Community Lending Enhancement and Regulatory Relief Act of 2013
A BILL
To enhance the ability of community financial institutions to foster economic growth and serve their communities, boost small businesses, increase individual savings, and for other purposes.
Sec. 2 Changes required to small bank holding company policy statement on assessment of financial and managerial factors
Small bank holding company policy statement on assessment of financial and managerial factors—
In general— Before the end of the 6-month period beginning on the date of the enactment of this Act, the Board of Governors of the Federal Reserve System shall publish in the Federal Register proposed revisions to the Small Bank Holding Company Policy Statement on Assessment of Financial and Managerial Factors (12 C.F.R. part 225—appendix C) that provide that the policy shall apply to a bank holding company which has pro forma consolidated assets of less than $5,000,000,000 and that—
is not engaged in any nonbanking activities involving significant leverage; and
does not have a significant amount of outstanding debt that is held by the general public.
Adjustment of amount— The Board of Governors of the Federal Reserve System shall annually adjust the dollar amount referred to in paragraph (1) in the Small Bank Holding Company Policy Statement on Assessment of Financial and Managerial Factors by an amount equal to the percentage increase, for the most recent year, in total assets held by all insured depository institutions, as determined by the Board.
Increase in debt-to-Equity ratio of small bank holding company— Before the end of the 6-month period beginning on the date of the enactment of this Act, the Board of Governors of the Federal Reserve System shall publish in the Federal Register proposed revisions to the Small Bank Holding Company Policy Statement on Assessment of Financial and Managerial Factors (12 C.F.R. part 225—appendix C) such that the debt-to-equity ratio allowable for a small bank holding company in order to remain eligible to pay a corporate dividend and to remain eligible for expedited processing procedures under Regulation Y of the Board of Governors of the Federal Reserve System would increase from 1:1 to 3:1.
Sec. 3 Escrow requirements
In general— Section 129D(c) of the Truth in Lending Act, as added by section 1461(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, is amended—
by redesignating paragraphs (1), (2), (3), and (4) as subparagraphs (A), (B), (C), and (D) and moving such subparagraphs 2 ems to the right;
striking “The Board” and inserting the following:
“(1) In general—The Board”
by adding at the end the following new paragraph:
“(2) Treatment of loans held by smaller creditors—The Board shall, by regulation, exempt from the requirements of subsection (a) any loan secured by a first lien on a consumer’s principle dwelling, if such loan is held by a creditor with assets of $10,000,000,000 or less.”
Sec. 4 Exception to annual privacy notice requirement under the Gramm-Leach-Bliley Act
Section 503 of the Gramm-Leach-Bliley Act (15 U.S.C. 6803) is amended by adding at the end the following:
“(f) Exception to annual notice requirement—A financial institution that—
“(1) provides nonpublic personal information only in accordance with the provisions of subsection (b)(2) or (e) of section 502 or regulations prescribed under section 504(b), and
“(2) has not changed its policies and practices with regard to disclosing nonpublic personal information from the policies and practices that were disclosed in the most recent disclosure sent to consumers in accordance with this subsection,”
Sec. 5 Accounting principles cost-benefit requirements
Section 19(b) of the Securities Act of 1933 (15 U.S.C. 77s(b)) is amended by adding at the end the following:
“(3) Generally accepted accounting principles cost-benefit requirements—The Commission or its designee shall conduct analyses of the costs and benefits (including economic benefits) of any new or amended accounting principle described under paragraph (1), and may not recognize such new or amended accounting principle, unless the Commission or its designee determines that the benefits to investors of such new or amended accounting principle significantly outweigh its costs.”
Sec. 6 Community bank exemption from annual management assessment of internal controls requirement of the Sarbanes-Oxley Act of 2002
Section 404 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7262) is amended by adding the following new subsection:
“(d) Community bank exemption
“(1) In general—This section shall not apply in any year to any insured depository institution which, as of the close of the preceding year, had total assets, as determined on a consolidated basis, of $10,000,000,000 or less.
“(2) Adjustment of amount—The Commission shall annually adjust the dollar amount in paragraph (1) by an amount equal to the percentage increase, for the most recent year, in total assets held by all depository institutions, as reported by the Federal Deposit Insurance Corporation.”
Sec. 7 Certain loans included as qualified mortgages
Section 129C(b)(2) of the Truth in Lending Act (15 U.S.C. 1639c(b)(2)) is amended—
in subparagraph (A)—
in clause (viii), by striking “and” at the end;
in clause (ix), by striking the period at the end and inserting “; and”; and
by adding at the end the following:
“(x) that is originated and retained in portfolio for a period of at least 3 years by a creditor having less than $10,000,000,000 in total assets.”
in subparagraph (E)—
by striking “The Board may, by regulation” and inserting “The Bureau shall, by regulation”; and
by amending clause (iv) to read as follows:
“(iv) that is extended by a creditor that—
“(I) originates and retains the balloon loans in portfolio for a period of at least 3 years; and
“(II) together with all affiliates, has total assets of $10,000,000,000 or less.”
Sec. 8 Increase in small servicer exemption
Section 6 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2605) is amended by adding at the end the following:
“(n) Small servicer exemption—The Bureau shall, by regulation, provide exemptions to, or adjustments for, the provisions of this section for servicers that service 20,000 or fewer mortgage loans, in order to reduce regulatory burdens while appropriately balancing consumer protections.”
Sec. 9 Appraiser qualification threshold
Section 1112(b) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3341(b)) is amended—
by striking “may establish a threshold level at or” and inserting “shall establish a threshold level of $250,000,”; and
by striking “transactions, if ” and inserting “transactions. Each Federal financial institutions regulatory agency and the Resolution Trust Corporation may establish a higher threshold than $250,000, if”.
Sec. 10 Coordination among financial institutions
Chapter 53 of title 31, United States Code, is amended—
by inserting after section 5332 the following new section:
“5333. Coordination among financial institutions
“(a) In general—In the case of an entry received via an automated clearing house, no receiving depository financial institution shall be required to verify that the entry is not a prohibited transaction, if the originating depository financial institution has warranted, pursuant to the automated clearing house rules governing such entry or otherwise, that the originating depository financial institution has complied with the sanctions programs administered by the Office of Foreign Assets Control in connection with such entry.
“(b) Definitions—For purposes of this section:
“(1) Automated clearing house—The term “automated clearing house” means a funds transfer system governed by rules which provide for the interbank clearing of electronic entries for participating depository financial institutions.
“(2) Depository financial institution—The term “depository financial institution” means—
“(A) any insured depository institution, as such term is defined under section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813);
“(B) any depository institution which is eligible to apply to become an insured depository institution under section 5 of the Federal Deposit Insurance Act (12 U.S.C. 1815);
“(C) any insured credit union, as defined in section 101 of the Federal Credit Union Act (12 U.S.C. 1752); and
“(D) any credit union which is eligible to apply to become an insured credit union pursuant to section 201 of the Federal Credit Union Act (12 U.S.C. 1781).
“(3) Entry—The term “entry” means an order to request for the transfer of funds through an automated clearing house.
“(4) Originating depository financial institution—The term “originating depository financial institution” means a depository financial institution that transmits entries via an automated clearing house for transmittal to a receiving depository financial institution.
“(5) Prohibited transaction—The term “prohibited transaction” means a funds transfer originated on behalf of a person to or from whom funds transfers are restricted by a sanctions program administered by the Office of Foreign Assets Control, including persons appearing on the list of specially designated nationals and blocked persons maintained by the Office of Foreign Assets Control.
“(6) Receiving depository financial institution—The term “receiving depository financial institution” means a depository financial institution that receives entries via an automated clearing house from an originating depository financial institution for debit or credit to the accounts of its customers.”
in the table of contents for such chapter by inserting after the item relating to section 5332 the following new item: