Financial Institutions Restructuring and Services Act of 1981

Financial Institutions Restructuring and Services Act of 1981 - Title I: Depository Institutions Insurance and Services - Depository Institutions Insurance and Services Act of 1981 - Part A - Form of Charter; Demand Accounts - Amends the Home Owners' Loan Act of 1933 to authorize the Federal Home Loan Bank Board to charter Federal associations known as Federal savings and loan associations or Federal savings banks (currently Federal mutual savings banks) to provide thrift institutions for the deposit or investment of funds and for the extension of credit for homes and other goods and services.

Permits an association to raise capital in the form of demand accounts as are authorized by its charter or by regulations of the Board.

Directs that all savings accounts and demand accounts will have the same priority upon liquidation.

Reduces, from 30 days to 14 days, the statutory notice-of-withdrawal period for savings accounts.

Eliminates the prohibition against the issuance of capital stock by Federal savings and loans. Grants any association the authority to issue such capital stock.

Permits any institution that is a Federal Home Loan Bank member (or is eligible to become a member) to convert to a Federal Savings and Loan Association, a Federal savings bank, or a Federal mutual savings bank (and in doing so may change directly from the mutual form to the stock form, or the reverse).

Revises the procedures and requirements for conversion of any Federal association back to a State type institution.

Allows any aggrieved person to obtain review of a final action of the Board or the Federal Savings and Loan Insurance Corporation which approves or disapproves a plan of conversion from the mutual to the stock form.

Permits any Federal savings bank chartered as such prior to the enactment of this Act or any Federal savings bank formerly organized as a mutual savings bank to continue to make any investment or engage in any activity not otherwise authorized by this Act to the degree it was authorized to do so prior to enactment of this Act.

Amends the National Housing Act to retain Federal Savings and Loan Insurance Corporation jurisdiction over State mutual to State stock conversions involving insured institutions.

Eliminates specified reporting requirements concerning such conversion activity. Eliminates the prohibition against the creation of Federal stock institutions in States where stock associations do not exist.

Amends the Home Owners' Loan Act of 1933 to include all Federal savings banks within the definition of "insured institution."

Part B - Investments - Amends the Home Owners' Loan Act of 1933 to revise the investment authority of associations with respect to: (1) account loans; (2) real property loans; (3) deposits; (4) State securities; (5) commercial and other loans; (6) housing and land and urban development insured or guaranteed investments; (7) corporate securities; (8) investment companies; (9) consumer loans; (10) investments in personalty; (11) education loans; (12) service corporations; (13) foreign assistance investments; and (14) small business investment companies.

Permits a Federal association to engage in activities and ventures incidental to the exercise of investment authority.

Amends the Federal Home Loan Bank Act to permit members of Federal Home Loan Banks to use their investments in time and savings deposits in other members, or in institutions eligible to become members, to help satisfy the statutory requirement that they maintain a certain amount of liquid assets.

Amends the Home Owners' Loan Act of 1933 to prohibit an association from establishing, retaining, or operating a branch outside the State in which the association has its home office, unless the association qualifies as a domestic building and loan association under the Internal Revenue Code or meets the asset composition test imposed under such Act on institutionals seeking so to qualify. Sets forth exceptions to such limitation.

Prohibits any savings and loan holding company, or any subsidiary thereof which is not an insured institution, and whose subsidiary insured institution fails to qualify as a domestic building and loan association under the Internal Revenue Code, from commencing, or continuing for more than three years after such failure, any business activity other than those specified for multiple savings and loan holding companies and their subsidiaries.

Part C - Preemption of Due- On-Sale Prohibitions - Declares that the provisions of the constitution or the laws of any State limiting the ability of any lender to enter into contracts, or to enforce contracts which provide that the lender may declare due and payable sums secured by the lender's security instrument if the property, or an interest therein, securing the loan is sold or transferred without the lender's prior written consent shall not apply to contracts involving loans secured by a lien or residential real property where such loans are originated by institutions chartered by the Federal Home Loan Bank Board, the Comptroller the Currency, or the National Credit Union Administration Board.

Makes the exercise by the institution of such a due-on-sale option exclusively governed by the terms of the loan contract.

Sets forth the procedure for the issuance of rules, regulations, and interpretations of such limitations.

Declares that such provisions shall not apply in any State after the date (on or after the date of enactment of this Act and before three years after the date of enactment) on which such State adopts a law or certifies that the voters of such State have voted in favor of any provision, constitutional or otherwise, which states explicitly and by its terms that such State does not want such provisions to apply in such State.

Part D - Extraordinary Authority Relating to Thrifts - Amends the National Housing Act to permit the Federal Savings and Loan Insurance Corporation, notwithstanding any other provision of State or Federal law (except antitrust law), to authorize an insured institution eligible for Corporation assistance to merge with any other insured institution or a Federal Deposit Insurance Corporation-insured bank, or to be acquired by any holding company.

Amends the Bank Holding Company Act to permit the Federal Reserve Board to approve, in emergencies, bank holding company acquisitions of thrift institutions, subject to the approval of the thrift institutions' primary Federal regulator.

Amends the Home Owners' Loan Act of 1933 to allow the Federal Home Loan Bank Board (or in the case of a Federally-chartered association, require) a mutual institution to become, or merge into a newly chartered, Federal stock association. Grants such authorization only with respect to an institution: (1) in receivership; (2) that has contracted to receive FDIC or FSLIC assistance; or (3) whose stability is threatened by the existence of severe financial conditions.

Amends the National Housing Act to permit the Federal Savings and Loan Insurance Corporation to provide assistance to any party acquiring a financially troubled insured institution. Authorizes the Corporation, in order to facilitate the liquidation of insured institutions, to provide for the organization of a new Federal association for such purpose subject to the approval of the Federal Home Loan Bank Board.

Authorizes the Corporation, in the event that a Federal association is in default, and with the Corporation appointed as conservator or receiver to: (1) make such disposition of the matter as it deems to be in the best interest of the association, its savers, and the Corporation; and (2) pay all valid credit obligations of the association.

Provides the Corporation with conservatorship and receivership powers over State-chartered insured institutions. Declares that in such cases the Corporation shall have the same powers and duties with respect to insured institutions as are conferred upon it under such Act with respect to Federal associations.

Grants the Corporation, in connection with the liquidation of insured institutions, the power to carry on the business of and to collect all obligations to the insured institutions, to settle, compromise, or release claims in favor of or against the insured institutions, subject only to the regulation of the Federal Home Loan Bank Board, or in cases where the Corporation has been appointed conservator, receiver, or legal custodian solely by a public authority, subject only to the regulation of such public authority.

Amends the Federal Home Loan Bank Act to allow the Federal Home Loan Bank Board, upon its determination that a severe financial condition threatens the stability of member institutions, to waive the requirements of such Act which require a portion of net earnings of Federal Home Loan Banks to be set aside semi-annually to a reserve account, and to pay dividends from undivided profits.

Amends the National Housing Act to permit the Federal Savings and Loan Insurance Corporation to borrow from the Federal Home Loan Banks provided that the rate on such loan is not less than the Federal Home Loan Banks' marginal cost of funds, and the loan is adequately secured.

Permits the Federal Savings and Loan Insurance Corporation, upon its determination that extraordinary financial conditions exist increasing the risk to the Corporation, to terminate distribution of shares of the secondary reserve and utilize such reserve on the same basis as the primary reserve.

Part E - Extraordinary Authority Relating to Banks - Amends the Federal Deposit Insurance Act to permit the Federal Deposit Insurance Corporation, whenever severe financial conditions exist which threaten the stability of a significant number of insured banks, to make loans to, or purchase the assets of, or make deposits in, any insured bank so threatened if it is probable that such action will substantially reduce the risk of loss or avert a threatened loss to the Corporation.

Permits the Corporation to provide assistance to any insured bank or Federal Savings and Loans Insurance Corporation insured institution which will facilitate its merger or consolidation with an insured bank.

Permits the Federal Deposit Insurance Corporation, whenever a State-chartered insured mutual savings bank converts into a Federal stock savings bank or merges with or is acquired by a Federal stock savings bank, to provide reasonable indemnification to the Federal Savings and Loan Insurance Corporation.

Includes any lending costs for the calendar year within the definition of the net assessment income of the Corporation.

Amends the Federal Deposit Insurance Act to permit the Federal Deposit Insurance Corporation, whenever an insured bank is closed and the Corporation is appointed receiver, to sell off the closed ban by an insured depository institution located in the same state but owned by an out-of-State bank or bank holding company.

Part F: Miscellaneous - Amends the Federal Home Loan Bank Act to allow the Federal Home Loan Bank Board to delegate any of its functions, except those of promulgating regulations and performing adjudications.

Specifies that a court may assess attorneys' fees against the Bank Board only in the event the agency loses a lawsuit.

Amends the Federal Home Loan Mortgage Corporation Act to authorize the Federal Home Loan Mortgage Corporation to purchase mortgage loans from the Federal Deposit Insurance Corporation and the National Credit Union Administration. Removes the limitation on the number of mortgages more than one year old that the Federal Home Loan Mortgage Corporation can purchase. Permits the Corporation to make secured advances to its members upon such security as the Board may prescribe.

Amends the National Housing Act to provide that depositors who have accounts in a Federal Savings and Loan Insurance Corporation insured institution that merges into another such institution in which they have accounts will be able to have separate insurance for the two accounts for a period of six-months.

Amends the Federal Home Loan Bank Act to provide compensation to the members of the Federal Savings and Loan Advisory Council, subject to the limitations of the Federal Advisory Committee Act.

Requires an institution withdrawing voluntarily from Federal Home Loan Bank membership to pay prepayment penalties in connection with liquidating any indebtedness it owes the Bank. Prohibits institutions which withdraw from the Federal Home Loan Bank System from reentering, except in connection with receiving Federal Savings and Loan Insurance Corporation insurance of accounts.

Sets December 31, 1987, as the deadline for applying for membership for current nonmembers and newly chartered institutions.

Title II: Provisions Relating to National and Member Banks - Part A - General Provisions - Amends Federal law to permit a national bank to make unsecured loans in an amount up to 15 percent of its unimpaired capital and surplus, plus an additional ten percent on loans fully secured by readily marketable collateral.

Permits the Comptroller of the Currency to prescribe rules and regulations defining or further defining terms used in determining when loans or extensions of credit to one person shall be deemed to be loans or extensions of credit to any other person.

Permits the Comptroller to establish limitations on the amount by which a national banking association may be indebted or in any way subject to liability to make payments. Permits the Comptroller to establish separate limitations on particular types or classes of transactions involving national bank indebtedness or liability and to alternatively or additionally establish aggregate limitations on total indebtedness and liability of national banking associations.

Amends the Federal Reserve Act to permit a national banking association to make loans secured by liens on interests in real estate.

Permits a lien taken by an association to be in any form recognized as a perfected lien on real estate under the law of the State in which the property is located.

Limits the amount advanced on any real estate loan to an amount that the association can reasonably expect to recover in a timely manner if required to look to the lien for repayment of the loan.

Requires a real estate loan to adequately provide, through a schedule of installment and other payments, a take-out commitment for the payment of all interest and the repayment of the principal of the loan within a reasonable period of time.

Sets forth exceptions to such limitations and restrictions.

Prohibits an association from making real estate loans in an aggregate amount in excess of its time and savings deposits.

Permits notes representing loans to finance the construction of residential or farm buildings and having maturities of less than nine months to be eligible for a discount as commercial paper within the terms of such Act if accompanied by a valid and binding agreement to advance the full amount of the loan upon the completion of the building.

Allows the Comptroller to issue a certificate of authority to commence the business of banking to a national banking association which is organized solely to do business with other financial institutions if such association is owned exclusively by other depository institutions and is engaged exclusively in providing banking services for other banks.

Permits an association to purchase for its own account shares of stock of a national banking association which is organized solely to do business with other financial institutions.

Permits actions and proceedings against any national bank, for which the Federal Deposit Insurance Corporation has been appointed as receiver, to be brought in any district or territorial court of the United States within the district in which such bank is located or in any State, county, or municipal court, having jurisdiction in similar cases, in the county or city in which such bank is located.

Authorizes a national bank to open or close, at its discretion, on a legal holiday declared by a State or District of Columbia official, unless the Comptroller directs otherwise.

Amends the Depository Institutions Deregulation and Monetary Control Act of 1980 to provide the authority to terminate the closed receivership fund for national banks which have been closed and for which the Comptroller has appointed a receiver other than the Federal Deposit Insurance Corporation.

Adds to such Act a Part C - Disposition of Unclaimed Property Recovered from Closed National Banks - Sets forth the procedures for disposition of unclaimed property in the possession, custody, or control of the Comptroller which was recovered from closed national banks. Authorizes the Comptroller to issue rules and regulations necessary or appropriate to carry out such disposition.

Increases the limit on bankers' acceptances that can be issued by a member bank from 50 percent of capital and surplus (or, with the permission of the Federal Reserve, 100 percent) to 200 percent of capital and surplus (or, with the permission of the Federal Reserve, 300 percent).

Banking Affiliates Act - Amends the Federal Reserve Act to permit a member bank to engage in any credit or investment transaction with bank or nonbank affiliates, so long as the member bank and its affiliates are 80 percent owned by the same bank or bank holding company. Sets forth limitations on transactions between a member bank and its holding company.

Exempts financial institutions with less than a specified amount of total deposits from the reserve requirements of the Monetary Control Act of 1980.

Part B - Financial Institutions Regulatory Act Amendments - Amends the Federal Reserve Act to eliminate size limits on loans to executive officers of member banks for real estate loans and loans for children's education.

Amends the Federal Reserve Act, the Home Owners' Loan Act, the Bank Holding Company Act of 1956, and the Bank Holding Company Act Amendments of 1970 to permit the agency having authority to impose a civil monetary penalty under such Act to, in its discretion, compromise, modify, or remit any civil monetary penalty which is subject to imposition or has been imposed under such authority.

Amends the Federal Reserve Act to repeal the reporting requirements on all loans made by a bank to its executive officers.

Requires the prior approval of the board of directors of a bank in the case of loans to executive officers, directors, and principal shareholders or their related interests aggregating more than a specified amount.

Amends the Federal Deposit Insurance Act to exclude any foreign bank having an insured branch in the United States (but shall apply to the insured branch) from provisions of such Act relating to loans, extensions of credit, and other dealings between member banks and their affiliates.

Provides for the removal of a management official of a federally chartered or federally insured depository institution for a violation of the Depository Institution Management Interlocks Act.

Revises the reporting requirements of the Bank Holding Company Act Amendments of 1970 relating to loans received from banks maintaining correspondent accounts.

Revises the reporting requirements of the Federal Deposit Insurance Act relating to the disclosure of material facts.

Title III: Securities Activities - Permits national banks to deal in and underwrite revenue obligations (except special assessment obligations and industrial revenue bonds) issued or guaranteed by or on behalf of a State or any political subdivision thereof.

Sets forth restrictions on the activities of national banks which deal in or underwrite such obligations.

Amends the Investment Company Act of 1940 to permit a bank, a bank holding company or a subsidiary thereof, a savings and loan association, a savings bank, or a credit union to: (1) organize, sponsor, operate, control, or render investment advice to an investment company; or (2) underwrite, distribute, sell, or issue securities of any investment company if certain standards are met. Sets forth procedures to insure compliance with such standards.

Title IV: Usury Provisions - Credit Deregulation and Availability Act of 1981 - Amends the Depository Institutions Deregulation and Monetary Control Act of 1980 to eliminate the current Federal rate ceiling for business and agricultural loans.

Permits a State to reject Federal preemption of State usury ceilings on such loans within three years of the effective date of this Act. Makes Federal preemption applicable to certain activities in connection with credit agreements entered into during the preemption period, if the credit is extended within 18 months of the effective date of the State law rejecting preemption.

Preempts all State usury laws in connection with extensions of consumer credit made by a creditor.

Permits a State to reject such Federal preemption within three years of the effective date of this Act. Includes a transitional provision where a State rejects Federal preemption, applicable to open-end credit transactions where the credit is extended within 18 months of the effective date of the State law rejecting preemption.

Authorizes the Board of Governors of the Federal Reserve System to publish Board interrelations regarding the scope and application of such provisions.

Authorizes the boards of directors of Federal credit unions to establish interest rates.

Title V: Credit Unions - Amends the Federal Credit Union Act to permit the National Credit Union Administration Board to authorize a merger or consolidation of an insured credit union which is in danger of insolvency with any other insured credit union. Permits the Board to authorize a purchase and assumption by an insured credit union of all or any part of the assets and liabilities of any other insured credit union which is insolvent or in danger of insolvency if the Board is satisfied that any emergency requiring expeditious action exists with respect to such credit union and that other alternatives are not reasonably available.

Permits the Board to authorize a purchase and assumption of all or any part of the assets, liabilities, and insured accounts of an insured credit union that is insolvent or in danger of insolvency by a federally insured financial institution other than a credit union.

Authorizes the Share Insurance Fund to borrow from the National Credit Union Administration Central Liquidity Facility.

Authorizes the Central Liquidity Facility to extend credit to the National Credit Union Administration Share Insurance Fund. Authorizes the Central Liquidity Facility to make short term loans to banks and other financial institutions and acquire financial assets for the purpose of effective cash management.

Exempts the Central Liquidity Facility from all Federal, State, and local taxation.

Authorizes the Central Liquidity Facility to act as an agent of the Federal Reserve System.

Permits the National Credit Union Administration Board to appoint itself as conservator in any case in which: (1) such action is necessary to conserve the assets of any insured credit union; or (2) an insured credit union consents to such an action by the Board.

Requires the National Credit Union Administration to be audited on a fiscal year basis rather than a calendar year basis.

Eliminates the requirement for partial year premium and rebates.

Permits the Secretary of the Treasury, upon request of the National Credit Union Administration Board, to invest and reinvest such portions of the annual operating fees as the Board determines are not needed for current operations.

Permits Federal credit unions to make mortgage loans provided the maturity does not exceed 30 years or such other limits as set by the National Credit Union Administration Board.

Eliminates the median sales price limitation on residential real property.

Permits Federal credit unions to refinance first mortgages.

Sets the maximum maturity for all second mortgage loans at 15 years.

Permits a Federal credit union, on first or second mortgage loans, to require that any partial prepayments be: (1) made on the date monthly installments are due; and (2) in the amount of that part of one or more monthly installments which would be applicable to principal.

Grants Federal credit unions the authority to issue Government National Mortgage Association mortgage-backed securities.

Permits a Federal credit union's board of directors to adopt a policy of terminating the membership of any member based on inactivity in the affairs of the credit union.

Title VI: Property, Casualty, Life Insurance Activities of Bank Holding Companies - Amends the Bank Holding Company Act of 1956 to prohibit bank holding companies and their subsidiaries from selling insurance as principals, agents, or brokers except: (1) where the insurance secures an extension of credit in the event of death, disability, or the involuntary unemployment of the debtor; (2) where the insurance is declining balance credit property insurance, sold by a subsidiary finance company, to protect against loss or damage to collateral securing an extension of credit of $10,000 or less (adjusted by the Consumer Price Index with 1980 as the base year); (3) any insurance agency activity in a community of less than 5,000 or which has inadequate insurance agency facilities; (4) any insurance agency activity lawfully engaged in by a bank holding company on June 12, 1980; (5) certain supervisory activity over agents who sell insurance covering a holding company's property and employees; and (6) any insurance agency activity, except the sale of unauthorized life insurance or annuities, conducted by a bank holding company or its subsidiary which has less than $50,000,000 in total assets.

Title VII: Miscellaneous - Amends the National Housing Act to increase the deposit insurance on individual retirement accounts.

Amends the Federal Deposit Insurance Act to exempt deposits at an International Banking Facility from Federal Deposit Insurance Corporation deposit and assessment coverage.

Amends the Truth in Lending Act to redefine the term creditor to exclude "arrangers of credit" for the purposes of such Act.

Preempts any State law that is similar in purpose, scope, requirement, or content to specified provisions under the Truth in Lending Act.

Revises statutory penalties where a creditor is in substantial noncompliance with the Truth in Lending Act.

Extends, for six months, the effective date of the amendments made in the Truth in Lending Simplification Act.

Amends the Federal Home Loan Bank Act to increase the stock-to-advances ceiling ratio that Federal Home Loan Bank members must observe.