Housing and Community Development Act of 1992/Title IX/Subtitle B

SUBTITLE B—BANK REGULATORY CLARIFICATION PROVISIONS

SEC. 951. AMENDMENT RELATING TO ESTIMATES OF REAL ESTATE SETTLEMENT COSTS.

Section 5(d) of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2604(d)) is amended by striking the last sentence and inserting `Such booklet shall be provided by delivering it or placing it in the mail not later than 3 business days after the lender receives the application, but no booklet need be provided if the lender denies the application for credit before the end of the 3-day period.´.

SEC. 952. ADJUSTABLE RATE MORTGAGE CAPS.

Section 1204(d)(2) of the Competitive Equality Banking Act of 1987 (12 U.S.C. 3806(d)(2)) is amended by striking `any loan´ and inserting `any consumer loan´.

SEC. 953. MODIFYING SEPARATE CAPITALIZATION RULE FOR SAVINGS ASSOCIATIONS' SUBSIDIARIES ENGAGED IN ACTIVITIES NOT PERMISSIBLE FOR NATIONAL BANKS.

(a) IN GENERAL—

Section 5(t)(5)(D) of the Home Owners' Loan Act (12 U.S.C. 1464(t)(5)(D)) is amended by redesignating clause (iii) as clause (ix) and by inserting after clause (ii) the following new clauses:

``(iii) AGENCY DISCRETION TO PRESCRIBE GREATER PERCENTAGE— Subject to clauses (iv), (v), and (vi), the Director may prescribe by order, with respect to a particular qualified savings association, an applicable percentage greater than that provided in clause (ii) if the Director determines, in the Director's sole discretion, that the use of the greater percentage, under the circumstances—

``(I) would not constitute an unsafe or unsound practice;

``(II) would not increase the risk to the affected deposit insurance fund; and

``(III) would not be likely to result in the association's being in an unsafe or unsound condition.

``(iv) SUBSTANTIAL COMPLIANCE WITH APPROVED CAPITAL PLAN— In the case of a savings association which is subject to a plan submitted under paragraph (7)(D) of this subsection or an order issued under this subsection, a directive issued or plan approved under subsection (s), or a capital restoration plan approved or order issued under section 38 or 39 of the Federal Deposit Insurance Act, an order issued under clause (iii) with respect to the association shall be effective only so long as the association is in substantial compliance with such plan, directive, or order.

``(v) LIMITATION ON INVESTMENTS TAKEN INTO ACCOUNT— In prescribing the amount by which an applicable percentage under clause (iii) may exceed the applicable percentage under clause (ii) with respect to a particular qualified savings association, the Director may take into account only the sum of—

``(I) the association's investments in, and extensions of credit to, the subsidiary that were made on or before April 12, 1989; and

``(II) the association's investments in, and extensions of credit to, the subsidiary that were made after April 12, 1989, and were necessary to complete projects initiated before April 12, 1989.

``(vi) LIMIT— The applicable percentage limit allowed by the Director in an order under clause (iii) shall not exceed the following limits:

`For the following period: —The limit is:

Prior to July 1, 1994 —75 percent

July 1, 1994 through June 30, 1995 —60 percent

July 1, 1995 through June 30, 1996 —40 percent

After June 30, 1996 —0 percent

``(vii) CRITICALLY UNDERCAPITALIZED INSTITUTION— In the case of a savings association that becomes critically undercapitalized (as defined in section 38 of the Federal Deposit Insurance Act) as determined under this subparagraph without applying clause (iii), clauses (iii) through (v) shall be applied by substituting `Corporation' for `Director' each place such term appears.

``(viii) QUALIFIED SAVINGS ASSOCIATION DEFINED— For purposes of clause (iii), the term `qualified savings association' means an eligible savings association (as defined in paragraph (3)(B)) which is subject to this paragraph solely because of the real estate investments or other real estate activities of the association's subsidiary, and—

``(I) is adequately capitalized (as defined in section 38 of the Federal Deposit Insurance Act); or

``(II) is in compliance with an approved capital restoration plan meeting the requirements of section 38 of the Federal Deposit Insurance Act, and is not critically undercapitalized (as defined in such section).´´.

(b) TECHNICAL AND CONFORMING AMENDMENT—

Clause (ix) of section 5(t)(5)(D) of the Home Owners' Loan Act (12 U.S.C. 1464(t)(5)(D)) (as so redesignated by subsection (a) of this section) is amended by inserting `or prescribed under clause (iii)´ after `clause (ii)´.

SEC. 954. REAL ESTATE APPRAISAL AMENDMENT.

Section 1112 of the Financial Institution Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3341) is amended—

(1) by striking `Each Federal financial institutions´ and inserting `(a) IN GENERAL— Each Federal financial institutions´; and

(2) by adding at the end the following new subsections:

``(b) THRESHOLD LEVEL— Each Federal financial institutions regulatory agency and the Resolution Trust Corporation may establish a threshold level at or below which a certified or licensed appraiser is not required to perform appraisals in connection with federally related transactions, if such agency determines in writing that such threshold level does not represent a threat to the safety and soundness of financial institutions.

``(c) GAO STUDY OF APPRAISALS IN CONNECTION WITH REAL ESTATE RELATED FINANCIAL TRANSACTIONS BELOW THE THRESHOLD LEVEL—

``(1) STUDY REQUIRED— At the end of the 18-month period, and the end of the 36-month period, beginning on the date of the enactment of this subsection, the Comptroller General of the United States shall conduct a study on the adequacy and quality of appraisals or evaluations conducted in connection with real estate related financial transactions below the threshold level established under subsection (b), taking into account—

``(A) the cost to any financial institution involved in any such transaction;

``(B) the possibility of losses to the Bank Insurance Fund, the Savings Association Insurance Fund, or the National Credit Union Share Insurance Fund;

``(C) the cost to any customer involved in any such transaction; and

``(D) the effect on low-income housing.

``(2) REPORTS TO CONGRESS AND THE APPROPRIATE FEDERAL FINANCIAL INSTITUTIONS REGULATORY AGENCIES— Upon completing each of the studies required under paragraph (1), the Comptroller General shall submit a report on the Comptroller General's findings and conclusions with respect to such study to the Federal financial institutions regulatory agencies, the Committee on Banking, Finance and Urban Affairs of the House of Representatives, and the Committee on Banking, Housing, and Urban Affairs of the Senate, together with such recommendations for legislative or administrative action as the Comptroller General determines to be appropriate.´´.

SEC. 955. INSIDER LENDING.

(a) AUTHORITY TO MAKE EXCEPTIONS TO DEFINITION OF EXTENSION OF CREDIT—

Section 22(h)(9)(D) of the Federal Reserve Act (12 U.S.C. 375b(h)(9)(D)) is amended—

(1) by striking `(D) EXTENSION OF CREDIT— A member bank´ and inserting the following:

``(D) EXTENSION OF CREDIT—

``(i) IN GENERAL— A member bank'; and

(2) by adding at the end the following new clause:

``(ii) EXCEPTIONS— The Board may, by regulation, make exceptions to clause (i) for transactions that the Board determines pose minimal risk.'.

(b) PRINCIPAL SHAREHOLDER DEFINED—

Section 22(h)(9)(F) of the Federal Reserve Act (12 U.S.C. 375b(h)(9)(F)) is amended—

(1) by striking `'shareholder' means any person´ and inserting `'shareholder'—

``(i) means any person´;

(2) by striking the period at the end of clause (i) (as so redesignated by paragraph (1) of this subsection) and inserting `; and´; and

(3) by adding at the end the following new clause:

``(ii) does not include a company of which a member bank is a subsidiary.´´.

SEC. 956. CLARIFICATION OF COMPENSATION STANDARDS.

Section 39 of the Federal Deposit Insurance Act (as added by section 132(a) of Federal Deposit Insurance Corporation Improvement Act of 1991) (12 U.S.C. 1831s) is amended—

(1) by striking subsection (d) and inserting the following new subsection:

``(d) STANDARDS TO BE PRESCRIBED BY REGULATION—

``(1) IN GENERAL— Standards under subsections (a), (b), and (c) shall be prescribed by regulation. Such regulations may not prescribe standards that set a specific level or range of compensation for directors, officers, or employees of insured depository institutions.

``(2) APPLICABILITY OF OTHER LAWS— Paragraph (1) shall not affect the authority of any appropriate Federal banking agency to restrict the level of compensation, including golden parachute payments (as defined in section 18(k)(4)), paid to any director, officer, or employee of an insured depository institution under any other provision of law.

``(3) SENIOR EXECUTIVE OFFICERS AT UNDERCAPITALIZED INSTITUTIONS— Paragraph (1) shall not affect the authority of any appropriate Federal banking agency to restrict compensation paid to any senior executive officer of an undercapitalized insured depository institution pursuant to section 38.

``(4) SAFETY AND SOUNDNESS OR ENFORCEMENT ACTIONS— Paragraph (1) shall not be construed as affecting the authority of any appropriate Federal banking agency under any provision of this Act other than this section, or under any other provision of law, to prescribe a specific level or range of compensation for any director, officer, or employee of an insured depository institution—

``(A) to preserve the safety and soundness of the institution; or

``(B) in connection with any action under section 8 or any order issued by the agency, any agreement between the agency and the institution, or any condition imposed by the agency in connection with the agency's approval of an application or other request by the institution, which is enforceable under section 8.'; and

(2) in subsection (e)(1)(A), by striking `(a), (b), or (c)´ and inserting `(a) or (b)´.

SEC. 957. TRUTH IN SAVINGS ACT AMENDMENTS.

(a) ON-PREMISES DISPLAYS—

Section 263 of the Truth in Savings Act (12 U.S.C. 4302) is amended—

(1) in subsection (a), by striking `subsection (b)´ and inserting `subsections (b) and (c)´;

(2) by redesignating subsections (c) and (d) as subsections (d) and (e), respectively; and

(3) by inserting after subsection (b) the following new subsection:

``(c) DISCLOSURE REQUIRED FOR ON-PREMISES DISPLAYS—

``(1) IN GENERAL— The disclosure requirements contained in this section shall not apply to any sign (including a rate board) disclosing a rate or rates of interest which is displayed on the premises of the depository institution if such sign contains—

``(A) the accompanying annual percentage yield; and

``(B) a statement that the consumer should request further information from an employee of the depository institution concerning the fees and terms applicable to the advertised account.

``(2) DEFINITION— For purposes of paragraph (1), a sign shall only be considered to be displayed on the premises of a depository institution if the sign is designed to be viewed only from the interior of the premises of the depository institution.'.

(b) EFFECTIVE DATE OF REGULATIONS—

Section 269(a)(2) of the Truth in Savings Act (12 U.S.C. 4308(a)(2)) is amended by striking `6 months´ and inserting `9 months´.