HR 865 IH
107th CONGRESS
1st Session
H. R. 865
To enhance the availability of capital and credit for all citizens
and communities, to ensure that community reinvestment keeps pace as banks,
securities firms, and other financial service providers become affiliates as a
result of the enactment of the Gramm-Leach-Bliley Act, and for other
purposes.
IN THE HOUSE OF REPRESENTATIVES
March 6, 2001
Mr. BARRETT (for himself, Mr. GUTIERREZ, Mr. FRANK, Mrs. JONES of Ohio, Ms.
BALDWIN, Ms. MCKINNEY, Mr. MCGOVERN, Ms. HOOLEY of Oregon, Mr. CAPUANO, Mr.
BONIOR, Mr. BLAGOJEVICH, Mr. ACEVEDO-VILA, Mr. FILNER, Mr. HINCHEY, Ms.
ROYBAL-ALLARD, Mrs. MEEK of Florida, Mr. ENGEL, Mr. MCDERMOTT, Mr. TOWNS, Mr.
RUSH, and Ms. NORTON) introduced the following bill; which was referred to the
Committee on Financial Services
A BILL
To enhance the availability of capital and credit for all citizens
and communities, to ensure that community reinvestment keeps pace as banks,
securities firms, and other financial service providers become affiliates as a
result of the enactment of the Gramm-Leach-Bliley Act, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE- This Act may be cited as the `Community Reinvestment
Modernization Act of 2001'.
(b) TABLE OF CONTENTS- The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--MODERNIZATION OF COMMUNITY REINVESTMENT ACT OF 1977 AND COMMUNITY
SERVICE OBLIGATIONS
Sec. 101. Extension of community reinvestment obligations within a
financial holding company.
Sec. 102. Provisions relating to improved responsiveness of insured
depository institutions to Community Reinvestment Act of 1977.
Sec. 103. Reduction of CRA rating due to predatory lending and other
negative credit practices.
Sec. 104. Responsiveness to community needs for securities and
investment services.
Sec. 105. Responsiveness to community needs for mortgages and mortgage
related services by mortgage banks.
Sec. 106. Responsiveness to community needs for insurance
services.
Sec. 107. Satisfactory ratings required by securities company, mortgage
bank, and insurance company affiliates of financial holding companies.
TITLE II--DATA DISCLOSURE REQUIREMENTS
Subtitle A--Disclosure of Insurance Availability and Insurer Investment
Information
Sec. 202. Establishment of general requirements to submit
information.
Sec. 203. Reporting of noncommercial insurance information.
Sec. 204. Reporting of rural insurance information.
Sec. 205. Waiver of reporting requirements.
Sec. 206. Reporting by private mortgage insurers.
Sec. 207. Reporting of information regarding investments by
insurers.
Sec. 208. Submission of information to Secretary and maintenance of
information.
Sec. 209. Availability and access system.
Sec. 212. Exemption and relation to State laws.
Sec. 215. Effective date.
Subtitle B--Improvements in Other Data Disclosure Requirements
Sec. 221. Improve small business and agriculture lending data
disclosure.
Sec. 222. Maintenance and disclosure of information by the Financial
Institutions Examination Counsel.
TITLE III--REGULATORY AND STRUCTURAL REFORMS
Sec. 301. Antiredlining requirement for financial holding
companies.
Sec. 302. Notice and public comment required before establishing a
financial holding company.
Sec. 303. Public meetings for bank acquisitions and mergers.
Sec. 304. CRA examination schedule for small banks.
Sec. 305. CRA sunshine requirements.
Sec. 306. Continuing community reinvestment requirement for financial
holding companies.
Sec. 307. Changes in reporting requirements under the Home Mortgage
Disclosure Act of 1975.
SEC. 2. FINDINGS.
The Congress hereby finds as follows:
(1) It is necessary to increase homeownership and small business
ownership for low- and moderate-income borrowers and persons of color.
(2) The United States has an overall homeownership rate of 66.7 percent,
while Hispanic and African-American homeownership rates are 46.2 percent and
46.9 percent respectively.
(3) The homeownership rate in central cities is 50.3 percent, compared
to 73.5 percent for the suburbs.
(4) It is necessary to close the wealth gap in the United States and to
increase access to insurance products.
(5) In 1998, the median net worth for Hispanic, African-American, Asian,
and other minority families was $16,400, which was 17.3 percent of the
median net worth of $94,900 for nonhispanic white families.
(6) Families earning $10,000 to $25,000 had a median net worth of
$24,800 in 1998 but $31,000 in 1995.
(7) Research conducted by the chief economist of the National
Association of Insurance Commissioners found that after controlling for risk
of loss, a 10 percentage point increase in the number of minorities in a zip
code is associated with a 2 percentage point increase in the number of `FAIR
plans', which are government-sponsored insurance plans of last resort for
those who cannot obtain insurance in the private market.
(8) In order to increase access to credit, wealth and insurance, it is
necessary to modernize the Community Reinvestment Act of 1977 to reflect
shifting trends in the financial services industry.
(9) Currently, about 40 percent of the assets in the financial industry
reside in bank and thrifts and are covered by the Community Reinvestment Act
of 1977, down from about 60 percent in the early 1980s.
SEC. 3. PURPOSES.
The purposes of this Act are as follows:
(1) To enhance the availability of financial services to citizens of all
economic circumstances and in all geographic areas.
(2) To enhance the ability of financial institutions to meet the capital
and credit needs of all citizens and communities, including underserved
communities and populations.
(3) To ensure that community reinvestment keeps pace with the
affiliation of banks, securities firms, and other financial service
providers, as provided by the Gramm-Leach-Bliley Act.
TITLE I--MODERNIZATION OF COMMUNITY REINVESTMENT ACT OF 1977 AND
COMMUNITY SERVICE OBLIGATIONS.
SEC. 101. EXTENSION OF COMMUNITY REINVESTMENT OBLIGATIONS WITHIN A FINANCIAL
HOLDING COMPANY.
Section 4(l) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(l))
is amended by adding at the end the following new paragraph:
`(A) IN GENERAL- All nonbank affiliates of bank holding companies that
engage in lending or offer banking products or services shall
be subject to the Community Reinvestment Act of 1977 in accordance with this
paragraph and in the same manner as a regulated financial institution (as
defined in such Act) and the record of any such affiliate in meeting community
credit, investment, and consumer needs shall be taken into account by the
Federal regulatory agency with jurisdiction over the affiliate's bank holding
company in the course of reviewing the activities of the bank holding company or
any application by such affiliate.
`(B) BANKING PRODUCTS AND SERVICES DEFINED- For purposes of this
paragraph, the term `banking products and services' includes--
`(i) insured deposits (as defined in section 3 of the Federal
Deposit Insurance Act) and related deposit services;
`(ii) consumer loans and extensions of credit and the servicing such
loans and extensions of credit;
`(iii) loans to purchase, refinance, construct, improve, or repair
domestic residential housing or manufactured housing, including
single-family and multifamily residential housing loans and home-equity
loans, and the servicing of such loans;
`(iv) small business and commercial loans and the servicing of such
loans; and
`(v) checking accounts, savings accounts, and related accounts or
instruments, including accounts from which the owner may make
withdrawals by negotiable or transferable instruments for the purpose of
making payments to third parties.'.
SEC. 102. PROVISIONS RELATING TO IMPROVED RESPONSIVENESS OF INSURED
DEPOSITORY INSTITUTIONS TO COMMUNITY REINVESTMENT ACT OF 1977.
(a) RATING REQUIRED FOR EACH STATE, METROPOLITAN AREA, AND SERVICE AREA-
Section 807(b)(1) of the Community Reinvestment Act of 1977 (12 U.S.C.
2906(b)(1)) is amended by striking subparagraph (B) and inserting the
following new subparagraphs to read as follows:
`(B) INITIAL SEPARATE EVALUATION AND RATING FOR STATE, METROPOLITAN,
OTHER SERVICE AREAS REQUIRED- The information required by clauses (i) and
(ii) of subparagraph (A) with respect to any regulated financial
institution shall be presented separately, and an initial rating shall be
determined separately, for--
`(i) each metropolitan area in which the regulated financial
institution maintains 1 or more domestic branches;
`(ii) each State in which the regulated financial institution
maintains 1 or more domestic branches outside of a metropolitan area;
and
`(iii) each community in which the regulated financial institution
makes more than 0.5 percent of the total amount of loans.
`(C) CONTENT OF SEPARATE EVALUATION- A written evaluation to which
subparagraph (B) applies shall describe how the Federal financial
supervisory agency has performed the examination of the regulated
financial institution, including a list of the individual domestic
branches examined.
`(D) LOW AND HIGH SATISFACTORY RATINGS- In assigning ratings under
subparagraphs (A) and (B), a Federal financial supervisory agency may
assign a rating of `low satisfactory record of meeting community credit
needs' or `high satisfactory record of meeting community credit needs' in
lieu of the rating referred to in paragraph (2)(B).'.
(b) ADDITIONAL PERFORMANCE FACTORS- Section 804(a)(1) of the Community
Reinvestment Act of 1977 (12 U.S.C. 2903(a)(1)) is amended--
(1) by inserting `and neighborhoods of different racial characteristics'
after `low- and moderate-income neighborhoods'; and
(2) By inserting `, taking into account the institution's share of the
total amount of credit extended in neighborhoods of different racial and
income characteristics within such community' before the semicolon at the
end.
(c) TECHNICAL AND CONFORMING AMENDMENTS-
(1) Section 807(b)(1)(A)(iii) of the Community Reinvestment Act of 1977
(12 U.S.C. 2906(b)(1)(A)(iii)) is amended--
(A) by inserting `overall' after `the institution's'; and
(B) by inserting `, taking into account each of the initial ratings
determined under subparagraph (B) for each State, metropolitan, and
service area in which the institution makes more than 0.5 percent of the
total amount of loans' before the period at the end.
(2) Section 807 of the Community Reinvestment Act of 1977 (12 U.S.C.
2906) is amended--
(A) by striking subsection (d); and
(B) by redesignating subsection (e) as subsection (d).
SEC. 103. REDUCTION OF CRA RATING DUE TO PREDATORY LENDING AND OTHER
NEGATIVE CREDIT PRACTICES.
(a) IN GENERAL- Section 804 of the Community Reinvestment Act of 1977 (12
U.S.C. 2903) is amended by adding at the end the following new subsections:
`(d) TREATMENT OF PREDATORY LENDING AND OTHER DISCRIMINATORY CREDIT
PRACTICES- In the case of a regulated financial institution, or affiliate of
any such institution, which the appropriate Federal financial supervisory
agency determines has engaged in any credit practice which has a negative
impact on a community or neighborhood, such as predatory lending, or has
engaged in any other lending practice or service in a manner which unlawfully
discriminates against any person or against low- and moderate-income
neighborhoods, the agency--
`(1) may not take any such practice or service into account in assessing
the institution's record of
meeting the credit needs of its entire community; and
`(2) shall reduce the rating that would otherwise obtain under section
807 with respect to such institution after consideration of the extent of
such negative or discriminatory practice or service.
`(e) MAINTENANCE OF CERTAIN RECORDS- For purposes of determining whether a
regulated financial institution engages in any practice or service described
in subsection (d), an appropriate Federal financial supervisory agency may
require, by regulation, regulated financial institutions to maintain records
of the terms and conditions of credit extended by the institution or the terms
and conditions at which credit was offered even though no credit was
extended.'.
SEC. 104. RESPONSIVENESS TO COMMUNITY NEEDS FOR SECURITIES AND INVESTMENT
SERVICES.
(a) AFFIRMATIVE OBLIGATION- The purpose of this section is to recognize
that each securities company has, with respect to each community comprising an
assessment area of such company, a continuing and affirmative obligation to
meet the need for financial services in such communities, including the needs
of low- and moderate-income neighborhoods and persons of modest means.
(b) DEFINITIONS- For purposes of this section, the following definitions
shall apply:
(1) ASSESSMENT AREA- The term `assessment area' means, with respect to a
securities company, each community in which such company--
(A) maintains a retail office or is represented by an agent;
or
(B) has not less than 0.5 percent of the total market in
securities.
(2) COMMUNITY DEVELOPMENT INVESTMENT- The term `community development
investment' means investment in activities that revitalize and stabilize
low- and moderate-income neighborhoods and directly benefit low- and
moderate-income individuals, including investment in affordable housing,
community services, small-business development, and economic
development.
(3) SECURITIES COMPANY- The term `securities company' means any person
who is--
(A) a broker or dealer that is registered under the Securities
Exchange Act of 1934;
(B) a registered investment adviser, properly registered by or on
behalf of either the Securities and Exchange Commission, with respect to
the investment advisory activities of such investment adviser and
activities incidental to such investment advisory activities; or
(C) an investment company that is registered under the Investment
Company Act of 1940.
(1) IN GENERAL- The Securities and Exchange Commission, in consultation
with the Secretary of the Treasury, shall develop a program to ensure that
securities companies meet the obligations described in subsection (a) and
the requirements of the program under this subsection.
(2) FACTORS TO BE INCLUDED-
(A) CUSTOMER EVALUATION- The program shall include, as appropriate, a
method for evaluating a securities company's record of helping to meet the
securities investment needs of its assessment area, including--
(i) the number and distribution of customers throughout the
community, including low- and moderate-income neighborhoods and the
dollar amounts of the investments made by such customers;
and
(ii) the extent to which the company has adopted innovative and
flexible marketing methods, such as low minimum amounts to open accounts
and low transaction fees, that facilitate the sale of securities to low-
and moderate-income customers.
(B) COMMUNITY DEVELOPMENT INVESTMENTS- The program shall include, as
appropriate, a method for evaluating a securities company's record of
community development investment in each assessment area,
including--
(i) the number and dollar amount of community development
investments in the assessment area; and
(ii) the responsiveness of the securities company, through community
development investments, to the credit, capital, and community
development needs of the assessment area, including low- and
moderate-income neighborhoods.
(C) PERFORMANCE- The program shall include, as appropriate, a method
for evaluating a securities company's record of providing access to
securities services in each assessment area, including--
(i) the company's record of opening or closing retail offices in the
assessment area;
(ii) the extent to which the securities company has adopted
effective alternate marketing systems in low- and moderate-income
neighborhoods, such as providing the means for low- and moderate-income
individuals to gain electronic access to the company at community
centers and similar locations in low- and moderate-income neighborhoods;
and
(iii) the extent to which the securities company has provided
investment education and other investment services, such as financial
counseling classes, in low- and moderate-income neighborhoods in the
assessment area.
(A) IN GENERAL- The program shall provide for--
(i) an evaluation and an initial rating of the performance of each
securities company in meeting the obligation established
under subsection (a) in each assessment area of the company; and
(ii) an overall rating, based on the initial ratings pursuant to
clause (i) of the overall achievement of the securities company in
meeting such obligation.
(B) TREATMENT OF INVESTMENT PRACTICES WITH NEGATIVE IMPACTS- In the
case of any securities company which the Securities and Exchange
Commission determines has engaged in securities and investment practices
which have a negative impact on any assessment area of the company or has
otherwise engaged in any practice or provided any service in a manner
which unlawfully discriminates against any person or against low- and
moderate-income neighborhoods, the Commission--
(i) may not take any such practice into account in assessing the
extent to which such company has met its obligation under subsection
(a); and
(ii) shall reduce the rating that would otherwise obtain under
subparagraph (A) with respect to such company, after considering the
extent of such negative or discriminatory practice or
service.'.
(C) MAINTENANCE OF CERTAIN RECORDS- For purposes of determining
whether a securities company engages in any practice or service described
in subparagraph (B), the Securities and Exchange Commission may require,
by regulation, securities companies to maintain records of the terms and
conditions at which securities products and services were provided by the
company and the terms and conditions at which such securities products or
services were offered by the company even though no transaction
occurred.
(4) CONSIDERATION OF SECURITIES COMPANY RATING- Whenever the Commission
considers an application to the Commission by a securities company, the
Securities and Exchange Commission shall--
(A) take into account the overall rating of the securities company
under this subsection;
(B) provide opportunity for comment on such rating; and
(C) take into account changes in the community reinvestment
performance of such company since the last overall rating and the likely
future community reinvestment performance of such company.
(d) RELEASE OF DATA- Information collected by the Securities and Exchange
Commission in connection with the program under subsection (c) shall be made
publicly available by the Commission in a format similar to the format for
public disclosure of information under the Home Mortgage Disclosure Act of
1975, as determined to be appropriate by the Commission.
SEC. 105. RESPONSIVENESS TO COMMUNITY NEEDS FOR MORTGAGES AND MORTGAGE
RELATED SERVICES BY MORTGAGE BANKS.
(a) AFFIRMATIVE OBLIGATION- Each mortgage bank shall have, with respect to
each community comprising an assessment area of such mortgage bank, a
continuing and affirmative obligation to meet the mortgage credit and mortgage
service needs of such communities, including extensions of credit in low- and
moderate-income neighborhoods of such communities.
(b) DEFINITIONS- For purposes of this section, the following definitions
shall apply:
(1) ASSESSMENT AREA- The term `assessment area' means, with respect to a
mortgage bank, each community in which such company--
(A) maintains a retail office or is represented by an agent;
or
(B) has not less than 0.5 percent of the total market in
housing-related loans.
(2) COMMUNITY DEVELOPMENT INVESTMENT- The term `community development
investment' means investment in activities that revitalize and stabilize
low- and moderate-income neighborhoods and directly benefit low- and
moderate-income individuals, including investment in affordable housing,
community services, small-business development, and economic
development.
(3) MORTGAGE BANK- The term `mortgage bank' means any lender who does
not accept deposits (as defined in section 3 of the Federal Deposit
Insurance Act) and originates housing-related loans.
(4) SECRETARY- The term `Secretary' means the Secretary of Housing and
Urban Development.
(1) IN GENERAL- The Secretary, in consultation with the Secretary of the
Treasury, shall develop a program to ensure that mortgage banks meet the
obligations described in subsection (a) and the requirements of the program
under this subsection.
(2) FACTORS TO BE INCLUDED-
(A) CUSTOMER EVALUATION- The program shall include, as appropriate, a
method for evaluating a mortgage bank's record of helping to meet the
mortgage credit and mortgage service needs of its assessment area,
including--
(i) the number and distribution of customers throughout the
community, including low- and moderate-income neighborhoods and the
dollar amounts of the mortgage credit extended to such customers by the
mortgage bank; and
(ii) the extent to which the mortgage bank has adopted innovative
and flexible marketing methods that facilitate the extension of mortgage
credit on a nondiscriminatory basis to low- and moderate-income
customers.
(B) COMMUNITY DEVELOPMENT INVESTMENTS- The program shall include, as
appropriate, a method for evaluating a mortgage bank's record of community
development investment in each assessment area, including--
(i) the number and dollar amount of community development
investments in the assessment area; and
(ii) the responsiveness of the mortgage bank, through community
development investments, to the credit, capital, and community
development needs of the assessment area, including low- and
moderate-income neighborhoods.
(C) PERFORMANCE- The program shall include, as appropriate, a method
for evaluating a mortgage bank's record of providing access to mortgage
credit and mortgage services in each assessment area, including--
(i) the bank's record of opening or closing retail offices in the
assessment area;
(ii) the extent to which the mortgage bank has adopted effective
alternate marketing systems in low- and moderate-income neighborhoods,
such as providing the means for low- and moderate-income individuals to
gain electronic access to the mortgage bank at community centers and
similar locations in low- and moderate-income neighborhoods;
(iii) the extent to which the mortgage bank has provided home
purchaser and home owner education and other counseling services, such
as financial counseling classes, in low- and moderate-income
neighborhoods in the assessment area.
(iv) the mortgage bank's market share in neighborhoods of different
racial and income characteristics;
(v) the number of applications received from and loans made to
minorities and low- and moderate-income persons;
(vi) a comparison of the rate at which the mortgage bank rejects
applications from minority and white applicants; and
(vii) any evidence of illegal discriminatory credit practices,
including prescreening, or offering less favorable loan products to
applicants of different racial backgrounds.
(A) IN GENERAL- The program shall provide for--
(i) an evaluation and an initial rating of the performance of each
mortgage bank in meeting the obligation established under subsection (a)
in each assessment area of the bank; and
(ii) an overall rating, based on the initial ratings pursuant to
clause (i) of the overall achievement of the mortgage bank in meeting
such obligation.
(B) TREATMENT OF CREDIT PRACTICES WITH NEGATIVE IMPACTS- In the case
of any mortgage bank which the Secretary determines has engaged in credit
practices which have a negative impact on any individuals or any
assessment area of the company, such as prescreening or predatory mortgage
lending, or has otherwise engaged in any practice or provided any service
in a manner which unlawfully discriminates against any person or against
low- and moderate-income neighborhoods, the Commission--
(i) may not take any such practice into account in assessing the
extent to which such company has met its obligation under subsection
(a); and
(ii) shall reduce the rating that would otherwise obtain under
subparagraph (A) with respect to such company, after considering the
extent of such negative or discriminatory practice or
service.
(C) MAINTENANCE OF CERTAIN RECORDS- For purposes of determining
whether a mortgage bank engages in any practice or service described in
subparagraph (B), the Secretary may require, by regulation, mortgage banks
to maintain records of the terms and conditions at which mortgage loans
and other services were provided by the company and the terms and
conditions at which such mortgage loans and other products and services
were offered by the bank even though no transaction occurred.
(d) CONSIDERATION OF MORTGAGE BANK'S RATING-
(1) REVIEW OF RATING- On an annual basis or at such shorter time-period
as the Secretary may determine to be appropriate, the Secretary
shall--
(A) review the overall rating of each mortgage bank under this
subsection;
(B) provide opportunity for comment on such rating; and
(C) review changes in the community reinvestment performance of such
mortgage bank since the last overall rating and the likely future
community reinvestment performance of such mortgage bank.
(2) NOTIFICATION OF UNSATISFACTORY PERFORMANCE- If, in conjunction with
a review pursuant to paragraph (1), the Secretary determines that a mortgage
bank has failed to meet the bank's obligations described in subsection (a)
and the requirements of the program under this subsection or failed to make
satisfactory improvements in meeting such obligations and requirements, the
Secretary shall notify the mortgage bank of such determination, describing
the conditions giving rise to the notice.
(3) AGREEMENT TO CORRECT CONDITIONS REQUIRED- Not later than 45 days
after the date of receipt by a mortgage bank of a notice given under
paragraph (2) (or such additional period as the Secretary may permit), the
mortgage bank shall execute an agreement with the Secretary to comply with
the obligations and requirements applicable to the mortgage bank under this
section.
(4) SECRETARY MAY IMPOSE LIMITATIONS- Until the conditions described in
a notice to a mortgage bank under paragraph (2) are corrected, the Secretary
may impose such limitations on the extent to which mortgage loans
originated, held, or serviced by such mortgage bank may be acquired by the
Federal Home Mortgage Corporation or the Federal National Mortgage
Association as the Secretary determines to be appropriate under the
circumstances and consistent with the purposes of this section.
(5) FAILURE TO CORRECT- If the conditions described in a notice to a
mortgage bank under paragraph (2) are not corrected within 180 days after
the date of receipt by the mortgage bank of a notice under paragraph (2),
the Secretary shall prohibit the Federal Home Mortgage Corporation and the
Federal National Mortgage Association from acquiring any mortgage loan
originated, held, or serviced by such mortgage bank.
(6) CONSULTATION- In taking any action under this subsection, the
Secretary shall consult with all relevant Federal and State regulatory
agencies and authorities.
SEC. 106. RESPONSIVENESS TO COMMUNITY NEEDS FOR INSURANCE SERVICES.
(a) AFFIRMATIVE OBLIGATION- The purpose of this section is to recognize
that each insurance company has, with respect to each community comprising an
assessment area of such company, a continuing and affirmative obligation to
meet the need for insurance services in such communities, including the needs
of low- and moderate-income neighborhoods and persons of modest means.
(b) DEFINITIONS- For purposes of this section, the following definitions
shall apply:
(1) ASSESSMENT AREA- The term `assessment area' means, with respect to
an insurance company, each community in which such company--
(A) maintains a retail office or is represented by an agent;
or
(B) has not less than 0.5 percent of the total market in
insurance.
(2) COMMUNITY DEVELOPMENT INVESTMENT- The term `community development
investment' means investment in activities that revitalize and stabilize
low- and moderate-income neighborhoods and directly benefit low- and
moderate-income individuals, including investment in affordable housing,
community services, small-business development, and economic
development.
(3) INSURANCE COMPANY- The term `insurance company' includes any person
engaged in the business of insurance to the extent of such activities.
(4) SECRETARY- The term `Secretary' means the Secretary of Housing and
Urban Development.
(1) IN GENERAL- The Secretary, in consultation with the Secretary of the
Treasury, shall develop a program to ensure that insurance companies meet
the obligations described in subsection (a) and the requirements of the
program under this subsection.
(2) FACTORS TO BE INCLUDED-
(A) CUSTOMER EVALUATION- The program shall include, as appropriate, a
method for evaluating an insurance company's record of helping to meet the
insurance needs of its assessment area, including--
(i) the number and distribution of customers throughout the
community, including low- and moderate-income neighborhoods and the
dollar amounts of the insurance policies held by such customers;
and
(ii) the extent to which the company has adopted innovative and
flexible marketing methods that facilitate the sale of insurance on a
nondiscriminatory basis to low- and moderate-income
customers.
(B) COMMUNITY DEVELOPMENT INVESTMENTS- The program shall include, as
appropriate, a method for evaluating an insurance company's record of
community development investment in each assessment area,
including--
(i) the number and dollar amount of community development
investments in the assessment area; and
(ii) the responsiveness of the insurance company, through community
development investments, to the credit, capital, and community
development needs of the assessment area, including low- and
moderate-income neighborhoods.
(C) PERFORMANCE- The program shall include, as appropriate, a method
for evaluating an insurance company's record of providing access to
insurance services in each assessment area, including--
(i) the company's record of opening or closing retail offices or
affiliating with agents in the assessment area;
(ii) the extent to which the insurance company has adopted effective
alternate marketing systems in low- and moderate-income neighborhoods,
such as providing the means for low- and moderate-income individuals to
gain electronic access to the company at community centers and similar
locations in low- and moderate-income neighborhoods; and
(iii) the extent to which the insurance company has provided
insurance education and other insurance services, such as financial
counseling classes, in low- and moderate-income neighborhoods in the
assessment area.
(3) RATING- The program shall provide for--
(i) an evaluation and an initial rating of the performance of each
insurance company in meeting the obligation established under subsection
(a) in each assessment area of the company; and
(ii) an overall rating, based on the initial ratings pursuant to
clause (i) of the overall achievement of the insurance company in
meeting such obligation.
(B) TREATMENT OF INSURANCE PRACTICES WITH NEGATIVE IMPACTS- In the
case of any insurance company which the Secretary determines has engaged
in practices which have a negative impact on any assessment area of the
company or has otherwise engaged in any practice or provided any service
in a manner which unlawfully discriminates against any person or against
low- and moderate-income neighborhoods, the Commission--
(i) may not take any such practice into account in assessing the
extent to which such company has met its obligation under subsection
(a); and
(ii) shall reduce the rating that would otherwise obtain under
subparagraph (A) with respect to such company after consideration of the
extent of such negative or discriminatory practice or
service.
(C) MAINTENANCE OF CERTAIN RECORDS- For purposes of determining
whether an insurance company engages in any practice or service described
in subparagraph (B), the Secretary may require, by regulation, insurance
companies to maintain records of the terms and conditions at which
insurance products and services were provided by the company and the terms
and conditions at which such insurance products or services were offered
by the company even though no transaction occurred.
(d) CONSIDERATION OF INSURANCE COMPANY'S RATING-
(1) REVIEW OF RATING- On an annual basis or at such shorter time-period
as the Secretary may determine to be appropriate, the Secretary
shall--
(A) review the overall rating of each insurance company under this
subsection;
(B) provide opportunity for comment on such rating; and
(C) review changes in the community reinvestment performance of such
insurance company since the last overall rating and the likely future
community reinvestment performance of such insurance company.
(2) NOTIFICATION OF UNSATISFACTORY PERFORMANCE- If, in conjunction with
a review pursuant to paragraph (1), the Secretary determines that an
insurance company has failed to meet the company's obligations described in
subsection (a) and the requirements of the program under this subsection or
failed to make satisfactory improvements in meeting such obligations and
requirements, the Secretary shall notify the insurance company and each
appropriate State insurance regulator of such determination, describing the
conditions giving rise to the notice.
(3) AGREEMENT TO CORRECT CONDITIONS REQUIRED- Not later than 45 days
after the date of receipt by an insurance company of a notice given under
paragraph (2) (or such additional period as the Secretary may permit), the
insurance company shall execute an agreement with the Secretary to comply
with the obligations and requirements applicable to the insurance company
under this section.
(4) SECRETARY MAY IMPOSE LIMITATIONS- Until the conditions described in
a notice to an insurance company under paragraph (2) are corrected, the
Secretary may impose such limitations on the extent to which mortgage loans
secured by real property insured by such insurance company may be acquired
by the Federal Home Mortgage Corporation or the Federal National Mortgage
Association as the Secretary determines to be appropriate under the
circumstances and consistent with the purposes of this section.
(5) FAILURE TO CORRECT- If the conditions described in a notice to a
mortgage bank under paragraph (2) are not corrected within 180 days after
the date of receipt by the mortgage bank of a notice under paragraph (2),
the Secretary shall--
(A) prohibit the Federal Home Mortgage Corporation and the Federal
National Mortgage Association from acquiring any mortgage loan secured by
real property insured by such insurance company;
(B) publish notice of such failure to correct in the Federal Register;
and
(C) notify each appropriate State insurance regulator of such failure
to correct.
(6) CONSULTATION- In taking any action under this subsection, the
Secretary shall consult with all relevant Federal and State regulatory
agencies and authorities.
(e) HEALTH AND LIFE INSURANCE LINES NOT INCLUDED- This section and section
107 shall not apply to life or health lines of insurance or to insurance
companies that provide only life or health insurance products.
SEC. 107. SATISFACTORY RATINGS REQUIRED BY SECURITIES COMPANY, MORTGAGE
BANK, AND INSURANCE COMPANY AFFILIATES OF FINANCIAL HOLDING COMPANIES.
(a) IN GENERAL- Section 4(l)(1) of the Bank Holding Company Act of 1956
(12 U.S.C. 1843(l)(1)) is amended--
(1) by striking `and' at the end of subparagraph (B);
(2) by redesignating subparagraph (C) as subparagraph (F); and
(3) by inserting after subparagraph (B) the following new
subparagraphs:
`(C) all of the securities company affiliates of the bank holding
company have a satisfactory rating of meeting community needs under
section 104 of the Community Reinvestment Modernization Act of
2001;
`(D) all of the mortgage bank affiliates of the bank holding company
have a satisfactory rating of meeting community needs under section 105 of
the Community Reinvestment Modernization Act of 2001;
`(E) all of the insurance company affiliates of the bank holding
company have a satisfactory rating of meeting community needs under
section 106 of the Community Reinvestment Modernization Act of 2001;
and'.
(b) TECHNICAL AND CONFORMING AMENDMENTS-
(1) Section 5(a) of the Bank Holding Company Act of 1956 (12 U.S.C.
1844(a)) is amended by striking `section 4(l)(1)(C)' and inserting `section
4(l)(1)(F)'.
(2) Section 8(c)(3)(A) of the International Banking Act of 1978 (12
U.S.C. 3106(c)(3)(A)) is amended by striking `section 4(l)(1)(C)' and
inserting `section 4(l)(1)(F)'.
TITLE II--DATA DISCLOSURE REQUIREMENTS
Subtitle A--Disclosure of Insurance Availability and Insurer Investment
Information
SEC. 201. SHORT TITLE.
This title may be cited as the `Insurance Disclosure Act'.
SEC. 202. ESTABLISHMENT OF GENERAL REQUIREMENTS TO SUBMIT INFORMATION.
(a) IN GENERAL- The Secretary of Housing and Urban Development shall, by
regulation, establish requirements for insurers to compile and submit
information to the Secretary for each annual reporting period, in accordance
with this title.
(b) CONSULTATION- In establishing the requirements for the submission of
information under this title, the Secretary shall consult with Federal
agencies having appropriate expertise, the National Association of Insurance
Commissioners, State insurance regulators, statistical agents, representatives
of small businesses, representatives of insurance agents (including minority
insurance agents), representatives of property and casualty insurers, and
community, consumer, and civil rights organizations, as appropriate.
(c) HEALTH AND LIFE INSURANCE LINES NOT INCLUDED- This title shall not
apply to life or health lines of insurance or to insurers that provide only
life or health insurance products.
SEC. 203. REPORTING OF NONCOMMERCIAL INSURANCE INFORMATION.
(a) IN GENERAL- The requirements established pursuant to section 202 to
carry out this section shall--
(1) be designed to ensure that information is submitted and compiled
under this section as may be necessary to permit analysis and comparison
of--
(A) the availability and affordability of insurance coverage and the
quality or type of insurance coverage, by census tract, including low- and
moderate-income neighborhoods, and the race and gender of policyholders;
and
(B) the location of the principal place of business of insurance
agents and the race of such agents, and the location of the principal
place of business of insurance agents terminated and the race of such
agents, by census tract, including low- and moderate-income neighborhoods;
and
(2) specify the data elements required to be reported under this section
and require uniformity in the definitions of the data elements.
(1) AGGREGATE INFORMATION- The regulations issued under section 203
shall require that each insurer for a designated line of insurance under
subparagraph (A) or (B) of section 210(a)(1) shall compile and submit to the
Secretary, for each annual reporting period--
(A) the total number of policies issued in such line, total exposures
covered by such policies, and total amount of premiums for such policies,
by designated line and by census tract, including low- and moderate-income
neighborhoods, in which the insured risk is located;
(B) the total number of cancellations and nonrenewals (expressed in
terms of policies or exposures, as determined by the Secretary), by
designated line and by census tract, including low- and moderate-income
neighborhoods, in which the insured risk is located;
(C) the total number and racial characteristics of--
(i) licensed agents of such insurer selling insurance in the
designated line, by census tract, including low- and moderate-income
neighborhoods, in which the agent's principal place of business is
located; and
(ii) such agents who were terminated by the insurer, by census tract
in which the agent's principal place of business was located;
and
(D) for such designated line of insurance, information that will
enable the Secretary to assess the aggregate loss experience for the
insurer, by census tract, including low- and moderate-income
neighborhoods, in which the insured risk is located.
(2) SPECIFICATION OF INFORMATION FOR ITEMIZED DISCLOSURE-
(A) IN GENERAL- The regulations issued under section 202 regarding
annual reporting requirements for insurers for a designated line of
insurance under subparagraph (A) or (B) of section 210(a)(1) shall, with
respect to policies issued under the designated line or exposure units
covered by such policies, as determined by the Secretary--
(i) specify the data elements that shall be submitted;
(ii) provide for the submission of information on an individual
insurer basis;
(iii) provide for the submission of the information with the least
burden on insurers, particularly small insurers, and insurance
agents;
(iv) take into account existing statistical reporting systems in the
insurance industry;
(v) require reporting by census tract, including low- and
moderate-income neighborhoods, in which the insured risk is
located;
(vi) provide for the submission of information that--
(I) identifies the designated line, and subline or coverage type;
and
(II) where applicable, distinguishes between the type of policy
under each such subline or coverage type that provides full
replacement cost and all other bases for computing claims, such as
actual cash value and fair market value;
(vii) provide for the submission of information that distinguishes
policies written in a residual market from policies written in the
voluntary market;
(I) whether information shall be submitted on the basis of policy
or exposure unit; and
(II) whether information, when submitted, shall be aggregated by
like policyholders with like policies, except that the Secretary shall
not permit such aggregation if it will adversely affect the accuracy
of the information reported;
(ix) in addition to reporting approvals, provide for the submission
of information regarding the number of denials, cancellations, and
nonrenewals of policies under the designated line by census tract in
which the insured risk is located, by race, gender, and income of the
policyholder (if known to the insurer), and by whether the policy was
issued in a voluntary or residual market; and
(x) provide for the submission of information on the racial
characteristics, gender, and income levels of policyholders at the level
of detail comparable to that required by the Home Mortgage Disclosure
Act of 1975 (and the regulations issued thereunder).
(B) RULES REGARDING OBTAINING RACIAL INFORMATION-
(i) WRITING REQUIREMENT- The information specified in subparagraph
(A)(x) relating to the racial characteristics of applicants for, and
policyholders of, insurance shall be obtained only in accordance with
the procedures for requesting and recording racial information
established in Regulation C of the Board of Governors of the Federal
Reserve System under the Home Mortgage Disclosure Act of 1975, as in
effect on the date of the enactment of this Act.
(ii) NOTICE OF VOLUNTARY NATURE OF QUESTION- Any such written
question shall clearly indicate that a response to the question is
voluntary on the part of the applicant or policyholder, but encouraged,
and that the information is being requested by the Federal Government to
monitor the availability and affordability of insurance.
(iii) PROVISION OF INFORMATION BY AGENT OR INSURER- If an applicant
for, or policyholder of, insurance declines to provide such information,
the agent or insurer for such insurance may provide such
information.
(3) RULE FOR REPORTING BY INSURERS- An insurer for a designated line
shall submit--
(A) information required under subparagraphs (A), (B), and (D) of
paragraph (1) and information required pursuant to paragraph (2), for
risks insured under such line that are located within each census tract
any part of which is located in a State for which the insurer is offering
the designated line; and
(B) information required under paragraph (1)(C) for agents within such
census tracts.
SEC. 204. REPORTING OF RURAL INSURANCE INFORMATION.
(a) IN GENERAL- The Secretary shall, by regulation, establish requirements
for insurers to annually compile and submit to the Secretary information
concerning the availability, affordability, and quality or type of insurance
in rural areas and to small businesses.
(b) CONTENT- The regulations under this section shall provide that the
information compiled and submitted under this section shall be compiled and
submitted on the basis of each census tract in which the insured risks are
located.
SEC. 205. WAIVER OF REPORTING REQUIREMENTS.
(a) WAIVER FOR STATES COLLECTING EQUIVALENT INFORMATION-
(1) AUTHORITY- Subject to the requirements under this section, the
Secretary shall provide, by regulation, for the waiver of the applicability
of the provisions of sections 203 and 204 for each insurer transacting
business within a State referred to in paragraph (2), but only with respect
to information required to be submitted under such sections that relates to
agents or insured risks located in the State.
(2) REQUIREMENTS- The Secretary may make a waiver pursuant to paragraph
(1) only with respect to a State that the Secretary determines has in effect
a law or other requirement that--
(A) requires insurers to submit to the State information that is at
least the same or equivalent to the information that is required to be
submitted to the Secretary pursuant to sections 203 and 204;
(B) provides for adequate enforcement of such law or other
requirements; and
(C) provides for the same annual reporting period used by the
Secretary under this title and for submission of the information to
the
Secretary in a timely fashion, as determined by the Secretary.
(3) DURATION- A waiver pursuant to paragraph (1) may remain in effect
only during the period for which the State law or other requirement required
under paragraph (2) remains in effect.
(b) MULTIPLE-STATE AREAS- In the case of any census tract that contains
area within (1) any State for
which a waiver has been made pursuant to subsection (a), and (2) any State
for which such a waiver has not been made, the provisions of this title
requiring submission of information to the Secretary regarding such tract or
area shall be considered to apply only to the portion that is located within the
State for which such a waiver has not been made.
(c) AUTHORITY FOR SECRETARY TO OBTAIN INFORMATION DIRECTLY FROM INSURERS-
If the State for which a waiver has been made pursuant to subsection (a) does
not submit to the Secretary the information required under subsection
(a)(2)(A) or submits information that is not complete, the Secretary shall
require the insurers transacting business within the State to submit such
information directly to the Secretary.
SEC. 206. REPORTING BY PRIVATE MORTGAGE INSURERS.
(a) HMDA REPORTING- On an annual basis, the Financial Institutions
Examination Council shall determine the extent to which each insurer providing
private mortgage insurance is making available to the public and submitting to
the appropriate agency information regarding such insurance that is equivalent
to the information regarding mortgages required to be reported under the Home
Mortgage Disclosure Act of 1975.
(b) REPORTING UNDER THIS TITLE-
(1) CERTIFICATION OF NONCOMPLIANCE- If, for any annual period referred
to in subsection (a), such Council determines that any insurer providing
private mortgage insurance is not making available to the public or
submitting the information referred to in subsection (a) or that the
information made available or submitted is not equivalent information as
described in subsection (a), then the Council shall notify the insurer of
such noncompliance. If, after the expiration of a reasonable period of time,
the insurer has not remedied such noncompliance to the satisfaction of the
Council, then the Council shall immediately certify such noncompliance to
the Secretary.
(2) REQUIREMENT- Upon the receipt of a certification under paragraph
(1), the Secretary shall, by order, require such insurer to submit to the
Secretary information regarding such insurance that complies with the
provisions of section 203 that are applicable to such insurance.
SEC. 207. REPORTING OF INFORMATION REGARDING INVESTMENTS BY INSURERS.
(a) IN GENERAL- The Secretary of Housing and Urban Development shall, by
regulation, require that each insurer that makes an investment in a property
or business shall compile and submit to the Secretary for each annual
reporting period, the following information:
(A) COMMERCIAL REAL ESTATE LOANS- The total number of loans for the
purchase of commercial real estate made by the insurer, the aggregate
amount of such loans, and the amount of each such loan, by census tract,
including low- and moderate-income neighborhoods, in which the real estate
for which the loan was made is located.
(B) SINGLE-FAMILY MORTGAGES- The total number of mortgage loans for
the purchase of 1- to 4-family dwellings made by the insurer, the
aggregate amount of such loans, and the amount of each such loan, by
census tract, including low- and moderate-income neighborhoods, in which
the dwelling for which the loan was made is located, which information
shall be disaggregated by racial characteristics, income level, and gender
of the borrower under the loan.
(C) COMMERCIAL AND INDUSTRIAL LOANS- The total number of commercial
and industrial loans made by the insurer, the aggregate amount of such
loans, and the amount of each such loan, by census tract, including low-
and moderate-income neighborhoods, in which the property or business
involved in the loan is located, which information shall be disaggregated
by the size of business of the borrower under the loan and by the
ownership characteristic of the business, which shall be classified as
either minority-owned, women-owned, or otherwise-owned.
(A) COMMERCIAL REAL ESTATE LOANS- The total number of loans for the
purchase of commercial real estate purchased by the insurer, the aggregate
amount of such loans, and the amount of each such loan, by census tract,
including low- and moderate-income neighborhoods, in which the real estate
for which the loan was made is located.
(B) SINGLE-FAMILY MORTGAGES- The total number of mortgage loans for
the purchase of 1- to 4-family dwellings purchased by the insurer, the
aggregate amount of such loans, and the amount of each such loan, by
census tract, including low- and moderate-income neighborhoods, in which
the dwelling for which the loan was made is located, which information
shall be disaggregated by racial characteristics, income level, and gender
of the borrower under the loan.
(C) COMMERCIAL AND INDUSTRIAL LOANS- The total number of commercial
and industrial loans purchased by the insurer, the aggregate amount of
such loans, and the amount of each such loan, by census tract, including
low- and moderate-income neighborhoods, in which the property or business
involved in the loan is located, which information shall be disaggregated
by the size of business of the borrower under the loan and by the
ownership characteristic of the business, which shall
be classified as either minority-owned, women-owned, or otherwise-owned.
(3) OTHER INVESTMENTS- For such other investments made by the insurer as
the Secretary may designate pursuant to subsection (b), the total number of
such investments, the aggregate amount of such investments, and the amount
of each such investment, by census tract, including low- and moderate-income
neighborhoods, in which the property
or business involved in the investment is located, as determined by the
Secretary, which information shall be disaggregated by the size of business of
the borrower under the loan and by the ownership characteristic of the business,
which shall be classified as either minority-owned, women-owned, or
otherwise-owned.
(b) DESIGNATION OF OTHER INVESTMENTS-
(1) IN GENERAL- For purposes of subsection (a)(3), the Secretary may
designate activities and investments other than the investments described in
paragraphs (1) and (2) of subsection (a) for which insurers shall compile
and submit information under this section.
(2) REQUIREMENT- In making designations under this subsection, the
Secretary shall designate (A) activities and investments that significantly
benefit low- and moderate-income families and persons, small businesses in
distressed communities, or minority- or women-owned businesses, and (B)
activities and investments that contribute to the creation of jobs and
economic development of distressed communities.
(3) CONSIDERATIONS- The Secretary shall specifically consider for
designation under this subsection investments in community development
financial institutions, community development corporations, State-issued
bonds, and securities backed by State development funds.
(c) SIZE OF BUSINESS- The Secretary shall, by regulation, establish
various categories of the sizes of businesses, for purposes of disaggregating
information under paragraphs (1)(C), (2)(C), and (3) of subsection (a) by
various sizes of businesses.
SEC. 208. SUBMISSION OF INFORMATION TO SECRETARY AND MAINTENANCE OF
INFORMATION.
(a) PERIOD OF MAINTENANCE- Each insurer required by this title to compile
and submit information to the Secretary shall maintain such information for
the 3-year period beginning upon the conclusion of the annual reporting period
to which such information relates. The Secretary shall maintain any
information submitted to the Secretary for such period as the Secretary
considers appropriate and feasible to carry out the purposes of this title and
to allow for historical analysis and comparison of the information.
(b) SUBMISSION- The Secretary shall issue regulations prescribing a
standard schedule (taking into consideration the provisions of section
209(a)), format, and method for submitting information under this title to the
Secretary. The format and method of submitting the information shall
facilitate and encourage the submission in a form readable by a computer. Any
insurer submitting information to the Secretary may submit in writing to the
Secretary any additional information or explanations that the insurer
considers relevant to the decision by the insurer to sell insurance.
SEC. 209. AVAILABILITY AND ACCESS SYSTEM.
(a) AVAILABILITY TO PUBLIC-
(1) IN GENERAL- The Secretary shall maintain and make available to the
public, in accordance with the requirements of this section, any information
submitted to the Secretary under this title and any information compiled by
the Secretary under this title.
(2) TIMING- The Secretary shall make such information publicly available
on a timetable determined by the Secretary, but not later than 9 months
after the conclusion of the annual reporting period to which the information
relates, except that such information shall not be made available to the
public until it is available in its entirety unless not all the information
required to be reported is available by such date.
(b) PUBLIC ACCESS SYSTEM-
(1) IMPLEMENTATION- The Secretary shall implement a system to facilitate
access to any information required to be made available to the public under
this title.
(2) BASES OF AVAILABILITY- The system shall provide access in the
following manners:
(A) ACCESS TO ITEMIZED INFORMATION- With respect to information
submitted under by insurers, on the basis of the insurer submitting the
information, on the basis of the census tract, including low- and
moderate-income neighborhoods, and on any other basis the Secretary
considers feasible and appropriate.
(B) ACCESS TO AGGREGATE INFORMATION- With respect to aggregate
information compiled by the Secretary, on the basis of (i) the insurer
submitting the information, and (ii) the census tract, including low- and
moderate-income neighborhoods, and on any other basis the Secretary
considers feasible and appropriate.
(c) PROTECTIONS REGARDING LOSS INFORMATION-
(1) PROHIBITION OF DISCLOSURE OF LOSS INFORMATION- Notwithstanding any
other provision of this title, the Secretary may not make available to the
public or otherwise disclose any information submitted under this title
regarding the amount or number of claims paid by any insurer, the amount of
losses of any insurer, or the loss experience for any insurer, except (A) in
the form of a loss ratio (expressing the relationship of claims paid to
premiums) made available or disclosed in compliance with the provisions of
paragraph (2), or (B) as provided in paragraph (3).
(2) PROTECTION OF IDENTITY OF INSURER- In making available to the public
or otherwise disclosing a loss ratio for an insurer--
(A) the Secretary may not identify the insurer to which the loss ratio
relates; and
(B) the Secretary may disclose the loss ratio only in a manner that
does not allow any party to determine the identity of the specific insurer
to which the loss ratio relates, except parties having access to
information under paragraph (3).
(3) CONFIDENTIALITY OF INFORMATION DISCLOSED TO GOVERNMENTAL AGENCIES-
The Secretary may make information referred to in paragraph (1) and the
identity of the specific insurer to
which such information relates available to any Federal entity and any State
agency responsible for regulating insurance in a State and may otherwise
disclose such information to any such entity or agency, but only to the extent
such entity or agency agrees not to make any such information available or
disclose such information to any other person.
SEC. 210. DESIGNATIONS.
(a) DESIGNATION OF LINES OF INSURANCE-
(1) IN GENERAL- The Secretary shall, by regulation, designate lines of
insurance as designated lines for purposes of this title, as follows:
(A) AUTOMOBILE- The Secretary shall designate private passenger
automobile insurance and shall also designate any sublines and coverage
types of private passenger automobile insurance that the Secretary
considers appropriate to determine and compare the availability,
affordability, and type of coverage in such line among applicable
regions.
(B) NONCOMMERCIAL INSURANCE FOR RESIDENTIAL PROPERTY- The Secretary
shall designate homeowners insurance and dwelling fire and allied lines,
and shall distinguish the coverage types in such lines by the perils
covered and by market or replacement value. For purposes of this title,
homeowners insurance shall not include any renters coverage or coverage
for the personal property of a condominium owner.
(2) REPORT- At any time the Secretary determines that any line of
insurance not described in paragraph (1) should be a designated line because
disparities in coverage provided under such line exist among geographic
areas having different income levels or racial composition, the Secretary
shall submit a report recommending designating such line of insurance as a
designated line for purposes of this title to the Committee on Banking,
Finance and Urban Affairs of the House of Representatives and the
appropriate Committees of the Senate.
(A) IN GENERAL- Except as provided in subparagraph (B), the Secretary
shall make the designations under this subsection once every 5 years, by
regulation, and each line and subline or coverage type designated under
such regulations shall be designated for each of the first 5 successive
annual reporting periods occurring after issuance of the
regulations.
(B) ALTERATION- During any 5-year period referred to in subparagraph
(A) in which designations are in effect, the Secretary may amend or revise
the designated lines, sublines, and coverage types only by regulation and
only in accordance with the requirements of this subsection. Such
regulations amending or revising designations shall apply only to annual
reporting periods beginning after the expiration of the 6-month period
beginning on the date of issuance of the regulations.
(b) TIMING OF DESIGNATIONS- The Secretary shall make the designations
required by subsection (a)(3)(A) and notify interested parties during the
6-month period ending 6 months before the commencement of the first annual
reporting period to which such designations apply.
(c) OBTAINING INFORMATION- The Secretary may require insurers to submit to
the Secretary such information as the Secretary considers necessary to make
designations specifically required under this title. The Secretary may not
require insurers to submit any information under this subsection that relates
to any line of insurance not specifically authorized to be designated pursuant
to this title or that is to be used solely for the purpose of a report under
subsection (a)(2).
SEC. 211. ENFORCEMENT.
(a) CIVIL PENALTIES- Any insurer who is determined by the Secretary, after
providing opportunity for a hearing on the record, to have violated any
requirement pursuant to this title shall be subject to a civil penalty of not
to exceed $5,000 for each day during which such violation continues.
(b) INJUNCTION- The Secretary may bring an action in an appropriate United
States district court for appropriate declaratory and injunctive relief
against any insurer who violates the requirements referred to in subsection
(a).
(c) INSURER LIABILITY- An insurer shall be responsible under subsections
(a) and (b) for any violation of a statistical agent acting on behalf of the
insurer.
SEC. 212. EXEMPTION AND RELATION TO STATE LAWS.
(a) EXEMPTION FOR UNITED STATES PROGRAMS- Reporting shall not be required
under this title with respect to insurance provided by any program
underwritten or administered by the United States.
(b) RELATION TO STATE LAWS- This title shall not be construed as
annulling, altering, or affecting the laws of any State or any political
subdivision of a State relating to public disclosure, submission of
information, and recordkeeping or exempting any insurer subject to this title
from any obligation under, or an obligation to comply with, any such law.
SEC. 213. REGULATIONS.
(1) IN GENERAL- The Secretary shall issue any regulations required under
this title and any other regulations that may be necessary to carry out this
title.
(2) SUBSTANTIVE REGULATIONS- The regulations shall be issued in
accordance with the procedures under section 553 of title 5, United States
Code, for substantive regulations.
(3) EFFECTIVE DATE- Except as otherwise provided in this title, such
final regulations shall be issued before the end of the 18-month period
beginning on the date of the enactment of this Act.
(b) BURDENS- In prescribing such regulations, the Secretary shall take
into consideration the administrative, paperwork, and other burdens on
insurance agents, including independent insurance agents, involved in
complying with the requirements of this title and shall minimize the burdens
imposed by such requirements with respect to such agents.
SEC. 214. DEFINITIONS.
For purposes of this subtitle, the following definitions shall apply:
(1) AGENT- The term `agent'--
(A) means, with respect to an insurer, an agent licensed by a State
who sells property and casualty insurance; and
(B) includes agents who are employees of the insurer, agents who are
independent contractors working exclusively for the insurer, and agents
who are independent contractors appointed to represent the insurer on a
nonexclusive basis.
(2) COMMERCIAL INSURANCE- The term `commercial insurance' means any line
of property and casualty insurance, except private passenger automobile,
homeowner's insurance and dwelling fire and allied lines, and other personal
lines of insurance.
(3) DESIGNATED LINE- The term `designated line' means a line of
insurance or bid, performance, and payment bonds designated by the Secretary
under section 210(a).
(4) EXPOSURES- The term `exposures' means, for purposes of section 203,
with respect to an insurance policy, an expression of an exposure unit
covered under the policy compared to the duration of the policy (pursuant to
standards established by the Secretary for uniform reporting of
exposures).
(5) EXPOSURE UNITS- The term `exposure units' means, for purposes of
section 203, an automobile or dwelling covered under an insurance policy for
private passenger automobile or homeowners or dwelling fire and allied lines
coverage.
(6) INSURANCE- The term `insurance' means property and casualty
insurance. Such term includes primary insurance, surplus lines insurance,
and any other arrangement for the shifting and distributing of risks that is
determined to be insurance under the law of any State in which the insurer
or insurer group engages in an insurance business.
(7) INSURER- The term `insurer'--
(A) means any corporation, association, society, order, firm, company,
mutual, partnership, individual, aggregation of individuals, or any other
legal entity that is authorized to transact the business of property or
casualty insurance in any State or that is engaged in a property or
casualty insurance business; and
(B) does not include an individual or entity which represents an
insurer as agent solely for the purpose of selling or which represents a
consumer as a broker solely for the purpose of buying insurance.
(8) ISSUED- The term `issued' means, with respect to an insurance
policy, newly issued or renewed.
(9) JOINT UNDERWRITING ASSOCIATION- The term `joint underwriting
association' means an unincorporated association of insurers established to
provide a particular form of insurance to the public.
(10) MORTGAGE INSURANCE- The term `mortgage insurance' means insurance
against the nonpayment of, or default on, a mortgage or loan for residential
or commercial property.
(11) PRIVATE MORTGAGE INSURANCE- The term `private mortgage insurance'
means mortgage insurance other than mortgage insurance made available under
the National Housing Act, title 38 of the United States Code, or title V of
the Housing Act of 1949.
(12) PROPERTY AND CASUALTY INSURANCE- The term `property and casualty
insurance'--
(A) means insurance against loss of or damage to property, insurance
against loss of income or extra expense incurred because of loss of, or
damage to, property, and insurance against third party liability claims
caused by negligence or imposed by statute or contract; and
(B) does not include workers' compensation, professional liability, or
title insurance.
(13) RESIDUAL MARKET- The term `residual market'--
(A) means an assigned risk plan, joint underwriting association, or
any similar mechanism designed to make insurance available to those unable
to obtain it in the voluntary market; and
(B) includes each statewide plan under part A of title XII of the
National Housing Act to assure fair access to insurance
requirements.
(14) RURAL AREA- The term `rural area' means any area that--
(A) has a population of 10,000 or more;
(B) has a continuous boundary; and
(C) contains only areas that are rural areas, as such term is defined
in section 520 of the Housing Act of 1949 (except that clause (3)(B) of
such section 520 shall not apply for purposes of this title).
(15) SECRETARY- The term `Secretary' means the Secretary of Housing and
Urban Development.
(16) STATE- The term `State' means any State, the District of Columbia,
the Commonwealth of Puerto Rico, the Northern Mariana Islands, the Virgin
Islands, American Samoa, and the Trust Territory of the Pacific
Islands.
SEC. 215. EFFECTIVE DATE.
The requirements of this title relating to reporting of information by
insurers shall take effect with respect to the first annual reporting period
that begins more than 36 months after the date of the enactment of this
Act.
Subtitle B--Improvements in Other Data Disclosure
Requirements
SEC. 221. IMPROVE SMALL BUSINESS AND AGRICULTURE LENDING DATA
DISCLOSURE.
(a) REPORTING REQUIREMENTS- Section 806 of the Community Reinvestment Act
of 1977 (12 U.S.C. 2905) is amended--
(1) by inserting `(a) IN GENERAL- ' after `SEC. 806.'; and
(2) by adding at the end the following new subsection:
`(b) REGULATORY EXEMPTIONS FROM REPORTING REQUIREMENTS-
`(1) PROHIBITION ON REGULATORY EXEMPTIONS FROM CERTAIN REPORTING
REQUIREMENTS- No provision of this title may be construed as authorizing the
Board or any other Federal agency to exempt any depository institution from
the requirements of any regulation prescribed under this title relating to
the provision of data relating to farm and small business loans, except with
regard to any institution described in section 809(a) which is not an
affiliate of any bank holding company or savings and loan holding
company.
`(2) IMPROVED DATA COLLECTION FOR SMALL BUSINESS AND FARM LOANS-
Regulations prescribed under this section shall require the following
information to be collected by regulated financial institutions in
connection with applications for farm and small business loans:
`(A) The race and gender of applicants, including minority-owned and
women-owned farms or small businesses.
`(B) The revenue of applicants for farm and small business
loans.
`(C) The actual census tract in which the applicant resides or is
located.
`(D) The disposition of the application by the regulated financial
institution and applicant.
`(3) DEFINITIONS- For purposes of this paragraph (2), the following
definitions shall apply:
`(A) MINORITY-OWNED FARM OR SMALL BUSINESS- The term `minority-owned
farm or small business' means a farm or small business--
`(i) more than 50 percent of the ownership or control of which is
held by 1 or more minority individuals; and
`(ii) more than 50 percent of the net profit or loss of which
accrues to 1 or more minority individuals.
`(B) WOMEN-OWNED FARM OR SMALL BUSINESS- The term `women-owned farm or
small business' means a farm or small business--
`(i) more than 50 percent of the ownership or control of which is
held by 1 or more women; and
`(ii) more than 50 percent of the net profit or loss of which
accrues to 1 or more women.
`(C) MINORITY- The term `minority' has the meaning given to such term
by section 1204(c)(3) of the Financial Institutions Reform, Recovery and
Enforcement Act of 1989.'.
SEC. 222. MAINTENANCE AND DISCLOSURE OF INFORMATION BY THE FINANCIAL
INSTITUTIONS EXAMINATION COUNSEL.
In collecting information from financial institutions, and affiliates of
financial institutions, under the Community Reinvestment Act of 1977 and the
Home Mortgage Disclosure Act of 1975 relating to farm, small business, and
home loans, and maintaining such information on and disclosing such
information from the national information center database, the Financial
Institutions Examination Council shall identify whether the financial
institution or affiliate is transmitting such information pursuant to the
Community Reinvestment Act of 1977 or the Home Mortgage Disclosure Act of
1975.
TITLE III--REGULATORY AND STRUCTURAL REFORMS
SEC. 301. ANTIREDLINING REQUIREMENT FOR FINANCIAL HOLDING COMPANIES.
Section 4(l)(1) of the Bank Holding Company Act of 1956 (12 U.S.C.
1843(l)(1)) is amended--
(1) by striking `and' at the end of subparagraph (B);
(2) by striking the period at the end of subparagraph (C) and inserting
`; and'; and
(3) by adding at the end the following new subparagraph:
`(D) in the case of any bank holding company which underwrites or
sells, or any affiliate of which underwrites or sells, annuities contracts
or contracts insuring, guaranteeing, or indemnifying against loss, harm,
damage, illness, disability, or death--
`(i) the company or affiliate has not been adjudicated in any
Federal court, and has not entered into a consent decree filed in a
Federal court or into a settlement agreement, premised upon a violation
of the Fair Housing Act for the activities described in this
subparagraph; or
`(ii) if such company or affiliate has entered into any such consent
decree or settlement agreement, the company or the affiliate is not in
violation of the decree or settlement agreement as determined by a court
of competent jurisdiction or the agency with which the decree or
agreement was entered into.'.
SEC. 302. NOTICE AND PUBLIC COMMENT REQUIRED BEFORE ESTABLISHING A FINANCIAL
HOLDING COMPANY.
Paragraph (6) of section 4(k) of the Bank Holding Company Act of 1956 (12
U.S.C. 1843(k)) is amended to read as follows:
`(6) NOTICE AND OPPORTUNITY FOR COMMENT REQUIRED-
`(A) IN GENERAL- No financial holding company shall directly or
indirectly acquire, and no company that becomes a financial holding
company shall directly or indirectly acquire control of, any company in
the United States, including through merger, consolidation, or other type
of business combination, that is engaged in activities permitted under
this subsection or subsection (n) or (o), unless--
`(i) such holding company has provided notice to the Board, not
later than 60 days prior to such proposed acquisition or prior to
becoming a financial holding company, and during that time period, or
such longer time period not exceeding an additional 60 days, as
established by the Board;
`(ii) the Board has provided public notice and opportunity for
comment for not less than 30 days; and
`(iii) the Board has not issued a notice disapproving the proposed
acquisition or retention.
`(B) FACTORS FOR CONSIDERATION- In reviewing any prior notice filed
under this paragraph, the Board shall take into consideration--
`(i) whether the company is in compliance with all applicable
criteria set forth in subsection (b) and the provisions of subsection
(d);
`(ii) whether the proposed combination represents an undue
aggregation of resources;
`(iii) whether the proposed combination poses a risk to the deposit
insurance system;
`(iv) whether the proposed combination poses a risk to State
insurance guaranty funds;
`(v) whether the proposed combination can reasonably be expected to
be in the best interests of depositors or policyholders of the
respective entities;
`(vi) whether the proposed transaction can reasonably be expected to
further the purposes of this Act and produce benefits to the
public;
`(vii) whether, and the extent to which, the proposed combination
poses an undue risk to the stability of the financial system in the
United States; and
`(viii) the community reinvestment record of all parties to the
proposed transaction.
`(C) REQUIRED INFORMATION- The Board may disapprove any prior notice
filed under this paragraph if the company submitting such notice neglects,
fails, or refuses to furnish to the Board all relevant information
required by the Board.
`(D) SOLICITATION OF VIEWS OF OTHER SUPERVISORY AGENCIES-
`(i) IN GENERAL- Upon receiving a prior notice under this paragraph,
in order to provide for the submission of their views and
recommendations, the Board shall give notice of the proposal
to--
`(I) the appropriate Federal banking agency of any bank
involved;
`(II) the appropriate functional regulator of any functionally
regulated nondepository institution (as defined in section 5(c)(1)(C))
involved; and
`(III) the Secretary of the Treasury, the Attorney General, and
the Federal Trade Commission.
`(ii) TIMING- The views and recommendations of any agency provided
notice under this paragraph shall be submitted to the Board not later
than 30 calendar days after the date on which notice to the agency was
given, unless the Board determines that another shorter time period is
appropriate.
SEC. 303. PUBLIC MEETINGS FOR BANK ACQUISITIONS AND MERGERS.
(a) BANK HOLDING COMPANY ACT OF 1956- Section 3(c)(2) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1842(c)(2)) is amended--
(1) by striking `FACTORS- In every case' and inserting `FACTORS-
`(A) IN GENERAL- In every case'; and
(2) by adding at the end the following new subparagraph:
`(B) PUBLIC MEETINGS- In the case of each application for approval
under this section, the Board shall, as necessary and on a timely basis,
conduct public meetings in 1 or more areas where the Board believes, in
the sole discretion of the Board, there will be a substantial public
impact.'.
(b) FEDERAL DEPOSIT INSURANCE ACT- Section 18(c) of the Federal Deposit
Insurance Act (12 U.S.C. 1828(c)) is amended by adding at the end the
following new paragraph:
`(12) PUBLIC MEETINGS- In each merger transaction involving 1 or more
insured depository institutions, the responsible agency shall, as necessary
and on a timely basis, conduct public meetings in 1 or more areas where the
agency believes, in the sole discretion of the agency, there will be a
substantial public impact.'.
(c) NATIONAL BANK CONSOLIDATION AND MERGER ACT- The National Bank
Consolidation and Merger Act (12 U.S.C. 215 et seq.) is amended by adding at
the end the following new section:
`SEC. 6. PUBLIC MEETINGS FOR BANK CONSOLIDATIONS AND MERGERS.
`In each case of a consolidation or merger under this Act, the Comptroller
shall, as necessary and on a timely basis, conduct public meetings in 1 or
more areas where the Comptroller believes, in the sole discretion of the
Comptroller, there will be a substantial public impact.'.
(d) HOME OWNERS' LOAN ACT- Section 10(e) of the Home Owners' Loan Act (12
U.S.C. 1463) is amended by adding at the end the following new paragraph:
`(7) PUBLIC MEETINGS FOR DEPOSITORY INSTITUTION ACQUISITIONS AND
MERGERS- In each case involving an application under this subsection, the
Director shall, as necessary and on a timely basis, conduct public meetings
in 1 or more areas where the Director believes, in the sole discretion
of
the Director, there will be a substantial public impact.'.
SEC. 304. CRA EXAMINATION SCHEDULE FOR SMALL BANKS.
Section 809(a) of the Community Reinvestment Act of 1977 (12 U.S.C.
2908(a)) is amended--
(1) in paragraph (1), by striking `60 months' and inserting `48 months';
and
(2) in paragraph (2), by striking `48 months' and inserting `36
months'.
SEC. 305. CRA SUNSHINE REQUIREMENTS.
(a) IN GENERAL- Section 48 of the Federal Deposit Insurance Act (12 U.S.C.
1831y) (as added by section 711 of the Gramm-Leach-Bliley Act) is amended--
(1) in subsection (a), by striking paragraphs (1) and (2) and inserting
the following new paragraphs:
`(1) shall be disclosed to the appropriate Federal banking agency and
subsequently may be made available in accordance with, and to the extent
provided in, section 552 of title 5, United States Code, subject to section
552a of such title; and
`(2) may be monitored by the appropriate Federal banking agency, during
the effective period of the agreement, for purposes of determining the
extent to which the parties to the agreement are complying with the
agreement.';
(2) by striking subsections (b), (c), (d), (f), (g), and (h);
(3) by redesignating subsection (e) as subsection (b); and
(4) in paragraph (1)(B) of subsection (b) (as so redesignated by
paragraph (3) of this subsection)--
(A) by inserting `or' after the semicolon at the end of clause
(i);
(B) by striking the period at the end of clause (ii) and inserting `;
or'; and
(C) by striking clause (iii).
SEC. 306. CONTINUING COMMUNITY REINVESTMENT REQUIREMENT FOR FINANCIAL
HOLDING COMPANIES.
(a) IN GENERAL- Section 4(l)(2) of the Community Reinvestment Act of 1977
(12 U.S.C. 1843(l)(2)) is amended--
(1) in subparagraph (A), by inserting `or continuing' after
`commencing'; and
(2) in subparagraph (B), by inserting `or maintaining' after
`acquiring'.
(b) TECHNICAL AND CONFORMING AMENDMENT-
(1) Paragraph (1) of section 4(m) of the Bank Holding Company Act of
1956 (12 U.S.C. 1843(m)(1)) is amended by striking `subsection (l)(1)' and
inserting `paragraph (1) or (2) of subsection (l)'.
(2) Paragraph (2) of section 4(m) of the Bank Holding Company Act of
1956 (12 U.S.C. 1843(m)(2)) is amended by striking `subsection (l)(1)' and
inserting `paragraphs (1) and (2) of subsection (l)'.
SEC. 307. CHANGES IN REPORTING REQUIREMENTS UNDER THE HOME MORTGAGE
DISCLOSURE ACT OF 1975.
(a) PROHIBITION ON REGULATORY EXEMPTIONS FROM REPORTING REQUIREMENTS-
Section 304 of the Home Mortgage Disclosure Act of 1975 (12 U.S.C. 2803) is
amended by adding at the end the following new subsection:
`(n) PROHIBITION ON REGULATORY EXEMPTIONS FROM REPORTING REQUIREMENTS-
Subject to subsection (i)--
`(1) no provision of this title may be construed as authorizing the
Board, the Secretary, or any other Federal agency to exempt any depository
institution from the requirements of this title; and
`(2) any exemption from the requirements of this title provided in any
regulation, such as the exemption provided in Appendix A to part 203 of the
Code of Federal Regulations for lending institutions described in section
303(2)(B) whose total dollar amount of purchase loans originated in any year
did not exceed 10 percent of the total dollar amount of all loan
originations by such institution in such year, shall cease to be effective
as of the date of the enactment of the Community Reinvestment Modernization
Act of 2001.'
(b) INFORMATION ON PRIME AND SUBPRIME MORTGAGE LOANS-
(1) IN GENERAL- Section 304(b) of the Home Mortgage Disclosure Act of
1975 (12 U.S.C. 2803(b)) is amended--
(A) by striking `and' at the end of paragraph (3);
(B) by striking the period at the end of paragraph (4) and inserting a
semicolon; and
(C) by adding at the end the following new paragraph:
`(5) the number and dollar amount of mortgage loans that were subprime
loans and the number and dollar amount of mortgage loans that were not
subprime loans;'.
(2) SUBPRIME LENDING PROGRAM DEFINED- Section 303 of the Home Mortgage
Disclosure Act of 1975 (12 U.S.C. 2802) is amended by adding at the end the
following new paragraph:
`(7) SUBPRIME LOANS- The term `subprime loan'--
`(A) has the meaning given such term by the Secretary, in regulations;
and
`(B) includes any loan made through a program maintained by a
depository institution that involves higher interest rates or fees than
traditional mortgage loans.'.
(c) REPORTING OF ADDITIONAL DATA REQUIRED- Section 304(b) of the Home
Mortgage Disclosure Act of 1975 (12 U.S.C. 2803(b)) is amended by inserting
after paragraph (5) (as added by subsection (b) of this section) the following
new paragraph:
`(6) information on loan pricing and terms, including interest rates,
bona fide discount points, origination fees, financing of lump sum insurance
premium payments, balloon payment, and prepayment penalties; and'.
(d) REPORTING ON MANUFACTURED HOME LOANS THAT ARE NOT TREATED BY THE
DEPOSITORY INSTITUTION AS REAL ESTATE LOANS-
(1) IN GENERAL- Section 304(b) of the Home Mortgage Disclosure Act of
1975 (12 U.S.C. 2803(b)) is amended by inserting after paragraph (6) (as
added by subsection (c) of this section) the following new paragraph:
`(7) the number and dollar amount of mortgage loans secured by
manufactured homes (as defined in section 603 of the National Manufactured
Housing Construction and Safety Act of 1974).'.
(2) MORTGAGE LOAN DEFINED TO INCLUDE MANUFACTURED HOME LOANS- Section
303(1) of the Home Mortgage Disclosure Act of 1975 (12 U.S.C. 2802(1)) is
amended by inserting `or a manufactured home' after `residential real
property'.
(e) ENFORCEMENT POWERS FOR SECRETARY- Section 305 of the Home Mortgage
Disclosure Act of 1975 (12 U.S.C. 2804) is amended by inserting at the end the
following new subsection:
`(d) AUTHORITY TO CARRY OUT SUBSECTION (b)(4)- For purposes of enforcing
compliance with the requirements of this title pursuant to subsection
(b)(4)--
`(1) subsections (b) through (n) of section 8 of the Federal Deposit
Insurance Act shall apply to depository institutions described in section
303(2)(B) in the same manner they apply to depository institutions (as
defined in section 3 of the Federal Deposit Insurance Act); and
`(2) the Secretary shall have the same powers and duties under such
subsections with respect to depository institutions described in section
303(2)(B) as an appropriate Federal banking agency (as defined in such Act)
has with respect to depository institutions (as defined in section 3 of the
Federal Deposit Insurance Act).'.
END