article: SECTION. 1. SHORT TITLE; TABLE OF CONTENTS. (a) Short Title.--This Act may be cited as the ``Small Business Assistance and Credit Crunch Relief Act of 1993''. (b) Table of Contents.--The following is a table of contents for this Act: Sec. 1. Short title; table of contents. Sec. 2. Findings. Sec. 3. Definitions. Sec. 4. Capital requirement flexibility. Sec. 5. New Federal banking regulations subject to regulatory impact analysis. Sec. 6. Review of statutory and regulatory provisions affecting small banks. Sec. 7. Real estate appraisals. Sec. 8. Truth in Lending Act. Sec. 9. Community Reinvestment Act. Sec. 10. Paperwork reduction study. Sec. 11. Sunset provision. SEC. 2. FINDINGS. The Congress finds that-- (1) credit availability is essential for small businesses to expand, to purchase new equipment, and to hire new workers; (2) the Nation's small business sector is expected to create 70 percent of the new jobs in the United States in 1993; (3) a severe credit crunch is denying small businesses the capital necessary to hire new workers and to grow; and (4) the cumulative burden of unnecessary Federal banking regulations has served as a disincentive for small community banks to lend to small businesses. SEC. 3. DEFINITIONS. For the purposes of this Act, the following definitions shall apply: (1) Incorporated definitions.--The terms ``appropriate Federal banking agency'', ``bank'', ``insured depository institution'', and ``savings association'' have the same meanings as in section 3 of the Federal Deposit Insurance Act. (2) Regulatory impact analysis.--The term ``regulatory impact analysis'' means a review of the potential costs and benefits to society of a proposed regulation, and in particular, the costs to small banks and their customers. (3) Small bank.--The term ``small bank'' means a bank or savings association with total assets of less than $400,000,000. SEC. 4. CAPITAL REQUIREMENT FLEXIBILITY. Section 38(a)(2) of the Federal Deposit Insurance Act (12 U.S.C. 1831o(a)(2)) is amended to read as follows: ``(2) Prompt corrective action required; factors to consider.--Each appropriate Federal banking agency and the Corporation (acting in the Corporation's capacity as the insurer of depository institutions under this Act) shall take prompt corrective action to resolve the problems of an insured depository institution after taking into consideration, in addition to the other criteria described in this section-- ``(A) the management expertise of the directors, officers, and employees of the insured depository institution; ``(B) any recent earnings history that suggests an improvement in the financial condition of the insured depository institution; ``(C) the quality of the assets held by the insured depository institution; and ``(D) the potential disruption to the local economy if the insured depository institution is closed or otherwise made subject to sanctions by Federal regulators.''. SEC. 5. NEW FEDERAL BANKING REGULATIONS SUBJECT TO REGULATORY IMPACT ANALYSIS. (a) Regulatory Impact Analysis.-- (1) In general.--Notwithstanding any other provision of law, no new regulation shall be promulgated by an appropriate Federal banking agency until such agency has conducted a regulatory impact analysis and concluded that the benefits of the proposed regulation outweigh the costs of implementing and complying with the regulation, including the particular benefits and costs of compliance with the proposed regulation for small banks. (2) Definition.--For purposes of this subsection, a regulation shall be considered to be ``new'' if it is promulgated, modified, amended, or reissued on or after the date of enactment of this Act. (b) Costs.--In reviewing the costs of implementing and complying with a proposed regulation under subsection (a), the appropriate Federal banking agency shall consider the impact of the proposed regulation on-- (1) the national economy (including the potential for job creation); (2) consumers; (3) small businesses; (4) small banks (including administrative and personnel costs); (5) other users of financial services; and (6) new paperwork and documentation requirements. (c) Benefits.--In reviewing the benefits of a proposed regulation under subsection (a), the appropriate Federal banking agency shall consider the benefits of the proposed regulation to-- (1) the public; (2) taxpayers; and (3) the overall safety and soundness of the Nation's banking system. (d) Easing Burden on Small Banks.--In conducting the regulatory impact analysis under subsection (a), the appropriate Federal banking agency shall consider including in the proposed regulation a provision that eases the regulatory burden on small banks, including special compliance provisions. (e) Estimate Required.--The regulatory impact analysis required by subsection (a) shall include an estimate of the number of small banks and small businesses that will be affected by the regulation. SEC. 6. REVIEW OF STATUTORY AND REGULATORY PROVISIONS AFFECTING SMALL BANKS. (a) In General.--Each appropriate Federal banking agency shall conduct a thorough review and evaluation of all-- (1) statutory provisions affecting small banks; and (2) regulatory provisions affecting small banks that have been promulgated by such appropriate Federal banking agency. (b) Review.--The review conducted pursuant to subsection (a) shall include-- (1) an analysis of the purposes of the provision; (2) the effectiveness of the provision in achieving such purposes; (3) whether any other provision provides an alternative or duplicative means of achieving those purposes; (4) the cost imposed by compliance with such provisions upon insured depository institutions and consumers; and (5) the relationship between such provision, compliance costs, and the availability of credit in the United States. (c) Suspension.--If an appropriate Federal banking agency makes a determination described in subsection (d), the appropriate Federal banking agency shall-- (1) not later than 90 days after the date of enactment of this Act, submit a written recommendation to the Congress to suspend the applicability of any law that affects small banks (or any portion thereof); and (2) not later than 30 days after the date of enactment of this Act, suspend the applicability of any Federal regulation or guideline promulgated by such appropriate Federal banking agency that affects small banks (or any portion thereof). (d) Determination.--For the purpose of subsection (c), a determination is described in this subsection if it is a determination by an appropriate Federal banking agency that-- (1) the law, regulation, or guideline has already accomplished its goal and is therefore no longer necessary; (2) the law, regulation, or guideline is not as effective in achieving its intended purpose as other available alternatives that would impose lesser costs on small banks, their customers, or the economy; (3) the cost of compliance with the law, regulation, or guideline outweighs the potential benefits sought to be accomplished by the law, regulation, or guideline; or (4) the law, regulation, or guideline has an adverse impact on the availability of credit in the United States which substantially outweighs the benefits sought to be accomplished by the law, regulation, or guideline. (e) Publication and Effective Date.--Any suspension of the applicability of any Federal regulation or guideline pursuant to subsection (c)(2) shall be published in the Federal Register, and shall become effective 30 days after the date of such publication, unless the appropriate Federal banking agency, for good cause, determines that a shorter period is necessary and in the public interest. (f) Consultation and Notification.-- (1) Consultation.--In making a determination under subsection (d), the appropriate Federal banking agency shall consult with the Secretary of the Treasury, the Chairperson of the Federal Deposit Insurance Corporation, the Chairman of the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, and the Director of the Office of Thrift Supervision. (2) Notification.--The appropriate Federal banking agency shall notify the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Banking, Finance and Urban Affairs of the House of Representatives prior to suspending the applicability of a regulation or guideline under subsection (c)(2). (g) Restriction.--Nothing in this section authorizes an appropriate Federal banking agency to recommend the suspension of any law, or to suspend any regulation or guideline-- (1) that is necessary for the safe and sound operation of insured depository institutions; or (2) that-- (A) prohibits discrimination in the provision of financial services based on race, sex, national origin, marital status, or age; (B) relates directly to the conduct of monetary policy; or (C) pertains to an enforcement proceeding or supervisory action with respect to a particular institution or party. SEC. 7. REAL ESTATE APPRAISALS. Section 1112(b) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3341(b)) is amended by inserting ``, which shall be not less than $250,000,'' after ``establish a threshold level''. SEC. 8. TRUTH IN LENDING ACT. Section 104 of the Truth in Lending Act (15 U.S.C. 1603) is amended by adding at the end the following new paragraph: ``(7) Credit transactions involving a bank or savings association with total assets of less than $400,000,000, and a consumer who had individual income of more than $200,000 in each of the 2 most recent years, or who, at the time of the transaction, has an individual net worth of more than $1,000,000.''. SEC. 9. COMMUNITY REINVESTMENT ACT. (a) Paperwork Reduction.--Section 804(a) of the Community Reinvestment Act of 1977 (12 U.S.C. 2903(a)) is amended-- (1) in paragraph (1), by striking ``and'' at the end; (2) in paragraph (2), by striking the period at the end and inserting ``; and''; and (3) by adding at the end the following new paragraph: ``(3) minimize the regulatory paperwork burden and costs to small banks associated with compliance with this title.''. (b) Applications.--Section 804(a) of the Community Reinvestment Act of 1977 (12 U.S.C. 2903(a)) is amended by adding at the end the following: ``The appropriate Federal financial supervisory agency shall not deny an application for a deposit facility by a regulated financial institution having total assets of less than $400,000,000 on the basis of such institution's compliance with this Act if the institution received a rating on its last evaluation under this section of `Outstanding' in its record of meeting community credit needs, as provided in section 807(b).''. (c) Paperwork Reduction for Small Banks.--The Community Reinvestment Act of 1977 (12 U.S.C. 2901 et seq.) is amended by adding at the end the following new section: ``SEC. 809. SMALL BANKS. ``(a) `Outstanding' Rating.-- ``(1) Paperwork reduction.--Except as provided in paragraph (2), a regulated financial institution that-- ``(A) receives a rating under section 804 of `Outstanding record of meeting community credit needs', as provided in section 807(b); and ``(B) has total assets of less than $400,000,000; shall be exempt from any documentation requirements of this title. ``(2) New documentation regulations.--Not later than 30 days after the date of enactment of this section, the appropriate Federal financial supervisory agency shall promulgate documentation requirements for the regulated financial institutions described in paragraph (1). Such regulations shall substantially reduce or eliminate the paperwork requirements imposed on such regulated financial institutions. ``(3) Disclosure of evaluation criteria.--Not later than 30 days after the date of enactment of this section, the appropriate Federal financial supervisory agency shall disclose to each regulated financial institution, in detail, the specific criteria an insured financial institution must satisfy in order to secure a rating of `Outstanding' on an evaluation under section 807(b). ``(b) `Substantial Noncompliance' Rating.--A regulated financial institution that receives a rating under section 804 of `Substantial noncompliance in meeting community credit needs', as provided in section 807(b), for 2 or more consecutive years, and has total assets of less than $400,000,000 shall be-- ``(1) subject to a civil penalty assessed by the appropriate Federal financial supervisory agency in an amount not to exceed $20,000; and ``(2) required to enter into a written agreement with the appropriate Federal financial supervisory agency to improve the institution's ability to ascertain and to help meet the credit needs of its local community.''. SEC. 10. PAPERWORK REDUCTION STUDY. Not later than 18 months after the date of enactment of this Act, each appropriate Federal banking agency, in consultation with insured depository institutions and other interested parties, shall-- (1) review the extent to which this Act has-- (A) reduced unnecessary internal written policies; and (B) eliminated such policies, where appropriate, while maintaining the applicable safety and soundness requirements; and (2) issue a recommendation as to whether the provisions of this Act should be extended beyond the sunset date established in section 11. SEC. 11. SUNSET PROVISION. The provisions of this Act and the amendments made by this Act shall remain in effect for a period of 3 years beginning on the date of enactment of this Act.
summary: Small Business Assistance and Credit Crunch Relief Act of 1993 - Amends the Federal Deposit Insurance Act to require each appropriate Federal banking agency and the Federal Deposit Insurance Corporation (FDIC) to take into consideration, in resolving the problems of an insured depository institution, the potential disruption to the local economy if the institution is closed or otherwise subjected to sanctions by Federal regulators. Prohibits such an agency from promulgating any new regulation until it has conducted a regulatory impact analysis and concluded that the regulation's benefits outweigh its costs, including the benefits and costs for small banks (those with total assets of less than $400 million). Directs each agency to conduct a thorough review and evaluation of all: (1) statutory provisions affecting small banks; and (2) regulatory provisions affecting such banks that have been promulgated by such agency. Provides for the suspension of regulations determined to be no longer necessary or ineffective and for the submission to the Congress of a recommendation to suspend the applicability of any Federal law that affects small banks. Requires publication of such suspensions in the Federal Register and appropriate consultation for such determinations. Amends the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 to raise from $100,000 to $250,000 the threshold for licensed or certified real estate appraisals on small business loans. Amends the Community Reinvestment Act of 1977 to require the minimization of regulatory paperwork burden and costs of compliance under such Act for small banks with the highest (outstanding) compliance rating as determined under such Act. Exempts small banks rated "outstanding" from any documentation requirements. Outlines penalties and documentation requirements for small banks receiving a "substantial noncompliance" rating. Requires each appropriate Federal banking agency to: (1) review the extent to which this Act has reduced and eliminated unnecessary internal written policies; and (2) issue a recommendation as to whether this Act should be extended beyond the sunset date of three years after its enactment.