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"(K) An insured bank as defined in section 3(h) of

7

the Federal Deposit Insurance Act (12 U.S.C. 1813(h))

7 tution holding company as defined in the Depository Institu

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that is controlled by no company other than a deposito-
ry institution holding company as defined in the Depos-
itory Institution Affiliation Act.".

AMENDMENTS TO THE FEDERAL RESERVE ACT

SEC. 103. Section 23A of the Federal Reserve Act (12

13 U.S.C. 371c) is amended by inserting the following at the
14 end of paragraph (a)(2): “Provided, however, That notwith-
15 standing the foregoing, a loan or extension of credit shall not
16 be deemed to be made to an affiliate if (i) the member bank

17 approves such loan or extension of credit in accordance with
18 substantially the same standards and procedures and on sub-
19 stantially the same terms that it applies to similar loans or
20 extensions of credit the proceeds of which are not transferred
21 to or for the benefit of an affiliate, and (ii) such loan or exten-
22 sion of credit is not made for the purposes of evading any of
23 the requirements of this section.".

company or any other affiliate of the depository institution 10 holding company."

(b) Section 32 of the Banking Act of 1933 (12 U.S.C.

12 78) is amended by inserting the following at the end of the
13 first paragraph of such section: "The provisions of this sec-
14 tion shall not apply to relationships involving an affiliate of a
15 depository institution holding company as defined in the De-
16 pository Institution Affiliation Act and either that depository
17 institution holding company or any other affiliate of that de-

18 pository institution holding company."

have acquired control of any other company by virtue
of its ownership of the voting securities of such other
company-

"(i) acquired or held in an agency, trust or

"(ii)(a) acquired or held in connection with or

will permit the sale thereof on a reasonable basis,

"(b) acquired or held in connection with or
incidental to market making, dealing, trading, bro-
kerage or other securities related activities and

ferring any control over the management or poli

cies of such company; or

"(iii) acquired in securing or collecting a debt

previously contracted in good faith, until two

3 read as follows: "For the purposes of subsection (j), the term
4 'insured bank' shall include-

"(i) any 'bank holding company', as that term is
defined in section 2 of the Bank Holding Company
Act, which has control of any such insured bank, and
the appropriate Federal banking agency in the case of
a bank holding company shall be the Board of Gover-
nors of the Federal Reserve System; and

"(ii) any 'depository institution holding company',
as that term is defined in section 101(a)(1) of the De-
pository Institution Affiliation Act, which has control
of any such insured bank, and the appropriate Federal
banking agency in the case of a depository institution
holding company shall be the appropriate Federal regu-
latory agency, as defined in section 101(a)(5) of the
Depository Institution Affiliation Act, of such insured
bank, or each such agency, if more than one, in the
case of a depository institution holding company which
has control of more than one such insured bank.".

2 Deposit Insurance Act (12 U.S.C. 1817(j)(1)) is amended to

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7

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10

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12

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21

7 ERS.-Section 15 of the Securities Exchange Act of 1934 is

8 amended by adding at the end thereof the following new sub-
9 section:

10 "(f) The Commission shall not grant registration to any
11 broker or dealer unless such broker or dealer establishes to
12 the satisfaction of the Commission that all requirements es-
13 tablished by the Depository Institutions Affiliation Act in
14 connection with the activities of such broker or dealer (in-
15 cluding any capital adequacy requirement) have been met.".
(b) REGULATION OF BROKERS AND DEALERS.—(1)
17 Section 15(b)(4) of the Securities Exchange Act of 1934 is
18 amended by inserting "the Depository Institutions Affiliation
19 Act," after "the Commodity Exchange Act," in subpara-
20 graph (D).

16

21 (2) Section 15(b)(4) of the Securities Exchange Act of 22 1934 is amended by inserting "The Depository Institutions 23 Affiliation Act," after "the Commodity Exchange Act," in 24 subparagraph (E).

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control of a company by virtue of its acquisition of
voting rights with respect to shares of such com-
pany acquired in the course of such solicitation.".
(b) The last sentence of section 407(q)(1) of the National
10 Housing Act (12 U.S.C. 1730(q)(1)) is amended to read as
11 follows: "For the purposes of this subsection (q), the term
12 'insured institution' shall include any savings and loan hold-
13 ing company, as that term is defined in section 408 of the
14 National Housing Act, which has control of any insured insti-
15 tution, and any depository institution holding company, as
16 that term is defined in section 101(a)(1) of the Depository
17 Institution Affiliation Act, which has control of any such in-
18 sured institution.".