A bill to authorize depository institutions to engage in securities activities.

Amends the Banking Act of 1933 to allow a member bank to be affiliated with a bank securities affiliate.

Permits any eligible association to acquire the stock of a bank securities affiliate. Defines an 'eligible association' as a bank with assets of less than $100,000,000 which is not controlled by a bank holding company.

Permits any officer, director, or employee of any member bank to serve at the same time as an officer, director or employee of any of its bank securities affiliates.

Amends the Bank Holding Company Act of 1956 to define "bank securities affiliate" to mean any corporation that: (1) is engaged in the United States in one or more of the activities authorized under such Act; and (2) is a broker or dealer within the meaning of the Securities Exchange Act of 1934 or an investment advisor within the meaning of the Investment Advisers Act of 1940.

Permits a bank securities affiliate to: (1) conduct any securities or securities-related activity that a bank is not prohibited from conducting; (2) deal in and underwrite obligations issued or guaranteed by or on behalf of a State or local government; (3) render investment advice to an investment company; and (4) underwrite, distribute, and sell securities of an investment company.

Limits Federal Reserve Board authority to: (1) require nonbanking subsidiaries of a bank holding company to submit reports regarding compliance with the provisions of the Bank Holding Company Act; and (2) conduct examinations of such subsidiaries.

Amends the Federal Reserve Act to allow a member bank and its subsidiaries to engage in a covered transaction or a financial assistance transaction with an affiliate only on substantially the same terms prevailing for comparable transactions with other nonaffiliated companies.

Imposes limitations on the amount of financial assistance transactions between a member bank and an affiliate or all its affiliates.

Prohibits a member bank and its subsidiaries from purchasing a low-quality asset from any affiliate unless previously committed to purchase such asset before it was acquired by the affiliate.

Prohibits a member bank and its affiliates from purchasing as fiduciary any securities or other assets from an affiliate unless lawfully authorized by the instrument creating the fiduciary relationship, by court or by local law.

Prohibits a member bank and its affiliates from publishing any advertisement suggesting that the member bank is responsible for its affiliates' obligations.

Prohibits a member bank and its subsidiaries from purchasing or otherwise acquiring, during the existence of any underwriting or selling syndicate, any obligation a principal underwriter of which is an affiliate or subsidiary of the member bank. Sets forth exemptions to such prohibitions.

Amends the Federal Deposit Insurance Act to limit the cease and desist authority of the Federal Reserve Board over nonbanking subsidiaries of a bank holding company to activities affecting the safety and soundness of any bank directly or indirectly owned or controlled by such bank holding company, or any activities otherwise violating any banking law, rule, regulation, or order.

Amends the Investment Company Act of 1940 to prohibit an investment company affiliated with a bank securities affiliate from: (1) placing or maintaining its securities or similar investments in the custody of a bank affiliated with such bank securities affiliate; (2) designating any such bank as trustee or custodian; or (3) depositing designated proceeds with any such bank.

Amends the Bank Holding Company Act Amendments of 1970 to prohibit any subsidiary of a bank holding company from engaging in certain tying arrangements in which banks are currently forbidden to engage.

Amends the Home Owners' Loan Act of 1933 to permit any eligible association, as defined by this Act, to acquire capital stock in any savings association securities affiliate.

Amends the National Housing Act to permit savings associations to engage in securities activities.

Amends the Federal Credit Union Act to permit an eligible credit union to acquire capital stock of any credit union securities affiliate, as defined by this Act.