Independent Banking Preservation Act

Independent Banking Preservation Act - Amends the Bank Holding Company Act of 1956 to provide that a savings and loan association controlled by a holding company which fails to devote 70 percent of its assets to residential mortgages or related investments will be treated as a bank.

Requires a unitary savings and loan holding company which becomes subject to such Act because of its failure to devote 70 percent of its assets to residential mortgages or investments to divest itself of nonfinancial activities.

Amends the Federal Deposit Insurance Act, the National Housing Act, and the Federal Credit Union Act to prohibit Federal financial assistance to mergers involving the 50 largest banks or bank holding companies. Requires divestiture by January 1, 1985 of any merger acquisitions by the 50 largest banks or bank holding companies which were approved after January 1, 1983.

Amends the Bank Holding Company Act of 1956 to terminate State authority to approve acquisitions by out of State bank holding companies.

Prohibits, on or after the effective date of this Act, any State-chartered depository institution from commencing any activity not previously and lawfully engaged in by such institution unless such activity: (1) was authorized explicitly by a State statute adopted prior to January 1, 1983; (2) is permitted under the Bank Holding Company Act of 1956 for a bank holding company; or (3) is explicity authorized by a State statute and is performed exclusively in the authorizing State for customers present in the State.

Prohibits the payment of unreasonably high interest rates and other related interest rate practices for the purposes of destroying competition in local financial markets. Establishes criminal penalties.

Amends the International Banking Act of 1978 to prohibit the Comptroller of the Currency from: (1) approving foreign bank operations unless State law explicitly allows them; or (2) approving foreign operations, even if State law allows them, if the home country of the foreign bank does not give reciprocal treatment to United States banks.

Authorizes small banks to exercise bank holding company powers without forming a separate corporation after application to the Federal Reserve Board.