PREVENTION OF CREATION OF NEW S&L HOLDING COMPANIES WITH COMMERCIAL AFFILIATES.

SEC. 401. PREVENTION OF CREATION OF NEW S&L HOLDING COMPANIES WITH COMMERCIAL AFFILIATES. (a) In General.—Section 10(c) of the Home Owners’ Loan Act (12 U.S.C. 1467a(c)) is amended by adding at the end the following new paragraph:113 STAT. 1435 “(9) Prevention of new affiliations between s&l holding companies and commercial firms.— “(A) In general.—Notwithstanding paragraph (3), no company may directly or indirectly, including through any merger, consolidation, or other type of business combination, acquire control of a savings association after May 4, 1999, unless the company is engaged, directly or indirectly (including through a subsidiary other than a savings association), only in activities that are permitted— “(i) under paragraph (1)(C) or (2) of this subsection; or “(ii) for financial holding companies under section 4(k) of the Bank Holding Company Act of 1956. “(B) Prevention of new commercial affiliations.—Notwithstanding paragraph (3), no savings and loan holding company may engage directly or indirectly (including through a subsidiary other than a savings association) in any activity other than as described in clauses (i) and (ii) of subparagraph (A). “(C) Preservation of authority of existing unitary s&l holding companies.—Subparagraphs (A) and (B) do not apply with respect to any company that was a savings and loan holding company on May 4, 1999, or that becomes a savings and loan holding company pursuant to an application pending before the Office on or before that date, and that— “(i) meets and continues to meet the requirements of paragraph (3); and “(ii) continues to control not fewer than 1 savings association that it controlled on May 4, 1999, or that it acquired pursuant to an application pending before the Office on or before that date, or the successor to such savings association. “(D) Corporate reorganizations permitted.—This paragraph does not prevent a transaction that— “(i) involves solely a company under common control with a savings and loan holding company from acquiring, directly or indirectly, control of the savings and loan holding company or any savings association that is already a subsidiary of the savings and loan holding company; or “(ii) involves solely a merger, consolidation, or other type of business combination as a result of which a company under common control with the savings and loan holding company acquires, directly or indirectly, control of the savings and loan holding company or any savings association that is already a subsidiary of the savings and loan holding company. “(E) Authority to prevent evasions.—The Director may issue interpretations, regulations, or orders that the Director determines necessary to administer and carry out the purpose and prevent evasions of this paragraph, including a determination that, notwithstanding the form of a transaction, the transaction would in substance result in a company acquiring control of a savings association. “(F) Preservation of authority for family trusts.—Subparagraphs (A) and (B) do not apply with 113 STAT. 1436respect to any trust that becomes a savings and loan holding company with respect to a savings association, if— “(i) not less than 85 percent of the beneficial ownership interests in the trust are continuously owned, directly or indirectly, by or for the benefit of members of the same family, or their spouses, who are lineal descendants of common ancestors who controlled, directly or indirectly, such savings association on May 4, 1999, or a subsequent date, pursuant to an application pending before the Office on or before May 4, 1999; and “(ii) at the time at which such trust becomes a savings and loan holding company, such ancestors or lineal descendants, or spouses of such descendants, have directly or indirectly controlled the savings association continuously since May 4, 1999, or a subsequent date, pursuant to an application pending before the Office on or before May 4, 1999.”. (b) Conforming Amendment.—Section 10(o)(5)(E) of the Home Owners’ Loan Act (12 U.S.C. 1467a(o)(5)(E)) is amended by striking “, except subparagraph (B)” and inserting “or (c)(9)(A)(ii)”. (c) Rule of Construction for Certain Applications.— (1) In general.—In the case of a company that— (A) submits an application with the Director of the Office of Thrift Supervision before the date of the enactment of this Act to convert a State-chartered trust company controlled by such company on May 4, 1999, to a savings association; and (B) controlled a subsidiary on May 4, 1999, that had submitted an application to the Director on September 2, 1998; the company (including any subsidiary controlled by such company as of such date of enactment) shall be treated as having filed such conversion application with the Director before May 4, 1999, for purposes of section 10(c)(9)(C) of the Home Owners’ Loan Act (as added by subsection (a)). (2) Definitions.—For purposes of paragraph (1), the terms “company”, “control”, “savings association”, and “subsidiary” have the meanings given those terms in section 10 of the Home Owners’ Loan Act.