Title IX — Strengthening Community Banks’ Role in Housing

“(j) Limited Exception for Custodial Deposits.—

“(1) In general.—Custodial deposits of an eligible institution shall not be considered to be funds obtained, directly or indirectly, by or through a deposit broker to the extent that the total amount of such custodial deposits does not exceed an amount equal to 20 percent of the total liabilities of the eligible institution.

“(2) Definitions.—In this subsection:

“(A) Custodial deposit.—The term ‘custodial deposit’ means a deposit that is not deposited at an insured depository institution in return for fees paid by the insured depository institution pursuant to an agreement with a third party and that would otherwise be considered to be obtained, directly or indirectly, by or through a deposit broker, if the deposit is deposited at 1 or more insured depository institutions, for the purpose of providing or maintaining deposit insurance for the benefit of a third party, by or through any of the following, each acting in a formal custodial or fiduciary capacity for the benefit of a third party:

“(i) An insured depository institution serving as agent, trustee, or custodian.

“(ii) A trust entity controlled by an insured depository institution serving as agent, trustee, or custodian.

“(iii) A State-chartered trust company serving as agent, trustee, or custodian.

“(iv) A plan administrator or investment advisor, acting in a formal custodial or fiduciary capacity for the benefit of a plan.

“(B) Eligible institution.—The term ‘eligible institution’ means an insured depository institution that accepts custodial deposits, if the insured depository institution has less than $10,000,000,000 in total assets as reported on the consolidated report of condition and income as reported quarterly to the appropriate Federal banking agency and—

“(i)

(I) when most recently examined under section 10(d) was assigned a composite rating of 1, 2, or 3 under the Uniform Financial Institutions Rating System (or an equivalent rating under a comparable rating system); and

“(II) is well capitalized; or

“(ii) has obtained a waiver pursuant to subsection (c).

“(C) Plan.—The term ‘plan’ has the meaning given the term in section 3 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1002).

“(D) Plan administrator.—The term ‘plan administrator’ has the meaning given the term ‘administrator’ in section 3 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1002).

“(E) Well capitalized.—The term ‘well capitalized’ has the meaning given the term in section 38(b).”

“(k) Restriction on Interest Rate Paid on Certain Custodial Deposits.—

“(1) Definitions.—In this subsection—

“(A) the terms ‘custodial deposit’, ‘eligible institution’, and ‘well capitalized’ have the meanings given those terms in subsection (j); and

“(B) the term ‘covered insured depository institution’ means an insured depository institution that while acting as an eligible institution under subsection (j), accepts custodial deposits while not well capitalized.

“(2) Prohibition.—A covered insured depository institution may not pay a rate of interest on custodial deposits that are accepted while not well capitalized that, at the time the funds or custodial deposits are accepted, significantly exceeds the limit set forth in paragraph (3).

“(3) Limit on interest rates.—The limit on the rate of interest referred to in paragraph (2) shall be not greater than—

“(A) the rate paid on deposits of similar maturity in the normal market area of the covered insured depository institution for deposits accepted in the normal market area of the covered insured depository institution; or

“(B) the national rate paid on deposits of comparable maturity, as established by the Corporation, for deposits accepted outside the normal market area of the covered insured depository institution.”

“(1) In general.—The sum of the following amounts of reciprocal deposits of an agent institution shall not be considered to be funds obtained, directly or indirectly, by or through a deposit broker:

“(A) An amount equal to 50 percent of the portion of the total liabilities of the agent institution that is less than or equal to $1,000,000,000.

“(B) An amount equal to 40 percent of the portion, if any, of the total liabilities of the agent institution that is greater than $1,000,000,000, but less than or equal to $10,000,000,000.

“(C) An amount equal to 30 percent of the portion, if any, of the total liabilities of the agent institution that is greater than $10,000,000,000, but less than or equal to $96,333,333,333.”

“(a) In General.—The board of directors”

“(b) Meetings.—The board of directors of a Federal credit union shall meet as follows:

“(1) With respect to a de novo Federal credit union, not less frequently than monthly during each of the first five years of the existence of such Federal credit union.

“(2) Not less than six times annually, with at least one meeting held during each fiscal quarter, with respect to a Federal credit union—

“(A) with a composite rating of either 1 or 2 under the Uniform Financial Institutions Rating System (or an equivalent rating under a comparable rating system); and

“(B) with a capability of management rating under such composite rating of either 1 or 2.

“(3) Not less frequently than once a month, with respect to a Federal credit union—

“(A) with a composite rating of either 3, 4, or 5 under the Uniform Financial Institutions Rating System (or an equivalent rating under a comparable rating system); or

“(B) with a capability of management rating under such composite rating of either 3, 4, or 5.”

“(iv) GAO review.—

“(I) In general.—The Comptroller General of the United States shall, not later than 60 days after a determination is made under clause (i), and again 180 days thereafter, review and report to the Congress on the determination under clause (i), including—

“(aa) the basis for the determination;

“(bb) the purpose for which any action was taken pursuant to such clause;

“(cc) the likely effect of the determination and such action on the incentives and conduct of insured depository institutions and uninsured depositors;

“(dd) any mismanagement by the executives and board of the insured depository institution that contributed to the failure of the insured depository institution;

“(ee) a review of the compensation practices of the insured depository institution;

“(ff) any supervisory or regulatory shortcomings with respect to the appropriate Federal banking agency of the insured depository institution;

“(gg) any actions taken by the Federal banking regulators, Financial Stability Oversight Council, Department of the Treasury, and other relevant financial regulators in relation to the failure of the insured depository institution; and

“(hh) any additional relevant entities or activities that may have contributed to the failure of the insured depository institution, including with respect to auditing, accounting, credit rating agencies, investment bank underwriters, and emergency liquidity options such as loans from the Federal reserve banks or advances through the Federal Home Loan Bank system.

“(II) Rule of construction.—Nothing in this clause or a report issued pursuant to this clause may be construed to limit the authority of a Federal agency to enforce violations of Federal statutes, rules, or orders.”

“(12) Appropriate federal banking agency report.—

“(A) In general.—The appropriate Federal banking agency of an insured depository institution about which a determination is made under paragraph (4)(G)(i) shall, not later than 90 days after the date of such determination, and again 210 days thereafter, submit a report to the Congress that discloses the following:

“(i) Subject to such redactions as the appropriate Federal banking agency determines appropriate to protect personally identifiable information about customers and other financial institutions (as such term is defined under section 11(e)(9)(D))—

“(I) all reports of examination and inspection that relate to the failed insured depository institution in the previous 3-year period;

“(II) all formal communications of a material supervisory determination conveyed to the failed insured depository institution in the previous 3-year period; and

“(III) any additional exam reports and correspondence that the appropriate Federal banking agency determines may be relevant to the failure of the insured depository institution.

“(ii) An examination of any mismanagement by the executives and board of the insured depository institution that contributed to the failure of the insured depository institution.

“(iii) Any supervisory or regulatory shortcomings by such appropriate Federal banking agency with respect to the insured depository institution.

“(iv) Any dynamics that the appropriate Federal banking agency determines may have contributed to the failure of the insured depository institution.

“(v) Any supervisory, regulatory, or legislative recommendations such appropriate Federal banking agency may have to improve the safety and soundness of similarly situated insured depository institutions, the banking system, and financial stability.

“(B) Protection of sensitive information.—

“(i) Effect on privilege.—The provision of any information by a Federal banking agency under this paragraph may not be construed as—

“(I) waiving, destroying, or otherwise affecting any privilege applicable to the information; or

“(II) waiving any exemption applicable to the information under section 552 of title 5, United States Code (commonly known as the ‘Freedom of Information Act’).

“(ii) Transparency.—

“(I) In general.—A Federal banking agency shall publish materials contained in a report required under subparagraph (A) to the fullest extent possible to promote transparency.

“(II) Consultation on omitting materials.—If a Federal banking agency determines particular materials described under subclause (I) should not be published, the Federal banking agency shall consult with the chair and ranking member of the Committee on Financial Services of the House of Representatives and the chair and ranking member of the Committee on Banking, Housing, and Urban Affairs of the Senate.

“(III) Omitting materials.—If, after the consultation required under subclause (II), the Federal banking agency determines there is a substantial public interest in not publishing such materials, the Federal banking agency shall provide those materials to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate with a written explanation describing the reasons for not publishing those materials.

“(iii) Privilege.—For purposes of this subparagraph, the term ‘privilege’ includes any work-product, attorney-client, or other privilege recognized under Federal or State law.

“(C) Report extension.—A Federal banking agency may extend a deadline described under subparagraph (A) for an additional 60 days, if the Federal banking agency—

“(i) faces ongoing circumstances that require the Federal banking agency to prioritize activities to promote stability of the United States banking system; and

“(ii) notifies the Congress of such extension and the reasons for such extension.

“(D) Consolidated reports.—A Federal banking agency may consolidate multiple reports required under this paragraph so long as the individual reports being consolidated all meet the timing requirements under this paragraph.

“(E) Rule of construction.—Nothing in this paragraph or reports or materials provided pursuant to this paragraph may be construed to limit the authority of a Federal agency to enforce violations of Federal statutes, rules, or orders.”