Business and Consumer Lending Stimulus Act - Prohibits Federal banking regulatory agencies from imposing or enforcing for a specified period any leverage limit for an adequately capitalized insured depository institution requiring a ratio of tangible equity to total assets greater than three percent.
Amends the Federal Deposit Insurance Act to require Federal banking regulatory agencies to: (1) consider, when prescribing real estate lending standards, their impact upon the availability of credit for certain target groups; and (2) minimize any negative impact.
Amends the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) to direct the Appraisal Subcommittee to encourage the States to enter into reciprocity agreements with sister States allowing licensed appraisers in one State to perform appraisals in other States.
Directs the Secretary of the Treasury to report to certain congressional committees on the effect of risk based capital standards upon insured depository institutions, the availability of credit, and the domestic economy.
Requires Federal banking regulatory agencies and the National Credit Union Administration to establish an independent appellate process within each agency to review regulatory determinations.
Directs the Board of Governors of the Federal Reserve System (the Board) to study and report to the Congress on the effect of sterile reserves. Directs the Office of Management and Budget and the Congressional Budget Office to study and report to the Congress on the budgetary impact of the payment of interest on sterile reserves.
Amends the Federal Deposit Insurance Act to cite circumstances under which the Resolution Trust Corporation may waive its rights to repudiate an agreement to sell credit card accounts receivable.
Requires Federal banking regulatory agencies to coordinate examinations conducted at an insured depository institution with Federal and State sister agencies so as to minimize the disruptive effects upon the institution's operations.
Directs the Board and the Secretary of Housing and Urban Development to jointly study and report to the Congress on ways to streamline the credit-granting process.
Amends the Federal Deposit Insurance Corporation Improvement Act of 1991 to increase the number and kinds of disclosures required of insured depository institutions with respect to loans made to small businesses, minority-owned businesses, and start-up enterprises.
Amends the Home Owners' Loan Act to treat as a bank, for certain purposes of the Federal Reserve Act, a savings association that is well capitalized without including goodwill in calculating its core capital (thus accelerating the effective date of the sister thrift exemption for well-capitalized institutions).
[Congressional Bills 103th Congress]
[From the U.S. Government Printing Office]
[H.R. 2955 Introduced in House (IH)]
103d CONGRESS
1st Session
H. R. 2955
To stimulate the economy by encouraging bank and thrift institution
lending to small- and medium-sized businesses and to consumers by
reducing and standardizing the leverage limit capital standard for safe
and sound depository institutions, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
August 6, 1993
Mr. Kennedy introduced the following bill; which was referred to the
Committee on Banking, Finance and Urban Affairs
_______________________________________________________________________
A BILL
To stimulate the economy by encouraging bank and thrift institution
lending to small- and medium-sized businesses and to consumers by
reducing and standardizing the leverage limit capital standard for safe
and sound depository 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.
This Act may be cited as the ``Business and Consumer Lending
Stimulus Act''.
SEC. 2. REDUCTION AND STANDARDIZATION OF LEVERAGE LIMIT CAPITAL
STANDARD APPLICABLE TO QUALIFIED DEPOSITORY INSTITUTIONS.
(a) In General.--In the case of any adequately capitalized insured
depository institution, the appropriate Federal banking agency may not
impose or enforce, during the 18-month period beginning on the date of
the enactment of this Act, any leverage limit with respect to such
depository institution which requires a ratio of tangible equity to
total assets greater than 3 percent.
(b) Exception.--Subsection (a) shall not apply with respect to an
insured depository institution which the appropriate Federal banking
agency determines--
(1) lacks sufficient loan loss reserves; or
(2) is operating in an unsafe or unsound manner.
(c) Definitions.--For purposes of this section--
(1) Adequately capitalized.--Subject to subsection (d), the
term ``adequately capitalized'' has the meaning given to such
term in section 38(b)(1)(B) of the Federal Deposit Insurance
Act, as implemented by each appropriate Federal banking agency
by regulation.
(2) Appropriate federal banking agency.--The term
``appropriate Federal banking agency'' has the meaning given to
such term in section 3(q) of the Federal Deposit Insurance Act.
(3) Insured depository institution.--The term ``insured
depository institution'' has the meaning given such term in
section 3(c)(2) of the Federal Deposit Insurance Act.
(4) Leverage limit.--The term ``leverage limit'' means the
capital standard relating to the minimum ratio of tangible
capital to total assets established by the appropriate Federal
banking agency pursuant to section 38(c)(1)(A)(i) of the
Federal Deposit Insurance Act.
(d) Determination of Adequacy of Capital.--Any determination by any
appropriate Federal banking agency with regard to the capital adequacy
of any insured depository institution for purposes of this Act shall be
made without regard to any requirement in section 38 of the Federal
Deposit Insurance Act, or any regulation prescribed under such section,
relating to a leverage limit.
SEC. 3. REGULATION OF REAL ESTATE LENDING.
Subsection (o) of section 18 of the Federal Deposit Insurance Act
(12 U.S.C. 1828(o)) (as added by section 304 of the Federal Insurance
Corporation Improvement Act of 1991) is amended--
(1) by redesignating paragraph (4) as paragraph (5); and
(2) by inserting new paragraph (4) as follows:
``(4) Consideration of impact of standards.--In prescribing
standards under paragraph (1), the appropriate Federal banking
agencies shall, consistent with safety and soundness,--
``(A) 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; and
``(B) minimize the negative impact that these
standards have on the availability of credit for such
purposes and in such areas.''.
SEC. 4. REAL ESTATE APPRAISAL AMENDMENT.
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), (c), (d), and (e) as
subsections (c), (d), (e), and (f), respectively;
(2) by adding the following new subsection (b):
``(b) Reciprocity.--The Appraisal Subcommittee shall encourage the
States to develop reciprocity agreements among the States so as to
readily authorize appraisers licensed or certified in 1 State and in
good standing with such State's appraiser certifying or licensing
agency to perform appraisals in any other State to the same extent as
appraisers certified or licensed by such other State.''; and
(3) by adding at the end of subsection (a)(3) the following
new sentence: ``A State appraiser certifying or licensing
agency shall not impose excessive fees or burdensome
requirements for temporary practice under this subsection, as
determined by the Appraisal Subcommittee.''.
SEC. 5. REPORT ON CAPITAL STANDARDS AND THEIR IMPACT ON THE ECONOMY.
(a) Study.--
(1) In general.--Before the end of the 90-day period
beginning on the date of the enactment of this Act, the
Secretary of the Treasury, after consultation with the Federal
banking agencies, shall report to the Committee on Banking,
Finance and Urban Affairs of the House of Representatives and
the Committee on Banking, Housing, and Urban Affairs of the
Senate on the effect that the implementation of risk based
capital standards, including the Basle international capital
standards, is having on--
(A) the safety and soundness of insured depository
institutions;
(B) the availability of credit, particularly to
individuals and small businesses; and
(C) economic growth.
(2) Recommendations.--The report shall contain any
recommendations with respect to capital standards that the
Secretary of the Treasury may determine to be appropriate.
(b) Definitions.--For purposes of this section, the terms ``Federal
banking agency'' and ``insured depository institution'' have the same
meanings as in section 3 of the Federal Deposit Insurance Act.
SEC. 6. REGULATORY APPEALS PROCESS.
(a) In General.--Before the end of the 180-day period beginning on
the date of the enactment of this Act, each appropriate Federal banking
agency and the National Credit Union Administration shall establish an
independent appellate process within the agency which shall be
responsible for reviewing material supervisory determinations made at
insured depository institutions or credit unions supervised by the
agency.
(b) Review Process.--In establishing the independent appellate
process required under subsection (a), each agency referred to in such
subsection shall take such action as may be appropriate to ensure
that--
(1) any appeal of a supervisory determination from any
insured depository institution or credit union, or any officer,
director, employee or other representative of any insured
depository institution or credit union, be heard and decided
expeditiously;
(2) appropriate safeguards exist for protecting the
appellant from retaliation by agency examiners; and
(3) the ruling agency officer have the authority, where
appropriate and as justice so requires, to stay the supervisory
determination pending completion of the appellate process.
(c) Appeals by Borrowers.--
(1) In general.--The appeals process established pursuant
to subsection (a) shall provide for an appeal of the
cancellation of a loan, a reduction in or the cancellation of a
line of credit, or a change in any terms or condition of a loan
or other extension of credit which is substantially adverse to
the borrower or recipient by any borrower or recipient of
credit from an insured depository institution who was in full
compliance with the terms of the loan or extension of credit at
the time of such action.
(2) Agency request to lender or creditor.--In reviewing any
appeal, the appropriate Federal banking agency may only request
a lender or other creditor to state the reasons for, or a
reconsideration of, the decision to take any action described
in paragraph (1).
(d) Comment Period.--Each agency referred to in subsection (a)
shall provide public notice and opportunity for comment on proposed
guidelines for an appellate process not later than 90 days after
enactment of this Act.
(e) Definitions.--For purposes of this section--
(1) Agency.--The term ``agency'' means the appropriate
Federal banking agency and the National Credit Union
Administration.
(2) Insured depository institution; appropriate federal
banking agency.--The terms ``insured depository institution''
and ``appropriate Federal banking agency'' have the meanings
given to such terms in section 3 of the Federal Deposit
Insurance Act.
(3) Material supervisory determination.--The term
``material supervisory determination'' includes determinations
relating to ratings on examinations of insured depository
institutions, the adequacy of loan loss reserve provisions by
such institutions, and loan classifications on loans
significant to the institution.
(4) Small business.--The term ``small business'' has the
meaning given to such term by the Administrator of the Small
Business Administration.
SEC. 7. STERILE RESERVES STUDIES.
(a) Federal Reserve Study.--Before the end of the 90-day period
beginning on the date of the enactment of this Act, the Board of
Governors of the Federal Reserve System, in consultation with the
Federal Deposit Insurance Corporation, shall study and report to
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 insured depository
institutions with a market rate of interest on sterile
reserves, or in the alternative, providing payment of this
interest into the appropriate deposit insurance fund;
(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 potential income lost by insured depository institutions;
(4) the degree to which the failure to pay interest on
sterile reserves has impacted upon economic growth; and
(5) the impact that 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.--No later than 90 days after enactment
of this Act, the Office of Management and Budget and the Congressional
Budget Office, in consultation with the Senate and House Committees on
the Budget, shall jointly study and report to Congress on the budgetary
impact of--
(1) paying insured depository institutions a market rate of
interest on sterile reserves; and
(2) paying such interest into the respective deposit
insurance funds.
(c) Definition.--For purposes of this section, the term ``insured
depository institution'' has the same meaning as in section 3 of the
Federal Deposit Insurance Act.
SEC. 8. 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 the Corporation's sole discretion and
upon such terms as the Corporation may prescribe, waive
the Corporation's 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 affected 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) shall not
be applied so as to--
``(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 be liable, in any capacity, to any person for
damages resulting from waiving or failing 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 may issue an
order affecting any such waiver or failure to waive.
``(E) Other authority not affected.--This paragraph
shall not be construed as limiting any other authority
of the Corporation to waive the Corporation's right
under this section to repudiate an agreement or lease.
``(15) Certain credit card customer lists protected.--
``(A) In general.--If any insured depository
institution sells credit card accounts receivable under
an agreement 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.--
Subparagraph (A) shall not be construed as limiting 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. 9. COORDINATED EXAMINATIONS.
Section 10(d) of the Federal Deposit Insurance Act (12 U.S.C.
1820(d)) (as amended by section 301 of this Act) is amended by adding
at the end the following new paragraph:
``(7) Coordinated examinations.--Each appropriate Federal
banking agency shall, to the extent practicable--
``(A) coordinate all examinations to be conducted
by that agency at an insured depository institution;
and
``(B) work with other appropriate Federal banking
agencies and appropriate State bank supervisors to
coordinate examinations to be conducted at an insured
depository institution,
so as to minimize the disruptive effects of such examinations
on the operations of the institution.''.
SEC. 10. STREAMLINED LENDING PROCESS FOR CONSUMER BENEFIT.
(a) Federal Reserve Study.--Before the end of the 1-year period
beginning on the date of the enactment of this Act, the Board of
Governors of the Federal Reserve System and the Secretary of Housing
and Urban Development shall jointly conduct a study and report to
Congress on ways to streamline the credit-granting process.
(b) Focus.--In carrying out subsection (a), the Board of Governors
of the Federal Reserve System and the Secretary of Housing and Urban
Development shall--
(1) identify ways to streamline the home mortgage, small
business and consumer lending processes so as to--
(A) reduce consumer inconvenience, cost and time
delays; and
(B) minimize cost and burdens on insured depository
institutions and credit unions without compromising the
effectiveness of any provision of law relating to
consumer protection;
(2) take such regulatory action, as appropriate, to meet
the objectives of paragraph (1); and
(3) provide Congress with legislative recommendations on
changes necessary to carry out the purposes of this section.
(c) Comment.--In carrying out the objectives of this section, the
Board shall solicit comments from other Federal banking agencies,
consumer groups, insured depository institutions, credit unions, and
other interested parties.
(d) Definition.--For purposes of this section, the term ``insured
depository institution'' has the meaning given to such term in section
3 of the Federal Deposit Insurance Act.
SEC. 11. REPORTING ON LOANS TO SMALL BUSINESSES, MINORITY-OWNED
BUSINESSES, AND START-UP ENTERPRISES.
Section 122 of the Federal Deposit Insurance Corporation
Improvement Act of 1991 (12 U.S.C. 1817 nt.) is amended by adding at
the end the following new subsection:
``(d) Reports on Loans to Small Businesses, Minority-Owned
Businesses, and Start-Up Businesses.--The information required to be
submitted by insured depository institutions under subsection (a) shall
include the following for the period covered by the report:
``(1) The total number of loans the principal on which does
not exceed $1,000,000.
``(2) The total number of loans to small businesses (as
defined in regulations prescribed by the Administrator of the
Small Business Administration).
``(3) The total number of loans to minority-owned
businesses (as defined in section 21A(r)(4)(A) of the Federal
Home Loan Bank Act).
``(4) The total number of loans to businesses which have
been incorporated, or otherwise been in existence, for less
than 2 years.''.
SEC. 12. ACCELERATING THE EFFECTIVE DATE OF THE SISTER THRIFT EXEMPTION
FOR WELL CAPITALIZED INSTITUTIONS.
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) In general.--Effective on and after the date
of enactment of this bill, every savings association
that is well capitalized (as defined in section 38 of
the Federal Deposit Insurance Act) without including
goodwill in calculating core capital shall be treated
as a bank for purposes of section 23A(d)(1) 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.''.
<all>
HR 2955 IH----2
Introduced in House
Introduced in House
Referred to the House Committee on Banking, Finance + Urban Affrs.
Referred to the Subcommittee on Consumer Credit and Insurance.
Referred to the Subcommittee on Housing and Community Development.
Referred to the Subcommittee on Economic Growth and Credit Formation.
Referred to the Subcommittee on Financial Institutions Supervision, Regulation and Deposit Insurance.
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