MUTUAL HOLDING COMPANY AMENDMENTS.

SEC. 107. MUTUAL HOLDING COMPANY AMENDMENTS. (a) In General.— Section 408 of the National Housing Act (12 U.S.C. 1730a) is amended by inserting after subsection (r) (as added by section 106(a) of this title) the following new subsection: “(s) Mutual Holding Companies.— “(1) In general.— Notwithstanding any provision of Federal law other than this title, an insured institution operating in mutual form may reorganize so as to become a holding company by— “(A) chartering an interim savings institution, the stock of which is to be wholly owned by the mutual institution; and “(B) transferring the substantial part of its assets and liabilities, including all of its insured liabilities, to the interim savings institution. “(2) Directors and certain account holders’ approval of plan required.— A reorganization is not authorized under this subsection unless— “(A) a plan providing for such reorganization has been approved by a majority of the board of directors of the mutual savings institution; and “(B) in the case of an institution in which holders of accounts and obligors exercise voting rights, such plan has been submitted to and approved by a majority of such individuals at a meeting held at the call of the directors in accordance with the procedures prescribed by the institution’s charter and bylaws. “(3) Notice to the corporation; disapproval period.— “(A) Notice required.— At least 60 days prior to taking any action described in paragraph (1), an insured institution seeking to establish a mutual holding company shall provide written notice to the Corporation. The notice shall contain such relevant information as the Corporation shall require by regulation or by specific request in connection with any particular notice. 101 STAT. 578 “(B) Transaction allowed if not disapproved.— Unless the Corporation within such 60-day notice period disapproves the proposed holding company formation, or ex-tends for another 30 days the period during which such disapproval may be issued, the insured institution providing such notice may proceed with the transaction, if the requirements of paragraph (2) have been met. “(C) Grounds for disapproval.— The Corporation may disapprove any proposed holding company formation only if— “(i) such disapproval is necessary to prevent unsafe or unsound practices; “(ii) the financial or management resources of the insured institution involved warrant disapproval; “(iii) the insured institution fails to furnish the information required under subparagraph (A); or “(iv) the insured institution fails to comply with the requirement of paragraph (2). “(D) Retention of capital assets.— In connection with the transaction described in paragraph (1), an insured institution may, subject to the approval of the Corporation, retain capital assets at the holding company level to the extent that such capital exceeds adequate reserves as prescribed pursuant to section 403(b) or the comparable provisions of State or Federal law. “(4) Ownership.— Persons having ownership rights in the mutual institution pursuant to section 5(b)(1)(B) of the Home Owners’ Loan Act of 1933 or State law shall have the same ownership rights with respect to the mutual holding company. “(5) Permitted activities.— A mutual holding company may engage only in the following activities: “(A) Investing in the stock of an insured institution. “(B) Acquiring a mutual institution through the merger of such institution into an insured institution subsidiary of such holding company or an interim savings institution subsidiary of such holding company. “(C) Subject to paragraph (6), merging with or acquiring another holding company, one of whose subsidiaries is an insured institution. “(D) Investing in a corporation the capital stock of which is available for purchase by an insured institution under Federal law or under the law of any State where the subsidiary insured institution or institutions have their home offices. “(E) Engaging in the activities described in subsection (c)(2), except subparagraph (B). “(6) Limitations on certain activities of acquired holding companies.— “(A) New activities.— If a mutual holding company acquires or merges with another holding company under paragraph (5)(C), the holding company acquired or the holding company resulting from such merger or acquisition may only invest in assets and engage in activities which are authorized under paragraph (5). “(B) Grace period for divesting prohibited assets or discontinuing prohibited activities.— Not later than 2 years following a merger or acquisition described in para-101 STAT. 579graph (5)(C), the acquired holding company or the holding company resulting from such merger or acquisition shall— “(i) dispose of any asset which is an asset in which a mutual holding company may not invest under paragraph (5); and “(ii) cease any activity which is an activity in which a mutual holding company may not engage under paragraph (5). “(7) Regulation.— Unless the context otherwise requires, a mutual holding company shall be subject to the other requirements of this section regarding regulation of holding companies. “(8) Definitions.— For purposes of this subsection— “(A) Mutual holding company.— The term ‘mutual holding company’ means a corporation organized as a holding company under this subsection. “(B) Mutual institution.— The term ‘mutual institution’ means— “(i) an insured institution; or “(ii) a savings bank (as defined in section 3(g) of the Federal Deposit Insurance Act), which is operating in mutual form.”. (b) Amendment to the Bank Holding Company Act.— Section 3 of the Bank Holding Company Act of 1956 (12 U.S.C. 1842) is amended by adding at the end thereof the following: “(g) Mutual Bank Holding Company.— “(1) Establishment.— Notwithstanding any provision of Federal law other than this Act, a savings bank or cooperative bank operating in mutual form may reorganize so as to form a holding company. “(2) Regulation.— A corporation organized as a holding company under this subsection shall be regulated on the same terms and be subject to the same limitations as any other holding company which controls a savings bank.”.