Summary: H.R.3876 — 99th Congress (1985-1986)All Information (Except Text)

There is one summary for H.R.3876. Bill summaries are authored by CRS.

Shown Here:
Introduced in House (12/06/1985)

Consumer Bank Act of 1985 - Title I: Regulation of Consumer Banks - Amends the Bank Holding Company Act of 1956 to exclude as a "bank" subject to the restrictions of such Act any consumer bank or any industrial bank, Morris Plan bank, industrial loan company or similar institution which operates as authorized by State law and which does not both make commercial loans and accept demand deposits.

Lists the requirements of a "consumer bank" which include: (1) a prohibition against making commercial loans; (2) a requirement to maintain investments in specified types of consumer loans; and (3) a requirement to make available in a State an aggregate amount of loans equal to 65 percent of the consumer deposits held by such institution which were received in such State. Defines a "commercial loan" as any loan or extension of credit for commercial, agricultural, or cultural purposes.

Applies tying arrangement provisions of such Act to consumer banks and consumer bank holding companies. Applies the Community Reinvestment Act to consumer banks.

Permits a consumer bank and its subsidiaries to enter into a transaction with an affiliate only if the terms and conditions are substantially the same, or at least as beneficial to the bank or subsidiary, as those prevailing for comparable transactions with nonaffiliated companies.

Prohibits a consumer bank from being held responsible, or from stating that it will assume responsibility, for the obligations of its affiliates.

Permits a consumer bank to offer or sell only those products and services that a national bank may offer or sell. Allows a consumer bank's nonbanking affiliates to offer or sell other products and services in the consumer bank's facility, but prohibits the bank or any bank employee or agent from publicly assisting the affiliates in selling their products.

Authorizes the Board of Governors of the Federal Reserve System, after providing notice and a hearing, to issue to the parent company of a consumer bank an order to cease and desist an activity or the ownership or control of a nonbank subsidiary which constitutes a serious actual risk to the financial safety, soundness, or stability of the consumer bank and which is inconsistent with sound banking principles.

Declares that no State may prohibit the affiliation of a bank with a consumer bank.

Title II: Consumer Bank Truth in Savings - Consumer Bank Truth in Savings Act - Requires any consumer bank announcement regarding the rate of interest payable on any deposit to state, and give equal prominence to, the annual percentage yield (and the method of compounding interest) followed by the annual rate of simple interest (including the period such rate will be in effect).