Financial Services Clarification Act

Financial Services Clarification Act - Title I: Financial Institutions Clarification - Amends the Banking Act of 1933 to authorize: (1) a bank that is a member of the Federal Reserve System (member bank) to be affiliated with a depository institution securities affiliate; and (2) an officer, director, or employee of any member bank to serve simultaneously in such a position with such an affiliate.

Amends the Securities Exchange Act to: (1) exclude such affiliates from the authority of certain regulatory agencies for municipal securities dealers; and (2) provide for affiliate representation on the Municipal Securities Rulemaking Board.

Amends the Bank Holding Company Act of 1956 to redefine the term "bank" to: (1) include any bank insured by the Federal Deposit Insurance Corporation; and (2) exclude foreign banks having an insured or uninsured branch in the United States, insured institutions, trust companies, credit unions that are insured, or eligible for insurance by the National Credit Union Administration Board, specified industrial loan companies, and institutions acquired by bank holding companies before enactment of this Act which engage solely in credit card operations and which do not accept demand deposits or make commercial loans. Defines the terms "depository institution securities affiliate" and "commercial loan" for purposes of such Act. Provides that an institution shall not be deemed to be engaged in the business of making commercial loans if the aggregate principal amount of its outstanding commercial loans does not exceed ten percent of its total assets in three out of every four quarters and two out of every three years.

Requires a company to divest itself of any entity which becomes a bank because of the definition revision under this Act if the establishment or acquisition of such entity: (1) occurred on or after July 1, 1983; and (2) would have been prohibited had such revised definition been in effect. Sets forth the applicability of provisions restricting nonbanking activities and subsidiaries of bank holding companies with respect to entities which become banks, and companies which become bank holding companies, as a result of such definition revision.

Permits a bank holding company to own or control shares of any depository institution securities affiliate which: (1) conducts activities permissible under the Bank Holding Company Act of 1956; (2) conducts any securities or securities-related activity that a national banking association is not prohibited from conducting; or (3) underwrites, sells, distributes, or deals in commercial paper. Prohibits any State from prohibiting the affiliation of a national banking association with a bank holding company which engages only in permissible activities under such Act.

Amends the Federal Deposit Insurance Act to apply to insured nonmember banks the restrictions contained in the Banking Act of 1933 on affiliations and director, officer, and employee relationships between member banks and securities organizations, with specified exceptions.

Title II: Deposit Brokers - Brokered Deposits Act of 1985 - Amends the National Housing Act and the Federal Deposit Insurance Act to prohibit the Federal Savings and Loan Insurance Corporation and the Federal Deposit Insurance Corporation, respectively, from promulgating regulations providing different deposit insurance for brokered deposits than for other deposits.

Prohibits an insured institution from accepting or maintaining short-term insured deposits placed through a broker in excess of the lesser of: (1) 200 percent of a savings and loan association's net worth or a bank's unimpaired capital and unimpaired surplus; or (2) 15 percent of total deposits. Prohibits an insured institution which does not satisfy minimum net worth requirements established by the appropriate Federal banking agency from accepting any additional insured accounts placed through a deposit broker.

Title III: Interstate Banking - Interstate Banking Act of 1985 - Amends the Bank Holding Company Act of 1956, the Federal Deposit Insurance Act, and the National Housing Act to authorize interstate bank branching among States in which State laws specifically authorize such branching.