H.R.1909 - FFSCC Charter Act of 2011
To create a charter for Federal Financial Services and Credit Companies.
Loading Bill Text
Rollover any line of text to comment and/or link to it.
SECTION 1. SHORT TITLE.
SEC. 2. FINDINGS; PURPOSE.
(1) According to the Federal Deposit Insurance Corporation, more than 60 million low- and moderate-income consumers in America remain unbanked, underbanked, or underserved.CommentsClose CommentsPermalink
(2) The proportion of United States households that are unbanked varies considerably across racial and ethnic groups with certain racial and ethnic groups being more likely to be unbanked than the population as a whole. Minorities more likely to be unbanked include Blacks (21.7 percent of Black households), Hispanics (19.3 percent), and American Indian/Alaskans (15.6 percent). Racial groups less likely to be unbanked are Asians (3.5 percent) and Whites (3.3 percent).CommentsClose CommentsPermalink
(3) Certain racial and ethnic minorities are more likely to be underbanked than the population as a whole. Minorities more likely to be underbanked include Blacks (an estimated 31.6 percent), American Indian/Alaskans (28.9 percent), and Hispanics (24.0 percent). Asians and Whites are less likely to be underbanked (7.2 percent and 14.9 percent, respectively).CommentsClose CommentsPermalink
(4) Households with income under $30,000 account for at least 71 percent of unbanked households. As income increases, the share of households that are unbanked declines considerably. Nationally, nearly 20 percent of lower-income United States households--almost 7 million households earning below $30,000 per year--do not currently have a bank account. In contrast, only 4.2 percent of households with annual income between $30,000 and $50,000 and less than 1 percent of households with yearly income of $75,000 or higher are unbanked.CommentsClose CommentsPermalink
(5) Lack of access to affordable banking products and services deters the economic advancement of low- and moderate-income consumers and stunts the economic growth of communities in which they live.CommentsClose CommentsPermalink
(b) Purpose- The purpose of this Act is to establish a vibrant, safe, and commercially viable market for underbanked and unbanked individuals to gain access to financial services and products.CommentsClose CommentsPermalink
SEC. 3. FEDERAL FINANCIAL SERVICES AND CREDIT COMPANY.
(1) under such regulations as the Comptroller of the Currency may prescribe, provide for the organization, incorporation, examination, operation, regulation, and chartering of companies to be known as Federal Financial Services and Credit Companies (hereinafter in this Act referred to as ‘FFSCCs’); andCommentsClose CommentsPermalink
(b) Eligibility- The Comptroller of the Currency may not issue an FFSCC charter to a company unless the company satisfies the following requirements, as reasonably determined by the Comptroller of the Currency:CommentsClose CommentsPermalink
(C) Ancillary financial services extended to consumers or small businesses, including issuing money orders, sending and receiving wire transfers, check cashing services, bill payment services, and tax preparation services.CommentsClose CommentsPermalink
(A) reflect sound financial principles and demonstrate realistic assessments of risk in light of economic and competitive conditions in the market for serving underbanked and unbanked populations;CommentsClose CommentsPermalink
(B) include information sufficient to permit the Comptroller of the Currency to evaluate the overall management ability of the company, especially the ability to provide financial services to the underbanked and unbanked population; andCommentsClose CommentsPermalink
(C) demonstrate that the company is aware of, and understands, Federal and State consumer credit laws and sound consumer credit operations and practices in the context of serving the needs of the underbanked and unbanked populations.CommentsClose CommentsPermalink
(4) The company has senior management officials who are familiar with applicable Federal and State consumer credit laws and regulations, and the credit needs of underbanked and unbanked consumers.CommentsClose CommentsPermalink
(5) The company has competent management, with ability and experience relevant to the types of services to be provided, especially the ability and experience to design and provide financial services to the underbanked and unbanked consumer population.CommentsClose CommentsPermalink
(A) SHORT-TERM CREDIT- With respect to an extension of short-term credit by an FFSCC, the FFSCC shall provide the person to whom credit is being extended a clear and prominent statement in the loan agreement that states the true cost of the loan in terms of an actual finance charge per dollar of credit extended to such person instead of the annual percentage rate disclosure required under the Truth in Lending Act.CommentsClose CommentsPermalink
(B) LONG-TERM CREDIT- With respect to an extension of long-term credit by an FFSCC, the FFSCC shall provide the person to whom credit is being extended a disclosure of the finance charge to be paid by the person, expressed as an ‘annual percentage rate’, using that term.CommentsClose CommentsPermalink
(2) ACCOUNT ACCESS- Each FFSCC shall provide continuous account access to the customers of the FFSCC, either through a toll-free telephone number, the Internet, or both.CommentsClose CommentsPermalink
(4) FINANCIAL PRODUCTS OFFERED- Each FFSCC shall provide to underbanked persons at least three financial products from within the services listed under the subparagraphs of subsection (b)(1).CommentsClose CommentsPermalink
(D) Submit to the Comptroller of the Currency for approval a business plan which, among other things, provides in reasonable detail evidence of the knowledge, understanding, and experience of the institution and senior management of the unique challenges that unbanked and underbanked individuals face with respect to access to financial credit.CommentsClose CommentsPermalink
(d) FFSCC Powers- Subject to such regulations as the Comptroller of the Currency may issue, in addition to general corporate powers, an FFSCC shall have the authority to provide any financial products authorized by the Comptroller of the Currency under section 4(2).CommentsClose CommentsPermalink
(e) Penalty- Whoever knowingly violates any provision of this section, or any regulation issued pursuant to this section, shall be fined not more than $20,000 for each day such violation continues or imprisoned for not more than 3 years, or both. The Comptroller of the Currency may authorize any State attorney general to enforce violations of this Act, or regulations issued pursuant to this Act.CommentsClose CommentsPermalink
(f) FFSCC Fee- All FFSCCs shall pay an annual fee to the Comptroller of the Currency in an amount that the Comptroller of the Currency determines is sufficient, in the aggregate, to offset the cost to the Comptroller of the Currency of carrying out the provisions of this section.CommentsClose CommentsPermalink
(g) Preemption of State Law- A law of a State or political subdivision thereof shall be preempted if the application of such law would have a discriminatory effect on a company because such company is chartered as an FFSCC.CommentsClose CommentsPermalink
(h) Model Forms- The Comptroller of the Currency shall draft approved, model product and disclosure forms that may be utilized by FFSCCs with any approved credit products or services offered by an FFSCC.CommentsClose CommentsPermalink
SEC. 4. RATES AND TERMS STUDY; DEVELOPMENT OF FINANCIAL PRODUCTS.
SEC. 5. DEFINITIONS.
(4) INSURED DEPOSITORY INSTITUTION- The term ‘insured depository institution’ shall have the meaning given such term under section 3(c) of the Federal Deposit Insurance Act.CommentsClose CommentsPermalink
(B) has limited or no ability to access non-depository services from insured depository institutions or insured credit unions, as reasonably determined by the Comptroller of the Currency.CommentsClose CommentsPermalink
(10) OTHER TERMS- The Comptroller of the Currency may issue regulations to define such other terms as the Comptroller of the Currency determines necessary to carry out this Act.CommentsClose CommentsPermalink