Home | Contact the OCC | Directory | Subject Index | Site Map | Privacy and Security | Accessibility | |||||
Legal and Regulatory | |||||
Economic Growth And Regulatory Paperwork
Reduction
Act of 1996
Title II of the Omnibus
Consolidated Appropriations Act for FY 1997 [This
document discusses only the highlights of the "Economic Growth and Regulatory
Paperwork Reduction Act of 1996." For more detail and information about the Act,
please refer to the summary of the legislation prepared by Law Department
staff.] Section numbers in brackets refer to the section numbers in the enacted legislation.
I.
Regulatory Burden Relief
A.
Supervisory Provisions
Eliminates the per branch capital
requirement. [Sec. 2204] Excludes ATMs or remote service
units from the definition of "branch" for purposes of prior approval
requirements and geographic restrictions, as well as any other requirements
applicable to "branches." [Sec. 2205] Permits well-capitalized banks
rated CAMEL 1 or 2 to invest in bank premises in amounts up to 150 percent of
the bank's capital and surplus with only a 30-day after-the- fact notice. [Sec.
2206] Establishes expedited procedures
to permit certain bank holding companies to engage in permissible nonbanking
activities, except for acquisitions of thrifts. [Sec. 2208]
Eliminates new director or senior
executive officer notices (914 notices) currently required for banks chartered
within the past two years or that have undergone a change in control within the
past 2 years; retains 914 notices for undercapitalized and troubled banks and
gives the Federal banking agencies discretion to require prior notice if deemed
appropriate in connection with review of a prompt corrective action plan or
otherwise; gives the Federal banking agencies 90 days to disapprove an officer
or director based on a 914 notice, instead of the current 30 days. [Sec. 2209]
Makes a number of changes to the
Depository Institution Management Interlocks Act (DIMIA): increases the amount
of the asset-size test that prohibits nationwide interlocks involving large
nonaffiliated institutions -- banks with assets of up to $2.5 billion (increased
from $1 billion) can now have interlocking management with nonaffiliated
institutions with assets of up to $1.5 billion (increased from $500 million);
permits grandfathered interlocks to continue indefinitely; and restores the
Federal banking agencies' authority to make exemptions to DIMIA, subject to
certain conditions. [Sec. 2210] Permits the Federal Reserve Board
(Fed) under certain conditions to exempt from insider lending restrictions
preferential loans to executive officers and directors of certain affiliates if
the officer or director does not participate in major policy-making functions of
the bank. [Sec. 2211] Exempts from the insider lending
restrictions a bank's company-wide benefit or compensation plans that are widely
available to employees of the bank and that do not give preference to any
officer, director, or principal shareholder (or related interests) over other
employees of the bank. [Sec. 2211] Exempts ATMs, certain branch
relocations or consolidations within an immediate neighborhood, and branches
closed in connection with an emergency acquisition from the prior notice
requirement for branch closures. [Sec. 2213] Permits the Federal banking
agencies to raise the asset limit for an 18-month examination cycle from
$175,000,000 to $250,000,000 for banks with a CAMEL 2 rating. [Sec. 2221]
Increases the number of depository
institutions that are exempt under the Home Mortgage Disclosure Act (HMDA) by
indexing the current exemption limit of $10 million to inflation retroactive to
1975; as a result, institutions with approximately $28 million in assets are now
exempt from HMDA. [Sec. 2225] Permits the OCC to waive the State
residency requirement for directors of national banks. There is a technical
drafting error in this amendment. As drafted, the amendment inadvertently
deleted the OCC's current authority to waive the citizenship requirement for up
to a minority of a national bank's directors if the bank is affiliated with a
foreign bank. A colloquy on the Floor of the Senate between Chairman D'Amato of
the Senate Banking Committee and Sens. Mack and Graham (142 Cong. Rec. S11919
(daily ed. Sept. 30, 1996)) clarifies that no change in the OCC's citizenship
waiver authority was intended by Congress and instructs the OCC to treat the
authority as continuing in effect and not to require any national banks that
have citizenship waivers to restructure their boards of directors. [Sec. 2241]
Requires each Federal banking
agency to ensure that its examiners consult with each other regarding
examination activities of a national bank and resolve any inconsistencies in
their recommendations, and consider appointing an examiner-in-charge for each
national bank.[Sec. 2244] Eliminates the independent auditor
attestation requirement for compliance with safety and soundness laws. [Sec.
2301] Authorizes the Federal banking
agencies to permit a bank's independent audit committee to include some inside
directors if the bank is unable to find competent outside directors, provided a
majority of the committee is still made up of outside directors (prior to the
enactment of this amendment, all members of the audit committee had to be
outside directors). [Sec. 2301] Removes the 7-percent asset growth
cap for non-bank banks. [Sec. 2304] Permits national banks to invest
in Edge and Agreement Act corporations in an aggregate amount that exceeds 10%
of capital (which was the maximum permitted under prior law) if the total
investment does not exceed 20% and the Fed determines that the additional
investment would not be unsafe or unsound. [Sec. 2307] Makes it a Federal crime to
produce, possess, or sell a fictitious financial instrument, e.g., so-called
"Comptroller's Warrants," which purports to be a financial instrument of the
United States (or any subdivision thereof), a foreign country, or a private
organization. [Sec. 2603] Provides that tax deferred annuities sold by an insured depository institution ("retirement CDs") are not deposits and, therefore, are not insured, but does not otherwise affect the authority of national banks to sell insurance. [Sec. 2614] B. Consumer ProvisionsRequires the Fed and HUD, within 6
months of enactment, to simplify and improve RESPA and TILA disclosures and
provide a single format for such disclosures. [Sec. 2101] Makes a number of changes to
RESPA's disclosure requirements. [Sec. 2103] Generally provides that, if a bank
or a third party self-tests for compliance under the Equal Credit Opportunity
Act and the Fair Housing Act, the test results will not be used against the bank
if the bank identifies possible violations and is taking appropriate corrective
actions, and if the bank is not using the results in its defense. [Sec. 2302]
After six months from the date of
enactment, gives the FTC regulatory authority over credit repair organizations
and imposes disclosure requirements and civil liability for violations. [Sec.
2451] Prevents the Fed from finalizing
for at least nine months its proposed Electronic Funds Transfer Act (EFTA)
regulations that would regulate stored value cards and requires the Fed to study
whether the EFTA could be applied to electronic stored value products without
adversely impacting their cost, development, and operation. [Sec. 2601]
Sunsets the Truth-in-Savings Act's civil liability provision in five years. [Sec. 2604] II.
Recapitalization of SAIF Recapitalizes the Savings
Association Insurance Fund (SAIF) as of October 1, 1996. [Sec. 2702]
Requires banks after December 31,
1996 to pay 20% of the interest on the bonds that funded the initial
capitalization of SAIF ("FICO bonds") but banks would be required to pay a full
pro-rata share of the interest obligation beginning after the earlier of
December 31, 1999 or the date on which the last savings association ceases to
exist. [Sec. 2703] Requires the Federal banking
agencies to take appropriate actions, including enforcement actions, to prevent
insured depository institutions and their holding companies from facilitating or
encouraging the shifting of deposits from SAIF to the Bank Insurance Fund (BIF)
for the purpose of evading SAIF assessments but would not prohibit a depository
institution from taking actions that are in the ordinary course of business and
not directed towards the depositors of an affiliate. [Sec. 2703]
Merges SAIF and BIF on
January 1, 1999 but only if no insured depository institution is a savings
association on that date. [Sec. 2704] Requires the Department of Treasury to conduct a study by March 31, 1997 on the development of a common charter for all insured depository institutions. [Sec. 2709] III.
Amendments to FCRA Substantially amends the Fair
Credit Reporting Act (FCRA). [Sec. 2401-2422] Prohibits the Federal banking agencies from examining for compliance with FCRA unless there has been a complaint about a violation or the agency otherwise has knowledge of a violation. [Sec. 2416] IV.
Amendments to Lender Liability Amends the Comprehensive
Environmental Response, Compensation, and Liability Act to clarify that a lender
is not liable for environmental cleanups of property securing a loan unless the
lender, among other things, participates in day-to-day decision making over the
operations of the property or has control over environmental compliance. [Sec.
2501-2505] Provides that lenders that
foreclose on property may take certain post-foreclosure actions (including, for
instance, the sale, liquidation, or re-lease (in the case of a lease financing
transaction) of the property and the maintaining or winding up of business
activities involving the property) without incurring liability for environmental
cleanup if the lender did not participate in management of the property prior to
foreclosure and the lender seeks to dispose of the property as soon as it is
commercially reasonable. [Sec. 2502] Puts into place the
Environmental Protection Agency's 1992 regulation clarifying lender liability
that was invalidatedy a court decision and prohibits judicial review of this
regulation. [Sec. 2504] Changes made by the legislation apply to any claim that has not been finally adjudicated as of the date of enactment, i.e., September 30, 1996. [Sec. 2505] Go
to: You are entering an official United States government
system, which may be used only for authorized purposes. Unauthorized modification of any
information stored on this system may result in criminal prosecution. |
|||||