To amend banking laws with respect to offshore activities, investments, and affiliations of national banks, and for other purposes.

June 21, 2001

Mr. CONYERS introduced the following bill; which was referred to the Committee on Financial Services

To amend banking laws with respect to offshore activities, investments, and affiliations of national banks, 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.

This Act may be cited as the `National Bank Offshore Activities Act of 2001'.

SEC. 2. CLARIFICATION OF TERRITORIAL APPLICATION.

Section 14 of the Act entitled `An Act to amend the national banking laws to clarify or eliminate ambiguities, to repeal certain laws which have become obsolete, and for other purposes' and approved September 8, 1959 (12 U.S.C. 42) is amended by inserting before the period at the end `, except that sections 5156B and 5211(d) of the Revised Statutes of the United States shall apply with respect to activities, investments, and affiliations of national banks without regard to any territorial limitation.'.

SEC. 3. REPORTS ON OFFSHORE INTERESTS REQUIRED.

Section 5211 of the Revised Statutes of the United States (12 U.S.C. 161) is amended by adding at the end the following new subsection:

`(d) REPORTS ON OFFSHORE INTERESTS REQUIRED-

`(1) IN GENERAL- If a national bank acquires, directly or indirectly, a beneficial interest in any offshore company, the national bank shall submit a written report on such acquisition to the Comptroller of the Currency before the end of the 30-day period beginning on the date the acquisition is consummated.

`(2) CONTENTS OF REPORT- A report submitted under paragraph (1) shall contain the following information:

`(A) The names of all the shareholders, principals, or holders of a beneficial interest in the offshore company.

`(B) The names of any directors, officers, or managing agent of the offshore company.

`(C) The purpose and business of the offshore company.

`(D) The identity and value of any assets held or owned by the offshore company.

`(E) All criminal convictions, indictments or similar formal legal accusations of criminal offenses, and government or regulatory investigations of, and any complaints concerning, any person identified in subparagraph (A) or (B).

`(F) Such other information as the Comptroller of the Currency may require by regulation or order.

`(3) UPDATE OF REPORT- A national bank which submits a report under paragraph (1) shall submit a supplemental report whenever any change occurs with regard to any information previously submitted to the Comptroller of the Currency under this subsection.

`(4) OFFSHORE COMPANY DEFINED-

`(A) IN GENERAL- The term `offshore company' means any company (as defined in section 2(b) of the Bank Holding Company Act of 1956) which is a person of a foreign country (as defined in section 3502(d) of the Primary Dealers Act of 1988).

`(B) EDGE ACT AND AGREEMENT CORPORATIONS NOT INCLUDED- The term `offshore company' shall not include a company or corporation in which a national bank holds an interest pursuant to section 25 or 25A of the Federal Reserve Act.'.

SEC. 4. PROHIBITION ON RELATIONS BETWEEN NATIONAL BANKS AND CERTAIN VIOLATORS.

(a) IN GENERAL- Chapter one of title LXII of the Revised Statutes of the United States (12 U.S.C. 21 et seq.) is amended by adding at the end the following new section:

`SEC. 5156B. PROHIBITION ON RELATIONS BETWEEN NATIONAL BANKS AND CERTAIN VIOLATORS.

`(a) NOTICE OF CERTAIN VIOLATIONS REQUIRED- A national bank shall submit a written notice in a timely manner with the Comptroller of the Currency disclosing any violation of any Federal, State, or foreign criminal law, banking or financial services law, or labor law, or any

regulation prescribed under any such law, by any agent or affiliate of the national bank, or any other entity with which the national bank maintains a correspondent banking relationship, which has been finally adjudicated or determined by any adjudicative, regulatory, or other governmental authority.

`(b) NOTICE AND PETITION BY OTHERS- In addition to a national bank, any other person or entity (including any Federal or State official, department, or agency) may--

`(1) file a notice with the Comptroller of the Currency under subsection (a) of any violation described in such subsection; and

`(2) petition the Comptroller to prohibit any further relationship between the national bank and the person with respect to whom such notice is filed.

`(c) PROHIBITION ON RELATIONSHIP-

`(1) IN GENERAL- Upon receiving any notice under subsection (a) or (b)(1) of any violation described in subsection (a) by any agent or affiliate of the national bank, or any other entity with which the national bank maintains a correspondent banking relationship, the Comptroller of the Currency shall serve on the national bank a written notice to show cause why the Comptroller should not issue an order prohibiting any further relationship between the national bank and any such agent, affiliate, or other entity.

`(2) CONTENTS OF SHOW CAUSE NOTICE- Any notice served on a national bank by the Comptroller of the Currency under paragraph (1) shall--

`(A) contain a statement of the facts constituting grounds for the prohibition order; and

`(B) fix the time and place for a hearing to determine whether a prohibition order shall be issued against the national bank.

`(3) NOTICE AND OPPORTUNITY FOR HEARING BY 3RD PARTY- If any person or entity filed a petition with the Comptroller of the Currency under subsection (b)(2) concerning the relationship at issue in the notice served by the Comptroller on the national bank, the Comptroller shall--

`(A) provide, to such person or entity, a copy of such notice; and

`(B) provide such person or entity an opportunity to be heard on the record at the hearing referred to in such notice.

`(4) CEASE AND DESIST ORDER- If the Comptroller of the Currency determines that--

`(A) any violation of any Federal, State, or foreign criminal law, banking or financial services law, or labor law, or any regulation prescribed under any such law, by any agent or affiliate of the national bank, or any other entity with which the national bank maintains a correspondent banking relationship, has been finally adjudicated or determined by any appropriate adjudicative, regulatory, or other governmental authority; and

`(B) good cause does not exist for continuing any relationship between the national bank and such agent, affiliate, or other entity,

the Comptroller of the Currency may issue a cease and desist order prohibiting the national bank from any further involvement or relationship with such agent, affiliate, or other entity, and requiring the national bank to dispose of any direct or indirect ownership interest of the national bank in any such agent, affiliate, or other entity.

`(5) APPLICABILITY OF SECTION 8 OF FEDERAL DEPOSIT INSURANCE ACT- The provisions and requirements of section 8 of the Federal Deposit Insurance Act relating to any determination concerning the issuance of a cease and desist order under such section (except the standard), the scope and content of any such order, any judicial review of any such determination, the enforcement of any such order, and the penalties for violating any such order shall apply with respect to any cease and desist order issued under this section.

`(d) FOREIGN BANKS- Any foreign bank having a Federal branch or agency (as such terms are defined in section 1(b) of the International Banking Act of 1978) shall be treated as a national bank for purposes of this section.'.

(b) CLERICAL AMENDMENT- The table of sections for chapter one of title LXII of the Revised Statutes of the United States is amended by inserting after the item relating to section 5156A the following new item:

`5156B. Prohibition on relations between national banks and certain violators.'.

END