Financial Institutions Regulatory Act

Financial Institutions Regulatory Act - Title I: Supervisory Authority Over Depository Institutions - Creates civil penalties for specified insiders loans and loans to affiliates, prohibited by the Federal Reserve Act, for violations of reserve borrowing loan limits.

Amends the Federal Reserve Act to prohibit member banks from making loans to insiders under specified conditions.

Amends the Bank Holding Company Act of 1956 to authorize the Board of Governors of the Federal Reserve System to order the termination of control or ownership by a bank holding company of any of its nonbank subsidiaries whenever they constitute a serious risk to the financial safety of a subsidiary bank of the holding company.

Amends the National Housing Act by authorizing the Federal Savings and Loan Insurance Corporation to order the termination of ownership or control of any noninsured subsidiary by a savings and loan holding company whenever there is reasonable cause to believe that continued ownership constitutes unsafe and inconsistent banking practice.

Grants authority to the Federal Savings and Loan Insurance Corporation to make loans to a savings and loan association in order that it may buy the assets of a failing savings and loan institution so as to prevent the failure of such institution.

Prescribes penalties for the violation of any provision of this Title.

Authorizes financial regulatory agencies, including the National Credit Union Administration and the Federal Home Loan Bank Board, to initiate cease and desist actions against officers, directors, stockholders, or any person participating in the affairs of a financial institution (as well as against the institution itself as is allowed by current law) when there have been violations of laws and regulations or unsafe and unsound banking practices which are likely to seriously weaken the condition of the institution in question.

Sets forth a procedure to be followed for removal of any officer or director for breach of fiduciary duty. Increases the allowable mortgage and education loans to executive officers of banks. Creates a hearing process for removal of a bank officer or director based on an indictment for or conviction of a felony.

Title II: Interlocking Directors - Depository Institution Management Interlocks Act - Prohibits interlocking management and director relations between any depository institutions or depository holding companies located in the same metropolitan area. States that this prohibition applies without regard to geographical limits where such an institution has assets exceeding $1,000,000,000 and seeks an interlocking relationship with any institution with assets over $500,000,000.

Delegates authority for the enforcement of this Act.

Title III: Foreign Branching - Amends the Federal Deposit Insurance Act to prohibit any State nonmember insured bank from operating any foreign branch without prior written consent of the Federal Deposit Insurance Corporation (FDIC).

States that when the liabilities of an insured bank for deposits are assumed by another insured bank the following shall occur: (1) the insured status of the bank whose liabilities are assumed shall terminate on the date of receipt by the FDIC of evidence of such assumption; (2) termination of separate insurance of all assumed deposits at the end of six months from the effective date; and (3) notification of such assumption by the assuming bank to each of the depositors of the assumed bank.

Amends existing requirements for the reporting and assessment of deposits accumulated for the payment of personal loans when such deposits are assigned or pledged to assure the payment of such loans at maturity.

Title IV: Conflicts of Interest - Depository Institutions Conflict of Interests Act - Amends the Federal Deposit Insurance Act, the Federal Reserve Act and the Federal Home Loan Bank Act to prohibit specified Presidential-appointee bank regulatory agency heads and members of such agencies from being employed for a period of two years after they leave office by institutions under their regulatory jurisdiction or with a holding company affiliate. Prohibits such individuals from appearing before the board of their respective agencies, either formally or informally, from contacting such board, directly or indirectly, orally or in writing, or from acting as agent or attorney for any other person, other than the United States, before such board for a period of two years immediately following their employment.

Title V: Credit Union Restructuring - Reorganizes the National Credit Union Administration and places it under the management of the National Credit Union Administration Board.

Directs the chairperson of such Board to represent the Administration in its official relations with other branches of Government.

Restricts the employment and activities of Board members for a period of two years immediately following their employment.

Requires each Federal credit union to pay the Administration an annual operating fee and to make annual financial reports to the Board.

Title VI: Change in Bank Control Act - Amends the Federal Deposit Insurance Act to prohibit any person from acquiring any insured bank or bank holding company unless the appropriate Federal banking agency has been notified and has not issued a notice of its disapproval within a specified time period. Prescribes the procedure to be followed by any agency in making its determination to approve or deny such change of control.

Title VII: Change in Savings and Loan Control Act - Amends the National Housing Act to prohibit any person from acquiring control of any federally insured savings and loan association or holding company unless the Federal Deposit Insurance Corporation has been notified and has not issued a notice of its disapproval within a specified time period. Prescribes the procedure to be followed by the Corporation in making its determination to approve or deny such change of control.

Requires any insured institution to disclose any loan secured, or to be secured, by 25 percent or more of the outstanding voting stock of an insured institution to the Corporation.

Prescribes civil penalties for violations of this Title.

Title VIII: Correspondent Accounts - Prohibits the extension of credit to any officer, director, or specified stockholders of a bank which has a correspondent relationship with the lending bank, in its own name or in the name of another bank, unless such loan does not: (1) involve more than the normal risk of repayment; (2) include unusual terms of interest or collateral; or (3) present any other unfavorable features.

Prohibits the establishment of a correspondent account where a loan already has been made to any officer, director, or specified stockholders of the bank desiring to open the account.

Prescribes civil penalties for violations of this Title.

Requires each executive officer and each stockholder who directly or indirectly owns, controls, or has the power to vote more than ten percent of any class of voting securities of an insured bank, to submit a written report to the board of directors of such bank for any year in which such officer or stockholder has outstanding an extension of credit from a bank which maintains a correspondent account in the name of such bank. Requires such report to include: (1) the maximum amount of indebtedness to the bank maintaining the correspondent account of such officer or stockholder and of each company, political or campaign committee which will benefit or is controlled by such officer or stockholder; (2) the maximum amount of such indebtedness as of a date not more than ten days prior to the filing of the report; (3) the range of interest rates charged on such indebtedness; and (4) the terms and conditions of such indebtedness.

Requires each insured bank to compile and submit such reports to specified regulatory agencies.

Title IX: Disclosure of Material Facts - Amends the Federal Deposit Insurance Act to list information which must be included in an annual report to be made by each insured bank to the appropriate Federal banking agency.

Title X: Federal Financial Institutions Examination Council - Federal Financial Institutions Examination Council Act - Establishes a Financial Institutions Examinations Council to prescribe uniform principles and standards for the Federal examination of financial institutions. Defines the term "financial institution" to mean: (1) a commercial bank; (2) a savings bank; (3) a trust company; (4) a savings and loan association; (5) a building and loan association; (6) a homestead association; (7) a cooperative bank; and (8) a credit union.

Directs that one-fifth of the operating costs of the Council be paid by each of the Federal financial institution regulatory agencies.

Directs the Council to make recommendations for uniformity in other supervisory matters, including classification of loans subject to risk and identification of financial institutions in need of special supervisory attention.

Requires the Council to establish a liaison committee composed of five representatives of State supervisory agencies in order to encourage the application of uniform examination principles and standards by State and Federal Supervisory agencies.

Title XI: Right to Financial Privacy - Right to Financial Privacy Act - Prohibits any Government authority from obtaining copies of, access to, or the information contained in, the financial records of any customer from a financial institution unless such records are reasonably described and: (1) such customer has authorized such disclosure in accordance with this Act; (2) such records are disclosed in response to an administrative subpena or summons; (3) such records are disclosed in response to a court order; (4) such records are disclosed in response to a judicial subpena; or (5) such financial records are disclosed in response to a formal written request meeting specified requirements. Requires in all cases that the customer be notified of the agency seeking such records, the purpose for which such records are sought, and the rights of customers under this Act.

Establishes specific conditions and procedures for the delay of notice to a customer.

States that no financial institution may provide to a Government authority copies of or the information contained in the financial records of any customer except in accordance with the requirements of this Act.

Sets forth provisions governing customer authorization, administrative subpenas and summonses, judicial subpenas, and search warrants.

Establishes procedures for a customer to challenge the disclosure of financial records.

Provides exceptions to the provisions of this Act and special procedures for the disclosure of records to the Secret Service and government authorities acting in the field of foreign intelligence.

Establishes civil penalties and the right to injunctive relief without regard to the amount in controversy for violation of the provisions of this Title.

Establishes conditions on the use of financial records about a customer obtained under the authority of a Federal grand jury.

Title XII: Charters for Thrift Institutions - Amends the Home Owners' Loan Act to authorize the Home Loan Bank Board to provide for the organization, chartering operation, and regulation of associations to be known as Federal Savings and Loan Associations or Federal mutual savings banks.

Subjects converting mutual savings banks to the requirements of existing State law pertaining to discrimination in the extension of home mortgage loans if the State requirements are more stringent than Federal laws and regulations.

Establishes a five year shared risk program in the event that a converting insititution fails.

Title XIII: Holding Companies - Amends the Bank Holding Company Act of 1956 to prohibit a bank holding company from providing insurance as a principal, agent, or broker except: (1) where the insurance is to secure a credit transaction; (2) where the insurance is sold in a community with a population of less than 5,000 or that has no other adequate insurance agency facilities; (3) where the insurance is sold by a bank holding company or its affiliate lawfully engaged in insurance activities prior to June 6, 1978; or (4) where the bank holding company engaged in insurance activities has assets of $50,000,000 or less.

Title XIV: Amendments to the National Banking Laws - Makes changes with respect to the following: (1) the power of national banks to purchase, hold, and convey real property; (2) the trust powers of national banks; (3) the emergency restrictions on Federal Reserve banks; and (4) examination of foreign operations of State member banks.

Allows an individual who holds the required number of shares in a company that controls a banking association to serve as a director of that association.

Permits a banking association to purchase shares of stock in a State chartered bank insured by the Federal Deposit Insurance Corporation if the stock of such bank is owned exclusively by other banks and if such bank is exclusively engaged in providing banking services for other banks, their officers, directors or employees. Limits the total amount of such stock which may be held by an association to five percent of its capital stock and paid in unimpaired surplus.

Title XV: Termination of National Bank Closed Receivership Fund - Directs the Comptroller of the Currency to disburse the liquidating dividends from national banks closed on or before January 22, 1934, held by the Comptroller in the capacity as successor to receivers of those banks.

Title XVI: Transaction Accounts - Permits any depository institution chartered by the Federal Home Loan Bank Board and located in a State which authorizes State-chartered institutions insured by the Federal Savings and Loan Insurance Corporation to offer transaction accounts permitting withdrawals or transfers of account on negotiable, transferable, or nonnegotiable check, order, or authorization, as determined by the Board, to offer comparable services to the extent authorized by the Board. Authorizes the Board to allow depository institutions located in the District of Columbia to offer transaction accounts if depository institutions in Virginia and Maryland are permitted to offer such accounts.

Title XVII: Financial Regulation Simplification Act - Requires the Federal financial regulatory agencies to establish a program which assures periodic review of existing regulations to insure that: (1) the need for and purposes of a regulation are clearly established; (2) timely participation is available to the public, financial institutions, and other Federal, State and local agencies; (3) alternatives to the promulgation of regulations are considered; (4) compliance costs, paperwork and other problems are minimized; and (5) conflicts, inconsistencies and duplication between the regulations of Federal agencies are avoided.

Terminates this Title five years after its effective date.

Title XVIII: Alternative Mortgage Instruments - Permits federally chartered savings and loan associations to offer alternative mortgage instruments where State law, rules, or regulations, allow State chartered savings and loan associations to offer such instruments.

Tile XIX: Prohibition on Credit Card Surcharges - Repeals the prohibition on the imposition of surcharges for payment by credit card in sales transactions.

Title XX: Effective Date - Sets forth the effective date for this Act.