Financial Reform Act

Financial Reform Act - Title I: Credit Unions - Revises the definition of terms used in the Federal Credit Union Act. Changes the application approval guidelines for granting insurance to member accounts.

Provides that the par value of shares for Federal credit unions may range from $5 to $25. Expands the loan making power of Federal credit unions to include: (1) residential real estate loans; and (2) loans to finance the purchase of mobile homes.

Extends the allowable investment possibilities for Federal credit unions to include obligations of the District of Columbia and several of its territories and possessions.

Allows Federal credit unions to deposit funds in any bank or trust company insured by the Federal Deposit Insurance Corporation and in any credit union operating in a foreign country which has been approved by the Department of Defense.

Establishes in the executive branch of the Government an independent agency to be known as the National Credit Union Administration. States that the Administration shall be under the management of a National Credit Union Administration Board, consisting of three members appointed by the President by and with the advice and consent of the Senate.

Adds a Title III (National Credit Union Administration Discount Fund) to the Federal Credit Union Act.

Establishes a National Credit Union Administration Discount Fund within the National Credit Union Administration to provide funds to meet the temporary liquidity needs of credit unions including emergency needs, seasonal needs, and needs arising from local economic dislocations.

Provides for the management and capitalization of the such Fund.

Enumerates the powers of the Board Administering the National Credit Union Administration Discount Fund including the right: (1) to sue and be sued, complain and defend, in any court of law or equity, State or Federal, and to remove any action from a state to a district court; (2) to prescribe rules and regulations which are necessary and appropriate to carry out the provisions of this title; (3) to issue debentures, bonds or other obligations to the Secretary of the Treasury; and (4) to make deposits in federally insured banks, mutual savings banks, savings and loan associations and credit unions.

Provides that any member of the Discount Fund shall be entitled to apply for advances in a prescribed manner and that the Board shall prescribe security upon which the advances shall be made. Describes the obligations of the member of the Discount Fund who receives the advance.

Requires that not later than 90 days after the close of each calendar year the Board shall prepare and submit to the President and to the Congress a full report of the activities of the Discount Fund for the previous calendar year.

Authorizes to be appropriated such sums as may be necessary to pay the administrative expenses of the Board.

Grants tax-exempt status to the Discount Fund.

Requires that the Board maintain an integral set of accounts of the Discount Fund which shall be audited by the Government Accounting Office.

Makes technical amendments to the Federal Credit Union Act in keeping with this title.

Title II: Banks and Savings and Loan Associations - Amends the Home Owners' Loan Act of 1933 to direct the Home Loan Bank Board to cause Federal savings and loan associations to be primarily long-term residential mortgage lenders. Enumerates the investments and dealings which can be made by such associations including: (1) loans secured by or made with respect to or for the acquisition, development, construction, improvement, or alteration of real property which primarily comprises or is to comprise or include one or more homes or dwelling units; (2) permanent financing in connection with any construction or development loan; (3) loans to, or other securities or instruments issued by, or having the benefit of any insurance, guaranty, or assistance of the United States, a State, political subdivision or specified housing programs; and (4) additional consumer, student, construction, and other loans but not to exceed an aggregate amount which exceeds 20 percent of its total investments.

Specifies that an association may act as custodian or trustee with respect to any securities issued or guaranteed by a financial insitution the accounts of which are insured by the Federal Savings and Loan Insurance Corporation or issued or guaranteed by an affiliate of one or more of such institution.

Provides that one or more associations may establish, maintain, or invest in common funds.

Authorizes the Home Loan Bank Board to provide for the organization, incorporation, conversion, examination, operation, and regulation, under such rules, regulations (including definitions of terms used in this Act), or orders as prescribed by this Act. Provides for the conversion of State-chartered mutual banks into Federal savings banks.

Authorizes each Federal home loan bank to make advances to financial institutions during any period that the Home Loan Bank Board determines that credit is not readily available upon reasonable terms to prospective purchasers of residential real property. Sets requirements which shall be followed in connection with any such advance. Allows the Board to prescribe rules in this regard. Permits the Board to direct the sale of obligations of Federal home loan banks to the Federal Financing Bank or the Secretary of the Treasury.

Amends the Federal Deposit Insurance Act to require periodic reporting of material transactions, including loans and other extensions of credit between any insured bank and its affiliates or any inside director or beneficial holder of more than five percent of the outstanding voting securities.

Requires that each insured bank which exercises trust powers shall publicly disclose its practices, procedures, and policies to prevent abuses in connection with conflicts of interests.

Establishes a civil penalty of up to $1,000 per day for each day during which specified violations of the Federal Reserve Act occur.

Prohibits member banks of the Federal Reserve System from making loans or extensions of credit to any of their officers, directors, or to specified other persons who have an interest in such bank where such loan or extension of credit exceeds the statutory limits on loans to one borrower. Extends such prohibition, under the Federal Deposit Insurance Act, to non-member insured banks.

Authorizes the Board of Governors of the Federal Reserve Board, under the Bank Holdings Company Act, to order a bank holding company to terminate activity or ownership or control of any subsidiary when the Board has reason to believe that the continuation of such activity, ownership, or control constitutes a serious risk to the financial safety of the subsidiary.

Revises the Federal Deposit Insurance Act to make directors, officers, employees, and agents as well as insured banks subject to cease-and-desist proceedings, and to temporary cease-and-desist orders.

Makes procedural changes to be followed with respect to removal of officers or directors.

Establishes a civil penalty of up to $21,000 per day for any bank insured under the Federal Deposit Insurance Act or for any officer, director, employee, or agent for such bank who violates the terms of any cease-and-desist proceeding or cease-and-desist order issued pursuant to this Act.

Provides for prompt action on any application for acquisitions or merger when such action is necessary to prevent failure of a bank. Makes technical amendments to the Saving's Clause of the Bank Holding Company Act to insure the legality of such immediate action.

Makes miscellaneous amendments to the Federal Deposit Insurance Act.

Sets forth procedures dealing with the acquisition of foreign branches. Authorizes a State non-member insured bank, under specified restrictions, to acquire and hold stock in banks organized under the law of a foreign country. Reduces from three to two the number of directors required to attest to the validity of a report of condition. Specifies events which shall be assumed to relieve an insured bank of liability for deposits. Limits any claims of a landlord for damages or indemnity for injury from rejection or abandonment of an unexpired lease of real property to an insured bank which has been closed.

Amends the Bank Holding Company Act to provide an opportunity for either House of Congress to veto a determination by the Board of Governors of the Federal Reserve System of which activities are so closely related to banking or managing or controlling banks as to be a proper incident thereto, for purposes of this Act. Makes amendments to this Act to prohibit further bank holding company acquisitions of savings and loan associations. Requires that each bank holding company shall have a reasonable member of unaffiliated directors on each of its executive committees.

Amends the Truth in Lending Act to require each federally insured bank, institution, and credit union to disclose competitive rates.

Title III: Deposit Interest Rates - Establishes the Deposit Interest Rate Control Committee which shall be composed of the Secretary of the Treasury and the Chairmen of the Board of Governors of the Federal Reserve System, the Board of Directors of the Federal Deposit Insurance Corporation, and the Federal Home Loan Bank Board.

Directs the Committee to so fix and adjust limitations on interest rates as to: (1) provide a reasonable rate of return to the small saver; (2) protect depository institutions from disintermediation; and (3) avoid undue competitive advantages among competing types of depository institutions.

Directs the Committee to: (1) prescribe rules limiting the payment and governing the advertisement of interest or dividends on specified deposits and accounts; (2) prescribe different rate limitations for different classes of deposits; (3) prohibit banks or institutions subject to regulation to pay any time deposit before its maturity except under specified conditions; and (4) bring action to enjoin non-insured banks from activities which would constitute a violation of this title.

Specifies the allowable interest rate with respect to time and savings deposits.

Requires that the Committee submit to Congress an annual report setting forth its actions during the preceding years and a special report at the expiration of its time and saving account authority.

Provides civil penalties not to exceed $100 per day for violations of this title.

Title IV: Regulatory Agencies - Amends the Home Loan Bank Act to include the qualifications necessary to become a Federal Home Loan bank Board member. Provides for a five year term for members of the Board.

Amends the Federal Deposit Insurance Act to include the qualifications necessary to become a member on the Board of Directors of the Federal Deposit Insurance Corporation.

Makes amendments as to appropriated funds for expenses of specified regulatory agencies.