AFFILIATIONS OF FSLIC INSURED INSTITUTIONS.

SEC. 106. SECURITIES AFFILIATIONS OF FSLIC INSURED INSTITUTIONS. (a) In General.— Section 408 of the National Housing Act (12 U.S.C. 1730a) is amended by inserting after subsection (q) (as added by section 104(e) of this title) the following new subsection: “(r) Securities Affiliations.— “(1) In general.— The provisions of section 20 of the Banking Act of 1933 (relating to affiliations between member banks and organizations engaged principally in certain securities activities) and the provisions of section 32 of the Banking Act of 1933 (relating to certain officer, director, or employee relationships involving a member bank and a person or organization primarily engaged in certain securities activities) shall be applicable to every insured institution in the same manner and to the same extent as if such insured institution were a member bank. “(2) Exceptions.— This subsection does not prohibit— “(A) the continuation of such an affiliation or relationship which commenced prior to March 5, 1987, or the establishment of such an officer, director, or employee relationship in connection with any affiliation established before such date; “(B) the Washington Mutual Savings Bank, located in the State of Washington, from acquiring control of one or more insured institutions or establishing an officer, director, or employee relationship between such an insured institution and any affiliate of the savings bank referred to in section 18(j)(3)(B) of the Federal Deposit Insurance Act; “(C) the acquisition of Peoples Savings and Loan Association of Owatonna, Minnesota, by Miller and Schroeder Holdings, Inc. (or any affiliate of such company), or the establishment of any officer, director, or employee relationship between such association and such company or any affiliate of such company, including Miller and Schroeder Financial, Inc.; or “(D) such an affiliation or officer, director, or employee relationship which results from the acquisition by an organization described in paragraph (1) of an insured institution under subsection (m) of this section, if such institution has total assets of $500,000,000 or more at the time of such acquisition. “(3) Two-year period.— An affiliation or an officer, director, or employee relationship that becomes unlawful as a result of the enactment of this subsection may continue for a period of 2 years after the date of the enactment of this subsection. “(4) Exempt activities of certain institutions.— Nothing in this subsection or section 18(j)(3) of the Federal Deposit Insurance Act prohibits an affiliation or an officer, director, or employee relationship between an insured institution or an institution which is eligible to become a member of a Federal Home Loan Bank, and an organization engaged principally in the issuance, sale, underwriting, or distribution, at wholesale or retail, or through syndicate participation, of— “(A) securities representing or secured by interests in real estate or real estate loans or pools of real estate loans; “(B) interests in partnerships formed primarily to own, operate, manage, or invest in real estate; 101 STAT. 577 “(C) insurance products deemed to be securities, including without limitation variable annuities and variable life insurance; “(D) securities of an investment company, as such term is defined in the Investment Company Act of 1940; and “(E) any securities to the extent such issuance, sale, underwriting, or distribution is permitted for national banks. “(5) Regulations.— “(A) In general.— The Corporation is authorized to issue rules and regulations and to publish interpretations governing the implementation of this subsection, and shall enforce the provisions of this subsection. “(B) Federal deposit insurance corporation authority.— For the purpose of paragraph (4), the Federal Deposit Insurance Corporation is authorized to issue rules and regulations and publish interpretations with respect to savings banks and other institutions subject to section 18(j)(3) of the Federal Deposit Insurance Act.”. (b) Expiration Date.— The amendment made by subsection (a) shall cease to be effective on March 1, 1988.