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115th Congress     }                                  {        Report
                        HOUSE OF REPRESENTATIVES
 2d Session        }                                  {        115-882

======================================================================

 
 TO REQUIRE THE APPROPRIATE FEDERAL BANKING AGENCIES TO RECOGNIZE THE 
   EXPOSURE-REDUCING NATURE OF CLIENT MARGIN FOR CLEARED DERIVATIVES

                                _______
                                

 August 3, 2018.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Hensarling, from the Committee on Financial Services, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 4659]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 4659) to require the appropriate Federal banking 
agencies to recognize the exposure-reducing nature of client 
margin for cleared derivatives, having considered the same, 
report favorably thereon without amendment and recommend that 
the bill do pass.

                          Purpose and Summary

    In September 2014, the Board of Governors of the Federal 
Reserve System (Federal Reserve), the Federal Deposit Insurance 
Corporation (FDIC), and the Office of the Comptroller of the 
Currency (OCC) adopted final rules to implement the 
``Supplementary Leverage Ratio'' (SLR). The SLR is the 
arithmetic mean of the ratio of Tier 1 capital to total 
leverage exposure calculated as of the last day of each month 
in the reporting quarter. Among other provisions, many market 
participants expressed concerns with the SLR's treatment of 
initial margin for cleared derivatives. To address these 
concerns, on December 14, 2017, Representative Blaine 
Luetkemeyer introduced H.R 4659. H.R. 4659 would require the 
Federal Reserve, the FDIC and OCC no later than three months 
after enactment to amend their rules for purposes of any 
leverage-based capital rule to deduct initial margin with 
respect to a centrally-cleared derivative transaction from the 
amount of any leverage exposure arising from the guarantee by 
the clearing member of that client's derivative obligation to 
the central counterparty.

                  Background and Need for Legislation

    The goal of H.R. 4659 is to reduce costs and increase 
options for commercial businesses and farmers who use futures 
and cleared swaps to manage their business risks by eliminating 
the punitive capital charge on cleared derivatives 
transactions. H.R. 4659 would accomplish this by requiring the 
appropriate Federal banking agencies to recognize the exposure-
reducing nature of client margin for cleared derivatives for 
the calculation of the supplementary leverage ratio (SLR).
    In response to the 2008 financial crisis, the Basel 
Committee on Banking Supervision (Basel Committee) agreed to 
modify internationally negotiated bank regulatory standards, 
known as the Basel Accords, to increase bank capital 
requirements. On July 9, 2013, the federal banking regulators, 
including the Federal Reserve, FDIC, and the OCC, issued a 
final rule to implement most of the Basel III recommendations.
    In addition to raising the simple leverage ratio, Basel III 
established a ``supplementary leverage ratio'' (SLR) that 
requires certain larger banking organizations to include 
leverage exposures that are both on and off asset the bank's 
balance sheet, which includes exposures arising from futures, 
options, and other derivative transactions. The Basel SLR was 
intended to be ``a simple, transparent, non-risk based leverage 
ratio to act as a credible supplementary measure to risk-based 
capital requirements.'' All banks with at least $250 billion in 
total assets and $10 billion in foreign assets must meet an SLR 
of 3%. Banks subject to these rules were required to meet the 
SLR beginning in January 2018.
    Title VII of the Dodd-Frank Act required certain over-the-
counter (OTC) swaps to be centrally cleared in order to take 
advantage of the risk mitigating benefits of clearing. As a 
result, the role of clearing members and the amount of 
transactions cleared by these institutions has expanded 
significantly. Although commercial and agricultural businesses, 
commonly known as ``end-users'' that use futures and swaps to 
manage business risks can only trade cleared derivatives 
through a clearing member, as they cannot access clearinghouses 
directly.
    For centrally cleared derivatives, clearinghouses collect 
initial margin on all client trades, which is typically posted 
by the business to the clearing member for the purpose of 
offsetting exposure to the clearinghouse. Any margin paid to a 
clearing member from a customer for cleared derivatives 
transactions is legally considered to belong to the customer. 
Commodity Futures Trading Commission (CFTC) rules require that 
customer margin be posted in the form of either cash or 
extremely safe and liquid securities such as U.S. Treasuries 
and that such margin be clearly segregated from the bank's own 
money. As a result, the clearing member bank and the 
corresponding capital regulatory treatment of the cleared swap 
transaction ultimately factors into the pricing of the 
transaction.
    The SLR imposes significant capital requirements on initial 
margin, which the clearing member collects to reduce risk on 
centrally cleared exposures. Specifically, the leverage ratio 
fails to recognize the exposure-reducing effect of segregated 
client margin posted to the bank, which is intended to help 
cover the clients' obligations as part of guaranteeing the 
client trade in the clearing process. For example, a clearing 
firm is clearing a transaction that would produce $100 of 
client exposure and is holding $10 of customer margin in a 
segregated account. If the client defaults, the clearing firm 
only owes the clearinghouse $90 because the $10 margin is there 
to cover some of the loss. But while the clearing firm's total 
exposure is the $90, regulators require the firm to hold 
capital for the full $100--instead of allowing the firm to 
offset $10 of customer margin in the firm's capital 
requirement. This failure of the leverage ratio to recognize 
the exposure-reducing effect of segregated margin therefore 
increases the amount of required capital that will need to be 
allocated to the clearing businesses within these banking 
institutions. As stated by CFTC Chairman Christopher Giancarlo, 
``[a]pplying the SLR to clearing customer margin reflects a 
flawed understanding of central counterparty (CCP) clearing.''
    As Kenneth Bentsen the CEO of SIFMA testified on February 
14, 2018, ``Because the SLR's approach to client clearing 
requires clearing firms to hold capital against these exposures 
far in excess of the risks they face,'' the mandate discourages 
client clearing activity. The banking regulator's decision to 
treat client margin punitively runs counter to both the Dodd-
Frank Act's mandates in Title VII and the G-20's commitment to 
promote central clearing. Thus, the economics of providing 
central clearing services to customers, the SLR's capital 
charges for certain assets, such as cash collateral, discourage 
banking organizations and their affiliates from providing such 
services to their customers. If neither Congress nor the 
banking regulators amend the SLR's treatment of initial margin, 
the long-term result would make it less likely for clearing 
members to add new clients for derivatives clearing. A healthy 
number of clearing members are vital to support derivatives 
end-users, including commercial and agricultural businesses as 
well as farmers and ranchers who use futures and cleared swaps 
to manage their business risks. Derivatives end-users only can 
trade swaps through a clearing member--they cannot access 
clearinghouses directly.
    CFTC Chairman Giancarlo estimated that addressing the 
leverage ratio treatment of initial margin would reduce bank 
capital by only 1% but would reduce clearing capital costs by 
70% and promote additional market activity. The number of firms 
engaged in this business has declined from 100 in 2002 to 55 at 
the start of 2017, of which only 19 firms actually were holding 
initial margin from clients. For specific product classes, 
there may be even fewer market providers. Former CFTC Chairman 
Timothy Massad raised concerns with industry consolidation 
increasing systemic risk by concentrating derivatives clearing 
activities in fewer clearing member banks, stating ``if some 
clearing members choose to limit customers, or get out of the 
clearing business altogether, that may make it harder to deal 
with the next time a clearing member defaults.''
    Financial regulators in the United Kingdom have announced 
that they will take steps to implement an offset for initial 
client margin within its domestic leverage ratio, and 
legislation has been introduced in the European Union to 
provide banks with an offset. Foreign regulators acting 
unilaterally to recognize an offset for client margin for 
centrally cleared derivatives without the U.S. making a similar 
recognition, will leave U.S. banks and their clients at a 
significant disadvantage as compared to their overseas 
competitors.
    H.R. 4659 is consistent with the Department of Treasury's 
October 2017 Core Principles Report on Capital Markets which 
was issued pursuant to Executive Order 13772 by President Trump 
in February 2017. The Treasury Department recommended r an 
offset for segregated initial margin held for centrally cleared 
derivatives in a firm's leverage ratio. As that Capital Markets 
Report correctly recognized, to grant such an offset would have 
an insignificant impact on capital requirements. In February 
14, 2018 testimony before the Subcommittee on Capital Markets, 
Securities, and Investment, Scott O'Malia, Chief Executive 
Officer, International Swaps and Derivatives Association noted, 
``Properly segregated client cash collateral is not a source of 
leverage and risk exposure. However, the rule requires firms to 
include these amounts in their calculations. This approach is 
unreasonable as cash collateral mitigates risk.''

                                Hearings

    The Financial Services Subcommittee on Capital Markets and 
Government Sponsored Enterprises held a hearing examining 
matters relating to H.R. 4659 on February 14, 2018.

                        Committee Consideration

    The Committee on Financial Services met in open session on 
March 21, 2018, and ordered H.R. 4659 to be reported favorably 
to the House without amendment by a recorded vote of 44 yeas to 
16 nays (recorded vote no. FC-170), a quorum being present.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. The 
sole recorded vote was on a motion by Chairman Hensarling to 
report the bill favorably to the House without amendment. The 
motion was agreed to by a recorded vote of 44 yeas to 16 nays 
(Record vote no. FC-170), a quorum being present.




[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]




                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the findings and recommendations of 
the Committee based on oversight activities under clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
are incorporated in the descriptive portions of this report.

                    Performance Goals and Objectives

    With respect to clause 3(c)(4) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
bill contains no measure that authorizes funding, so no 
statement of general performance goals and objectives for which 
any measure authorizes funding is required.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

                 Congressional Budget Office Estimates

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, June 8, 2018.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4659, a bill to 
require the appropriate Federal banking agencies to recognize 
the exposure-reducing nature of client margin for cleared 
derivatives.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Kathleen 
Gramp and Sarah Puro.
            Sincerely,
                                             Mark P. Hadley
                                        (For Keith Hall, Director).
    Enclosure.

H.R. 4659--A bill to require the appropriate Federal banking agencies 
        to recognize the exposure-reducing nature of client margin for 
        cleared derivatives

    Summary: H.R. 4659 would change the calculation of a bank's 
supplementary leverage ratio (SLR) to exclude from the ratio's 
denominator the amount that a nonbank entity pays to the bank 
as collateral for certain derivatives contracts.\1\ Currently, 
that collateral--also called the segregated margin--must be 
included as an asset in the SLR's denominator.
---------------------------------------------------------------------------
    \1\The SLR is a capital-to-assets ratio that accounts for 
derivatives and other commitments that are not typically included in a 
bank's leverage ratio calculation.
---------------------------------------------------------------------------
    CBO estimates that enacting H.R. 4659 would increase 
deficits by $44 million over the 2018-2028 period. That amount 
includes a net increase in direct spending of $46 million and 
an increase in revenues of $2 million. Most of those costs 
would be recovered from financial institutions in years after 
2028. Because enacting the bill would affect direct spending 
and revenues, pay-as-you-go-procedures apply.
    CBO estimates that enacting H.R. 4659 would not increase 
net direct spending by more than $2.5 billion or on-budget 
deficits by more than $5 billion in any of the four consecutive 
10-year periods beginning in 2029.
    H.R. 4659 contains no intergovernmental mandates as defined 
in the Unfunded Mandates Reform Act (UMRA). Additional fees 
imposed by the Federal Deposit Insurance Corporation (FDIC) and 
the Office of the Comptroller of the Currency (OCC) would 
increase the cost of an existing mandate on private entities 
required to pay those assessments. However, CBO estimates that 
the incremental cost of the mandate would fall well below the 
annual threshold established in UMRA for private-sector 
mandates ($160 million in 2018, adjusted for inflation).
    Estimated cost to the Federal Government: The estimated 
budgetary effect of H.R. 4659 is shown in the following table. 
The costs of the legislation fall within budget function 370 
(advancement of commerce).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                      By fiscal year, in millions of dollars--
                                                          ----------------------------------------------------------------------------------------------
                                                            2018   2019   2020   2021   2022   2023   2024   2025   2026   2027   2028  2019-23  2019-28
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              INCREASES IN DIRECT SPENDING
 
Estimated Budget Authority...............................      0      1      5      7      7      7      6      4      4      3      3       27       46
Estimated Outlays........................................      0      1      5      7      7      7      6      4      4      3      3       27       46
 
                                                                  INCREASES IN REVENUES
 
Estimated Revenues.......................................      0      0      *      *      *      *      *      *      *      *      *        1        2
 
                                       NET INCREASE IN THE DEFICIT FROM INCREASES IN DIRECT SPENDING AND REVENUES
 
Increase in the Deficit..................................      0      1      5      7      7      7      5      4      3      3      2       26       44
--------------------------------------------------------------------------------------------------------------------------------------------------------
Components do not sum to totals because of rounding; * = between zero and $500,000.

    Basis of estimate: The budgetary effects of H.R. 4659 stem 
from a small increase in the chance that the FDIC would incur 
additional costs to resolve failed financial institutions. The 
change in the SLR calculation could reduce the amount of 
capital held by about 10 large bank holding companies and their 
subsidiary insured depository institutions. For this estimate, 
CBO assumes that the bill will be enacted near the end of 2018.
    This cost estimate is based on the analysis underlying cost 
projections for the FDIC's financial resolution programs 
included in CBO's April 2018 baseline budget projections. Those 
projections incorporate a weighted probability of different 
possibilities for future failures of financial institutions. 
Most of those possibilities have a very small probability of 
occurring, but if they did, the costs to the FDIC's Deposit 
Insurance Fund (DIF) or the Orderly Liquidation Fund (OLF) 
would be very large.\2\ In CBO's view federal regulations that 
require banks to maintain certain levels of capital and 
liquidity lower the FDIC's costs for resolving failed financial 
institutions because they increase the proportion of losses 
that would be absorbed by shareholders and other creditors.
---------------------------------------------------------------------------
    \2\The DIF, which is funded by premiums paid by member 
institutions, resolves the assets of failed insured depository 
institutions and insures certain deposits up to $250,000 per person. 
The OLF was established to resolve failures of certain large, 
systemically important financial institutions--banks and nonbanks. In 
the event of such a failure, costs to the OLF would be recouped by 
assessments (which are recorded as revenues in the budget) collected 
from other large financial institutions.
---------------------------------------------------------------------------
    CBO estimates that the bill would allow about 10 large bank 
holding companies and their insured depository institutions to 
exclude certain amounts paid by nonbanks on centrally cleared 
derivatives when calculating their SLR. The bill's provisions 
could reduce the capital that those institutions must hold 
relative to their assets. Changes in the amount of capital that 
a bank holds can affect its probability of failure, which in 
turn may affect costs incurred by the DIF and the OLF.\3\ The 
net effect of implementing the bill would vary among eligible 
institutions because the SLR is only one measure used by 
federal regulators to determine how much capital a bank must 
hold.
---------------------------------------------------------------------------
    \3\The academic literature suggests that a 1 percent decrease in 
the capital-to-assets ratio for a bank can increase the probability of 
failure by between 5 percent and 60 percent. CBO used a midpoint of 
that range for this estimate.
---------------------------------------------------------------------------
    The effects of the bill on bank holding companies that 
would be resolved by the OLF and on insured depository 
institutions that would be resolved by the DIF are different 
because of the different regulatory requirements for how much 
capital those entities must hold relative to their assets. 
Based on publicly available information about the current 
components of bank balance sheets, CBO expects that the total 
capital of the 10 bank holding companies affected by the bill 
could decrease by about two-tenths of one percent and that 
their associated insured depository institutions could reduce 
capital by less than three-quarters of one percent using the 
loss and failure rates that underlie CBO's April 2018 baseline 
projections for the FDIC. CBO used the estimates of the 
decreases in capital to calculate the additional cost to the 
government for resolving the affected financial institutions. 
As a result, CBO estimates that enacting H.R. 4659 would 
increase deficits by $44 million over the 2019-2028 period; 
that amount comprises an increase in direct spending of $46 
million and an increase in revenues of $2 million.
    Uncertainty: CBO endeavors to develop estimates that are in 
the middle of the distribution of potential budgetary outcomes. 
In this case, budget projections are uncertain because future 
decisions by banks and market participants are unknown. 
Specifically the reduction in capital that banks hold (if any) 
in response to H.R. 4659 could be different than CBO has 
estimated. In addition, how any reduction in bank capital might 
increase federal costs in the event of a bank failure is also 
uncertain. Finally, CBO's estimates under current law are 
themselves uncertain because changes in the underlying economy 
could have a significant effect on bank health and bank failure 
rates. CBO's current law baseline includes a small chance, in 
every year, that the economy could experience a downturn that 
affects the banking sector.
    Pay-As-You-Go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in outlays and revenues that are 
subject to those pay-as-you-go procedures were shown in the 
table on page 2.
    Increase in long-term direct spending and deficits: CBO 
estimates that enacting H.R. 4659 would not increase net direct 
spending by more than $2.5 billion or on-budget deficits by 
more than $5 billion in any of the four consecutive 10-year 
periods beginning in 2029.
    Mandates: H.R. 4659 contains no intergovernmental mandates 
as defined in UMRA. Additional fees imposed by the FDIC and the 
OCC would increase the cost of an existing mandate on private 
entities required to pay those assessments. However, CBO 
estimates that the incremental cost of the mandate would fall 
well below the annual threshold established in UMRA for 
private-sector mandates ($160 million in 2018, adjusted for 
inflation).
    Estimate prepared by: Federal costs: Kathleen Gramp and 
Sarah Puro; Mandates: Jon Sperl.
    Estimate reviewed by: Kim P. Cawley, Chief, Natural 
Resources Cost Estimating Unit; Susan Willie, Chief, Mandates 
Unit; H. Samuel Papenfuss, Deputy Assistant Director for Budget 
Analysis.

                       Federal Mandates Statement

    This information is provided in accordance with section 423 
of the Unfunded Mandates Reform Act of 1995.
    The Committee has determined that the bill does not contain 
Federal mandates on the private sector. The Committee has 
determined that the bill does not impose a Federal 
intergovernmental mandate on State, local, or tribal 
governments.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of the section 
102(b)(3) of the Congressional Accountability Act.

                         Earmark Identification

    With respect to clause 9 of rule XXI of the Rules of the 
House of Representatives, the Committee has carefully reviewed 
the provisions of the bill and states that the provisions of 
the bill do not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits within the meaning of the 
rule.

                    Duplication of Federal Programs

    In compliance with clause 3(c)(5) of rule XIII of the Rules 
of the House of Representatives, the Committee states that no 
provision of the bill establishes or reauthorizes: (1) a 
program of the Federal Government known to be duplicative of 
another Federal program; (2) a program included in any report 
from the Government Accountability Office to Congress pursuant 
to section 21 of Public Law 111-139; or (3) a program related 
to a program identified in the most recent Catalog of Federal 
Domestic Assistance, published pursuant to the Federal Program 
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No. 
98-169).

                   Disclosure of Directed Rulemaking

    Pursuant to section 3(i) of H. Res. 5, (115th Congress), 
the following statement is made concerning directed rule 
makings: The Committee estimates that the bill requires 
directed rule makings for the Federal Reserve, Federal Deposit 
Insurance Corporation and Office of the Comptroller of the 
Currency by amending their rules for purposes of any leverage-
based capital rule to deduct initial margin with respect to a 
centrally-cleared derivative transaction from the amount of any 
leverage exposure arising from the guarantee by the clearing 
member of that client's derivative obligation to the central 
counterparty.

             Section-by-Section Analysis of the Legislation


Section 1. Treatment of client margin

    This section amends Section 18(n) of the Federal Deposit 
Insurance Act by providing that for the purposes of any 
leverage-based capital rule, the amount of any initial margin 
provided by a client with respect to a centrally-cleared 
derivative obligation shall be deducted from the amount of any 
leverage exposure.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, and existing law in which no 
change is proposed is shown in roman):

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, and existing law in which no 
change is proposed is shown in roman):

                     FEDERAL DEPOSIT INSURANCE ACT




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

           *       *       *       *       *       *       *

                              ----------                              


                    BANK HOLDING COMPANY ACT OF 1956



           *       *       *       *       *       *       *
                             administration

  Sec. 5. (a) Within one hundred and eighty days after the date 
of enactment of this Act, or within one hundred and eighty days 
after becoming a bank holding company, whichever is later, each 
bank holding company shall register with the Board on forms 
prescribed by the Board, which shall include such information 
with respect to the financial condition and operations, 
management, and intercompany relationships of the bank holding 
company and its subsidiaries, and related matters, as the Board 
may deem necessary or appropriate to carry about the purposes 
of this Act. The Board may, in its discretion, extend the time 
within which a bank holding company shall register and file the 
requisite information. A declaration filed in accordance with 
section 4(l)(1)(C) shall satisfy the requirements of this 
subsection with regard to the registration of a bank holding 
company but not any requirement to file an application to 
acquire a bank pursuant to section 3.
  (b) The Board is authorized to issue such regulations and 
orders, including regulations and orders relating to the 
capital requirements for bank holding companies, as may be 
necessary to enable it to administer and carry out the purposes 
of this Act and prevent evasions thereof. In establishing 
capital regulations pursuant to this subsection, the Board 
shall seek to make such requirements countercyclical, so that 
the amount of capital required to be maintained by a company 
increases in times of economic expansion and decreases in times 
of economic contraction, consistent with the safety and 
soundness of the company.
  (c) Reports and Examinations.--
          (1) Reports.--
                  (A) In general.--The Board, from time to 
                time, may require a bank holding company and 
                any subsidiary of such company to submit 
                reports under oath to keep the Board informed 
                as to--
                          (i) its financial condition, systems 
                        for monitoring and controlling 
                        financial and operating risks, and 
                        transactions with depository 
                        institution subsidiaries of the bank 
                        holding company; and
                          (ii) compliance by the bank holding 
                        company or subsidiary with--
                                  (I) this Act;
                                  (II) Federal laws that the 
                                Board has specific jurisdiction 
                                to enforce against the company 
                                or subsidiary; and
                                  (III) other than in the case 
                                of an insured depository 
                                institution or functionally 
                                regulated subsidiary, any other 
                                applicable provision of Federal 
                                law.
                  (B) Use of existing reports and other 
                supervisory information.--The Board shall, to 
                the fullest extent possible, use--
                          (i) reports and other supervisory 
                        information that the bank holding 
                        company or any subsidiary thereof has 
                        been required to provide to other 
                        Federal or State regulatory agencies;
                          (ii) externally audited financial 
                        statements of the bank holding company 
                        or subsidiary;
                          (iii) information otherwise available 
                        from Federal or State regulatory 
                        agencies; and
                          (iv) information that is otherwise 
                        required to be reported publicly.
                  (C) Availability.--Upon the request of the 
                Board, the bank holding company or a subsidiary 
                of the bank holding company shall promptly 
                provide to the Board any information described 
                in clauses (i) through (iii) of subparagraph 
                (B).
          (2) Examinations.--
                  (A) In general.--Subject to subtitle B of the 
                Consumer Financial Protection Act of 2010, the 
                Board may make examinations of a bank holding 
                company and each subsidiary of a bank holding 
                company in order to--
                          (i) inform the Board of--
                                  (I) the nature of the 
                                operations and financial 
                                condition of the bank holding 
                                company and the subsidiary;
                                  (II) the financial, 
                                operational, and other risks 
                                within the bank holding company 
                                system that may pose a threat 
                                to--
                                          (aa) the safety and 
                                        soundness of the bank 
                                        holding company or of 
                                        any depository 
                                        institution subsidiary 
                                        of the bank holding 
                                        company; or
                                          (bb) the stability of 
                                        the financial system of 
                                        the United States; and
                                  (III) the systems of the bank 
                                holding company for monitoring 
                                and controlling the risks 
                                described in subclause (II); 
                                and
                          (ii) monitor the compliance of the 
                        bank holding company and the subsidiary 
                        with--
                                  (I) this Act;
                                  (II) Federal laws that the 
                                Board has specific jurisdiction 
                                to enforce against the company 
                                or subsidiary; and
                                  (III) other than in the case 
                                of an insured depository 
                                institution or functionally 
                                regulated subsidiary, any other 
                                applicable provisions of 
                                Federal law.
                  (B) Use of reports to reduce examinations.--
                For purposes of this paragraph, the Board 
                shall, to the fullest extent possible, rely 
                on--
                          (i) examination reports made by other 
                        Federal or State regulatory agencies 
                        relating to a bank holding company and 
                        any subsidiary of a bank holding 
                        company; and
                          (ii) the reports and other 
                        information required under paragraph 
                        (1).
                  (C) Coordination with other regulators.--The 
                Board shall--
                          (i) provide reasonable notice to, and 
                        consult with, the appropriate Federal 
                        banking agency, the Securities and 
                        Exchange Commission, the Commodity 
                        Futures Trading Commission, or State 
                        regulatory agency, as appropriate, for 
                        a subsidiary that is a depository 
                        institution or a functionally regulated 
                        subsidiary of a bank holding company 
                        before commencing an examination of the 
                        subsidiary under this section; and
                          (ii) to the fullest extent possible, 
                        avoid duplication of examination 
                        activities, reporting requirements, and 
                        requests for information.
          (3) Capital.--
                  (A) In general.--The Board may not, by 
                regulation, guideline, order, or otherwise, 
                prescribe or impose any capital or capital 
                adequacy rules, guidelines, standards, or 
                requirements on any functionally regulated 
                subsidiary of a bank holding company that--
                          (i) is not a depository institution; 
                        and
                          (ii) is--
                                  (I) in compliance with the 
                                applicable capital requirements 
                                of its Federal regulatory 
                                authority (including the 
                                Securities and Exchange 
                                Commission) or State insurance 
                                authority;
                                  (II) properly registered as 
                                an investment adviser under the 
                                Investment Advisers Act of 
                                1940, or with any State; or
                                  (III) is licensed as an 
                                insurance agent with the 
                                appropriate State insurance 
                                authority.
                  (B) Rule of construction.--Subparagraph (A) 
                shall not be construed as preventing the Board 
                from imposing capital or capital adequacy 
                rules, guidelines, standards, or requirements 
                with respect to--
                          (i) activities of a registered 
                        investment adviser other than with 
                        respect to investment advisory 
                        activities or activities incidental to 
                        investment advisory activities; or
                          (ii) activities of a licensed 
                        insurance agent other than insurance 
                        agency activities or activities 
                        incidental to insurance agency 
                        activities.
                  (C) Limitations on indirect action.--In 
                developing, establishing, or assessing bank 
                holding company capital or capital adequacy 
                rules, guidelines, standards, or requirements 
                for purposes of this paragraph, the Board may 
                not take into account the activities, 
                operations, or investments of an affiliated 
                investment company registered under the 
                Investment Company Act of 1940, unless the 
                investment company is--
                          (i) a bank holding company; or
                          (ii) controlled by a bank holding 
                        company by reason of ownership by the 
                        bank holding company (including through 
                        all of its affiliates) of 25 percent or 
                        more of the shares of the investment 
                        company, and the shares owned by the 
                        bank holding company have a market 
                        value equal to more than $1,000,000.
                  (D) Treatment of client margin.--For purposes 
                of any leverage-based capital rule, guideline, 
                standard, or requirement promulgated, 
                prescribed, or imposed by the Board on bank 
                holding companies, the amount of any initial 
                margin provided by a client of a bank holding 
                company or affiliate thereof with respect to a 
                centrally-cleared derivative obligation shall 
                be deducted from the amount of any leverage 
                exposure arising from the guarantee by the bank 
                holding company or affiliate thereof of the 
                client's derivative obligation to the central 
                counterparty.
          (4) Functional regulation of securities and insurance 
        activities.--
                  (A) Securities activities.--Securities 
                activities conducted in a functionally 
                regulated subsidiary of a depository 
                institution shall be subject to regulation by 
                the Securities and Exchange Commission, and by 
                relevant State securities authorities, as 
                appropriate, subject to section 104 of the 
                Gramm-Leach-Bliley Act, to the same extent as 
                if they were conducted in a nondepository 
                institution subsidiary of a bank holding 
                company.
                  (B) Insurance activities.--Subject to section 
                104 of the Gramm-Leach-Bliley Act, insurance 
                agency and brokerage activities and activities 
                as principal conducted in a functionally 
                regulated subsidiary of a depository 
                institution shall be subject to regulation by a 
                State insurance authority to the same extent as 
                if they were conducted in a nondepository 
                institution subsidiary of a bank holding 
                company.
          (5) Definition.--For purposes of this subsection, the 
        term ``functionally regulated subsidiary'' means any 
        company--
                  (A) that is not a bank holding company or a 
                depository institution; and
                  (B) that is--
                          (i) a broker or dealer that is 
                        registered under the Securities 
                        Exchange Act of 1934;
                          (ii) a registered investment adviser, 
                        properly registered by or on behalf of 
                        either the Securities and Exchange 
                        Commission or any State, with respect 
                        to the investment advisory activities 
                        of such investment adviser and 
                        activities incidental to such 
                        investment advisory activities;
                          (iii) an investment company that is 
                        registered under the Investment Company 
                        Act of 1940;
                          (iv) an insurance company, with 
                        respect to insurance activities of the 
                        insurance company and activities 
                        incidental to such insurance 
                        activities, that is subject to 
                        supervision by a State insurance 
                        regulator; or
                          (v) an entity that is subject to 
                        regulation by, or registration with, 
                        the Commodity Futures Trading 
                        Commission, with respect to activities 
                        conducted as a futures commission 
                        merchant, commodity trading adviser, 
                        commodity pool, commodity pool 
                        operator, swap execution facility, swap 
                        data repository, swap dealer, major 
                        swap participant, and activities that 
                        are incidental to such commodities and 
                        swaps activities.
  (d) Before the expiration of two years following the date of 
enactment of this Act, and each year thereafter in the Board's 
annual report to the Congress, the Board shall report to the 
Congress the results of the administration of this Act, stating 
what, if any, substantial difficulties have been encountered in 
carrying out the purposes of this Act, and any recommendations 
as to changes in the law which in the opinion of the Board 
would be desirable.
  (e)(1) Notwithstanding any other provision of this Act, the 
Board may, whenever it has reasonable cause to believe that the 
continuation by a bank holding company of any activity or of 
ownership or control of any of its nonbank subsidiaries, other 
than a nonbank subsidiary of a bank, constitutes a serious risk 
to the financial safety, soundness, or stability of a bank 
holding company subsidiary bank and is inconsistent with sound 
banking principles or with the purposes of this Act or with the 
Financial Institutions Supervisory Act of 1966, at the election 
of the bank holding company--
          (A) order the bank holding company or any such 
        nonbank subsidiaries, after due notice and opportunity 
        for hearing, and after considering the views of the 
        bank's primary supervisor, which shall be the 
        Comptroller of the Currency in the case of a national 
        bank or the Federal Deposit Insurance Corporation and 
        the appropriate State supervisory authority in the case 
        of an insured nonmember bank, to terminate such 
        activities or to terminate (within one hundred and 
        twenty days or such longer period as the Board may 
        direct in unusual circumstances) its ownership or 
        control of any such subsidiary either by sale or by 
        distribution of the shares of the subsidiary to the 
        shareholders of the bank holding company; or
          (B) order the bank holding company, after due notice 
        and opportunity for hearing, and after consultation 
        with the primary supervisor for the bank, which shall 
        be the Comptroller of the Currency in the case of a 
        national bank, and the Federal Deposit Insurance 
        Corporation and the appropriate State supervisor in the 
        case of an insured nonmember bank, to terminate (within 
        120 days or such longer period as the Board may direct) 
        the ownership or control of any such bank by such 
        company.
The distribution referred to in subparagraph (A) shall be pro 
rata with respect to all of the shareholders of the 
distributing bank holding company, and the holding company 
shall not make any charge to its shareholders arising out of 
such a distribution.
  (2) The Board may in its discretion apply to the United 
States district court within the jurisdiction of which the 
principal office of the holding company is located, for the 
enforcement of any effective and outstanding order issued under 
this section, and such court shall have jurisdiction and power 
to order and require compliance therewith, but except as 
provided in section 9 of this Act, no court shall have 
jurisdiction to affect by injunction or otherwise the issuance 
or enforcement of any notice or order under this section, or to 
review, modify, suspend, terminate, or set aside any such 
notice or order.
  (f) In the course of or in connection with an application, 
examination, investigation or other proceeding under this Act, 
the Board, or any member or designated representative thereof, 
including any person designated to conduct any hearing under 
this Act, shall have the power to administer oaths and 
affirmations, to take or cause to be taken depositions, and to 
issue, revoke, quash, or modify subpoenas and subpoenas duces 
tecum; and the Board is empowered to make rules and regulations 
to effectuate the purposes of this subsection. The attendance 
of witnesses and the production of documents provided for in 
this subsection may be required from any place in any State or 
in any territory or other place subject to the jurisdiction of 
the United States at any designated place where such proceeding 
is being conducted. Any party to proceedings under this Act may 
apply to the United States District Court for the District of 
Columbia, or the United States district court for the judicial 
district or the United States court in any territory in which 
such proceeding is being conducted or where the witness resides 
or carries on business, for the enforcement of any subpoena or 
subpoena duces tecum issued pursuant to this subsection, and 
such courts shall have jurisdiction and power to order and 
require compliance therewith. Witnesses subpoenaed under this 
subsection shall be paid the same fees and mileage that are 
paid witnesses in the district courts of the United States. Any 
service required under this subsection may be made by 
registered mail, or in such other manner reasonably calculated 
to give actual notice as the Board may by regulation or 
otherwise provide. Any court having jurisdiction of any 
proceeding instituted under this subsection may allow to any 
such party such reasonable expenses and attorneys' fees as it 
deems just and proper. Any person who willfully shall fail or 
refuse to attend and testify or to answer any lawful inquiry or 
to produce books, papers, correspondence, memoranda, contracts, 
agreements, or other records, if in such person's power so to 
do, in obedience to the subpoena of the Board, shall be guilty 
of a misdemeanor and, upon conviction, shall be subject to a 
fine of not more than $1,000 or to imprisonment for a term of 
not more than one year or both.
  (g) Authority of State Insurance Regulator and the Securities 
and Exchange Commission.--
          (1) In general.--Notwithstanding any other provision 
        of law, any regulation, order, or other action of the 
        Board that requires a bank holding company to provide 
        funds or other assets to a subsidiary depository 
        institution shall not be effective nor enforceable with 
        respect to an entity described in subparagraph (A) if--
                  (A) such funds or assets are to be provided 
                by--
                          (i) a bank holding company that is an 
                        insurance company, a broker or dealer 
                        registered under the Securities 
                        Exchange Act of 1934, an investment 
                        company registered under the Investment 
                        Company Act of 1940, or an investment 
                        adviser registered by or on behalf of 
                        either the Securities and Exchange 
                        Commission or any State; or
                          (ii) an affiliate of the depository 
                        institution that is an insurance 
                        company or a broker or dealer 
                        registered under the Securities 
                        Exchange Act of 1934, an investment 
                        company registered under the Investment 
                        Company Act of 1940, or an investment 
                        adviser registered by or on behalf of 
                        either the Securities and Exchange 
                        Commission or any State; and
                  (B) the State insurance authority for the 
                insurance company or the Securities and 
                Exchange Commission for the registered broker, 
                dealer, investment adviser (solely with respect 
                to investment advisory activities or activities 
                incidental thereto), or investment company, as 
                the case may be, determines in writing sent to 
                the holding company and the Board that the 
                holding company shall not provide such funds or 
                assets because such action would have a 
                material adverse effect on the financial 
                condition of the insurance company or the 
                broker, dealer, investment company, or 
                investment adviser, as the case may be.
          (2) Notice to state insurance authority or sec 
        required.--If the Board requires a bank holding 
        company, or an affiliate of a bank holding company, 
        that is an insurance company or a broker, dealer, 
        investment company, or investment adviser described in 
        paragraph (1)(A) to provide funds or assets to a 
        depository institution subsidiary of the holding 
        company pursuant to any regulation, order, or other 
        action of the Board referred to in paragraph (1), the 
        Board shall promptly notify the State insurance 
        authority for the insurance company, the Securities and 
        Exchange Commission, or State securities regulator, as 
        the case may be, of such requirement.
          (3) Divestiture in lieu of other action.--If the 
        Board receives a notice described in paragraph (1)(B) 
        from a State insurance authority or the Securities and 
        Exchange Commission with regard to a bank holding 
        company or affiliate referred to in that paragraph, the 
        Board may order the bank holding company to divest the 
        depository institution not later than 180 days after 
        receiving the notice, or such longer period as the 
        Board determines consistent with the safe and sound 
        operation of the depository institution.
          (4) Conditions before divestiture.--During the period 
        beginning on the date an order to divest is issued by 
        the Board under paragraph (3) to a bank holding company 
        and ending on the date the divestiture is completed, 
        the Board may impose any conditions or restrictions on 
        the holding company's ownership or operation of the 
        depository institution, including restricting or 
        prohibiting transactions between the depository 
        institution and any affiliate of the institution, as 
        are appropriate under the circumstances.
          (5) Rule of construction.--No provision of this 
        subsection may be construed as limiting or otherwise 
        affecting, except to the extent specifically provided 
        in this subsection, the regulatory authority, including 
        the scope of the authority, of any Federal agency or 
        department with regard to any entity that is within the 
        jurisdiction of such agency or department.

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                         HOME OWNERS' LOAN ACT



           *       *       *       *       *       *       *
SEC. 10. REGULATION OF HOLDING COMPANIES.

  (a) Definitions.--
          (1) In general.--As used in this section, unless the 
        context otherwise requires--
                  (A) Savings association.--The term ``savings 
                association'' includes a savings bank or 
                cooperative bank which is deemed by the 
                appropriate Federal banking agency to be a 
                savings association under subsection (l).
                  (B) Uninsured institution.--The term 
                ``uninsured institution'' means any depository 
                institution the deposits of which are not 
                insured by the Federal Deposit Insurance 
                Corporation.
                  (C) Company.--The term ``company'' means any 
                corporation, partnership, trust, joint-stock 
                company, or similar organization, but does not 
                include the Federal Deposit Insurance 
                Corporation, the Resolution Trust Corporation, 
                any Federal home loan bank, or any company the 
                majority of the shares of which is owned by the 
                United States or any State, or by an 
                instrumentality of the United States or any 
                State.
                  (D) Savings and loan holding company.--
                          (i) In general.--Except as provided 
                        in clause (ii), the term ``savings and 
                        loan holding company'' means any 
                        company that directly or indirectly 
                        controls a savings association or that 
                        controls any other company that is a 
                        savings and loan holding company.
                          (ii) Exclusion.--The term ``savings 
                        and loan holding company'' does not 
                        include--
                                  (I) a bank holding company 
                                that is registered under, and 
                                subject to, the Bank Holding 
                                Company Act of 1956 (12 U.S.C. 
                                1841 et seq.), or to any 
                                company directly or indirectly 
                                controlled by such company 
                                (other than a savings 
                                association);
                                  (II) a company that controls 
                                a savings association that 
                                functions solely in a trust or 
                                fiduciary capacity as described 
                                in section 2(c)(2)(D) of the 
                                Bank Holding Company Act of 
                                1956 (12 U.S.C. 1841(c)(2)(D)); 
                                or
                                  (III) a company described in 
                                subsection (c)(9)(C) solely by 
                                virtue of such company's 
                                control of an intermediate 
                                holding company established 
                                pursuant to section 10A.
                  (E) Multiple savings and loan holding 
                company.--The term ``multiple savings and loan 
                holding company'' means any savings and loan 
                holding company which directly or indirectly 
                controls 2 or more savings associations.
                  (F) Diversified savings and loan holding 
                company.--The term ``diversified savings and 
                loan holding company'' means any savings and 
                loan holding company whose subsidiary savings 
                association and related activities as permitted 
                under paragraph (2) of subsection (c) of this 
                section represented, on either an actual or a 
                pro forma basis, less than 50 percent of its 
                consolidated net worth at the close of its 
                preceding fiscal year and of its consolidated 
                net earnings for such fiscal year, as 
                determined in accordance with regulations 
                issued by the appropriate Federal banking 
                agency.
                  (G) Subsidiary.--The term ``subsidiary'' has 
                the same meaning as in section 3 of the Federal 
                Deposit Insurance Act.
                  (H) Affiliate.--The term ``affiliate'' of a 
                savings association means any person which 
                controls, is controlled by, or is under common 
                control with, such savings association.
                  (I) Bank holding company.--The terms ``bank 
                holding company'' and ``bank'' have the 
                meanings given to such terms in section 2 of 
                the Bank Holding Company Act of 1956.
                  (J) Acquire.--The term ``acquire'' has the 
                meaning given to such term in section 13(f)(8) 
                of the Federal Deposit Insurance Act.
          (2) Control.--For purposes of this section, a person 
        shall be deemed to have control of--
                  (A) a savings association if the person 
                directly or indirectly or acting in concert 
                with one or more other persons, or through one 
                or more subsidiaries, owns, controls, or holds 
                with power to vote, or holds proxies 
                representing, more than 25 percent of the 
                voting shares of such savings association, or 
                controls in any manner the election of a 
                majority of the directors of such association;
                  (B) any other company if the person directly 
                or indirectly or acting in concert with one or 
                more other persons, or through one or more 
                subsidiaries, owns, controls, or holds with 
                power to vote, or holds proxies representing, 
                more than 25 percent of the voting shares or 
                rights of such other company, or controls in 
                any manner the election or appointment of a 
                majority of the directors or trustees of such 
                other company, or is a general partner in or 
                has contributed more than 25 percent of the 
                capital of such other company;
                  (C) a trust if the person is a trustee 
                thereof; or
                  (D) a savings association or any other 
                company if the Board determines, after 
                reasonable notice and opportunity for hearing, 
                that such person directly or indirectly 
                exercises a controlling influence over the 
                management or policies of such association or 
                other company.
          (3) Exclusions.--Notwithstanding any other provision 
        of this subsection, the term ``savings and loan holding 
        company'' does not include--
                  (A) any company by virtue of its ownership or 
                control of voting shares of a savings 
                association or a savings and loan holding 
                company acquired in connection with the 
                underwriting of securities if such shares are 
                held only for such period of time (not 
                exceeding 120 days unless extended by the 
                Board) as will permit the sale thereof on a 
                reasonable basis; and
                  (B) any trust (other than a pension, profit-
                sharing, shareholders', voting, or business 
                trust) which controls a savings association or 
                a savings and loan holding company if such 
                trust by its terms must terminate within 25 
                years or not later than 21 years and 10 months 
                after the death of individuals living on the 
                effective date of the trust, and is (i) in 
                existence on June 26, 1967, or (ii) a 
                testamentary trust created on or after June 26, 
                1967.
          (4) Special rule relating to qualified stock 
        issuance.--No savings and loan holding company shall be 
        deemed to control a savings association solely by 
        reason of the purchase by such savings and loan holding 
        company of shares issued by such savings association, 
        or issued by any savings and loan holding company 
        (other than a bank holding company) which controls such 
        savings association, in connection with a qualified 
        stock issuance if such purchase is approved by the 
        Board under subsection (q)(1)(D), unless the acquiring 
        savings and loan holding company, directly or 
        indirectly, or acting in concert with 1 or more other 
        persons, or through 1 or more subsidiaries, owns, 
        controls, or holds with power to vote, or holds proxies 
        representing, more than 15 percent of the voting shares 
        of such savings association or holding company.
  (b) Registration and Examination.--
          (1) In general.--Within 90 days after becoming a 
        savings and loan holding company, each savings and loan 
        holding company shall register with the Board on forms 
        prescribed by the Board, which shall include such 
        information, under oath or otherwise, with respect to 
        the financial condition, ownership, operations, 
        management, and intercompany relationships of such 
        holding company and its subsidiaries, and related 
        matters, as the Board may deem necessary or appropriate 
        to carry out the purposes of this section. Upon 
        application, the Board may extend the time within which 
        a savings and loan holding company shall register and 
        file the requisite information.
          (2) Reports.--
                  (A) In general.--Each savings and loan 
                holding company and each subsidiary thereof, 
                other than a savings association, shall file 
                with the Board, such reports as may be required 
                by the Board. Such reports shall be made under 
                oath or otherwise, and shall be in such form 
                and for such periods, as the Board may 
                prescribe. Each report shall contain such 
                information concerning the operations of such 
                savings and loan holding company and its 
                subsidiaries as the Board may require.
                  (B) Use of existing reports and other 
                supervisory information.--The Board shall, to 
                the fullest extent possible, use--
                          (i) reports and other supervisory 
                        information that the savings and loan 
                        holding company or any subsidiary 
                        thereof has been required to provide to 
                        other Federal or State regulatory 
                        agencies;
                          (ii) externally audited financial 
                        statements of the savings and loan 
                        holding company or subsidiary;
                          (iii) information that is otherwise 
                        available from Federal or State 
                        regulatory agencies; and
                          (iv) information that is otherwise 
                        required to be reported publicly.
                  (C) Availability.--Upon the request of the 
                Board, a savings and loan holding company or a 
                subsidiary of a savings and loan holding 
                company shall promptly provide to the Board any 
                information described in clauses (i) through 
                (iii) of subparagraph (B).
          (3) Books and records.--Each savings and loan holding 
        company shall maintain such books and records as may be 
        prescribed by the Board.
          (4) Examinations.--
                  (A) In general.--Subject to subtitle B of the 
                Consumer Financial Protection Act of 2010, the 
                Board may make examinations of a savings and 
                loan holding company and each subsidiary of a 
                savings and loan holding company system, in 
                order to--
                          (i) inform the Board of--
                                  (I) the nature of the 
                                operations and financial 
                                condition of the savings and 
                                loan holding company and the 
                                subsidiary;
                                  (II) the financial, 
                                operational, and other risks 
                                within the savings and loan 
                                holding company system that may 
                                pose a threat to--
                                          (aa) the safety and 
                                        soundness of the 
                                        savings and loan 
                                        holding company or of 
                                        any depository 
                                        institution subsidiary 
                                        of the savings and loan 
                                        holding company; or
                                          (bb) the stability of 
                                        the financial system of 
                                        the United States; and
                                  (III) the systems of the 
                                savings and loan holding 
                                company for monitoring and 
                                controlling the risks described 
                                in subclause (II); and
                          (ii) monitor the compliance of the 
                        savings and loan holding company and 
                        the subsidiary with--
                                  (I) this Act;
                                  (II) Federal laws that the 
                                Board has specific jurisdiction 
                                to enforce against the company 
                                or subsidiary; and
                                  (III) other than in the case 
                                of an insured depository 
                                institution or functionally 
                                regulated subsidiary, any other 
                                applicable provisions of 
                                Federal law.
                  (B) Use of reports to reduce examinations.--
                For purposes of this subsection, the Board 
                shall, to the fullest extent possible, rely 
                on--
                          (i) the examination reports made by 
                        other Federal or State regulatory 
                        agencies relating to a savings and loan 
                        holding company and any subsidiary; and
                          (ii) the reports and other 
                        information required under paragraph 
                        (2).
                  (C) Coordination with other regulators.--The 
                Board shall--
                          (i) provide reasonable notice to, and 
                        consult with, the appropriate Federal 
                        banking agency, the Securities and 
                        Exchange Commission, the Commodity 
                        Futures Trading Commission, or State 
                        regulatory agency, as appropriate, for 
                        a subsidiary that is a depository 
                        institution or a functionally regulated 
                        subsidiary of a savings and loan 
                        holding company before commencing an 
                        examination of the subsidiary under 
                        this section; and
                          (ii) to the fullest extent possible, 
                        avoid duplication of examination 
                        activities, reporting requirements, and 
                        requests for information.
          (5) Agent for service of process.--The Board may 
        require any savings and loan holding company, or 
        persons connected therewith if it is not a corporation, 
        to execute and file a prescribed form of irrevocable 
        appointment of agent for service of process.
          (6) Release from registration.--The Board may at any 
        time, upon the motion or application of the Board, 
        release a registered savings and loan holding company 
        from any registration theretofore made by such company, 
        if the Board determines that such company no longer has 
        control of any savings association.
  (c) Holding Company Activities.--
          (1) Prohibited activities.--Except as otherwise 
        provided in this subsection, no savings and loan 
        holding company and no subsidiary which is not a 
        savings association shall--
                  (A) engage in any activity or render any 
                service for or on behalf of a savings 
                association subsidiary for the purpose or with 
                the effect of evading any law or regulation 
                applicable to such savings association;
                  (B) commence any business activity, other 
                than the activities described in paragraph (2); 
                or
                  (C) continue any business activity, other 
                than the activities described in paragraph (2), 
                after the end of the 2-year period beginning on 
                the date on which such company received 
                approval under subsection (e) of this section 
                to become a savings and loan holding company 
                subject to the limitations contained in this 
                subparagraph.
          (2) Exempt activities.--The prohibitions of 
        subparagraphs (B) and (C) of paragraph (1) shall not 
        apply to the following business activities of any 
        savings and loan holding company or any subsidiary (of 
        such company) which is not a savings association:
                  (A) Furnishing or performing management 
                services for a savings association subsidiary 
                of such company.
                  (B) Conducting an insurance agency or escrow 
                business.
                  (C) Holding, managing, or liquidating assets 
                owned or acquired from a savings association 
                subsidiary of such company.
                  (D) Holding or managing properties used or 
                occupied by a savings association subsidiary of 
                such company.
                  (E) Acting as trustee under deed of trust.
                  (F) Any other activity--
                          (i) which the Board, by regulation, 
                        has determined to be permissible for 
                        bank holding companies under section 
                        4(c) of the Bank Holding Company Act of 
                        1956, unless the Board, by regulation, 
                        prohibits or limits any such activity 
                        for savings and loan holding companies; 
                        or
                          (ii) in which multiple savings and 
                        loan holding companies were authorized 
                        (by regulation) to directly engage on 
                        March 5, 1987.
                  (G) In the case of a savings and loan holding 
                company, purchasing, holding, or disposing of 
                stock acquired in connection with a qualified 
                stock issuance if the purchase of such stock by 
                such savings and loan holding company is 
                approved by the Board pursuant to subsection 
                (q)(1)(D).
                  (H) Any activity that is permissible for a 
                financial holding company (as such term is 
                defined under section 2(p) of the Bank Holding 
                Company Act of 1956 (12 U.S.C. 1841(p)) to 
                conduct under section 4(k) of the Bank Holding 
                Company Act of 1956 if--
                          (i) the savings and loan holding 
                        company meets all of the criteria to 
                        qualify as a financial holding company, 
                        and complies with all of the 
                        requirements applicable to a financial 
                        holding company, under sections 4(l) 
                        and 4(m) of the Bank Holding Company 
                        Act and section 804(c) of the Community 
                        Reinvestment Act of 1977 (12 U.S.C. 
                        2903(c)) as if the savings and loan 
                        holding company was a bank holding 
                        company; and
                          (ii) the savings and loan holding 
                        company conducts the activity in 
                        accordance with the same terms, 
                        conditions, and requirements that apply 
                        to the conduct of such activity by a 
                        bank holding company under the Bank 
                        Holding Company Act of 1956 and the 
                        Board's regulations and interpretations 
                        under such Act.
          (3) Certain limitations on activities not applicable 
        to certain holding companies.--Notwithstanding 
        paragraphs (4) and (6) of this subsection, the 
        limitations contained in subparagraphs (B) and (C) of 
        paragraph (1) shall not apply to any savings and loan 
        holding company (or any subsidiary of such company) 
        which controls--
                  (A) only 1 savings association, if the 
                savings association subsidiary of such company 
                is a qualified thrift lender (as determined 
                under subsection (m)); or
                  (B) more than 1 savings association, if--
                          (i) all, or all but 1, of the savings 
                        association subsidiaries of such 
                        company were initially acquired by the 
                        company or by an individual who would 
                        be deemed to control such company if 
                        such individual were a company--
                                  (I) pursuant to an 
                                acquisition under section 13(c) 
                                or 13(k) of the Federal Deposit 
                                Insurance Act or section 408(m) 
                                of the National Housing Act; or
                                  (II) pursuant to an 
                                acquisition in which assistance 
                                was continued to a savings 
                                association under section 13(i) 
                                of the Federal Deposit 
                                Insurance Act; and
                          (ii) all of the savings association 
                        subsidiaries of such company are 
                        qualified thrift lenders (as determined 
                        under subsection (m)).
          (4) Prior approval of certain new activities 
        required.--
                  (A) In general.--No savings and loan holding 
                company and no subsidiary which is not a 
                savings association shall commence, either de 
                novo or by an acquisition (in whole or in part) 
                of a going concern, any activity described in 
                paragraph (2)(F)(i) of this subsection without 
                the prior approval of the Board.
                  (B) Factors to be considered.--In considering 
                any application under subparagraph (A) by any 
                savings and loan holding company or any 
                subsidiary of any such company which is not a 
                savings association, the Board shall consider--
                          (i) whether the performance of the 
                        activity described in such application 
                        by the company or the subsidiary 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 of such 
                        activity (such as undue concentration 
                        of resources, decreased or unfair 
                        competition, conflicts of interest, or 
                        unsound financial practices);
                          (ii) the managerial resources of the 
                        companies involved; and
                          (iii) the adequacy of the financial 
                        resources, including capital, of the 
                        companies involved.
                  (C) Director may differentiate between new 
                and ongoing activities.--In prescribing any 
                regulation or considering any application under 
                this paragraph, the Board may differentiate 
                between activities commenced de novo and 
                activities commenced by the acquisition, in 
                whole or in part, of a going concern.
                  (D) Approval or disapproval by order.--The 
                approval or disapproval of any application 
                under this paragraph by the Board shall be made 
                in an order issued by the Board containing the 
                reasons for such approval or disapproval.
          (5) Grace period to achieve compliance.--If any 
        savings association referred to in paragraph (3) fails 
        to maintain the status of such association as a 
        qualified thrift lender, the Board may allow, for good 
        cause shown, any company that controls such association 
        (or any subsidiary of such company which is not a 
        savings association) up to 3 years to comply with the 
        limitations contained in paragraph (1)(C).
          (6) Special provisions relating to certain companies 
        affected by 1987 amendments.--
                  (A) Exception to 2-year grace period for 
                achieving compliance.--Notwithstanding 
                paragraph (1)(C), any company which received 
                approval under subsection (e) of this section 
                to acquire control of a savings association 
                between March 5, 1987, and August 10, 1987, 
                shall not continue any business activity other 
                than an activity described in paragraph (2) 
                after August 10, 1987.
                  (B) Exemption for activities lawfully engaged 
                in before march 5, 1987.--Notwithstanding 
                paragraph (1)(C) and subject to subparagraphs 
                (C) and (D), any savings and loan holding 
                company which received approval, before March 
                5, 1987, under subsection (e) of this section 
                to acquire control of a savings association may 
                engage, directly or through any subsidiary 
                (other than a savings association subsidiary of 
                such company), in any activity in which such 
                company or such subsidiary was lawfully engaged 
                on such date.
                  (C) Termination of subparagraph (b) 
                exemption.--The exemption provided under 
                subparagraph (B) for activities engaged in by 
                any savings and loan holding company or a 
                subsidiary of such company (which is not a 
                savings association) which would otherwise be 
                prohibited under paragraph (1)(C) shall 
                terminate with respect to such activities of 
                such company or subsidiary upon the occurrence 
                (after August 10, 1987) of any of the 
                following:
                          (i) The savings and loan holding 
                        company acquires control of a bank or 
                        an additional savings association 
                        (other than a savings association 
                        acquired pursuant to section 13(c) or 
                        13(k) of the Federal Deposit Insurance 
                        Act or section 406(f) or 408(m) of the 
                        National Housing Act).
                          (ii) Any savings association 
                        subsidiary of the savings and loan 
                        holding company fails to qualify as a 
                        domestic building and loan association 
                        under section 7701(a)(19) of the 
                        Internal Revenue Code of 1986.
                          (iii) The savings and loan holding 
                        company engages in any business 
                        activity--
                                  (I) which is not described in 
                                paragraph (2); and
                                  (II) in which it was not 
                                engaged on March 5, 1987.
                          (iv) Any savings association 
                        subsidiary of the savings and loan 
                        holding company increases the number of 
                        locations from which such savings 
                        association conducts business after 
                        March 5, 1987 (other than an increase 
                        which occurs in connection with a 
                        transaction under section 13(c) or (k) 
                        of the Federal Deposit Insurance Act or 
                        section 408(m) of the National Housing 
                        Act.
                          (v) Any savings association 
                        subsidiary of the savings and loan 
                        holding company permits any overdraft 
                        (including an intraday overdraft), or 
                        incurs any such overdraft in its 
                        account at a Federal Reserve bank, on 
                        behalf of an affiliate, unless such 
                        overdraft is the result of an 
                        inadvertent computer or accounting 
                        error that is beyond the control of 
                        both the savings association subsidiary 
                        and the affiliate.
                  (D) Order to terminate subparagraph (b) 
                activity.--Any activity described in 
                subparagraph (B) may also be terminated by the 
                Board, after opportunity for hearing, if the 
                Board determines, having due regard for the 
                purposes of this Act, that such action is 
                necessary to prevent conflicts of interest or 
                unsound practices or is in the public interest.
          (7) Foreign savings and loan holding company.--
        Notwithstanding any other provision of this section, 
        any savings and loan holding company organized under 
        the laws of a foreign country as of June 1, 1984 
        (including any subsidiary thereof which is not a 
        savings association), which controls a single savings 
        association on August 10, 1987, shall not be subject to 
        this subsection with respect to any activities of such 
        holding company which are conducted exclusively in a 
        foreign country.
          (8) Exemption for bank holding companies.--Except for 
        paragraph (1)(A), this subsection shall not apply to 
        any company that is treated as a bank holding company 
        for purposes of section 4 of the Bank Holding Company 
        Act of 1956, or any of its subsidiaries.
          (9) Prevention of new affiliations between s&l 
        holding companies and commercial firms.--
                  (A) In general.--Notwithstanding paragraph 
                (3), no company may directly or indirectly, 
                including through any merger, consolidation, or 
                other type of business combination, acquire 
                control of a savings association after May 4, 
                1999, unless the company is engaged, directly 
                or indirectly (including through a subsidiary 
                other than a savings association), only in 
                activities that are permitted--
                          (i) under paragraph (1)(C) or (2) of 
                        this subsection; or
                          (ii) for financial holding companies 
                        under section 4(k) of the Bank Holding 
                        Company Act of 1956.
                  (B) Prevention of new commercial 
                affiliations.--Notwithstanding paragraph (3), 
                no savings and loan holding company may engage 
                directly or indirectly (including through a 
                subsidiary other than a savings association) in 
                any activity other than as described in clauses 
                (i) and (ii) of subparagraph (A).
                  (C) Preservation of authority of existing 
                unitary s&l holding companies.--Subparagraphs 
                (A) and (B) do not apply with respect to any 
                company that was a savings and loan holding 
                company on May 4, 1999, or that becomes a 
                savings and loan holding company pursuant to an 
                application pending before the Office on or 
                before that date, and that--
                          (i) meets and continues to meet the 
                        requirements of paragraph (3); and
                          (ii) continues to control not fewer 
                        than 1 savings association that it 
                        controlled on May 4, 1999, or that it 
                        acquired pursuant to an application 
                        pending before the Office on or before 
                        that date, or the successor to such 
                        savings association.
                  (D) Corporate reorganizations permitted.--
                This paragraph does not prevent a transaction 
                that--
                          (i) involves solely a company under 
                        common control with a savings and loan 
                        holding company from acquiring, 
                        directly or indirectly, control of the 
                        savings and loan holding company or any 
                        savings association that is already a 
                        subsidiary of the savings and loan 
                        holding company; or
                          (ii) involves solely a merger, 
                        consolidation, or other type of 
                        business combination as a result of 
                        which a company under common control 
                        with the savings and loan holding 
                        company acquires, directly or 
                        indirectly, control of the savings and 
                        loan holding company or any savings 
                        association that is already a 
                        subsidiary of the savings and loan 
                        holding company.
                  (E) Authority to prevent evasions.--The Board 
                may issue interpretations, regulations, or 
                orders that the Board determines necessary to 
                administer and carry out the purpose and 
                prevent evasions of this paragraph, including a 
                determination (in consultation with the 
                appropriate Federal banking agency) that, 
                notwithstanding the form of a transaction, the 
                transaction would in substance result in a 
                company acquiring control of a savings 
                association.
                  (F) Preservation of authority for family 
                trusts.--Subparagraphs (A) and (B) do not apply 
                with respect to any trust that becomes a 
                savings and loan holding company with respect 
                to a savings association, if--
                          (i) not less than 85 percent of the 
                        beneficial ownership interests in the 
                        trust are continuously owned, directly 
                        or indirectly, by or for the benefit of 
                        members of the same family, or their 
                        spouses, who are lineal descendants of 
                        common ancestors who controlled, 
                        directly or indirectly, such savings 
                        association on May 4, 1999, or a 
                        subsequent date, pursuant to an 
                        application pending before the Office 
                        on or before May 4, 1999; and
                          (ii) at the time at which such trust 
                        becomes a savings and loan holding 
                        company, such ancestors or lineal 
                        descendants, or spouses of such 
                        descendants, have directly or 
                        indirectly controlled the savings 
                        association continuously since May 4, 
                        1999, or a subsequent date, pursuant to 
                        an application pending before the 
                        Office on or before May 4, 1999.
  (d) Transactions With Affiliates.--Transactions between any 
subsidiary savings association of a savings and loan holding 
company and any affiliate (of such savings association 
subsidiary) shall be subject to the limitations and 
prohibitions specified in section 11 of this Act.
  (e) Acquisitions.--
          (1) In general.--It shall be unlawful for--
                  (A) any savings and loan holding company 
                directly or indirectly, or through one or more 
                subsidiaries or through one or more 
                transactions--
                          (i) to acquire, except with the prior 
                        written approval of the Board, the 
                        control of a savings association or a 
                        savings and loan holding company, or to 
                        retain the control of such an 
                        association or holding company acquired 
                        or retained in violation of this 
                        section as heretofore or hereafter in 
                        effect;
                          (ii) to acquire, except with the 
                        prior written approval of the Board, by 
                        the process of merger, consolidation, 
                        or purchase of assets, another savings 
                        association or a savings and loan 
                        holding company, or all or 
                        substantially all of the assets of any 
                        such association or holding company;
                          (iii) to acquire, by purchase or 
                        otherwise, or to retain, except with 
                        the prior written approval of the 
                        Board, more than 5 percent of the 
                        voting shares of a savings association 
                        not a subsidiary, or of a savings and 
                        loan holding company not a subsidiary, 
                        or in the case of a multiple savings 
                        and loan holding company (other than a 
                        company described in subsection 
                        (c)(8)), to acquire or retain, and the 
                        Board may not authorize acquisition or 
                        retention of, more than 5 percent of 
                        the voting shares of any company not a 
                        subsidiary which is engaged in any 
                        business activity other than the 
                        activities specified in subsection 
                        (c)(2). This clause shall not apply to 
                        shares of a savings association or of a 
                        savings and loan holding company--
                                  (I) held as a bona fide 
                                fiduciary (whether with or 
                                without the sole discretion to 
                                vote such shares);
                                  (II) held temporarily 
                                pursuant to an underwriting 
                                commitment in the normal course 
                                of an underwriting business;
                                  (III) held in an account 
                                solely for trading purposes;
                                  (IV) over which no control is 
                                held other than control of 
                                voting rights acquired in the 
                                normal course of a proxy 
                                solicitation;
                                  (V) acquired in securing or 
                                collecting a debt previously 
                                contracted in good faith, 
                                during the 2-year period 
                                beginning on the date of such 
                                acquisition or for such 
                                additional time (not exceeding 
                                3 years) as the Board may 
                                permit if the Board determines 
                                that such an extension will not 
                                be detrimental to the public 
                                interest;
                                  (VI) acquired under section 
                                408(m) of the National Housing 
                                Act or section 13(k) of the 
                                Federal Deposit Insurance Act;
                                  (VII) held by any insurance 
                                company, as defined in section 
                                2(a)(17) of the Investment 
                                Company Act of 1940, except as 
                                provided in paragraph (6); or
                                  (VIII) acquired pursuant to a 
                                qualified stock issuance if 
                                such purchase is approved by 
                                the Board under subsection 
                                (q)(1)(D);
                        except that the aggregate amount of 
                        shares held under this clause (other 
                        than under subclauses (I), (II), (III), 
                        (IV), and (VI)) may not exceed 15 
                        percent of all outstanding shares or of 
                        the voting power of a savings 
                        association or savings and loan holding 
                        company; or
                          (iv) to acquire the control of an 
                        uninsured institution, or to retain for 
                        more than one year after February 14, 
                        1968, or from the date on which such 
                        control was acquired, whichever is 
                        later, except that the Board may upon 
                        application by such company extend such 
                        one-year period from year to year, for 
                        an additional period not exceeding 3 
                        years, if the Board finds such 
                        extension is warranted and is not 
                        detrimental to the public interest; and
                  (B) any other company, without the prior 
                written approval of the Board, directly or 
                indirectly, or through one or more subsidiaries 
                or through one or more transactions, to acquire 
                the control of one or more savings 
                associations, except that such approval shall 
                not be required in connection with the control 
                of a savings association, (i) acquired by 
                devise under the terms of a will creating a 
                trust which is excluded from the definition of 
                ``savings and loan holding company'' under 
                subsection (a) of this section, (ii) acquired 
                in connection with a reorganization in which a 
                person or group of persons, having had control 
                of a savings association for more than 3 years, 
                vests control of that association in a newly 
                formed holding company subject to the control 
                of the same person or group of persons, or 
                (iii) acquired by a bank holding company that 
                is registered under, and subject to, the Bank 
                Holding Company Act of 1956, or any company 
                controlled by such bank holding company. The 
                Board shall approve an acquisition of a savings 
                association under this subparagraph unless the 
                Board finds the financial and managerial 
                resources and future prospects of the company 
                and association involved to be such that the 
                acquisition would be detrimental to the 
                association or the insurance risk of the 
                Deposit Insurance Fund, and shall render a 
                decision within 90 days after submission to the 
                Board of the complete record on the 
                application.
        Consideration of the managerial resources of a company 
        or savings association under subparagraph (B) shall 
        include consideration of the competence, experience, 
        and integrity of the officers, directors, and principal 
        shareholders of the company or association.
          (2) Factors to be considered.--The Board shall not 
        approve any acquisition under subparagraph (A)(i) or 
        (A)(ii), or of more than one savings association under 
        subparagraph (B) of paragraph (1) of this subsection, 
        any acquisition of stock in connection with a qualified 
        stock issuance, any acquisition under paragraph (4)(A), 
        or any transaction under section 13(k) of the Federal 
        Deposit Insurance Act, except in accordance with this 
        paragraph. In every case, the Board shall take into 
        consideration the financial and managerial resources 
        and future prospects of the company and association 
        involved, the effect of the acquisition on the 
        association, the insurance risk to the Deposit 
        Insurance Fund, and the convenience and needs of the 
        community to be served, and shall render a decision 
        within 90 days after submission to the Board of the 
        complete record on the application. Consideration of 
        the managerial resources of a company or savings 
        association shall include consideration of the 
        competence, experience, and integrity of the officers, 
        directors, and principal shareholders of the company or 
        association. Before approving any such acquisition, 
        except a transaction under section 13(k) of the Federal 
        Deposit Insurance Act, the Board shall request from the 
        Attorney General and consider any report rendered 
        within 30 days on the competitive factors involved. The 
        Board shall not approve any proposed acquisition--
                  (A) which would result in a monopoly, or 
                which would be in furtherance of any 
                combination or conspiracy to monopolize or to 
                attempt to monopolize the savings and loan 
                business in any part of the United States,
                  (B) the effect of which in any section of the 
                country may be substantially to lessen 
                competition, or tend to create a monopoly, or 
                which in any other manner would be in restraint 
                of trade, unless it finds that the 
                anticompetitive effects of the proposed 
                acquisition are clearly outweighed in the 
                public interest by the probable effect of the 
                acquisition in meeting the convenience and 
                needs of the community to be served,
                  (C) if the company fails to provide adequate 
                assurances to the Board that the company will 
                make available to the Board such information on 
                the operations or activities of the company, 
                and any affiliate of the company, as the Board 
                determines to be appropriate to determine and 
                enforce compliance with this Act,
                  (D) in the case of an application involving a 
                foreign bank, if the foreign bank is not 
                subject to comprehensive supervision or 
                regulation on a consolidated basis by the 
                appropriate authorities in the bank's home 
                country, or
                  (E) in the case of an application by a 
                savings and loan holding company to acquire an 
                insured depository institution, if--
                          (i) the home State of the insured 
                        depository institution is a State other 
                        than the home State of the savings and 
                        loan holding company;
                          (ii) the applicant (including all 
                        insured depository institutions which 
                        are affiliates of the applicant) 
                        controls, or upon consummation of the 
                        transaction would control, more than 10 
                        percent of the total amount of deposits 
                        of insured depository institutions in 
                        the United States; and
                          (iii) the acquisition does not 
                        involve an insured depository 
                        institution in default or in danger of 
                        default, or with respect to which the 
                        Federal Deposit Insurance Corporation 
                        provides assistance under section 13 of 
                        the Federal Deposit Insurance Act (12 
                        U.S.C. 1823).
          (3) Interstate Acquisitions.--No acquisition shall be 
        approved by the Board under this subsection which will 
        result in the formation by any company, through one or 
        more subsidiaries or through one or more transactions, 
        of a multiple savings and loan holding company 
        controlling savings associations in more than one 
        State, unless--
                  (A) such company, or a savings association 
                subsidiary of such company, is authorized to 
                acquire control of a savings association 
                subsidiary, or to operate a home or branch 
                office, in the additional State or States 
                pursuant to section 13(k) of the Federal 
                Deposit Insurance Act;
                  (B) such company controls a savings 
                association subsidiary which operated a home or 
                branch office in the additional State or States 
                as of March 5, 1987; or
                  (C) the statutes of the State in which the 
                savings association to be acquired is located 
                permit a savings association chartered by such 
                State to be acquired by a savings association 
                chartered by the State where the acquiring 
                savings association or savings and loan holding 
                company is located or by a holding company that 
                controls such a State chartered savings 
                association, and such statutes specifically 
                authorize such an acquisition by language to 
                that effect and not merely by implication.
          (4) Acquisitions by certain individuals.--
                  (A) In general.--Notwithstanding subsection 
                (h)(2), any director or officer of a savings 
                and loan holding company, or any individual who 
                owns, controls, or holds with power to vote (or 
                holds proxies representing) more than 25 
                percent of the voting shares of such holding 
                company, may acquire control of any savings 
                association not a subsidiary of such savings 
                and loan holding company with the prior written 
                approval of the Board.
                  (B) Treatment of certain holding companies.--
                If any individual referred to in subparagraph 
                (A) controls more than 1 savings and loan 
                holding company or more than 1 savings 
                association, any savings and loan holding 
                company controlled by such individual shall be 
                subject to the activities limitations contained 
                in subsection (c) to the same extent such 
                limitations apply to multiple savings and loan 
                holding companies, unless all or all but 1 of 
                the savings associations (including any 
                institution deemed to be a savings association 
                under subsection (l) of this section) 
                controlled directly or indirectly by such 
                individual was acquired pursuant to an 
                acquisition described in subclause (I) or (II) 
                of subsection (c)(3)(B)(i).
          (5) Acquisitions pursuant to certain security 
        interests.--This subsection and subsection (c)(2) of 
        this section do not apply to any savings and loan 
        holding company which acquired the control of a savings 
        association or of a savings and loan holding company 
        pursuant to a pledge or hypothecation to secure a loan, 
        or in connection with the liquidation of a loan, made 
        in the ordinary course of business. It shall be 
        unlawful for any such company to retain such control 
        for more than one year after February 14, 1968, or from 
        the date on which such control was acquired, whichever 
        is later, except that the Board may upon application by 
        such company extend such one-year period from year to 
        year, for an additional period not exceeding 3 years, 
        if the Board finds such extension is warranted and 
        would not be detrimental to the public interest.
          (6) Shares held by insurance affiliates.--Shares 
        described in clause (iii)(VII) of paragraph (1)(A) 
        shall not be excluded for purposes of clause (iii) of 
        such paragraph if--
                  (A) all shares held under such clause 
                (iii)(VII) by all insurance company affiliates 
                of such savings association or savings and loan 
                holding company in the aggregate exceed 5 
                percent of all outstanding shares or of the 
                voting power of the savings association or 
                savings and loan holding company; or
                  (B) such shares are acquired or retained with 
                a view to acquiring, exercising, or 
                transferring control of the savings association 
                or savings and loan holding company.
          (7) Definitions.--For purposes of paragraph (2)(E)--
                  (A) the terms ``default'', ``in danger of 
                default'', and ``insured depository 
                institution'' have the same meanings as in 
                section 3 of the Federal Deposit Insurance Act 
                (12 U.S.C. 1813); and
                  (B) the term ``home State'' means--
                          (i) with respect to a national bank, 
                        the State in which the main office of 
                        the bank is located;
                          (ii) with respect to a State bank or 
                        State savings association, the State by 
                        which the savings association is 
                        chartered;
                          (iii) with respect to a Federal 
                        savings association, the State in which 
                        the home office (as defined by the 
                        regulations of the Board of the Office 
                        of Thrift Supervision, or, on and after 
                        the transfer date, the Comptroller of 
                        the Currency) of the Federal savings 
                        association is located; and
                          (iv) with respect to a savings and 
                        loan holding company, the State in 
                        which the amount of total deposits of 
                        all insured depository institution 
                        subsidiaries of such company was the 
                        greatest on the date on which the 
                        company became a savings and loan 
                        holding company.
  (f) Declaration of Dividend.--Every subsidiary savings 
association of a savings and loan holding company shall give 
the Board not less than 30 days' advance notice of the proposed 
declaration by its directors of any dividend on its guaranty, 
permanent, or other nonwithdrawable stock. Such notice period 
shall commence to run from the date of receipt of such notice 
by the Board. Any such dividend declared within such period, or 
without the giving of such notice to the Board, shall be 
invalid and shall confer no rights or benefits upon the holder 
of any such stock.
  (g) Administration and Enforcement.--
          (1) In general.--[The Board]
                  (A) Regulations and orders._The Board  is 
                authorized to issue such regulations and 
                orders, including regulations and orders 
                relating to capital requirements for savings 
                and loan holding companies, as the Board deems 
                necessary or appropriate to enable the Board to 
                administer and carry out the purposes of this 
                section, and to require compliance therewith 
                and prevent evasions thereof. In establishing 
                capital regulations pursuant to this 
                subsection, the appropriate Federal banking 
                agency shall seek to make such requirements 
                countercyclical so that the amount of capital 
                required to be maintained by a company 
                increases in times of economic expansion and 
                decreases in times of economic contraction, 
                consistent with the safety and soundness of the 
                company.
          (B) Treatment of client margin.--For purposes of any 
        leverage-based capital rule, guideline, standard, or 
        requirement promulgated, prescribed, or imposed by the 
        Board on savings and loan holding companies, the amount 
        of any initial margin provided by a client of a savings 
        and loan holding company or affiliate thereof with 
        respect to a centrally-cleared derivative obligation 
        shall be deducted from the amount of any leverage 
        exposure arising from the guarantee by the savings and 
        loan holding company or affiliate thereof of the 
        client's derivative obligation to the central 
        counterparty.
          (2) Investigations.--The Board may make such 
        investigations as the Board deems necessary or 
        appropriate to determine whether the provisions of this 
        section, and regulations and orders thereunder, are 
        being and have been complied with by savings and loan 
        holding companies and subsidiaries and affiliates 
        thereof. For the purpose of any investigation under 
        this section, the Board may administer oaths and 
        affirmations, issue subpenas, take evidence, and 
        require the production of any books, papers, 
        correspondence, memorandums, or other records which may 
        be relevant or material to the inquiry. The attendance 
        of witnesses and the production of any such records may 
        be required from any place in any State. The Board may 
        apply to the United States district court for the 
        judicial district (or the United States court in any 
        territory) in which any witness or company subpenaed 
        resides or carries on business, for enforcement of any 
        subpena issued pursuant to this paragraph, and such 
        courts shall have jurisdiction and power to order and 
        require compliance.
          (3) Proceedings.--(A) In any proceeding under 
        subsection (a)(2)(D) or under paragraph (5) of this 
        subsection, the Board may administer oaths and 
        affirmations, take or cause to be taken depositions, 
        and issue subpenas. The Board may make regulations with 
        respect to any such proceedings. The attendance of 
        witnesses and the production of documents provided for 
        in this paragraph may be required from any place in any 
        State or in any territory at any designated place where 
        such proceeding is being conducted. Any party to such 
        proceedings may apply to the United States District 
        Court for the District of Columbia, or the United 
        States district court for the judicial district or the 
        United States court in any territory in which such 
        proceeding is being conducted, or where the witness 
        resides or carries on business, for enforcement of any 
        subpena issued pursuant to this paragraph, and such 
        courts shall have jurisdiction and power to order and 
        require compliance therewith. Witnesses subpenaed under 
        this section shall be paid the same fees and mileage 
        that are paid witnesses in the district courts of the 
        United States.
          (B) Any hearing provided for in subsection (a)(2)(D) 
        or under paragraph (5) of this section shall be held in 
        the Federal judicial district or in the territory in 
        which the principal office of the association or other 
        company is located unless the party afforded the 
        hearing consents to another place, and shall be 
        conducted in accordance with the provisions of chapter 
        5 of title 5, United States Code.
          (4) Injunctions.--Whenever it appears to the Board 
        that any person is engaged or has engaged or is about 
        to engage in any acts or practices which constitute or 
        will constitute a violation of the provisions of this 
        section or of any regulation or order thereunder, the 
        Board may bring an action in the proper United States 
        district court, or the United States court of any 
        territory or other place subject to the jurisdiction of 
        the United States, to enjoin such acts or practices, to 
        enforce compliance with this section or any regulation 
        or order, or to require the divestiture of any 
        acquisition in violation of this section, or for any 
        combination of the foregoing, and such courts shall 
        have jurisdiction of such actions. Upon a proper 
        showing an injunction, decree, restraining order, order 
        of divestiture, or other appropriate order shall be 
        granted without bond.
          (5) Cease and desist orders.--(A) Notwithstanding any 
        other provision of this section, the Board may, 
        whenever the Board has reasonable cause to believe that 
        the continuation by a savings and loan holding company 
        of any activity or of ownership or control of any of 
        its noninsured subsidiaries constitutes a serious risk 
        to the financial safety, soundness, or stability of a 
        savings and loan holding company's subsidiary savings 
        association and is inconsistent with the sound 
        operation of a savings association or with the purposes 
        of this section or section 8 of the Federal Deposit 
        Insurance Act, order the savings and loan holding 
        company or any of its subsidiaries, after due notice 
        and opportunity for hearing, to terminate such 
        activities or to terminate (within 120 days or such 
        longer period as the Board directs in unusual 
        circumstances) its ownership or control of any such 
        noninsured subsidiary either by sale or by distribution 
        of the shares of the subsidiary to the shareholders of 
        the savings and loan holding company. Such distribution 
        shall be pro rata with respect to all of the 
        shareholders of the distributing savings and loan 
        holding company, and the holding company shall not make 
        any charge to its shareholders arising out of such a 
        distribution.
          (B) The Board may in the discretion of the Board 
        apply to the United States district court within the 
        jurisdiction of which the principal office of the 
        company is located, for the enforcement of any 
        effective and outstanding order issued under this 
        section, and such court shall have jurisdiction and 
        power to order and require compliance therewith. Except 
        as provided in subsection (j), no court shall have 
        jurisdiction to affect by injunction or otherwise the 
        issuance or enforcement of any notice or order under 
        this section, or to review, modify, suspend, terminate, 
        or set aside any such notice or order.
  (h) Prohibited Acts.--It shall be unlawful for--
          (1) any savings and loan holding company or 
        subsidiary thereof, or any director, officer, employee, 
        or person owning, controlling, or holding with power to 
        vote, or holding proxies representing, more than 25 
        percent of the voting shares, of such holding company 
        or subsidiary, to hold, solicit, or exercise any 
        proxies in respect of any voting rights in a savings 
        association which is a mutual association;
          (2) any director or officer of a savings and loan 
        holding company, or any individual who owns, controls, 
        or holds with power to vote (or holds proxies 
        representing) more than 25 percent of the voting shares 
        of such holding company, to acquire control of any 
        savings association not a subsidiary of such savings 
        and loan holding company, unless such acquisition is 
        approved by the Board pursuant to subsection (e)(4); or
          (3) any individual, except with the prior approval of 
        the Board, to serve or act as a director, officer, or 
        trustee of, or become a partner in, any savings and 
        loan holding company after having been convicted of any 
        criminal offense involving dishonesty or breach of 
        trust.
  (i) Penalties.--
          (1) Criminal penalty.--(A) Whoever knowingly violates 
        any provision of this section or being a company, 
        violates any regulation or order issued by the Board 
        under this section, shall be imprisoned not more than 1 
        year, fined not more than $100,000 per day for each day 
        during which the violation continues, or both.
          (B) Whoever, with the intent to deceive, defraud, or 
        profit significantly, knowingly violates any provision 
        of this section shall be fined not more than $1,000,000 
        per day for each day during which the violation 
        continues, imprisoned not more than 5 years, or both.
          (2) Civil money penalty.--
                  (A) Penalty.--Any company which violates, and 
                any person who participates in a violation of, 
                any provision of this section, or any 
                regulation or order issued pursuant thereto, 
                shall forfeit and pay a civil penalty of not 
                more than $25,000 for each day during which 
                such violation continues.
                  (B) Assessment.--Any penalty imposed under 
                subparagraph (A) may be assessed and collected 
                by the Board in the manner provided in 
                subparagraphs (E), (F), (G), and (I) of section 
                8(i)(2) of the Federal Deposit Insurance Act 
                for penalties imposed (under such section) and 
                any such assessment shall be subject to the 
                provisions of such section.
                  (C) Hearing.--The company or other person 
                against whom any civil penalty is assessed 
                under this paragraph shall be afforded a 
                hearing if such company or person submits a 
                request for such hearing within 20 days after 
                the issuance of the notice of assessment. 
                Section 8(h) of the Federal Deposit Insurance 
                Act shall apply to any proceeding under this 
                paragraph.
                  (D) Disbursement.--All penalties collected 
                under authority of this paragraph shall be 
                deposited into the Treasury.
                  (E) Violate defined.--For purposes of this 
                section, the term ``violate'' includes any 
                action (alone or with another or others) for or 
                toward causing, bringing about, participating 
                in, counseling, or aiding or abetting a 
                violation.
                  (F) Regulations.--The Board shall prescribe 
                regulations establishing such procedures as may 
                be necessary to carry out this paragraph.
          (3) Civil money penalty.--
                  (A) Penalty.--Any company which violates, and 
                any person who participates in a violation of, 
                any provision of this section, or any 
                regulation or order issued pursuant thereto, 
                shall forfeit and pay a civil penalty of not 
                more than $25,000 for each day during which 
                such violation continues.
                  (B) Assessment; etc.--Any penalty imposed 
                under subparagraph (A) may be assessed and 
                collected by the Board in the manner provided 
                in subparagraphs (E), (F), (G), and (I) of 
                section 8(i)(2) of the Federal Deposit 
                Insurance Act for penalties imposed (under such 
                section) and any such assessment shall be 
                subject to the provisions of such section.
                  (C) Hearing.--The company or other person 
                against whom any penalty is assessed under this 
                paragraph shall be afforded an agency hearing 
                if such company or person submits a request for 
                such hearing within 20 days after the issuance 
                of the notice of assessment. Section 8(h) of 
                the Federal Deposit Insurance Act shall apply 
                to any proceeding under this paragraph.
                  (D) Disbursement.--All penalties collected 
                under authority of this paragraph shall be 
                deposited into the Treasury.
                  (E) Violate defined.--For purposes of this 
                section, the term ``violate'' includes any 
                action (alone or with another or others) for or 
                toward causing, bringing about, participating 
                in, counseling, or aiding or abetting a 
                violation.
                  (F) Regulations.--The Board shall prescribe 
                regulations establishing such procedures as may 
                be necessary to carry out this paragraph.
          (4) Notice under this section after separation from 
        service.--The resignation, termination of employment or 
        participation, or separation of an institution-
        affiliated party (within the meaning of section 3(u) of 
        the Federal Deposit Insurance Act) with respect to a 
        savings and loan holding company or subsidiary thereof 
        (including a separation caused by the deregistration of 
        such a company or such a subsidiary) shall not affect 
        the jurisdiction and authority of the Board to issue 
        any notice and proceed under this section against any 
        such party, if such notice is served before the end of 
        the 6-year period beginning on the date such party 
        ceased to be such a party with respect to such holding 
        company or its subsidiary (whether such date occurs 
        before, on, or after the date of the enactment of this 
        paragraph).
  (j) Judicial Review.--Any party aggrieved by an order of the 
Board under this section may obtain a review of such order by 
filing in the court of appeals of the United States for the 
circuit in which the principal office of such party is located, 
or in the United States Court of Appeals for the District of 
Columbia Circuit, within 30 days after the date of service of 
such order, a written petition praying that the order of the 
Board be modified, terminated, or set aside. A copy of the 
petition shall be forthwith transmitted by the clerk of the 
court to the Board, and thereupon the Board shall file in the 
court the record in the proceeding, as provided in section 2112 
of title 28, United States Code. Upon the filing of such 
petition, such court shall have jurisdiction, which upon the 
filing of the record shall be exclusive, to affirm, modify, 
terminate, or set aside, in whole or in part, the order of the 
Board. Review of such proceedings shall be had as provided in 
chapter 7 of title 5, United States Code. The judgment and 
decree of the court shall be final, except that the same shall 
be subject to review by the Supreme Court upon certiorari as 
provided in section 1254 of title 28, United States Code.
  (k) Savings Clause.--Nothing contained in this section, other 
than any transaction approved under subsection (e)(2) of this 
section or section 13 of the Federal Deposit Insurance Act, 
shall be interpreted or construed as approving any act, action, 
or conduct which is or has been or may be in violation of 
existing law, nor shall anything herein contained constitute a 
defense to any action, suit, or proceeding pending or hereafter 
instituted on account of any act, action, or conduct in 
violation of the antitrust laws.
  (l) Treatment of FDIC Insured State Savings Banks and 
Cooperative Banks as Savings Associations.--
          (1) In general.--Notwithstanding any other provision 
        of law, a savings bank (as defined in section 3(g) of 
        the Federal Deposit Insurance Act) and a cooperative 
        bank that is an insured bank (as defined in section 
        3(h) of the Federal Deposit Insurance Act) upon 
        application shall be deemed to be a savings association 
        for the purpose of this section, if the appropriate 
        Federal banking agency determines that such bank is a 
        qualified thrift lender (as determined under subsection 
        (m)).
          (2) Failure to maintain qualified thrift lender 
        status.--If any savings bank which is deemed to be a 
        savings association under paragraph (1) subsequently 
        fails to maintain its status as a qualified thrift 
        lender, as determined by the appropriate Federal 
        banking agency, such bank may not thereafter be a 
        qualified thrift lender for a period of 5 years.
  (m) Qualified Thrift Lender Test.--
          (1) In general.--Except as provided in paragraphs (2) 
        and (7), any savings association is a qualified thrift 
        lender if--
                  (A) the savings association qualifies as a 
                domestic building and loan association, as such 
                term is defined in section 7701(a)(19) of the 
                Internal Revenue Code of 1986; or
                  (B)(i) the savings association's qualified 
                thrift investments equal or exceed 65 percent 
                of the savings association's portfolio assets; 
                and
                  (ii) the savings association's qualified 
                thrift investments continue to equal or exceed 
                65 percent of the savings association's 
                portfolio assets on a monthly average basis in 
                9 out of every 12 months.
          (2) Exceptions granted by director.--Notwithstanding 
        paragraph (1), the appropriate Federal banking agency 
        may grant such temporary and limited exceptions from 
        the minimum actual thrift investment percentage 
        requirement contained in such paragraph as the 
        appropriate Federal banking agency deems necessary if--
                  (A) the appropriate Federal banking agency 
                determines that extraordinary circumstances 
                exist, such as when the effects of high 
                interest rates reduce mortgage demand to such a 
                degree that an insufficient opportunity exists 
                for a savings association to meet such 
                investment requirements; or
                  (B) the appropriate Federal banking agency 
                determines that--
                          (i) the grant of any such exception 
                        will significantly facilitate an 
                        acquisition under section 13(c) or 
                        13(k) of the Federal Deposit Insurance 
                        Act;
                          (ii) the acquired association will 
                        comply with the transition requirements 
                        of paragraph (7)(B), as if the date of 
                        the exemption were the starting date 
                        for the transition period described in 
                        that paragraph; and
                          (iii) the appropriate Federal banking 
                        agency determines that the exemption 
                        will not have an undue adverse effect 
                        on competing savings associations in 
                        the relevant market and will further 
                        the purposes of this subsection.
          (3) Failure to become and remain a qualified thrift 
        lender.--
                  (A) In general.--A savings association that 
                fails to become or remain a qualified thrift 
                lender shall immediately be subject to the 
                restrictions under subparagraph (B).
                  (B) Restrictions applicable to savings 
                associations that are not qualified thrift 
                lenders.--
                          (i) Restrictions effective 
                        immediately.--The following 
                        restrictions shall apply to a savings 
                        association beginning on the date on 
                        which the savings association should 
                        have become or ceases to be a qualified 
                        thrift lender:
                                  (I) Activities.--The savings 
                                association shall not make any 
                                new investment (including an 
                                investment in a subsidiary) or 
                                engage, directly or indirectly, 
                                in any other new activity 
                                unless that investment or 
                                activity would be permissible 
                                for the savings association if 
                                it were a national bank, and is 
                                also permissible for the 
                                savings association as a 
                                savings association.
                                  (II) Branching.--The savings 
                                association shall not establish 
                                any new branch office at any 
                                location at which a national 
                                bank located in the savings 
                                association's home State may 
                                not establish a branch office. 
                                For purposes of this subclause, 
                                a savings association's home 
                                State is the State in which the 
                                savings association's total 
                                deposits were largest on the 
                                date on which the savings 
                                association should have become 
                                or ceased to be a qualified 
                                thrift lender.
                                  (III) Dividends.--The savings 
                                association may not pay 
                                dividends, except for dividends 
                                that--
                                          (aa) would be 
                                        permissible for a 
                                        national bank;
                                          (bb) are necessary to 
                                        meet obligations of a 
                                        company that controls 
                                        such savings 
                                        association; and
                                          (cc) are specifically 
                                        approved by the 
                                        Comptroller of the 
                                        Currency and the Board 
                                        after a written request 
                                        submitted to the 
                                        Comptroller of the 
                                        Currency and the Board 
                                        by the savings 
                                        association not later 
                                        than 30 days before the 
                                        date of the proposed 
                                        payment.
                                  (IV) Regulatory authority.--A 
                                savings association that fails 
                                to become or remain a qualified 
                                thrift lender shall be deemed 
                                to have violated section 5 of 
                                the Home Owners' Loan Act (12 
                                U.S.C. 1464) and subject to 
                                actions authorized by section 
                                5(d) of the Home Owners' Loan 
                                Act (12 U.S.C. 1464(d)).
                          (ii) Additional restrictions 
                        effective after 3 years.--Beginning 3 
                        years after the date on which a savings 
                        association should have become a 
                        qualified thrift lender, or the date on 
                        which the savings association ceases to 
                        be a qualified thrift lender, as 
                        applicable, the savings association 
                        shall not retain any investment 
                        (including an investment in any 
                        subsidiary) or engage, directly or 
                        indirectly, in any activity, unless 
                        that investment or activity--
                                  (I) would be permissible for 
                                the savings association if it 
                                were a national bank; and
                                  (II) is permissible for the 
                                savings association as a 
                                savings association.
                  (C) Holding company regulation.--Any company 
                that controls a savings association that is 
                subject to any provision of subparagraph (B) 
                shall, within one year after the date on which 
                the savings association should have become or 
                ceases to be a qualified thrift lender, 
                register as and be deemed to be a bank holding 
                company subject to all of the provisions of the 
                Bank Holding Company Act of 1956, section 8 of 
                the Federal Deposit Insurance Act, and other 
                statutes applicable to bank holding companies, 
                in the same manner and to the same extent as if 
                the company were a bank holding company and the 
                savings association were a bank, as those terms 
                are defined in the Bank Holding Company Act of 
                1956.
                  (D) Requalification.--A savings association 
                that should have become or ceases to be a 
                qualified thrift lender shall not be subject to 
                subparagraph (B) or (C) if the savings 
                association becomes a qualified thrift lender 
                by meeting the qualified thrift lender 
                requirement in paragraph (1) on a monthly 
                average basis in 9 out of the preceding 12 
                months and remains a qualified thrift lender. 
                If the savings association (or any savings 
                association that acquired all or substantially 
                all of its assets from that savings 
                association) at any time thereafter ceases to 
                be a qualified thrift lender, it shall 
                immediately be subject to all provisions of 
                subparagraphs (B) and (C) as if all the periods 
                described in subparagraphs (B)(ii) and (C) had 
                expired.
                  (E) Exemption for specialized savings 
                associations serving certain military 
                personnel.--Subparagraph (A) shall not apply to 
                a savings association subsidiary of a savings 
                and loan holding company if at least 90 percent 
                of the customers of the savings and loan 
                holding company and its subsidiaries and 
                affiliates are active or former members in the 
                United States military services or the widows, 
                widowers, divorced spouses, or current or 
                former dependents of such members.
                  (F) Exemption for certain federal savings 
                associations.--This paragraph shall not apply 
                to any Federal savings association in existence 
                as a Federal savings association on the date of 
                enactment of the Financial Institutions Reform, 
                Recovery, and Enforcement Act of 1989--
                          (i) that was chartered before October 
                        15, 1982, as a savings bank or a 
                        cooperative bank under State law; or
                          (ii) that acquired its principal 
                        assets from an association that was 
                        chartered before October 15, 1982, as a 
                        savings bank or a cooperative bank 
                        under State law.
                  (G) No circumvention of exit moratorium.--
                Subparagraph (A) of this paragraph shall not be 
                construed as permitting any insured depository 
                institution to engage in any conversion 
                transaction prohibited under section 5(d) of 
                the Federal Deposit Insurance Act.
          (4) Definitions.--For purposes of this subsection, 
        the following definitions shall apply:
                  (A) Actual thrift investment percentage.--The 
                term ``actual thrift investment percentage'' 
                means the percentage determined by dividing--
                          (i) the amount of a savings 
                        association's qualified thrift 
                        investments, by
                          (ii) the amount of the savings 
                        association's portfolio assets.
                  (B) Portfolio assets.--The term ``portfolio 
                assets'' means, with respect to any savings 
                association, the total assets of the savings 
                association, minus the sum of--
                          (i) goodwill and other intangible 
                        assets;
                          (ii) the value of property used by 
                        the savings association to conduct its 
                        business; and
                          (iii) liquid assets of the type 
                        required to be maintained under section 
                        6 of the Home Owners' Loan Act, as in 
                        effect on the day before the date of 
                        the enactment of the Financial 
                        Regulatory Relief and Economic 
                        Efficiency Act of 2000, in an amount 
                        not exceeding the amount equal to 20 
                        percent of the savings association's 
                        total assets.
                  (C) Qualified thrift investments.--
                          (i) In general.--The term ``qualified 
                        thrift investments'' means, with 
                        respect to any savings association, the 
                        assets of the savings association that 
                        are described in clauses (ii) and 
                        (iii).
                          (ii) Assets includible without 
                        limit.--The following assets are 
                        described in this clause for purposes 
                        of clause (i):
                                  (I) The aggregate amount of 
                                loans held by the savings 
                                association that were made to 
                                purchase, refinance, construct, 
                                improve, or repair domestic 
                                residential housing or 
                                manufactured housing.
                                  (II) Home-equity loans.
                                  (III) Securities backed by or 
                                representing an interest in 
                                mortgages on domestic 
                                residential housing or 
                                manufactured housing.
                                  (IV) Existing obligations of 
                                deposit insurance agencies.--
                                Direct or indirect obligations 
                                of the Federal Deposit 
                                Insurance Corporation or the 
                                Federal Savings and Loan 
                                Insurance Corporation issued in 
                                accordance with the terms of 
                                agreements entered into prior 
                                to July 1, 1989, for the 10-
                                year period beginning on the 
                                date of issuance of such 
                                obligations.
                                  (V) New obligations of 
                                deposit insurance agencies.--
                                Obligations of the Federal 
                                Deposit Insurance Corporation, 
                                the Federal Savings and Loan 
                                Insurance Corporation, the 
                                FSLIC Resolution Fund, and the 
                                Resolution Trust Corporation 
                                issued in accordance with the 
                                terms of agreements entered 
                                into on or after July 1, 1989, 
                                for the 5-year period beginning 
                                on the date of issuance of such 
                                obligations.
                                  (VI) Shares of stock issued 
                                by any Federal home loan bank.
                                  (VII) Loans for educational 
                                purposes, loans to small 
                                businesses, and loans made 
                                through credit cards or credit 
                                card accounts.
                          (iii) Assets includible subject to 
                        percentage restriction.--The following 
                        assets are described in this clause for 
                        purposes of clause (i):
                                  (I) 50 percent of the dollar 
                                amount of the residential 
                                mortgage loans originated by 
                                such savings association and 
                                sold within 90 days of 
                                origination.
                                  (II) Investments in the 
                                capital stock or obligations 
                                of, and any other security 
                                issued by, any service 
                                corporation if such service 
                                corporation derives at least 80 
                                percent of its annual gross 
                                revenues from activities 
                                directly related to purchasing, 
                                refinancing, constructing, 
                                improving, or repairing 
                                domestic residential real 
                                estate or manufactured housing.
                                  (III) 200 percent of the 
                                dollar amount of loans and 
                                investments made to acquire, 
                                develop, and construct 1- to 4-
                                family residences the purchase 
                                price of which is or is 
                                guaranteed to be not greater 
                                than 60 percent of the median 
                                value of comparable newly 
                                constructed 1- to 4-family 
                                residences within the local 
                                community in which such real 
                                estate is located, except that 
                                not more than 25 percent of the 
                                amount included under this 
                                subclause may consist of 
                                commercial properties related 
                                to the development if those 
                                properties are directly related 
                                to providing services to 
                                residents of the development.
                                  (IV) 200 percent of the 
                                dollar amount of loans for the 
                                acquisition or improvement of 
                                residential real property, 
                                churches, schools, and nursing 
                                homes located within, and loans 
                                for any other purpose to any 
                                small businesses located within 
                                any area which has been 
                                identified by the appropriate 
                                Federal banking agency, in 
                                connection with any review or 
                                examination of community 
                                reinvestment practices, as a 
                                geographic area or neighborhood 
                                in which the credit needs of 
                                the low- and moderate-income 
                                residents of such area or 
                                neighborhood are not being 
                                adequately met.
                                  (V) Loans for the purchase or 
                                construction of churches, 
                                schools, nursing homes, and 
                                hospitals, other than those 
                                qualifying under clause (IV), 
                                and loans for the improvement 
                                and upkeep of such properties.
                                  (VI) Loans for personal, 
                                family, or household purposes 
                                (other than loans for personal, 
                                family, or household purposes 
                                described in clause (ii)(VII)).
                                  (VII) Shares of stock issued 
                                by the Federal Home Loan 
                                Mortgage Corporation or the 
                                Federal National Mortgage 
                                Association.
                          (iv) Percentage restriction 
                        applicable to certain assets.--The 
                        aggregate amount of the assets 
                        described in clause (iii) which may be 
                        taken into account in determining the 
                        amount of the qualified thrift 
                        investments of any savings association 
                        shall not exceed the amount which is 
                        equal to 20 percent of a savings 
                        association's portfolio assets.
                          (v) The term ``qualified thrift 
                        investments'' excludes--
                                  (I) except for home equity 
                                loans, that portion of any loan 
                                or investment that is used for 
                                any purpose other than those 
                                expressly qualifying under any 
                                subparagraph of clause (ii) or 
                                (iii); or
                                  (II) goodwill or any other 
                                intangible asset.
                  (D) Credit card.--The appropriate Federal 
                banking agency shall issue such regulations as 
                may be necessary to define the term ``credit 
                card''.
                  (E) Small business.--The appropriate Federal 
                banking agency shall issue such regulations as 
                may be necessary to define the term ``small 
                business''.
          (5) Consistent accounting required.--
                  (A) In determining the amount of a savings 
                association's portfolio assets, the assets of 
                any subsidiary of the savings association shall 
                be consolidated with the assets of the savings 
                association if--
                          (i) Assets of the subsidiary are 
                        consolidated with the assets of the 
                        savings association in determining the 
                        savings association's qualified thrift 
                        investments; or
                          (ii) Residential mortgage loans 
                        originated by the subsidiary are 
                        included pursuant to paragraph 
                        (4)(C)(iii)(I) in determining the 
                        savings association's qualified thrift 
                        investments.
                  (B) In determining the amount of a savings 
                association's portfolio assets and qualified 
                thrift investments, consistent accounting 
                principles shall be applied.
          (6) Special rules for puerto rico and virgin islands 
        savings associations.--
                  (A) Puerto rico savings associations.--With 
                respect to any savings association 
                headquartered and operating primarily in Puerto 
                Rico--
                          (i) the term ``qualified thrift 
                        investments'' includes, in addition to 
                        the items specified in paragraph (4)--
                                  (I) the aggregate amount of 
                                loans for personal, family, 
                                educational, or household 
                                purposes made to persons 
                                residing or domiciled in the 
                                Commonwealth of Puerto Rico; 
                                and
                                  (II) the aggregate amount of 
                                loans for the acquisition or 
                                improvement of churches, 
                                schools, or nursing homes, and 
                                of loans to small businesses, 
                                located within the Commonwealth 
                                of Puerto Rico; and
                          (ii) the aggregate amount of loans 
                        related to the purchase, acquisition, 
                        development and construction of 1- to 
                        4-family residential real estate--
                                  (I) which is located within 
                                the Commonwealth of Puerto 
                                Rico; and
                                  (II) the value of which (at 
                                the time of acquisition or upon 
                                completion of the development 
                                and construction) is below the 
                                median value of newly 
                                constructed 1- to 4-family 
                                residences in the Commonwealth 
                                of Puerto Rico, which may be 
                                taken into account in 
                                determining the amount of the 
                                qualified thrift investments 
                                and of such savings association 
                                shall be doubled.
                  (B) Virgin islands savings associations.--
                With respect to any savings association 
                headquartered and operating primarily in the 
                Virgin Islands--
                          (i) the term ``qualified thrift 
                        investments'' includes, in addition to 
                        the items specified in paragraph (4)--
                                  (I) the aggregate amount of 
                                loans for personal, family, 
                                educational, or household 
                                purposes made to persons 
                                residing or domiciled in the 
                                Virgin Islands; and
                                  (II) the aggregate amount of 
                                loans for the acquisition or 
                                improvement of churches, 
                                schools, or nursing homes, and 
                                of loans to small businesses, 
                                located within the Virgin 
                                Islands; and
                          (ii) the aggregate amount of loans 
                        related to the purchase, acquisition, 
                        development and construction of 1- to 
                        4-family residential real estate--
                                  (I) which is located within 
                                the Virgin Islands; and
                                  (II) the value of which (at 
                                the time of acquisition or upon 
                                completion of the development 
                                and construction) is below the 
                                median value of newly 
                                constructed 1- to 4-family 
                                residences in the Virgin 
                                Islands, which may be taken 
                                into account in determining the 
                                amount of the qualified thrift 
                                investments and of such savings 
                                association shall be doubled.
          (7) Transitional rule for certain savings 
        associations.--
                  (A) In general.--If any Federal savings 
                association in existence as a Federal savings 
                association on the date of enactment of the 
                Financial Institutions Reform, Recovery, and 
                Enforcement Act of 1989--
                          (i) that was chartered as a savings 
                        bank or a cooperative bank under State 
                        law before October 15, 1982; or
                          (ii) that acquired its principal 
                        assets from an association that was 
                        chartered before October 15, 1982, as a 
                        savings bank or a cooperative bank 
                        under State law,
                meets the requirements of subparagraph (B), 
                such savings association shall be treated as a 
                qualified thrift lender during the period 
                ending on September 30, 1995.
                  (B) Subparagraph (b) requirements.--A savings 
                association meets the requirements of this 
                subparagraph if, in the determination of the 
                appropriate Federal banking agency--
                          (i) the actual thrift investment 
                        percentage of such association does 
                        not, after the date of enactment of the 
                        Financial Institutions Reform, 
                        Recovery, and Enforcement Act of 1989, 
                        decrease below the actual thrift 
                        investment percentage of such 
                        association on July 15, 1989; and
                          (ii) the amount by which--
                                  (I) the actual thrift 
                                investment percentage of such 
                                association at the end of each 
                                period described in the 
                                following table, exceeds
                                  (II) the actual thrift 
                                investment percentage of such 
                                association on July 15, 1989,
                        is equal to or greater than the 
                        applicable percentage (as determined 
                        under the following table) of the 
                        amount by which 70 percent exceeds the 
                        actual thrift investment percentage of 
                        such association on such date of 
                        enactment:

        For the following                                 The applicable
          period:                                         percentage is:
        July 1, 1991-September 30, 1992.................      25 percent
        October 1, 1992-March 31, 1994..................      50 percent
        April 1, 1994-September 30, 1995................      75 percent
        Thereafter......................................     100 percent

                  (C) For purposes of this paragraph, the 
                actual thrift investment percentage of an 
                association on July 15, 1989, shall be 
                determined by applying the definition of 
                ``actual thrift investment percentage'' that 
                takes effect on July 1, 1991.
  (n) Tying Restrictions.--A savings and loan holding company 
and any of its affiliates shall be subject to section 5(q) and 
regulations prescribed under such section, in connection with 
transactions involving the products or services of such company 
or affiliate and those of an affiliated savings association as 
if such company or affiliate were a savings association.
  (o) Mutual Holding Companies.--
          (1) In general.--A savings association operating in 
        mutual form may reorganize so as to become a holding 
        company by--
                  (A) chartering an interim savings 
                association, the stock of which is to be wholly 
                owned, except as otherwise provided in this 
                section, by the mutual association; and
                  (B) transferring the substantial part of its 
                assets and liabilities, including all of its 
                insured liabilities, to the interim savings 
                association.
          (2) Directors and certain account holders' approval 
        of plan required.--A reorganization is not authorized 
        under this subsection unless--
                  (A) a plan providing for such reorganization 
                has been approved by a majority of the board of 
                directors of the mutual savings association; 
                and
                  (B) in the case of an association in which 
                holders of accounts and obligors exercise 
                voting rights, such plan has been submitted to 
                and approved by a majority of such individuals 
                at a meeting held at the call of the directors 
                in accordance with the procedures prescribed by 
                the association's charter and bylaws.
          (3) Notice to the director; disapproval period.--
                  (A) Notice required.--At least 60 days prior 
                to taking any action described in paragraph 
                (1), a savings association seeking to establish 
                a mutual holding company shall provide written 
                notice to the Board. The notice shall contain 
                such relevant information as the Board shall 
                require by regulation or by specific request in 
                connection with any particular notice.
                  (B) Transaction allowed if not disapproved.--
                Unless the Board within such 60-day notice 
                period disapproves the proposed holding company 
                formation, or extends for another 30 days the 
                period during which such disapproval may be 
                issued, the savings association providing such 
                notice may proceed with the transaction, if the 
                requirements of paragraph (2) have been met.
                  (C) Grounds for disapproval.--The Board may 
                disapprove any proposed holding company 
                formation only if--
                          (i) such disapproval is necessary to 
                        prevent unsafe or unsound practices;
                          (ii) the financial or management 
                        resources of the savings association 
                        involved warrant disapproval;
                          (iii) the savings association fails 
                        to furnish the information required 
                        under subparagraph (A); or
                          (iv) the savings association fails to 
                        comply with the requirement of 
                        paragraph (2).
                  (D) Retention of capital assets.--In 
                connection with the transaction described in 
                paragraph (1), a savings association may, 
                subject to the approval of the Board, retain 
                capital assets at the holding company level to 
                the extent that such capital exceeds the 
                association's capital requirement established 
                by the Board pursuant to subsections (s) and 
                (t) of section 5.
          (4) Ownership.--
                  (A) In general.--Persons having ownership 
                rights in the mutual association pursuant to 
                section 5(b)(1)(B) of this Act or State law 
                shall have the same ownership rights with 
                respect to the mutual holding company.
                  (B) Holders of certain accounts.--Holders of 
                savings, demand or other accounts of--
                          (i) a savings association chartered 
                        as part of a transaction described in 
                        paragraph (1); or
                          (ii) a mutual savings association 
                        acquired pursuant to paragraph (5)(B),
                shall have the same ownership rights with 
                respect to the mutual holding company as 
                persons described in subparagraph (A) of this 
                paragraph.
          (5) Permitted activities.--A mutual holding company 
        may engage only in the following activities:
                  (A) Investing in the stock of a savings 
                association.
                  (B) Acquiring a mutual association through 
                the merger of such association into a savings 
                association subsidiary of such holding company 
                or an interim savings association subsidiary of 
                such holding company.
                  (C) Subject to paragraph (6), merging with or 
                acquiring another holding company, one of whose 
                subsidiaries is a savings association.
                  (D) Investing in a corporation the capital 
                stock of which is available for purchase by a 
                savings association under Federal law or under 
                the law of any State where the subsidiary 
                savings association or associations have their 
                home offices.
                  (E) Engaging in the activities described in 
                subsection (c)(2) or (c)(9)(A)(ii).
          (6) Limitations on certain activities of acquired 
        holding companies.--
                  (A) New activities.--If a mutual holding 
                company acquires or merges with another holding 
                company under paragraph (5)(C), the holding 
                company acquired or the holding company 
                resulting from such merger or acquisition may 
                only invest in assets and engage in activities 
                which are authorized under paragraph (5).
                  (B) Grace period for divesting prohibited 
                assets or discontinuing prohibited 
                activities.--Not later than 2 years following a 
                merger or acquisition described in paragraph 
                (5)(C), the acquired holding company or the 
                holding company resulting from such merger or 
                acquisition shall--
                          (i) dispose of any asset which is an 
                        asset in which a mutual holding company 
                        may not invest under paragraph (5); and
                          (ii) cease any activity which is an 
                        activity in which a mutual holding 
                        company may not engage under paragraph 
                        (5).
          (7) Regulation.--A mutual holding company shall be 
        chartered by the Board and shall be subject to such 
        regulations as the Board may prescribe. Unless the 
        context otherwise requires, a mutual holding company 
        shall be subject to the other requirements of this 
        section regarding regulation of holding companies.
          (8) Capital improvement.--
                  (A) Pledge of stock of savings association 
                subsidiary.--This section shall not prohibit a 
                mutual holding company from pledging all or a 
                portion of the stock of a savings association 
                chartered as part of a transaction described in 
                paragraph (1) to raise capital for such savings 
                association.
                  (B) Issuance of nonvoting shares.--This 
                section shall not prohibit a savings 
                association chartered as part of a transaction 
                described in paragraph (1) from issuing any 
                nonvoting shares or less than 50 percent of the 
                voting shares of such association to any person 
                other than the mutual holding company.
          (9) Insolvency and liquidation.--
                  (A) In general.--Notwithstanding any 
                provision of law, upon--
                          (i) the default of any savings 
                        association--
                                  (I) the stock of which is 
                                owned by any mutual holding 
                                company; and
                                  (II) which was chartered in a 
                                transaction described in 
                                paragraph (1);
                          (ii) the default of a mutual holding 
                        company; or
                          (iii) a foreclosure on a pledge by a 
                        mutual holding company described in 
                        paragraph (8)(A),
                a trustee shall be appointed receiver of such 
                mutual holding company and such trustee shall 
                have the authority to liquidate the assets of, 
                and satisfy the liabilities of, such mutual 
                holding company pursuant to title 11, United 
                States Code.
                  (B) Distribution of net proceeds.--Except as 
                provided in subparagraph (C), the net proceeds 
                of any liquidation of any mutual holding 
                company pursuant to subparagraph (A) shall be 
                transferred to persons who hold ownership 
                interests in such mutual holding company.
                  (C) Recovery by corporation.--If the 
                Corporation incurs a loss as a result of the 
                default of any savings association subsidiary 
                of a mutual holding company which is liquidated 
                pursuant to subparagraph (A), the Corporation 
                shall succeed to the ownership interests of the 
                depositors of such savings association in the 
                mutual holding company, to the extent of the 
                Corporation's loss.
          (10) Definitions.--For purposes of this subsection--
                  (A) Mutual holding company.--The term 
                ``mutual holding company'' means a corporation 
                organized as a holding company under this 
                subsection.
                  (B) Mutual association.--The term ``mutual 
                association'' means a savings association which 
                is operating in mutual form.
                  (C) Default.--The term ``default'' means an 
                adjudication or other official determination of 
                a court of competent jurisdiction or other 
                public authority pursuant to which a 
                conservator, receiver, or other legal custodian 
                is appointed.
          (11) Dividends.--
                  (A) Declaration of dividends.--
                          (i) Advance notice required.--Each 
                        subsidiary of a mutual holding company 
                        that is a savings association shall 
                        give the appropriate Federal banking 
                        agency and the Board notice not later 
                        than 30 days before the date of a 
                        proposed declaration by the board of 
                        directors of the savings association of 
                        any dividend on the guaranty, 
                        permanent, or other nonwithdrawable 
                        stock of the savings association.
                          (ii) Invalid dividends.--Any dividend 
                        described in clause (i) that is 
                        declared without giving notice to the 
                        appropriate Federal banking agency and 
                        the Board under clause (i), or that is 
                        declared during the 30-day period 
                        preceding the date of a proposed 
                        declaration for which notice is given 
                        to the appropriate Federal banking 
                        agency and the Board under clause (i), 
                        shall be invalid and shall confer no 
                        rights or benefits upon the holder of 
                        any such stock.
                  (B) Waiver of dividends.--A mutual holding 
                company may waive the right to receive any 
                dividend declared by a subsidiary of the mutual 
                holding company, if--
                          (i) no insider of the mutual holding 
                        company, associate of an insider, or 
                        tax-qualified or non-tax-qualified 
                        employee stock benefit plan of the 
                        mutual holding company holds any share 
                        of the stock in the class of stock to 
                        which the waiver would apply; or
                          (ii) the mutual holding company gives 
                        written notice to the Board of the 
                        intent of the mutual holding company to 
                        waive the right to receive dividends, 
                        not later than 30 days before the date 
                        of the proposed date of payment of the 
                        dividend, and the Board does not object 
                        to the waiver.
                  (C) Resolution included in waiver notice.--A 
                notice of a waiver under subparagraph (B) shall 
                include a copy of the resolution of the board 
                of directors of the mutual holding company, in 
                such form and substance as the Board may 
                determine, together with any supporting 
                materials relied upon by the board of directors 
                of the mutual holding company, concluding that 
                the proposed dividend waiver is consistent with 
                the fiduciary duties of the board of directors 
                to the mutual members of the mutual holding 
                company.
                  (D) Standards for waiver of dividend.--The 
                Board may not object to a waiver of dividends 
                under subparagraph (B) if--
                          (i) the waiver would not be 
                        detrimental to the safe and sound 
                        operation of the savings association;
                          (ii) the board of directors of the 
                        mutual holding company expressly 
                        determines that a waiver of the 
                        dividend by the mutual holding company 
                        is consistent with the fiduciary duties 
                        of the board of directors to the mutual 
                        members of the mutual holding company; 
                        and
                          (iii) the mutual holding company has, 
                        prior to December 1, 2009--
                                  (I) reorganized into a mutual 
                                holding company under 
                                subsection (o);
                                  (II) issued minority stock 
                                either from its mid-tier stock 
                                holding company or its 
                                subsidiary stock savings 
                                association; and
                                  (III) waived dividends it had 
                                a right to receive from the 
                                subsidiary stock savings 
                                association.
                  (E) Valuation.--
                          (i) In general.--The appropriate 
                        Federal banking agency shall consider 
                        waived dividends in determining an 
                        appropriate exchange ratio in the event 
                        of a full conversion to stock form.
                          (ii) Exception.--In the case of a 
                        savings association that has 
                        reorganized into a mutual holding 
                        company, has issued minority stock from 
                        a mid-tier stock holding company or a 
                        subsidiary stock savings association of 
                        the mutual holding company, and has 
                        waived dividends it had a right to 
                        receive from a subsidiary savings 
                        association before December 1, 2009, 
                        the appropriate Federal banking agency 
                        shall not consider waived dividends in 
                        determining an appropriate exchange 
                        ratio in the event of a full conversion 
                        to stock form.
  (p) Holding Company Activities Constituting Serious Risk to 
Subsidiary Savings Association.--
          (1) Determination and imposition of restrictions.--If 
        the Board or the appropriate Federal banking agency for 
        the savings association determines that there is 
        reasonable cause to believe that the continuation by a 
        savings and loan holding company of any activity 
        constitutes a serious risk to the financial safety, 
        soundness, or stability of a savings and loan holding 
        company's subsidiary savings association, the Board may 
        impose such restrictions as the Board, in consultation 
        with the appropriate Federal banking agency for the 
        savings association determines to be necessary to 
        address such risk. Such restrictions shall be issued in 
        the form of a directive to the holding company and any 
        of its subsidiaries, limiting--
                  (A) the payment of dividends by the savings 
                association;
                  (B) transactions between the savings 
                association, the holding company, and the 
                subsidiaries or affiliates of either; and
                  (C) any activities of the savings association 
                that might create a serious risk that the 
                liabilities of the holding company and its 
                other affiliates may be imposed on the savings 
                association.
        Such directive shall be effective as a cease and desist 
        order that has become final.
          (2) Review of directive.--
                  (A) Administrative review.--After a directive 
                referred to in paragraph (1) is issued, the 
                savings and loan holding company, or any 
                subsidiary of such holding company subject to 
                the directive, may object and present in 
                writing its reasons why the directive should be 
                modified or rescinded. Unless within 10 days 
                after receipt of such response the Board 
                affirms, modifies, or rescinds the directive, 
                such directive shall automatically lapse.
                  (B) Judicial review.--If the Board affirms or 
                modifies a directive pursuant to subparagraph 
                (A), any affected party may immediately 
                thereafter petition the United States district 
                court for the district in which the savings and 
                loan holding company has its main office or in 
                the United States District Court for the 
                District of Columbia to stay, modify, terminate 
                or set aside the directive. Upon a showing of 
                extraordinary cause, the savings and loan 
                holding company, or any subsidiary of such 
                holding company subject to a directive, may 
                petition a United States district court for 
                relief without first pursuing or exhausting the 
                administrative remedies set forth in this 
                paragraph.
  (q) Qualified Stock Issuance by Undercapitalized Savings 
Associations or Holding Companies.--
          (1) In general.--For purposes of this section, any 
        issue of shares of stock shall be treated as a 
        qualified stock issuance if the following conditions 
        are met:
                  (A) The shares of stock are issued by--
                          (i) an undercapitalized savings 
                        association; or
                          (ii) a savings and loan holding 
                        company which is not a bank holding 
                        company but which controls an 
                        undercapitalized savings association 
                        if, at the time of issuance, the 
                        savings and loan holding company is 
                        legally obligated to contribute the net 
                        proceeds from the issuance of such 
                        stock to the capital of an 
                        undercapitalized savings association 
                        subsidiary of such holding company.
                  (B) All shares of stock issued consist of 
                previously unissued stock or treasury shares.
                  (C) All shares of stock issued are purchased 
                by a savings and loan holding company that is 
                registered, as of the date of purchase, with 
                the Board in accordance with the provisions of 
                subsection (b)(1) of this section.
                  (D) Subject to paragraph (2), the Board 
                approved the purchase of the shares of stock by 
                the acquiring savings and loan holding company.
                  (E) The entire consideration for the stock 
                issued is paid in cash by the acquiring savings 
                and loan holding company.
                  (F) At the time of the stock issuance, each 
                savings association subsidiary of the acquiring 
                savings and loan holding company (other than an 
                association acquired in a transaction pursuant 
                to subsection (c) or (k) of section 13 of the 
                Federal Deposit Insurance Act or section 408(m) 
                of the National Housing Act) has capital (after 
                deducting any subordinated debt, intangible 
                assets, and deferred, unamortized gains or 
                losses) of not less than 6\1/2\ percent of the 
                total assets of such savings association.
                  (G) Immediately after the stock issuance, the 
                acquiring savings and loan holding company 
                holds not more than 15 percent of the 
                outstanding voting stock of the issuing 
                undercapitalized savings association or savings 
                and loan holding company.
                  (H) Not more than one of the directors of the 
                issuing association or company is an officer, 
                director, employee, or other representative of 
                the acquiring company or any of its affiliates.
                  (I) Transactions between the savings 
                association or savings and loan holding company 
                that issues the shares pursuant to this section 
                and the acquiring company and any of its 
                affiliates shall be subject to the provisions 
                of section 11.
          (2) Approval of acquisitions.--
                  (A) Additional capital commitments not 
                required.--The Board shall not disapprove any 
                application for the purchase of stock in 
                connection with a qualified stock issuance on 
                the grounds that the acquiring savings and loan 
                holding company has failed to undertake to make 
                subsequent additional capital contributions to 
                maintain the capital of the undercapitalized 
                savings association at or above the minimum 
                level required by the Board or any other 
                Federal agency having jurisdiction.
                  (B) Other conditions.--Notwithstanding 
                subsection (a)(4), the Board may impose such 
                conditions on any approval of an application 
                for the purchase of stock in connection with a 
                qualified stock issuance as the Board 
                determines to be appropriate, including--
                          (i) a requirement that any savings 
                        association subsidiary of the acquiring 
                        savings and loan holding company limit 
                        dividends paid to such holding company 
                        for such period of time as the Board 
                        may require; and
                          (ii) such other conditions as the 
                        Board deems necessary or appropriate to 
                        prevent evasions of this section.
                  (C) Application deemed approved if not 
                disapproved within 90 days.--An application for 
                approval of a purchase of stock in connection 
                with a qualified stock issuance shall be deemed 
                to have been approved by the Board if such 
                application has not been disapproved by the 
                Board before the end of the 90-day period 
                beginning on the date such application has been 
                deemed sufficient under regulations issued by 
                the Board.
          (3) No limitation on class of stock issued.--The 
        shares of stock issued in connection with a qualified 
        stock issuance may be shares of any class.
          (4) Undercapitalized savings association defined.--
        For purposes of this subsection, the term 
        ``undercapitalized savings association'' means any 
        savings association--
                  (A) the assets of which exceed the 
                liabilities of such association; and
                  (B) which does not comply with one or more of 
                the capital standards in effect under section 
                5(t).
  (r) Penalty for Failure To Provide Timely and Accurate 
Reports.--
          (1) First tier.--Any savings and loan holding 
        company, and any subsidiary of such holding company, 
        which--
                  (A) maintains procedures reasonably adapted 
                to avoid any inadvertent and unintentional 
                error and, as a result of such an error--
                          (i) fails to submit or publish any 
                        report or information required under 
                        this section or regulations prescribed 
                        by the Board or appropriate Federal 
                        banking agency, within the period of 
                        time specified by the Board or 
                        appropriate Federal banking agency; or
                          (ii) submits or publishes any false 
                        or misleading report or information; or
                  (B) inadvertently transmits or publishes any 
                report which is minimally late,
        shall be subject to a penalty of not more than $2,000 
        for each day during which such failure continues or 
        such false or misleading information is not corrected. 
        Such holding company or subsidiary shall have the 
        burden of proving by a preponderence of the evidence 
        that an error was inadvertent and unintentional and 
        that a report was inadvertently transmitted or 
        published late.
          (2) Second tier.--Any savings and loan holding 
        company, and any subsidiary of such holding company, 
        which--
                  (A) fails to submit or publish any report or 
                information required under this section or 
                under regulations prescribed by the Board or 
                appropriate Federal banking agency, within the 
                period of time specified by the Board or 
                appropriate Federal banking agency; or
                  (B) submits or publishes any false or 
                misleading report or information,
        in a manner not described in paragraph (1) shall be 
        subject to a penalty of not more than $20,000 for each 
        day during which such failure continues or such false 
        or misleading information is not corrected.
          (3) Third tier.--If any savings and loan holding 
        company or any subsidiary of such a holding company 
        knowingly or with reckless disregard for the accuracy 
        of any information or report described in paragraph (2) 
        submits or publishes any false or misleading report or 
        information, the Board or appropriate Federal banking 
        agency may assess a penalty of not more than $1,000,000 
        or 1 percent of total assets of such company or 
        subsidiary, whichever is less, per day for each day 
        during which such failure continues or such false or 
        misleading information is not corrected.
          (4) Assessment.--Any penalty imposed under paragraph 
        (1), (2), or (3) shall be assessed and collected by the 
        Board or appropriate Federal banking agency in the 
        manner provided in subparagraphs (E), (F), (G), and (I) 
        of section 8(i)(2) of the Federal Deposit Insurance Act 
        (for penalties imposed under such section) and any such 
        assessment (including the determination of the amount 
        of the penalty) shall be subject to the provisions of 
        such subsection.
          (5) Hearing.--Any savings and loan holding company or 
        any subsidiary of such a holding company against which 
        any penalty is assessed under this subsection shall be 
        afforded a hearing if such savings and loan holding 
        company or such subsidiary, as the case may be, submits 
        a request for such hearing within 20 days after the 
        issuance of the notice of assessment. Section 8(h) of 
        the Federal Deposit Insurance Act shall apply to any 
        proceeding under this subsection.
  (s) Mergers, Consolidations, and Other Acquisitions 
Authorized.--
          (1) In general.--Subject to sections 5(d)(3) and 
        18(c) of the Federal Deposit Insurance Act and all 
        other applicable laws, any Federal savings association 
        may acquire or be acquired by any insured depository 
        institution.
          (2) Expedited approval of acquisitions.--
                  (A) In general.--Any application by a savings 
                association to acquire or be acquired by 
                another insured depository institution which is 
                required to be filed with the appropriate 
                Federal banking agency for the savings 
                association under any applicable law or 
                regulation shall be approved or disapproved in 
                writing by the appropriate Federal banking 
                agency for the savings association before the 
                end of the 60-day period beginning on the date 
                such application is filed with the agency.
                  (B) Extension of period.--The period for 
                approval or disapproval referred to in 
                subparagraph (A) may be extended for an 
                additional 30-day period if the appropriate 
                Federal banking agency for the savings 
                association determines that--
                          (i) an applicant has not furnished 
                        all of the information required to be 
                        submitted; or
                          (ii) in the judgment of the 
                        appropriate Federal banking agency for 
                        the savings association, any material 
                        information submitted is substantially 
                        inaccurate or incomplete.
          (3) Acquire defined.--For purposes of this 
        subsection, the term ``acquire'' means to acquire, 
        directly or indirectly, ownership or control through a 
        merger or consolidation or an acquisition of assets or 
        assumption of liabilities, provided that following such 
        merger, consolidation, or acquisition, an acquiring 
        insured depository institution may not own the shares 
        of the acquired insured depository institution.
          (4) Regulations.--
                  (A) Required.--The Comptroller shall 
                prescribe such regulations as may be necessary 
                to carry out paragraph (1).
                  (B) Effective date.--The regulations required 
                under subparagraph (A) shall--
                          (i) be prescribed in final form 
                        before the end of the 90-day period 
                        beginning on the date of the enactment 
                        of this subsection; and
                          (ii) take effect before the end of 
                        the 120-day period beginning on such 
                        date.
          (5) Limitation.--No provision of this section shall 
        be construed to authorize a national bank or any 
        subsidiary thereof to engage in any activity not 
        otherwise authorized under the National Bank Act or any 
        other law governing the powers of a national bank.
  (t) Exemption for Bank Holding Companies.--This section shall 
not apply to a bank holding company that is subject to the Bank 
Holding Company Act of 1956, or any company controlled by such 
bank holding company.
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