,i  #aaeth ,,congress  #ast ,session    
,h4 ,r4 #ddci  ,,in ,,the ,,house ,,of  
,,representatives  ,november #af1       
#bjag,mr4 ,hollingsworth 7for himself1  
,mr4 ,hastings1 ,mr4 ,mc,henry1 ,mr4    
,luetkemeyer1 and ,mr4 ,cuellar7        
introduced the following bill2 which was
 referred to the ,committee on          
,financial ,services  ,a ,,bill  ,to    
amend the ,revised ,statutes1 the ,bank 
,service ,company ,act1 the ,federal    
,deposit ,insurance ,act1 and the ,home 
,owners' ,loan ,act to clarify that the 
role of the insured depository          
institution as lender and the location  
of an insured depository institution    
under applicable law are not affected by
 any contract between the institution   
and a third-party service provider1 and 
to clarify that ,federal preemption of  
,state usury laws applies to any loan to
 which an insured depository institution
 is the party to which the debt is      
initially owed according to its terms1  
and for other purposes4  #a4 ,short     

title ,this ,act may be cited as the    
,modernizing ,credit ,opportunities     
,act4  #b4 ,findings ,congress finds the
 following3  7#a7 ,insured depository   
institutions have found efficiencies in 
their lending operations through a      
variety of different relationships with 
nondepository institutions that perform 
different lending-related functions4    
7#b7 ,the ,federal banking regulators   
have recognized that insured depository 
institutions may enter into             
relationships with third parties to     
originate loans1 have recognized the    
benefits of these arrangements for      
institutions and borrowers alike1 and   
have issued guidance to ensure the      
safety and soundness of such            
relationships and to protect borrowers4 
7#c7 ,insured depository institutions   
routinely engage in third-party lending 
arrangements and regulators have long   
recognized that third-party lending     
arrangements provide institutions with  
the ability to supplement1 enhance or   

expedite lending services for their     
customers1 and that engaging in         
third-party lending arrangements also   
enables institutions to reduce the cost 
of delivering credit products1 to expand
 access to credit1 and to achieve       
strategic goals4  7#d7 ,litigation      
concerning loans made by an insured     
depository institution that involve     
arrangements with third parties that    
perform lending-related functions have  
required the courts to determine the    
identity and location of the lender but 
have reached inconsistent results4  7#e7
 ,inconsistencies in the determinations 
of the identity and location of the     
lender under judicially crafted         
multi-factor balancing tests lessen the 
efficiency of the lending process1      
reduce the transparency of the lending  
process for both lenders and borrowers1 
and jeopardize the substantial benefits 
of third-party lending arrangements for 
borrowers and the economy4  7#f7 ,in    
order to maximize efficiency and        

transparency1 it is necessary to clarify
 and reinforce existing law by codifying
 clear and straightforward standards    
that establish that an insured          
depository institution is the lender on 
any loan or discount made1 or upon any  
note1 bill of exchange or other evidence
 of debt where it is the party to which 
the debt is initially owed according to 
its terms and that any relationship with
 a third party that performs            
lending-related functions does not      
affect the determination of such        
institution's role as the lender or its 
location4  #c4 ,location of insured     
depository institution  7a7 ,amendment  
to the ,bank ,service ,company ,act     
,section #g of the ,bank ,service       
,company ,act 7#ab ,u4,s4,c4 #ahfg7 is  
amended-- 7#a7 by redesignating         
subsection 7d7 as subsection 7e72 and   
7#b7 by inserting after subsection 7c7  
the following3  7d7 ,location of insured
 depository institution ,the geographic 
location within the ,united ,states of a

 person performing services for an      
insured depository institution under    
subsection 7c7 or the existence of an   
economic relationship between an insured
 depository institution and another     
person shall not affect the             
determination of the location of such   
institution under other applicable law4 
4  7b7 ,amendment to the ,home ,owners' 
,loan ,act ,section #e7;d77#g7 of the   
,home ,owners' ,loan ,act 7#ab ,u4,s4,c4
 #adfd7;d77#g77 is amended-- 7#a7 by    
redesignating subparagraph 7,e7 as      
subparagraph 7,f72 and  7#b7 by         
inserting after subparagraph 7,d7 the   
following3  7,e7 ,location of savings   
association ,the geographic location    
within the ,united ,states of a person  
performing services for a savings       
association under subparagraph 7,d7 or  
the existence of an economic            
relationship between a savings          
association and another person shall not
 affect the determination of the        
location of the savings association     

under other applicable law4  4  #d4     
,terms and conditions  7a7 ,amendment to
 the ,revised ,statutes ,section #eaig  
of the ,revised ,statutes 7#ab ,u4,s4,c4
 #he7 is amended by inserting the       
following after the first sentence3 ,a  
loan1 discount1 note1 bill of exchange1 
or other debt is made by an association1
 and subject to the preceding sentence1 
where the association is the party to   
which the debt is owed according to the 
terms of the loan1 discount1 note1 bill 
of exchange1 or other debt1 regardless  
of any later assignment4 ,the existence 
of a service or economic relationship   
between an association and another      
person shall not affect the application 
of this section to the rate of interest 
upon the loan or discount made1 or the  
note1 bill1 or other evidence of debt or
 the identity of the association as the 
lender under the agreement44  7b7       
,amendment to the ,federal ,deposit     
,insurance ,act ,subsection 7a7 of      
section #bg of the ,federal ,deposit    

,insurance ,act 7#ab ,u4,s4,c4          
#ahca;d7a77 is amended by adding at the 
end the following3 ,a loan1 discount1   
note1 bill of exchange1 or other debt is
 made by a ,state bank or an insured    
branch of a foreign bank1 and subject to
 the preceding sentence1 where a ,state 
bank or an insured branch of a foreign  
bank is the party to which the debt is  
owed according to the terms of the loan1
 discount1 note1 bill of exchange or    
other debt1 regardless of any later     
assignment4 ,the existence of a service 
or economic relationship between a      
,state bank or insured branch of a      
foreign bank and another person shall   
not affect the application of this      
subsection to the interest rate upon the
 loan or discount made1 or upon the     
note1 bill of exchange1 or other        
evidence of debt or the identity of the 
,state bank or insured branch of a      
foreign bank as the lender under the    
agreement44  7c7 ,amendment to the ,home
 ,owners' ,loan ,act ,section #d7;g77#a7

 of the ,home ,owners' ,loan ,act 7#ab  
,u4,s4,c4 #adfc7;g77#a77 is amended by  
adding at the end the following3 ,an    
extension of credit is made by a savings
 association1 and subject to the        
preceding sentence1 where a savings     
association is the party to which the   
debt is owed according to the terms of  
the debt1 regardless of any later       
assignment4 ,the existence of a service 
or economic relationship between a      
savings association and another person  
shall not affect the application of this
 subsection to the interest rate upon   
the extension of credit or the identity 
of the savings association as the lender
 under the agreement44