5164.
(H) Section 5165.
(I) Section 5166.
(J) Section 5167.
(K) Section 5170.
(L) Section 517 L
(M) Section 5172.
(N) Section 5173.
(0) Section 5174.
(?) Section 5175.
(Q) Section 5176.
(R) Section 5177.
(S) Section 5178.
(T) Section 5179.
(U) Section 5180.
(V) Section 5181.
(W) Section 5182.
(X) Section 5183.
(Y) Section 5184.
(Z) Section 5185.
(AA) Section 5186.
(BB) Section 5187.
(CO Section 5188.
(DD) Section 5189.
(3) The table of sections for chapter 3 of title LXII of
the Revised Statutes of the United States is amended by striking the item relating to each of the following sections:
(A) Section 5193.
(B) Section 5194.
(C) Section 5195.
(D) Section 5196.
(E) Section 5202.
(F) Section 5203.
(G) Section 5206.
(H) Section 5209.
(1) Section 5212.
(4) The table of sections for chapter 4 of title LXII of
the Revised Statutes of the United States is amended—
12 USC 28,
fS^iTipT'
}S~152
165-175,'58L
12 USC 82,
flAP'
163,592.
108 STAT. 2296
PUBLIC LAW 103-325—SEPT. 23, 1994
(A) by inserting after the item relating to section 5239
the following new item:
"5239A. Regulatory authority.";
and
12 use 131-138,
183-186,195,
5^^-
(B) by striking the items relating to the following sections:
(i) Section 5222.
(ii) Section 5223.
(iii) Section 5224.
(iv) Section 5225.
(v) Section 5226.
(vi) Section 5227.
(vii) Section 5228.
(viii) Section 5229.
(ix) Section 5230.
(x) Section 523 L
(xi) Section 5232.
(xii) Section 5233.
(xiii) Section 5237.
(xiv) Section 5243.
Approved September 23, 1994.
LEGISLATIVE HISTORY—H.R. 3474 (S. 1275):
HOUSE REPORTS: No. 103-652 (Comm. of Conference).
SENATE REPORTS: No. 103-169 accompanying S. 1275 (Comm. on Banking, Housing,
and Urban Affairs).
CONGRESSIONAL RECORD:
Vol. 139 (1993): Nov. 21, considered and passed House.
Vol. 140 (1994): Mar. 16, 17, considered and passed Senate, amended, in lieu of
S. 1275.
Aug. 4, House agreed to conference report.
Aug. 9, Senate agreed to conference report.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 30 (1994):
Sept. 23, Presidential remarks.
@FedFRASER