,i #aac? ,,congress #a/ ,session ,h4 ,r4 #afjc ,,9 ,,! ,,h\se ,,( ,,repres5tatives ,april #ag1 #bjac ,mr4 ,grimm 7= himself1 ,mr4 ,k+ ( ,new ,york1 & ,mr4 ,meeks7 introduc$ ! foll[+ bill2 :i* 0 ref]r$ to ! ,committee on ,f9ancial ,s]vices ,a ,,bill ,to support & promote community f9ancial in/itutions 9 ! mutual =m1 & = o!r purposes4 #a4 ,%ort title ,?is ,act may be cit$ z ! ,mutual ,community ,bank ,competitive ,equality ,act4 #b4 ,f9d+s ,congress f9ds ! foll[+3 7#a7 ,mutual f9ancial in/itutions h be5 an integral "p ( ! ,am]ican bank+ l&scape = almo/ #bjj ye>s4 7#b7 ,su* in/itutions op]ate = ! purpose ( s]v+ ! local depositors & borr[]s & ! communities 9 :i* !y op]ate4 7#c7 ,mutual banks play a critical role 9 enc\rag+ ?rift1 provid+ home loans & loans = small bus9esses4 7#d7 ,mutual banks are among ! /ronge/ f9ancial in/itutions 9 ! c\ntry & are *>act]iz$ by high capital ratios & cons]vative1 community-focus$ managem5t4 7#e7 ,congress deems x necess>y to provide = ! support & cont9u$ developm5t ( ^! vital community f9ancial in/itutions4 #c4 ,mutual national banks au?oriz$ ,*apt] "o ( title ,,xii ( ! ,revis$ ,/atutes ( ! ,unit$ ,/ates 7#ab ,u4,s4,c4 #ba et seq47 is am5d$ by ins]t+ aft] section #eacc ! foll[+ new section3 #eacc;,a4 ,mutual national banks 7a7 ,9 g5]al ,not)/&+ ! section designat$ ! ,?ird ( section #eacd1 9 ord] to provide mutual in/itutions = ! deposit ( funds1 ! ext5sion ( cr$it1 & provision ( o!r s]vices1 ! ,comptroll] ( ! ,curr5cy may *>t] mutual national banks ei!r de novo or ?r\gh a conv]sion ( any insur$ depository in/itution or any ,/ate mutual bank or cr$it union1 subject to regulations prescrib$ by ! ,comptroll] ( ! ,curr5cy 9 accordance ) ?is section4 ,! p[]s conf]r$ by ?is section are int5d$ to provide = ! creation & ma9t5ance ( mutual national banks z bodies corporate exi/+ 9 p]petuity = ! b5efit ( _! depositors & ! communities 9 :i* !y op]ate4 7b7 ,regulations 7#a7 ,regulations ( ! comptroll] ,! ,comptroll] ( ! ,curr5cy is au?oriz$ to prescribe appropriate regulations = ! organization1 incorporation1 gov]nance1 conv]sion1 exam9ation1 op]ation1 sup]vision1 & regulation ( mutual national banks4 7#b7 ,applicability ( capital /ock requirem5ts ,! ,comptroll] ( ! ,curr5cy %all prescribe regulations reg>d+ appropriate capital sub/itutes = ! requirem5ts ( ?is title ) respect to capital /ock1 & limitations impos$ on national banks "u ?is title bas$ on capital /ock1 z su* requirem5ts %all apply to mutual national banks4 7c7 ,de novo *>t]s 7#a7 ,! ,comptroll] ( ! ,curr5cy is au?oriz$ to issue a c]tificate ( au?ority to comm5ce ! bus9ess ( bank+ to a mutual national bank 9 accordance ) ! requirem5ts set =? 9 section #eafi1 provid$ t ref]5ces to capital /ock %all mean pl$g$ acc\nts1 non)drawable inve/m5t c]tificates1 or simil> in/rum5ts by ! incorporators4 7#b7 ,^u ! issuance ( ! c]tificate requir$ by p>agraph 7#a71 ! mutual national bank %all become a body corporate & ! incorporators %all become ! fir/ bo>d ( directors1 ) ! p[] & au?ority to manage ! affairs ( ! bank z h]e9 set =?4 7d7 ,conv]sions 7#a7 ,conv]sion ( a mutual depository to a mutual national bank ,subject to su* regulations z ! ,comptroll] ( ! ,curr5cy may prescribe1 any mutual depository may conv]t to a mutual national bank by fil+ ) ! ,comptroll] ( ! ,curr5cy a notice ( its election to conv]t on a specifi$ date t is n e>li] ?an #cj days aft] ! date on :i* ! notice is fil$1 & ! mutual depository %all be conv]t$ to a mutual national bank *>t] on ! date specifi$ 9 ! notice4 7#b7 ,conv]sion to /ock national bank ,subject to su* regulations z ! ,comptroll] ( ! ,curr5cy may prescribe = ! protection ( depositors' rights & = any o!r purpose ! ,comptroll] ( ! ,curr5cy may consid] appropriate1 any national bank t is organiz$ 9 ! mutual =m "u subsection 7a7 may reorganize on an equitable basis z a /ock national bank4 7#c7 ,conv]sion to /ate banks ,any national mutual bank may conv]t to a ,/ate bank *>t] 9 accordance ) regulations prescrib$ by ! ,comptroll] ( ! ,curr5cy & applicable ,/ate law4 7e7 ,t]m9at+ mutuality ,if a mutual national bank elects to t]m9ate mutuality1 x mu/ d s by-- 7#a7 liquidat+2 or 7#b7 conv]t+ on an equitable basis to a national bank+ association op]at+ 9 /ock =m4 7f7 ,/atus & rights ( memb]s 7#a7 ,9 g5]al ,9 g5]al1 ! /atus ( a memb] is prim>ily t ( a depositor & second>ily t ( a hold] ( an in*oate "r to p>ticipate 9 ! equity ( a mutual national bank ^u a liquidation or conv]sion 9 accordance ) regulations prescrib$ by ! ,comptroll] ( ! ,curr5cy4 7#b7 ,m&atory rights ,ea* memb] ( a mutual national bank %all h ! foll[+ rights3 7,a7 ,su* rights z may be agre$ ^u1 by contract1 betwe5 ! memb] & ! mutual national bank4 7,b7 ,9 ! ev5t ! bo>d ( directors1 9 its sole discretion1 det]m9es a conv]sion ( a mutual national bank to a national bank+ association op]at+ 9 /ock =m is 9 ! be/ int]e/s ( ! community 9 :i* ! bank op]ates1 !n ! memb]s z ( a record date set by ! bo>d ( directors %all h ! fir/ "r to subscribe = & pur*ase /ock 9 ! conv]t$ bank1 on an equitable basis bas$ on ! am\nt ( ! deposit held by su* memb] z ( ! record date4 7,c7 ,9 ! ev5t-- 7i7 ! bo>d ( directors1 9 its sole discretion1 det]m9es a liquidation ( ! mutual national bank is 9 ! be/ int]e/s ( ! community 9 :i* ! bank op]ates1 & su* bo>d ( directors has adopt$ a plan ( liquidation 9 accordance ) regulations proscrib$ by ! ,comptroll] ( ! ,curr5cy1 & ! ,comptroll] ( ! ,curr5cy has approv$ if su* plan2 or 7ii7 if = any o!r reason ! bank is liquidat$ by op]ation ( law1 !n ! memb]s z ( ! date ( liquidation %all h ! "r to h cr$it$ to _! acc\nts1 on a pro rata basis1 any residual assets left aft] ! paym5t ( all liabilities & exp5ses1 includ+ exp5ses ( liquidation ( ! mutual national bank4 7g7 ,managem5t ( ! bank ,! bo>d ( directors %all h ! entire managem5t & control ( ! affairs ( ! mutual national bank4 ,no depositor or borr[] %all h ! "r to vote on any matt] relat+ to ! mutual national bank4 ,any vot+ rights ( memb]s prior to a conv]sion to a mutual national bank %all be ext+ui%$ ^u a conv]sion to a mutual national bank4 7h7 ,mutual hold+ company =mation ,a mutual national bank may reorganize into ! mutual hold+ company =m ( organization 9 accordance ) regulations promulgat$ by ! ,comptroll] ( ! ,curr5cy4 7i7 ,def9itions ,= purposes ( ?is section1 ! foll[+ def9itions %all apply3 7#a7 ,insur$ depository in/itution ,! t]m insur$ depository in/itution has ! same mean+ z 9 section #c ( ! ,f$]al ,deposit ,insurance ,act4 7#b7 ,mutual national bank ,! t]m mutual national bank means a national bank+ association t op]ates 9 mutual =m & is *>t]$ by ! ,comptroll] ( ! ,curr5cy "u ?is section4 7#c7 ,mutual depository ,! t]m mutual depository means a depository in/itution t is organiz$ 9 non/ock =m1 includ+ a ,f$]al non-/ock depository & any =m ( non/ock depository provid$ = "u ,/ate law1 ! deposits ( :i* are insur$ by an in/rum5tality ( ! ,f$]al ,gov]nm5t4 7#d7 ,mutuality ,! t]m mutuality means ! quality ( be+ an insur$ depository in/itution organiz$ "u a ,f$]al or ,/ate law provid+ = ! organization ( non/ock depository in/itutions1 or a hold+ company organiz$ "u a ,f$]al or ,/ate law provid+ = ! organization ( non/ock entities t control "o or m depository in/itutions4 7#e7 ,memb] ,! t]m memb] means ea* insur$ acc\nt hold] 9 a mutual depository's sav+s1 dem&1 or o!r au?oriz$ depository acc\nts & ea* insur$ acc\nt hold] 9 su* an acc\nt 9 a depository subsidi>y ( a mutual bank hold+ company4 ,! bo>d ( directors may adopt a bylaw sett+ a m9imum doll> ?re%old to qualify z a memb] up to #a1jjj4 7#f7 ,memb]%ip rights ,! t]m memb]%ip rights means ! rights ( ea* memb] "u ?is section4 7j7 ,con=m+ ref]5ces ,unless o!rwise provid$ by ! ,comptroll] ( ! ,curr5cy-- 7#a7 any ref]5ce 9 any ,f$]al law to a national bank op]at+ 9 /ock =m1 includ+ a ref]5ce to ! t]m national bank+ association1 memb] bank1 national bank1 national association1 bank1 insur$ bank1 insur$ depository in/itution1 or depository in/itution1 %all be deem$ to ref] also to a mutual national bank2 7#b7 any ref]5ce 9 any ,f$]al law to ! t]m bo>d ( directors1 director1 or directors ( a national bank op]at+ 9 /ock =m %all be deem$ to ref] also to ! bo>d ( a mutual national bank2 & 7#c7 any t]ms 9 ,f$]al law t may apply only to a national bank op]at+ 9 /ock =m1 includ+ ! t]ms /ock1 %>es1 %>es ( /ock1 capital /ock1 common /ock1 /ock c]tificate1 /ock c]tificates1 c]tificates repres5t+ %>es ( /ock1 /ock divid5d1 transf]able /ock1 ea* class ( /ock1 cumulate su* %>es1 p> value1 pref]r$ /ock %all n apply to a mutual national bank1 unless ! ,comptroll] ( ! ,curr5cy det]m9es t ! context requires o!rwise4 4 #d4 ,mutual inve/m5t c]tificates au?oriz$ ,section #ch7;c77#a7 ( ! ,f$]al ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahcao7c77#a77 is h]eby am5d$ by delet+ subp>agraph 7,b77ii7 9 p>agraph 7,a7 & ins]t+ subp>agraph 7,b77ii7 & p>agraph 7,c7 & by add+ at ! end ( subp>agraph 7,b77ii7 ! foll[+3 7,c7 7i7 ,not)/&+ any o!r provision ( law1 a mutual depository1 z def9$ 9 7#ab ,u4,s4,c4 #eacc;,a7h77#c771 is au?oriz$ to issue ,mutual ,inve/m5t ,c]tificates1 :i* %all be includ$ z ,ti] #a capital = purposes ( any capital /&>ds issu$ by an appropriate ,f$]al bank+ ag5cy1 provid$ t su* c]tificates mu/ be-- 7,i7 nonvot+1 except t ! issu+ mutual depository in/itution may p]mit vot+ 9 ! ev5t t-- 7aa7 ! mutual depository in/itution fails to pay divid5ds = a m9imum ( ?ree consecutive divid5d p]iods1 & !n ! hold]s ( ! class or classes ( ,mutual ,inve/m5t ,c]tificates grant$ su* vot+ rights1 & vot+ z a s+le class1 ) "o vote = ea* out/&+ c]tificate1 may elect by a majority vote a maximum ( "o-?ird ( ! in/itution's bo>d ( directors1 ! directors s elect$ to s]ve until ! next annual meet+ ( ! in/itution succe$+ ! paym5t ( all curr5t & pa/ divid5ds2 7bb7 any m]g]1 consolidation1 or reorganization 7except 9 a sup]visory case7 is s\ght to be au?oriz$1 :]e ! issu+ in/itution is n ! survivor1 provid$ t ! regulatory capital ( ! result+ in/itution available = paym5t ( any class ( ,mutual ,inve/m5t ,c]tificates on liquidation is less ?an ! regulatory capital available = su* class prior to ! m]g]1 consolidation1 or reorganization2 7cc7 any action is s\ght to be au?oriz$ :i* w\ld create any class ( ,mutual ,inve/m5t ,c]tificates hav+ a pref]5ce or priority ov] an out/&+ class or classes ( ,mutual ,inve/m5t ,c]tificates2 7dd7 any action is s\ght to be au?oriz$ :i* w\ld adv]sely *ange ! specific t]ms ( any class ( ,mutual ,inve/m5t ,c]tificates2 7ee7 action is s\ght to be au?oriz$ :i* w\ld increase ! numb] ( a class ( ,mutual ,inve/m5t ,c]tificates1 or ! numb] ( a class ( ,mutual ,inve/m5t ,c]tificates rank+ prior to or on p>ity ) ano!r class ( ,mutual ,inve/m5t ,c]tificates2 or 7ff7 action is s\ght :i* w\ld au?orize ! issuance ( an additional class or classes ( ,mutual ,inve/m5t ,c]tificates )\t ! in/itution hav+ met specific f9ancial /&>ds2 7,,ii7 r$eemable at ! sole discretion ( ! ,bo>d ( ,directors ( ! mutual depository2 & 7,,iii7 provide t any divid5ds paid mu/ be non-cumulative4 7ii7 ,not)/&+ any o!r provision ( law1 non)drawable acc\nts1 pl$g$ acc\nts1 mutual capital c]tificates1 or simil> in/rum5ts1 au?oriz$ z ( ! date ( ! enactm5t ( ! ,mutual ,community ,bank ,equity ,act1 %all be includ$ z ,ti] #a capital = purposes ( any capital /&>ds issu$ by an appropriate ,f$]al bank+ ag5cy4 7iii7 ,! appropriate ,f$]al bank+ ag5cies are h]eby au?oriz$ to prescribe appropriate regulations to implem5t ^! provisions4 4 #e4 ,protection ( mutual depositories 7a7 ,9 g5]al ,subsection 7h7 ( section #aj ( ! ,home ,own]s' ,loan ,act 7#ab ,u4,s4,c4 #adfg;a7h77 is am5d$-- 7#a7 by /rik+ or aft] ! semicolon at ! end ( p>agraph 7#b72 7#b7 by /rik+ ! p]iod at ! end ( p>agraph 7#c7 & ins]t+ 2 or2 & 7#c7 by ins]t+ aft] p>agraph 7#c71 ! foll[+ new p>agraph3 7#d7 any company or any subsidi>y ( any company1 any director1 (fic]1 employee1 or p]son own+1 controll+1 or hold+ ) ! p[] to vote1 or hold+ proxies repres5t+ m ?an #be p]c5t ( ! vot+ %>es1 ( su* company or subsidi>y1 or any director1 (fic]1 employee1 or p]son act+ 9 conc]t ) su* company or subsidi>y1 to hold1 solicit1 or ex]cise any proxies 9 respect ( a sav+s association :i* is a mutual association1 ) ! view or int5tion to1 directly or indirectly1 control or attempt to control ! mutual association4 4 7b7 ,en=cem5t action ,subsection 7i7 ( section #aj ( ! ,home ,own]s' ,loan ,act 7#ab ,u4,s4,c4 #adfg;a7i77 is am5d$ by ins]t+ aft] p>agraph 7#c7 ! foll[+ new p>agraph3 7#d7 ,civil actions by association 7,a7 ,equitable relief ,any aggriev$ mutual sav+s association may br+ a civil action 9 a c\rt ( appropriate jurisdiction & may recov] su* equitable relief1 includ+ injunctive relief1 & reasonable attorney's fees1 z det]m9$ by ! c\rt = any violation or attempt$ violation ( p>agraph 7#a7 or 7#d7 ( subsection 7h74 7,b7 ,proxies null & void ,9 addition to any damages or relief "u p>agraph 7#a71 any proxy held or ex]cis$ by any p>ty ! hold+ or ex]cise ( :i* has be5 det]m9$ to be a violation ( p>agraph 7#a7 or 7#d7 ( subsection 7h7 %all be deem$ null & void1 z ( ! inception ( su* proxy1 & %all n be c\nt$ = purposes ( det]m9+ a quorum at any meet+ ( su* aggriev$ mutual association4 7,c7 ,/atute ( limitation 7i7 ,9 g5]al ,an action may n be br\ght "u subp>agraph 7,a7 aft] ! end ( ! #ahj-;day p]iod beg9n+ on ! lat] (-- 7,i7 ! date ( ! discov]y ( ! alleg$ violation by ! aggriev$ mutual sav+s association2 or 7,,ii7 ! date ( ! enactm5t ( ! ,mutual ,sav+s ,association ,pres]vation ,act4 7ii7 ,no attribution rule ,= purposes ( clause 7i77,i71 ! k ( ! facts & circum/ances giv+ rise to an alleg$ violation by any p>ty to ! violation %all n be attribut$ to ! sav+s association4 4 #f4 ,e/abli%m5t ( *>itable f\ndations au?oriz$ 7a7 ,any mutual hold+ company or direct or indirect /ock subsidi>y ( a mutual hold+ company may contribute or issue %>es ( su* /ock subsidi>y to a *>itable f\ndation e/abli%$ by ! mutual hold+ company or any direct or indirect /ock subsidi>y ( ! mutual hold+ company1 provid$ t-- 7#a7 ! *>itable f\ndation qualifies z a #eja7;c77#c7 organization "u ! ,int]nal ,rev5ue ,code1 z am5d$2 7#b7 ! ,f\ndation's gov]nance complies ) regulations adopt$ by ! appropriate ,f$]al bank+ ag5cy2 7#c7 at ! "t ( ! contribution or issuance to ! *>itable f\ndation1 no direct or indirect /ock subsidi>y ( ! mutual hold+ company1 nor any affiliate !re(1 has issu$ %>es ( common /ock to any nonaffiliate ( ! direct or indirect /ock subsidi>y ( ! mutual hold+ company2 7#d7 ! value ( ! /ock s contribut$ or issu$ by ! direct or indirect /ock subsidi>y ( ! mutual hold+ company1 z det]m9$ 9 accordance ) subsection 7b71 %all n exce$ m ?an #aj p]c5t ( ! insur$ depository in/itution's consolidat$ ,ti] #a capital1 z ( ! qu>t] end prior to ! e/abli%m5t ( ! *>itable f\ndation2 7#e7 ! direct or indirect /ock subsidi>y ( ! mutual hold+ company t contributes or issues ! %>es to ! *>itable f\ndation mu/ reasonably expect to utilize ! tax d$uction )9 ! "t p]iod proscrib$ by ! ,int]nal ,rev5ue ,s]vice = contributions to *>itable f\ndations2 & 7#f7 ! mutual hold+ company & ea* direct or indirect /ock subsidi>y ( ! mutual hold+ company w be 8well capitaliz$0 "u ! prompt corrective action regulations imm$iately foll[+ ! contribution to ! *>itable f\ndation4 7b7 ,prior to any contribution or issuance by a direct or indirect /ock subsidi>y ( ! mutual hold+ company to a *>itable f\ndation pursuant to subsection 7a71 ! mutual hold+ company %all obta9 an appraisal1 by an indep5d5t apprais] exp]i5c$ 9 su* matt]s1 ( ! pro =ma value ( ! /ock s contribut$ on a fully conv]t$ basis4 ,! value ( ! /ock s contribut$1 z det]m9$ by ! apprais]1 %all be limit$ 9 accordance ) p>agraph 7#d7 ( subsection 7b74 #g4 ,divid5ds paid by subsidi>ies ( mutual hold+ companies ,section #aj7o77#aa77;,b7 ( ! ,home ,own]s' ,loan ,act 7#ab ,u4,s4,c4 #adfg;a7o77#aa77;,b77 is am5d$ by delet+ or at ! end ( 7i71 delet+ ! p]iod at ! end ( 7ii7 & ins]t+ a semicolon at ! end !re(1 & add+ ! foll[+3 7iii7 a majority ( ! bo>d ( directors ( ! mutual hold+ company1 or a committee !re(1 consi/s ( directors :o are n affiliates ( any /ock subsidi>y ( ! mutual hold+ company & :o d n directly or indirectly own any %>es ( ! /ock to :i* ! waiv] w\ld apply1 & vote 9 favor ( ! waiv] ( ! divid5d2 or 7iv7 an indep5d5t corporate committee consi/+ ( p]sons :o are n /ockhold]s1 affiliates1 depositors1 borr[]s1 or memb]s ( ! mutual hold+ company or any /ock subsidi>y ( ! mutual hold+ company vote 9 favor ( ! waiv] ( ! divid5d4 4 #h4 ,pres]v+ mutuality bylaws au?oriz$ 7a7 ,! ,bo>d ( ,directors ( a mutual depository may adopt a bylaw to pres]ve ! mutuality ( a mutual depository4 ,su* bylaw provisions may include-- 7#a7 sup]majority vot+ requirem5ts1 up to #hj p]c5t1 by ! memb]s to approve a conv]sion to /ock =m2 7#b7 a prohibition aga9/ any p]son f s]v+1 or nom9at+ a p]son to s]ve1 on ! ,bo>d ( ,directors ( ! mutual depository1 if su* p]son or nom9ee has an int5tion to propose a conv]sion f mutual to /ock =m2 7#c7 a requirem5t t any p]son s]v+ or nom9at$ to s]ve on ! ,bo>d ( ,directors may n propose a conv]sion f mutual to /ock =m = a p]iod ( "t n exce$+ five ye>s1 z det]m9$ by ! ,bo>d1 beg9n+ on ! lat] ( ! date su* bylaw is adopt$ or su* p]son is elect$ to s]ve on ! ,bo>d2 7#d7 a prohibition aga9/ any memb] f propos+ a conv]sion to /ock =m at any annual or special meet+ ( memb]s or by ! writt5 cons5t ( memb]s2 & 7#e7 a violation ( "o or m ( ! bylaw provisions adopt$ to pres]ve mutuality %all be a basis = t]m9ation z a memb] ( ! ,bo>d ( ,directors4 7b7 ,not)/&+ ! =ego+1 9 no ev5t %all any bylaw adopt$ pursuant to section 7a7 h any =ce & effect 9 ! ev5t ! mutual depository is n well capitaliz$ 9 accordance ) ! rules e/abli%$ by su* depositories appropriate ,f$]al bank+ ag5cy4 #i4 ,applicability ( small bank hold+ company policy /atem5t to small mutual hold+ company ,! ,bo>d ( ,gov]nors ( ! ,f$]al ,res]ve %all apply its ,small ,bank ,hold+ ,company ,policy ,/atem5t to any mutual hold+ company t w\ld o!rwise qualify z a small bank hold+ company1 if x 7 a bank hold+ company4