Riegle Community Development and Regulatory Improvement Act of 1994

TABLE OF CONTENTS:

Title I: Community Development and Consumer Protection

Subtitle A: Community Development and Financial

Institutions Act

Subtitle B: Home Ownership and Equity Protection

Title II: Small Business Capital Formation

Subtitle A: Small Business Loan Securitization

Subtitle B: Small Business Capital Enhancement

Title III: Paperwork Reduction and Regulatory Improvement

Title IV: Money Laundering

Title V: National Flood Insurance Reform

Subtitle A: Definitions

Subtitle B: Compliance and Increased Participation

Subtitle C: Ratings and Incentives for Community

Floodplain Management Programs

Subtitle D: Mitigation of Flood Risks

Subtitle E: Task Forces

Subtitle F: Miscellaneous Provisions

Title VI: General Provisions

Riegle Community Development and Regulatory Improvement Act of 1994 - Title I: Community Development and Consumer Protection - Subtitle A: Community Development Banking and Financial Institutions Act - Community Development Banking and Financial Institutions Act of 1994 - Establishes the Community Development Financial Institutions Fund (the Fund) as a wholly owned government corporation to promote economic revitalization and community development through an investment and assistance program for community development financial institutions. Vests Fund management in an Administrator.

(Sec. 104) Establishes the Community Development Advisory Board to advise on Fund policies, but not on the granting or denial of any particular application. Prescribes selection criteria for community development partnerships and institutions. Mandates Fund assistance for a geographically diverse group of applicants from metropolitan, nonmetropolitan, and rural areas. Makes exceptions to non-Federal matching funds requirements in the case of an applicant with severe constraints on available source of matching funds.

(Sec. 109) Provides for a Fund training program to assist the financial services industry to undertake community development activities. Authorizes the Fund to provide capitalization assistance to enhance the liquidity of community development financial institutions.

(Sec. 114) Sets forth incentives within the parameters of the Bank Enterprise of 1991 for depository institutions to engage in community development banking through private investments in targeted activities in qualified distressed communities. Mandates that a community development financial institution receiving Fund assistance compile and maintain specified user profile data. Prescribes guidelines for coordinated recordkeeping and oversight by the Fund and the appropriate Federal banking agency. Directs the Fund to study and report to the President and the Congress on lending and investment practices on Indian reservations and other land held in trust by the United States. Instructs the Comptroller General to submit to the President and the Congress an evaluation of Fund structure, governance, and performance. Establishes an Inspector General for the Fund and authorizes appropriations for it.

(Sec. 120) Amends the Federal Credit Union Act to authorize the National Credit Union Administration Board (NCUAB) to invest idle moneys from the Community Development Credit Union Revolving Loan Fund into Treasury securities, and to use the interest earned for technical assistance to community development credit unions.

(Sec. 121) Authorizes appropriations for FY 1995 through 1998.

Subtitle B: Home Ownership and Equity Protection - Home Ownership and Equity Protection Act of 1994 - Amends the Truth in Lending Act to set forth disclosure requirements for certain (closed- end) consumer credit transactions secured by a consumer's principal dwelling (other than a residential mortgage transaction, a reverse mortgage transaction, or a transaction under an open end credit plan) which meet specified criteria with respect to: (1) the annual percentage rate; and (2) points and fees which exceed certain limits. (Sec. 152) Prohibits such mortgages from containing: (1) prepayment penalties; (2) balloon payments; (3) negative amortization; and (4) prepaid payments. Prohibits a creditor from extending credit without regard to a consumer's repayment ability. Imposes a civil penalty for violations of this Act.

(Sec. 154) Amends the Truth in Lending Act to require a creditor to conspicuously disclose specified lending data to a consumer in connection with reverse mortgage transactions.

(Sec. 157) Directs the Board of Governors of the Federal Reserve System (the Board) to: (1) study and report to the Congress on the adequacy of Federal consumer protections in connection with an open end credit transaction secured by the consumer's principal dwelling; (2) report to the Congress on whether, for purposes of such transactions, a more appropriate interest rate index exists than the yield on Treasury securities; and (3) conduct periodic public hearings on the home equity loan market and the adequacy of existing consumer protection laws to protect low-income consumers.

Title II: Small Business Capital Formation - Subtitle A: Small Business Loan Securitization - Small Business Loan Securitization and Secondary Market Enhancement Act of 1994 - Amends the Securities Exchange Act of 1934 to define a "small business related security" (SBRS) as generally a high rated security that represents or is secured by promissory notes or leases of personal property evidencing the obligation of a small business concern. Extends to SBRS subject to Board jurisdiction the same exemptions from margin requirements and credit prohibitions as currently apply to mortgage related securities.

(Sec. 206) Amends the Home Owners' Loan Act, the Federal Credit Union Act, and related statutes to allow banks, credit unions, and other depository institutions to invest in SBRS.

(Sec. 207) Amends the Secondary Mortgage Market Enhancement Act of 1984 to: (1) authorize any U.S. person or entity to invest in SBRS to the same extent such person is authorized to invest in U.S. obligations; and (2) exempt SBRS from any State law's security registration and qualification requirements to the same extent as U.S. securities. Permits the States to enact registration or qualification requirements for SBRS within seven years of enactment of this Act (thus overriding its preemptions).

(Sec. 208) Mandates that accounting principles applicable to the transfer of a small business loan or lease of personal property with recourse contained in federally required reports or statements be consistent with generally accepted accounting principles. Requires the amount of capital required to be maintained by a depository institution with respect to the sale of a small business loan or personal property lease with recourse to equal an amount sufficient to meet its reasonable estimated liability under the recourse arrangement. Sets forth capital and reserve requirements for the transfer by qualified insured depository institutions of small business loans with recourse.

(Sec. 209) Directs the Board and the Securities and Exchange Commission (the Commission) to conduct a joint study and report to the Congress on the impact of the small business loan securitization provisions of this Act upon the credit and securities markets.

(Sec. 210) Directs the Financial Institutions Examination Council to report to the Congress on its recommendations for the use of consistent financial terminology by depository institutions for small business loans or leases of personal property sold for the creation of small business related securities.

Subtitle B: Small Business Capital Enhancement -Establishes the Small Business Capital Enhancement Program to enhance the availability of financing for small business concerns through State implementation of small business capital access programs. Authorizes any State to apply to the Community Development Financial Institutions Fund for approval as a participating State eligible for reimbursement. Sets forth application approval criteria and implementation guidelines.

(Sec. 253) Provides that a non-participating State that has its own capital access program providing portfolio insurance for business loans (based on a separate loss reserve fund for each financial institution) may apply to be approved as a participating State.

Specifies that: (1) if a State is approved, each financial institution with a particular agreement in effect with the State shall immediately be considered a participating financial institution; and (2) a State with an existing program that is approved may continue to implement the program utilizing the reserve funds accumulated under the State program.

(Sec. 255) Establishes requirements for the terms of participation agreements.

(Sec. 257) Provides for reimbursement by the Fund of participating States, based on specified formulas. Requires a participating State that withdraws funds from a reserve fund pursuant to terms of the participation agreement to reimburse the Fund according to a specified formula.

(Sec. 260) Authorizes appropriations.

Title III: Paperwork Reduction and Regulatory Improvement - Prescribes guidelines under which the Federal banking regulatory agencies must: (1) implement specified measures to reduce paperwork and administrative burdens upon banks (including an adequate transition period for new regulations); (2) streamline and make uniform various regulatory requirements; (3) consider the impact that specified regulations prescribed under the Federal Deposit Insurance Act have upon credit availability for small business, residential, and agricultural purposes, and on low- and moderate-income communities; (4) eliminate duplicative filings; (5) conduct coordinated and unified regulatory examinations; (6) raise the asset threshold for certain small banking institutions that qualify for an 18-month regulatory examination cycle; and (7) simplify and make electronically available the call report filing and disclosure system. Repeals certain publication requirements.

(Sec. 309) Mandates that each appropriate Federal banking agency and the National Credit Union Administration Board: (1) establish an independent intra-agency appellate process to review material supervisory determinations in agencies under their purview; (2) appoint an ombudsman to act as liaison between the agency and any affected person; and (3) implement an alternative dispute resolution pilot program. Directs the Administrative Conference of the United States to submit an evaluation report regarding the program to the Congress.

(Sec. 310) Amends the Bank Secrecy Act to permit electronic filing of mandatory currency transaction reports by uninsured banks or financial institutions.

(Sec. 311) Requires the Secretary of the Treasury to publish all rulings related to reporting for money laundering enforcement, and to issue annual staff commentaries pertaining to them.

(Sec. 312) Amends the Real Estate Settlement Procedures Act of 1974 to exempt from its purview certain business, commercial, agricultural, and governmental credit transactions.

(Sec. 314) Modifies the Federal audit requirements for certain insured institutions whose holding companies provide comparable auditing functions. Requires the Federal Deposit Insurance Corporation (FDIC) to submit written notification to an institution of its determination to require a review of its quarterly financial reports.

(Sec. 315) Amends the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 to direct the Appraisal Subcommittee to encourage the States to develop reciprocity agreements allowing certified appraisers to perform appraisals in sister States.

(Sec. 316) Amends the Home Owners' Loan Act to accelerate the effective date for interaffiliate transactions by well-capitalized savings associations.

(Sec. 317) Amends the Federal Deposit Insurance Act (FDIA) to permit agreements made by a governmental entity for the collateralization of deposits even though the agreement was not executed contemporaneously with the acquisition of the collateral or with any changes in the collateral made in accordance with such an agreement.

(Sec. 318) Amends the FDIA to require each appropriate Federal banking agency to prescribe by regulation or guideline (currently by regulation only) standards relating to asset quality, earnings, and stock valuation for insured depository institutions. Excludes depository institution holding companies from the scope of such standards.

(Sec. 319) Amends the Bank Holding Company Act of 1956 and the FDIA to set forth expedited procedures for bank holding company formation and conversion transactions respectively.

(Sec. 320) Amends the Securities Act of 1933 to exempt from its registration requirements certain holding company formations transacted in the context of the reorganization of a depository institution into a holding company structure.

(Sec. 321) Amends Federal law to reduce the post-approval waiting period for: (1) bank holding company acquisitions; and (2) bank mergers.

(Sec. 322) Amends Federal banking law and the Home Owners' Loan Act to: (1) authorize national banks and Federal savings associations to purchase shares in a bankers' bank in cases where some of the other investors are depository institution holding companies; and (2) permit bankers' banks to provide services to such holding companies, and to provide correspondent banking services upon request.

Amends the Federal Reserve Act to increase from 10 to 15 percent the percentage of a member bank's capital and surplus that may be represented by equity-secured loans.

(Sec. 325) Amends the FDIA to allow the FDIC to waive in advance the right to subsequently repudiate an insured depository institution's sale of its credit card accounts receivable.

(Sec. 326) Amends the Federal Reserve Act and the FDIA to limit, in cases of political upheaval or actions by foreign governments or instrumentalities, the liability of member banks for deposits made at foreign branches.

(Sec. 327) Requires reports to the Congress by: (1) the Comptroller General regarding FDIC compliance with FDIA strictures only when the FDIC has outstanding obligations (currently regardless of the existence of outstanding obligations); (2) the Secretary of the Treasury regarding the impact upon the domestic economy of risk-based capital standards for depository institutions; (3) the Board of Governors of the Federal Reserve System (the Board) and selected Federal agencies upon the monetary and budgetary impact of the payment of interest on certain sterile reserves held by insured depository institutions; and (4) the Secretary of the Treasury regarding inconveniences in the process by which credit is made available for consumers and small businesses.

(Sec. 331) Amends selected banking laws to delineate the parameters of administrative autonomy for the Comptroller of the Currency and the Office of Thrift Supervision.

(Sec. 332) Amends the Truth in Savings Act to modify the definition of account to mean one offered by a depository institution and intended for and generally used by consumers primarily for personal, family or household purposes (thus excluding certain nonprofit business accounts from the Act's strictures).

(Sec. 333) Requires the Board to study and report to the Congress on the advisability of extending the statutory period for the availability of funds from one business day to two business days.

(Sec. 334) Amends the Federal Reserve Act to authorize the Board to make exceptions to the Act's strictures governing insider lending if it finds that an individual neither actually participates in major policymaking functions of the member bank, nor has authority to do so.

(Sec. 336) Amends the Truth in Lending Act to prescribe reduced disclosure guidelines for radio broadcast advertisements for consumer leases,and (2) provide a toll-free telephone number to secure related information. Directs the Board to report to the Congress on credit advertising rules.

(Sec. 337) Provides that well capitalized insured depository institutions do not have to register as deposit brokers.

(Sec. 338) Amends the Depository Institution Management Interlocks Act to extend from 15 to 20 years the period during which certain management officials may continue dual service with unaffiliated institutions or holding companies, subject to timely review on a case- by-case basis by the appropriate Federal regulatory agency.

(Sec. 339) Amends the Fair Credit Reporting Act to require a consumer reporting agency to disclose to the consumer details of checks upon which an adverse characterization of the consumer is based.

(Sec. 340) Amends the FDIA to set forth alternative customer notice procedures in lieu of written customer acknowledgement for a depository institution that is not federally insured.

(Sec. 341) Directs the Federal Financial Institutions Examination Council to study and report to the Congress on the feasibility of establishing a data bank for the depository institution reports submitted to a Federal banking agency.

(Sec. 343) Mandates that Federal banking agencies finalize actions on applications within one year of receipt.

(Sec. 344) Directs the Board to submit recommendations to the Congress whether it would benefit consumers to have the option of waiving or modifying their rights of rescission with respect to debt consolidation or refinancing (without new advances).

(Sec. 345) Amends the Real Estate Settlement Procedures Act to provide that creditors are in compliance with its mortgage transaction disclosure requirements if they submit a statement that the person making the loan has previously assigned, sold, or transferred the servicing of federally related mortgage loans (thus simplifying current disclosure requirements).

(Sec. 346) Amends the Bank Holding Company Act of 1956 to prescribe 60-day notice procedures in lieu of current application requirements for bank holding companies seeking Board approval to engage in nonbanking activities or to acquire certain ownership interests.

(Sec. 347) Amends the Securities Exchange Act of 1934 to include commercial real estate within the definition of "mortgage related security" (thus conferring upon such securities the benefits of the Secondary Mortgage Market Enhancement Act of 1984 and permitting depository institutions to purchase such securities subject to Federal regulatory oversight). Permits the States to "opt-out" of this Federal definition of mortgage related security upon enactment of specific legislation to the contrary.

(Sec. 348) Amends the FDIA to: (1) require the FDIC to minimize the regulatory burden imposed upon well-capitalized insured depository institutions in the implementation of its data collection prescriptions; and (2) direct the Federal Financial Institutions Examination Council to issue guidelines establishing standards for discretionary use by Federal banking regulatory agencies to determine the adequacy of State examinations.

(Sec. 350) Sets forth: (1) a six-month period during which the Federal banking regulatory agencies must review and revise regulations to better reflect the credit risk exposure of an insured depository institution regarding the transfer of assets with recourse; and (2) a cut-off date after which the amount of risk-based capital required to be held by an insured depository institution regarding those assets may not exceed the maximum amount of recourse for which it is contractually liable.

Title IV: Money Laundering - Money Laundering Suppression Act of 1994 - Amends Federal law to prescribe guidelines for both mandatory and discretionary exemptions from monetary transaction reporting requirements for depository institutions.

(Sec. 402) Directs the Secretary of the Treasury (the Secretary) to: (1) submit an annual status report to the Congress on the consequent reduction in the overall number of currency transaction reports; (2) streamline currency transaction reports to eliminate information of little value for law enforcement purposes; (3) assign a single designee to receive reports of suspicious transactions; and (4) submit annual reports to the Congress on the number of suspicious transactions reported.

(Sec. 404) Requires each appropriate Federal banking agency to review and enhance: (1) training and examination procedures to improve the identification of money laundering schemes involving depository institutions; and (2) procedures for referring cases to appropriate law enforcement agencies.

Requires the Secretary and each appropriate law enforcement agency to provide information regularly to each appropriate Federal banking agency regarding money laundering schemes and activities involving depository institutions in order to enhance agency ability to examine for and identify money laundering activity.

Requires the Financial Institutions Examination Council to report to the Congress on the usefulness of the reporting of criminal schemes by law enforcement agencies.

(Sec. 405) Includes negotiable instruments drawn on foreign banks within the purview of monetary transactions subject to Federal recordkeeping and reporting requirements.

(Sec. 406) Requires the Secretary to delegate to Federal banking agencies any authority to assess civil money penalties.

(Sec. 407) Expresses the sense of the Congress that the States should: (1) establish uniform laws for licensing and regulating non- depository institution businesses which engage in currency transactions; (2) provide sufficient resources for regulatory enforcement; and (3) develop a model statute to implement the regulatory scheme. Directs the Secretary to study and report to the Congress: (1) on the States' progress towards such a model statute; and (2) on possible Federal funding sources to cover costs incurred by the States in implementing a licensing and enforcement scheme.

(Sec. 408) Sets forth Federal registration requirements for money transmitting businesses. Directs the Secretary to prescribe regulations establishing a threshold point for treating an agent of a money transmitting business as a money transmitting business. Establishes civil and criminal penalties for violation of such requirements.

(Sec. 409) Amends Federal law regarding monetary instruments transactions to include within the definition of "financial institution" a casino, gambling casino, or gaming establishment with specified annual gaming revenues which is either State-licensed, or a certain class of Indian gaming operation (thus subjecting Indian casinos to the more comprehensive currency reporting and recordkeeping requirements of the Bank Secrecy Act).

(Sec. 411) Sets forth criminal penalties for structuring domestic and international transactions to evade Federal reporting requirements (currently such violations must be wilful in order to be penalized).

(Sec. 412) Requires the Comptroller General to study and report to the Congress on: (1) the vulnerability of cashiers' checks to money laundering schemes; and (2) the need for additional recordkeeping requirements for such checks.

Title V: National Flood Insurance Reform - National Flood Insurance Reform Act of 1994 - Subtitle A: Definitions - Defines specified terms under the Flood Disaster Protection Act of 1973 and the National Flood Insurance Act of 1968.

Subtitle B: Compliance and Increased Participation - Amends the Robert T. Stafford Disaster Relief and Emergency Assistance Act to prohibit any waiver of its flood insurance purchase requirements for recipients of disaster assistance for flood-damaged structures.

(Sec. 522) Amends the Flood Disaster Protection Act of 1973 to prohibit Federal agency lenders and government-sponsored enterprises for housing from entering into, or extending, any loan secured by improved real estate located in identified special flood hazard areas unless the property is adequately covered by flood insurance for the term of the loan. Exempts certain small loans from such flood insurance purchase requirements.

(Sec. 523) Mandates that, with respect to loans secured by improved real estate or a mobile home, each: (1) Federal entity for lending regulation require specified lending institutions to establish escrow accounts for any flood insurance premiums; (2) Federal agency lender require and provide for escrow and payment of flood insurance premiums and fees; and (3) lender or servicer of such loans notify borrowers of such flood insurance purchase requirements. Requires such entities, upon borrower inaction, to purchase flood insurance on behalf of the borrower.

(Sec. 525) Establishes civil penalties for regulated lending institutions with a pattern or practice of failure to require flood insurance or to notify borrowers of flood insurance purchase requirements. Authorizes lender fees for determining the applicability of such requirements.

(Sec. 527) Amends the National Flood Insurance Act of 1968 to modify the special flood hazard notice requirements incumbent upon regulated lending institutions and Federal agency lenders.

(Sec. 528) Sets a deadline by which the Director of the Federal Emergency Management Agency (FEMA) must develop a standard flood hazard determination form in connection with loans for residential properties located in special flood hazard areas.

(Sec. 529) Amends the Federal Deposit Insurance Act, the Federal Credit Union Act, and the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 to require the respective Federal regulatory agencies to report to the Congress on the compliance of lending institutions under their purview with the National Flood Insurance Program.

(Sec. 530) Amends the Federal Financial Institutions Examinations Council Act of 1978 to direct the Financial Examinations Council to assist Federal entities for lending regulation to develop uniform flood insurance standards and requirements.

Subtitle C: Ratings and Incentives for Community Floodplain Management Programs - Amends the National Flood Insurance Act of 1968 to establish a voluntary community rating system and premium rate incentives for community floodplain management in the form of credits on premium rates. Provides for program funding.

Subtitle D: Mitigation of Flood Risks - Amends the National Flood Insurance Act of 1968 to: (1) repeal the Flooded Property Purchase and Loan Program; (2) terminate the erosion-threatened structures program; (3) set forth a flood mitigation assistance program under which the FEMA Director must provide planning assistance grants to States and communities to implement flood damage mitigation activities; (4) establish the National Flood Mitigation Fund to finance such mitigation assistance program; and (5) mandate that the national flood insurance program enable the purchase of insurance to cover the cost of compliance with land use and control measures for specified damage- or loss-prone properties.

Subtitle E: Task Forces - Establishes a two-year interagency Flood Insurance Task Force to: (1) make recommendations regarding standardized flood insurance enforcement procedures; (2) study and report on compliance assistance and compliance models; (3) develop recommendations for enforcement and compliance procedures; and (4) study the reasonableness of flood hazard determination fees.

(Sec. 562) Establishes a two-year Task Force on Natural and Beneficial Functions of the Floodplain to study: (1) floodplain functions that reduce flood-related losses; and (2) develop recommendations on how to reduce flood losses by protecting the natural and beneficial functions of the floodplain.

Subtitle F: Miscellaneous Provisions - Amends the National Flood Insurance Act of 1968 to extend from September 30, 1995, to September 30, 1996: (1) the national flood insurance program; and (2) the authorities for its emergency implementation. Sets forth an annual limitation on chargeable risk premium rate increases for flood insurance on properties within any single risk classification.

(Sec. 572) Amends the Housing and Community Development Act of 1987 to repeal the limitation on premium rate increases with respect to the National Flood Insurance Program.

(Sec. 573) Increases the maximum flood insurance coverage amounts for residential and nonresidential property and its contents. Prescribes guidelines under which the FEMA Director is required to assess the need to update and revise floodplain areas and flood-risk zones at least every five years.

(Sec. 576) Establishes the Technical Mapping Advisory Council to advise the FEMA Director on flood insurance rate maps.

(Sec. 577) Instructs the FEMA Director to study and report to the Congress on: (1) the impact of erosion hazards upon the national flood insurance program; (2) a cost-benefit analysis of mapping erosion hazard areas; (3) the economic effects of charging actuarially based premium rates under the national flood insurance program for certain structures not constructed or substantially improved after a specified date; and (4) the appropriateness of existing requirements regarding the effective date and time of coverage under flood insurance contracts obtained through the national flood insurance program.

(Sec. 580) Permits certain required land use and control measures to provide for the repair and restoration to predamaged conditions of specified damage- or loss-prone agricultural structures. Declares such structures ineligible for Federal disaster relief assistance. Requires the FEMA Director to report biennially on the effects of implementation of this Act upon the national flood insurance program. Prohibits granting Federal disaster relief assistance in a flood disaster area to certain persons obligated to obtain flood insurance but who have failed to do so.

Title VI: General Provisions - Expresses the sense of the Senate that: (1) the Majority Leader and the Republican leader should meet to determine the timetable, procedures and forum for hearings on all matters related to Madison Guaranty Savings and Loan Association, Whitewater Development Corporation, and Capital Management Services Inc.; (2) no immunity shall be granted over the objection of Special Counsel Robert B. Fiske, Jr., to witnesses called to testify at such hearings; and (3) the hearings should be structured and sequenced in a manner that in the judgment of the leaders they would not interfere with the Special Counsel's ongoing investigation.

(Sec. 602) Makes technical amendments to Federal banking laws.