Financial Reform and Community Protection Act of 1988

Financial Reform and Community Protection Act of 1988 - Title I: Securities Affiliates of Bank Holding Companies - Amends the Banking Act of 1933 to permit a member bank of the Federal Reserve System to be an affiliate of a certified securities affiliate or a bank service corporation which engages in activities permissible for a certified securities affiliate. Repeals the prohibition against an officer, director, or employee of a member bank from serving as an officer, director, or employee of an affiliated securities subsidiary.

Amends the Bank Holding Company Act of 1956 to allow bank holding companies to acquire ownership or control of a certified securities affiliate provided such acquisition is approved by the Federal Reserve Board (Board) and other standards are met.

Allows a certified securities affiliate to: (1) buy, sell, deal in, or underwrite asset-backed securities, municipal securities, and securities which a national bank may deal in or underwrite; and (2) buy, sell, underwrite, deal in, or distribute, as principal or agent, commercial paper issued by an entity. Defines a "certified securities affiliate" as any nonbank subsidiary of a bank holding company which: (1) is a broker or dealer under the Securities and Exchange Act of 1934; and (2) does not underwrite or deal in securities except to the extent allowed by this Act.

Specifies factors to be considered by the Board prior to the approval of an application of a bank holding company to acquire a securities affiliate, including whether such acquisition can reasonably be expected to produce benefits to the public that outweigh possible adverse effects and whether the bank holding company possesses managerial resources to conduct the securities activities safely and soundly. Requires the Board to disapprove such an application if the proposed acquisition would result in the affiliation of a bank or bank holding company with total assets of more than $30,000,000,000 with an investment banking organization with total assets of more than $15,000,000,000.

Places specified restrictions on the funding of a certified securities affiliate by a bank holding company. Prohibits the extension of credit by a bank: (1) to a certified securities affiliate, subsidiary, or associated investment company; or (2) to enhance the marketability of, finance the purchase of, or finance the payment of principal or interest on, securities of such an affiliate. Specifies exceptions for one-day extensions of credit to clear Government securities. Prohibits interlocking directorates between a bank and a certified securities affiliate. Sets forth disclosure requirements and prohibitions for a certified securities affiliate. Prohibits a certified securities affiliate from underwriting securities secured by mortgages or other obligations originated by an affiliated bank unless such securities are rated by an unaffiliated organization. Prohibits the sharing of names or business premises between a bank and a certified securities affiliate. Requires each appropriate Federal banking agency to establish a regulatory enforcement program regarding bank holding companies and their certified securities affiliates.

Amends the Federal Reserve Act to increase by 30 days the period in which a member bank or its subsidiary may not knowingly purchase or otherwise acquire any security if a principal underwriter of that security is an affiliate of such bank.

Amends the Bank Service Corporation Act to allow bank service corporations, upon approval by the appropriate Federal banking agency, to engage in any securities activity in which a certified securities affiliate may engage. Specifies factors to be considered by the appropriate Federal banking agency prior to the approval of an application of a bank service corporation to engage in securities activities, including whether the bank service corporation possesses managerial resources to conduct the securities activities safely and soundly and whether such activities can reasonably be expected to produce benefits to the public that outweigh possible adverse effects. Sets forth specified prohibitions and limitations concerning the securities activities of a bank service corporation, similar to those prescribed for certified securities affiliates.

Title II: Community Benefit Requirements - Amends the Bank Holding Company Act of 1956 to specify community benefit standards which must be met prior to the approval of an application of a bank holding company to acquire a certified securities affiliate. Provides that the Board must find that: (1) each bank subsidiary of the applicant bank holding company has a current community benefit rating no less favorable than "good"; or (2) if any bank subsidiary has a rating of "average," the applicant has made specific commitments to improve the availability and affordability of credit and deposit services which are commonly used by the entire community, including small businesses and low- and moderate-income persons. Requires the Board to disapprove an application if the applicant bank holding company or its subsidiary banks have established a pattern of: (1) acquiring or chartering federally-insured depository institutions or opening or closing deposit facilities in a manner that tends to exclude low- and moderate-income neighborhoods; or (2) failing to provide reasonably priced and accessible deposit services to low- and moderate-income persons.

Requires the Board to prepare and make public a written community benefit evaluation and community benefit rating based on an examination of each bank subsidiary of an applicant bank holding company. Specifies that the community benefit rating shall rank the community benefit performance of each bank subsidiary of an applicant bank holding company according to a five-grade performance scale ranging from "poor or substantial noncompliance" to "excellent." Requires the Board, after providing public notice and an opportunity for public comments, to prescribe the assessment factors for measuring community benefit performance applicable in each Federal reserve bank district which shall take into account community reinvestment performance and the extent of compliance with the Financial Services Access Act and other consumer protection laws.

Amends the Community Reinvestment Act of 1977 to include as a factor in the examination of a financial institution whether or not a financial institution offers a basic financial services account as required by the Financial Services Access Act set forth in the following title.

Title III: Access to Financial Services - Financial Services Access Act - Requires every depository institution to offer consumers a basic financial services account. Specifies that such an account shall: (1) be available only to consumers who have $1,000 or less on deposit; (2) require that all recurring Federal payments to the consumer be directly deposited; (3) not have a minimum balance requirement of more than $25; (4) have a limit of not more than ten transactions per month; (5) not have service charges or fees which exceed a minimal amount; (6) require the institution to provide a monthly statement or passbook; (7) not require the individual to exclusively use automated teller machines or other nonteller services; (8) provide direct deposit receipt notices; and (9) pay interest. Sets forth provisions concerning the administrative enforcement of such requirements by the appropriate Federal banking agency.

Title IV: Amendments to the Home Mortgage Disclosure Act - Amends the Home Mortgage Disclosure Act of 1975 to require depository institutions to maintain records and make public disclosures of the number and total dollar amount of commercial loans originated by or purchased by such an institution during each fiscal year. (Present law requires such disclosure only for mortgage loans.) Requires the itemization of small business loans in such public disclosures.

Title V: Notice of Branch Closures by Bank and Thrift Institutions - Notice of Branch Closure Act of 1988 - Requires any national or district bank which proposes to close any branch to provide a written notice of such proposed closing to the Comptroller of the Currency and to customers of such branch not less than 90 days and not more than 180 days before such closing. Specifies the required form and content of such notice.

Amends the Home Owners' Loan Act of 1933 to require any savings and loan association which proposes to close any branch to provide written notice of such proposed closing to the Federal Home Loan Bank Board and to customers of such branch not less than 90 days and not more than 180 days before such closing. Specifies the required form and content of such notice.

Requires the Comptroller of the Currency and the Bank Board, upon receipt of such a notice, to determine whether the closing of such branch will result in a significant reduction in the availability of services of depository institutions in the area in which such branch is located and consult with community leaders and other depository institutions to explore the feasibility of replacing such branch with adequate banking facilities.