Garn-St Germain Depository Institutions Act of 1982

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

short title

Section 1. This Act may be cited as the “Garn-St Germain Depository Institutions Act of 1982”.

TITLE I—DEPOSIT INSURANCE FLEXIBILITY

short title

Sec. 101. This title may be cited as the “Deposit Insurance Flexibility Act”.

Part A—Federal Deposit Insurance Corporation Amendments

assistance to insured banks

Sec. 111. Section 13(c) of the Federal Deposit Insurance Act (12 U.S.C. 1823(c)) is amended to read as follows:

“(c)(1) The Corporation is authorized, in its sole discretion and upon such terms and conditions as the Board of Directors may prescribe, to make loans to, to make deposits in, to purchase the assets or securities of, to assume the liabilities of, or to make contributions to, any insured bank—

“(A) if such action is taken to prevent the closing of such insured bank;

“(B) if, with respect to a closed insured bank, such action is taken to restore such closed insured bank to normal operation; or

“(C) if, when severe financial conditions exist which threaten the stability of a significant number of insured banks or of insured banks possessing significant financial resources, such action is taken in order to lessen the risk to the Corporation posed by such insured bank under such threat of instability.

“(2)(A) In order to facilitate a merger or consolidation of an insured bank described in subparagraph (B) with an insured institution or the sale of assets of such insured bank and the assumption of such insured bank’s liabilities by an insured institution, or the acquisition of the stock of such insured bank, the Corporation is authorized, in its sole discretion and upon such terms and conditions as the Board of Directors may prescribe—

“(i) to purchase any such assets or assume any such liabilities;

[96 Stat. 1470–1538 omitted (69 pages)]

(b) Section 3(l)(1) of such Act (12 U.S.C. 1813(l)(1)) is amended by inserting “thrift certificate, investment certificate, certificate of indebtedness, or other similar name,” before “or a check or draft drawn against a deposit account”.

(c) Section 5(a) of such Act (12 U.S.C. 1815(a)) is amended by adding at the end thereof the following: “Before approving the application of any industrial bank or similar financial institution, the Board of Directors shall determine that it is chartered and operating under laws providing for examination, supervision, and liquidation substantially comparable to those applicable to banks operating in the same State.”.

(d) Section 109(b)(2) of title 11, United States Code, is amended by striking out “or” before “credit union”, and by inserting “, or industrial bank or similar institution which is an insured bank as defined in section 3(h) of the Federal Deposit Insurance Act (12 U.S.C. 1813(h))” after “credit union”.

applicability of the international banking act of 1978

Sec. 704. Section 8(c) of the International Banking Act of 1978 (12 U.S.C. 3106(c)) is amended by inserting in the first sentence immediately after the words “on the date of enactment of this Act” the following: “or on the date of the establishment of a branch in a State an application for which was filed on or before July 26, 1978”.

securities activities under the international banking act of 1978

Sec. 705. (a) The last sentence of section 8(c) of the International Banking Act of 1978 (12 U.S.C. 3106(c)) is amended by striking out all after “company, and” and inserting in lieu thereof the following: “the term ‘domestically-controlled affiliate covered in 1978’ shall mean an affiliate organized under the laws of the United States or any State thereof if (i) no foreign bank or group of foreign banks acting in concert owns or controls, directly or indirectly, 45 per centum or more of its voting shares, and (ii) no more than 20 per centum of the number of directors as established from time to time to constitute the whole board of directors and 20 per centum of the executive officers of such affiliate are persons affiliated with any such foreign bank. For the purpose of the preceding sentence, the term ‘persons affiliated with any such foreign bank’ shall mean (A) any person who is or was an employee, officer, agent, or director of such foreign bank or who otherwise has or had such a relationship with such foreign bank that would lead such person to represent the interests of such foreign bank, and (B) in the case of any director of such domestically controlled affiliate covered in 1978, any person in favor of whose election as a director votes were cast by less than two-thirds of all shares voting in connection with such election other than shares owned or controlled, directly or indirectly, by any such foreign bank.”.

(b) The second sentence of section 8(c) of such Act is amended to read as follows: “Notwithstanding subsection (a) of this section, a foreign bank or company referred to in this subsection may retain ownership or control of any voting shares (or, where necessary to prevent dilution of its voting interest, acquire additional voting shares) of any domestically-controlled affiliate covered in 1978 which since July 26, 1978, has engaged in the business of underwrit-

[96 Stat. 1540–1547 omitted (8 pages)]

cation is made during such period with the written consent of any person obligated to repay such credit.

relation to other law

Sec. 806. Section 501(c)(1) of the Depository Institutions Deregulation and Monetary Control Act of 1980 shall not apply to transactions which are subject to this title.

effective date

Sec. 807. (a) This title shall be effective upon enactment.

(b) Within sixty days of the enactment of this title, the Comptroller of the Currency, the National Credit Union Administration, and the Federal Home Loan Bank Board shall identify, describe, and publish those portions or provisions of their respective regulations that are inappropriate for (and thus inapplicable to), or that need to be conformed for the use of, the nonfederally chartered housing creditors to which their respective regulations apply, including without limitation, making necessary changes in terminology to conform the regulatory and disclosure provisions to those more typically associated with various types of transactions including credit sales.

Approved October 15, 1982.