Financial Institutions Equity Act of 1984

(Reported to House from the Committee on Banking, Finance and Urban Affairs with amendment, H. Rept. 98-889)

Financial Institutions Equity Act of 1984 - Amends the Bank Holding Company Act of 1956 to redefine the term "bank" as either a bank insured by the Federal Deposit Insurance Corporation, an institution eligible to apply for such insurance, or a State or federally chartered institution that accepts transaction accounts and demand accounts and makes commercial loans.

Prohibits a bank holding company from providing insurance services through a subsidiary or affiliated company.

Declares that no institution shall be required to obtain insurance from the Federal Deposit Insurance Corporation (FDIC) if such institution is insured under a State insurance system on the date of enactment of this Act and continuously thereafter.

Grants any bank holding company which is not in compliance with the provisions of this Act two years from the date of enactment to become so.

Permits any bank holding company to continue to control any institution which became a bank due to this Act and for which the approval of the formation of such institution was formally granted on or before June 30, 1983, by the appropriate Federal or State regulatory authority.

Prohibits the Board from approving any application to retain control of an institution where retention would violate the affiliations and personnel relationships restrictions of this Act.

Permits any such institution to continue engaging only in such activities as such institution engaged in on May 24, 1984, and only at the same locations.

Amends the Federal Deposit Insurance Act to state that the provisions of the Banking Act of 1933 relating to affiliations between member banks and organizations engaged principally in certain securities activities, and relating to officer, director, or employee relationships involving a member bank and a person or organizations primarily engaged in certain securities activities, shall apply to every nonmember insured or uninsured bank as if it were a member.

Permits any affiliation or relationship that becomes unlawful because of such restriction to continue for a period of two years after enactment of this Act.

Exempts certain foreign banks and limited purpose trust companies from such restrictions.

Declares that for the purposes of the Banking Act of 1933: (1) engaging in the business of receiving deposits through affiliates shall be deemed the same as engaging in the business of receiving deposits directly by a person, firm, corporation, association, business trust, or other similar organization; and (2) any depository institution and any affiliate thereof shall be deemed to be engaged in the business of receiving deposits.

Amends the National Housing Act to provide that in any case in which a savings and loan holding company controls an uninsured institution (including a State chartered savings bank or mutual savings bank) such company shall be deemed to control an insured institution, and an uninsured institution shall be deemed to be an insured institution. Requires any company which was operating on May 24, 1984, and is not in compliance with such provisions to comply not later than two years after the date of enactment of this Act.

Prohibits a unitary savings and loan company, the subsidiary insured or uninsured institution of which is a nonqualified institution, from commencing or continuing any business activity not permissible for a multiple savings and loan holding company.

Declares that a qualified institution shall include an institution chartered (as of May 24, 1984) as a mutual savings bank or a savings bank under Federal or State law, and any State chartered savings bank as of March 10, 1982, which became a Federal savings and loan association before May 24, 1984. Requires the Federal Savings and Loan Insurance Corporation (FSLIC) to determine that such institution: (1) does not decrease the percentage of its assets invested in residential mortgages and related investments below the percentage it held on the date of enactment of this Act or 65 percent, whichever is the lesser; (2) increases such percentage by an amount equal to specified percentages. Grants thrift institutions, with certain exceptions, four years to meet the qualified institutions requirements.

Permits the Corporation to grant temporary and limited exceptions to such investment requirements.

Provides that in any case in which an uninsured institution was in operation on the date of enactment of this Act and was not insured by the FSLIC but was insured in accordance with the National Housing Act, such uninsured institution shall not be required to obtain FSLIC insurance.

Prohibits nonqualified institutions from engaging in any commercial lending activity.

Prohibits nonqualified institutions from engaging in any activity which is not authorized for a Federal association under the Home Owners Loan Act of 1933.

Declares that the provisions of the Banking Act of 1933 relating to affiliations between member banks and organizations engaged principally in certain securities activities and relating to officer, director, or employee relationships involving a member bank and a person or organization primarily engaged in securities activities, shall apply to every insured or uninsured institution as if it were a member of the Federal Reserve System.

Applies the provisions of the Homeowners' Loan Act of 1933 relating to the prohibition on tying arrangements to State chartered insured and uninsured institutions in the same manner in which such provisions apply to associations.

Provides that in any case in which a State chartered depository institution engages, pursuant to State law, in any activity which is not authorized by the Board of Governors of the Federal Reserve System or the FSLIC such activity may only be conducted within such State and solely for its residents. Permits, during the ten-year period following the enactment of this Act, such nonauthorized activities to be conducted with respect to persons with whom such State chartered depository institution was conducting them on May 24, 1984.

Declares that in any case in which any entity commences, between May 24, 1984, and the date of enactment of this Act, any activity which becomes prohibited pursuant to this Act, such entity shall cease such activity on the date of enactment.

Exempts any State chartered depository institution from the provisions of this Act unless there is a change in control, in corporate status, or in method of insurance of its accounts, deposits, or obligations.