HR 3126 IHCommentsClose CommentsPermalink

To establish the Consumer Financial Protection Agency, and for other purposes.CommentsClose CommentsPermalink

July 8, 2009CommentsClose CommentsPermalink

Mr. FRANK of Massachusetts (for himself, Ms. WATERS, Mrs. MALONEY, Mr. GUTIERREZ, Mr. WATT, Mr. ACKERMAN, Mr. SHERMAN, Mr. CAPUANO, Mr. MILLER of North Carolina, Mr. AL GREEN of Texas, Mr. ELLISON, Ms. SPEIER, and Mr. GRAYSON) introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concernedCommentsClose CommentsPermalink

To establish the Consumer Financial Protection Agency, and for other purposes.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘Consumer Financial Protection Agency Act of 2009’.CommentsClose CommentsPermalink

SEC. 2. TABLE OF CONTENTS.

The table of contents for this Act is as follows:CommentsClose CommentsPermalink





Sec. 1. Short title.CommentsClose CommentsPermalink





Sec. 2. Table of contents.CommentsClose CommentsPermalink

TITLE I--CONSUMER FINANCIAL PROTECTION AGENCY

Sec. 101. Definitions.CommentsClose CommentsPermalink

Subtitle A--Establishment of the Agency

Sec. 111. Establishment of the Consumer Financial Protection Agency.CommentsClose CommentsPermalink





Sec. 112. Board.CommentsClose CommentsPermalink





Sec. 113. Executive and administrative powers.CommentsClose CommentsPermalink





Sec. 114. Administration.CommentsClose CommentsPermalink





Sec. 115. Consumer Advisory Board.CommentsClose CommentsPermalink





Sec. 116. Coordination.CommentsClose CommentsPermalink





Sec. 117. Reports to the Congress.CommentsClose CommentsPermalink





Sec. 118. Funding; fees and assessments; penalties and fines.CommentsClose CommentsPermalink





Sec. 119. Effective date.CommentsClose CommentsPermalink

Subtitle B--General Powers of the Agency

Sec. 121. Mandate and objectives.CommentsClose CommentsPermalink





Sec. 122. Authorities.CommentsClose CommentsPermalink





Sec. 123. Collection of information; confidentiality rules.CommentsClose CommentsPermalink





Sec. 124. Monitoring; assessments of significant rules; reports.CommentsClose CommentsPermalink





Sec. 125. Authority to restrict mandatory pre-dispute arbitration.CommentsClose CommentsPermalink





Sec. 126. Effective date.CommentsClose CommentsPermalink

Subtitle C--Specific Authorities

Sec. 131. Prohibiting unfair, deceptive, or abusive acts or practices.CommentsClose CommentsPermalink





Sec. 132. Disclosures and communications.CommentsClose CommentsPermalink





Sec. 133. Sales practices.CommentsClose CommentsPermalink





Sec. 134. Pilot disclosures.CommentsClose CommentsPermalink





Sec. 135. Adopting operational standards to deter unfair, deceptive, or abusive practices.CommentsClose CommentsPermalink





Sec. 136. Standard consumer financial products or services.CommentsClose CommentsPermalink





Sec. 137. Duties.CommentsClose CommentsPermalink





Sec. 138. Consumer rights to access information.CommentsClose CommentsPermalink





Sec. 139. Prohibited acts.CommentsClose CommentsPermalink





Sec. 140. Effective date.CommentsClose CommentsPermalink

Subtitle D--Preservation of State Law

Sec. 141. Relation to State law.CommentsClose CommentsPermalink





Sec. 142. Preservation of enforcement powers of States.CommentsClose CommentsPermalink





Sec. 143. State law preemption standards for national banks and subsidiaries clarified.CommentsClose CommentsPermalink





Sec. 144. Visitorial standards.CommentsClose CommentsPermalink





Sec. 145. Clarification of law applicable to nondepository institution subsidiaries.CommentsClose CommentsPermalink





Sec. 146. State law preemption standards for Federal savings associations and subsidiaries clarified.CommentsClose CommentsPermalink





Sec. 147. Visitorial standards.CommentsClose CommentsPermalink





Sec. 148. Clarification of law applicable to nondepository institution subsidiaries.CommentsClose CommentsPermalink





Sec. 149. Effective date.CommentsClose CommentsPermalink

Subtitle E--Enforcement Powers

Sec. 151. Definitions.CommentsClose CommentsPermalink





Sec. 152. Investigations and administrative discovery.CommentsClose CommentsPermalink





Sec. 153. Hearings and adjudication proceedings.CommentsClose CommentsPermalink





Sec. 154. Litigation authority.CommentsClose CommentsPermalink





Sec. 155. Relief available.CommentsClose CommentsPermalink





Sec. 156. Referrals for criminal proceedings.CommentsClose CommentsPermalink





Sec. 157. Employee protection.CommentsClose CommentsPermalink





Sec. 158. Effective date.CommentsClose CommentsPermalink

Subtitle F--Transfer of Functions and Personnel; Transitional Provisions

Sec. 161. Transfer of certain functions.CommentsClose CommentsPermalink





Sec. 162. Designated transfer date.CommentsClose CommentsPermalink





Sec. 163. Savings provisions.CommentsClose CommentsPermalink





Sec. 164. Transfer of certain personnel.CommentsClose CommentsPermalink





Sec. 165. Incidental transfers.CommentsClose CommentsPermalink





Sec. 166. Interim authority of the Secretary.CommentsClose CommentsPermalink

Subtitle G--Regulatory Improvements

Sec. 171. Collection of deposit account data.CommentsClose CommentsPermalink





Sec. 172. Small business data collection.CommentsClose CommentsPermalink

Subtitle H--Conforming Amendments

Sec. 181. Amendments to the Inspector General Act of 1978.CommentsClose CommentsPermalink





Sec. 182. Amendments to the Privacy Act of 1974.CommentsClose CommentsPermalink





Sec. 183. Amendments to the Alternative Mortgage Transaction Parity Act of 1982.CommentsClose CommentsPermalink





Sec. 184. Amendments to the Consumer Credit Protection Act.CommentsClose CommentsPermalink





Sec. 185. Amendments to the Expedited Funds Availability Act.CommentsClose CommentsPermalink





Sec. 186. Amendments to the Federal Deposit Insurance Act.CommentsClose CommentsPermalink





Sec. 187. Amendments to the Gramm-Leach-Bliley Act.CommentsClose CommentsPermalink





Sec. 188. Amendments to the Home Mortgage Disclosure Act of 1975.CommentsClose CommentsPermalink





Sec. 189. Amendments to division D of the Omnibus Appropriations Act, 2009.CommentsClose CommentsPermalink





Sec. 190. Amendments to the Real Estate Settlement Procedures Act of 1974.CommentsClose CommentsPermalink





Sec. 191. Amendments to the Right to Financial Privacy Act of 1978.CommentsClose CommentsPermalink





Sec. 192. Amendments to the Secure and Fair Enforcement for Mortgage Licensing Act of 2008.CommentsClose CommentsPermalink





Sec. 193. Amendments to the Truth in Savings Act.CommentsClose CommentsPermalink





Sec. 194. Effective date.CommentsClose CommentsPermalink

TITLE J--IMPROVEMENTS TO THE FEDERAL TRADE COMMISSION ACT

Sec. 201. Amendments to the Federal Trade Commission Act.CommentsClose CommentsPermalink

TITLE I--CONSUMER FINANCIAL PROTECTION AGENCYCommentsClose CommentsPermalink

SEC. 101. DEFINITIONS.

For the purposes of subtitles A through F of this title, the following definitions shall apply:CommentsClose CommentsPermalink





(1) AFFILIATE- The term ‘affiliate’ means any person that controls, is controlled by, or is under common control with another person.CommentsClose CommentsPermalink





(2) AGENCY- The term ‘Agency’ means the Consumer Financial Protection Agency.CommentsClose CommentsPermalink





(3) ALTERNATIVE CONSUMER FINANCIAL PRODUCT OR SERVICE- The term ‘alternative consumer financial product or service’ means a consumer financial product or service that is of the same type or class as a standard consumer financial product or service, but that contains different or additional terms, fees, or features.CommentsClose CommentsPermalink





(4) APPOINTED BOARD MEMBER- The term ‘appointed Board member’ or ‘appointed Board members’ means a member or members of the Board appointed by the President under section 112(a)(1).CommentsClose CommentsPermalink





(5) BOARD- The term ‘Board’ means the Board of the Consumer Financial Protection Agency.CommentsClose CommentsPermalink





(6) BOARD OF GOVERNORS- The term ‘Board of Governors’ means the Board of Governors of the Federal Reserve System.CommentsClose CommentsPermalink





(7) CONSUMER- The term ‘consumer’ means an individual or an agent, trustee, or representative acting on behalf of an individual.CommentsClose CommentsPermalink





(8) CONSUMER FINANCIAL PRODUCT OR SERVICE- The term ‘consumer financial product or service’ means any financial product or service to be used by a consumer primarily for personal, family, or household purposes.CommentsClose CommentsPermalink





(9) COVERED PERSON- The term ‘covered person’ means--CommentsClose CommentsPermalink





(A) any person who engages directly or indirectly in a financial activity, in connection with the provision of a consumer financial product or service; orCommentsClose CommentsPermalink





(B) any person who, in connection with the provision of a consumer financial product or service, provides a material service to, or processes a transaction on behalf of, a person described in subparagraph (A).CommentsClose CommentsPermalink





(10) CREDIT- The term ‘credit’ means the right granted by a person to a consumer to defer payment of a debt, incur debt and defer its payment, or purchase property or services and defer payment for such purchase.CommentsClose CommentsPermalink





(11) CREDIT UNION- The term ‘credit union’ means a Federal credit union, State credit union, or State-chartered credit union as defined in section 101 of the Federal Credit Union Act (12 U.S.C. 1752).CommentsClose CommentsPermalink





(12) DEPOSIT- The term ‘deposit’--CommentsClose CommentsPermalink





(A) has the same meaning as in section 3(l) of the Federal Deposit Insurance Act; andCommentsClose CommentsPermalink





(B) includes a share in a member account (as defined in section 101(5) of the Federal Credit Union Act) at a credit union.CommentsClose CommentsPermalink





(13) DEPOSIT-TAKING ACTIVITY- The term ‘deposit-taking activity’ means--CommentsClose CommentsPermalink





(A) the acceptance of deposits, the provision of other services related to the acceptance of deposits, or the maintenance of deposit accounts;CommentsClose CommentsPermalink





(B) the acceptance of money, the provision of other services related to the acceptance of money, or the maintenance of members’ share accounts by a credit union; orCommentsClose CommentsPermalink





(C) the receipt of money or its equivalent, as the Agency may determine by regulation or order, received or held by the covered person (or an agent for the person) for the purpose of facilitating a payment or transferring funds or value of funds by a consumer to a third party.CommentsClose CommentsPermalink





For the purposes of this title, the Agency may determine that the term ‘deposit-taking activity’ includes the receipt of money or its equivalent in connection with the sale or issuance of any payment instrument or stored value product or service.CommentsClose CommentsPermalink





(14) DESIGNATED TRANSFER DATE- The term ‘designated transfer date’ has the meaning provided in section 162.CommentsClose CommentsPermalink





(15) DIRECTOR- The term ‘Director’ means the Director of the Agency.CommentsClose CommentsPermalink





(16) ENUMERATED CONSUMER LAWS- The term ‘enumerated consumer laws’ means each of the following:CommentsClose CommentsPermalink





(A) The Alternative Mortgage Transaction Parity Act (12 U.S.C. 3801 et seq.).CommentsClose CommentsPermalink





(B) The Electronic Funds Transfer Act (15 U.S.C. 1693 et seq.)CommentsClose CommentsPermalink





(C) The Equal Credit Opportunity Act (15 U.S.C. 1691 et seq.).CommentsClose CommentsPermalink





(D) The Fair Credit Reporting Act (15 U.S.C. 1681 et seq.), except with respect to sections 615(e), 624, and 628.CommentsClose CommentsPermalink





(E) The Fair Debt Collection Practices Act (15 U.S.C. 1692 et seq.).CommentsClose CommentsPermalink





(F) Subsections (c), (d), (e), and (f) of section 43 of the Federal Deposit Insurance Act (12 U.S.C. 1831t).CommentsClose CommentsPermalink





(G) Sections 502, 503, 504, 505, 506, 507, 508, and 509 of the Gramm-Leach-Bliley Act (15 U.S.C. 6802 et seq.).CommentsClose CommentsPermalink





(H) The Home Mortgage Disclosure Act (12 U.S.C. 2801 et seq.).CommentsClose CommentsPermalink





(I) The Real Estate Settlement Procedures Act (12 U.S.C. 2601 et seq.).CommentsClose CommentsPermalink





(J) The Secure and Fair Enforcement for Mortgage Licensing Act (12 U.S.C. 5101 et seq.).CommentsClose CommentsPermalink





(K) The Truth in Lending Act (15 U.S.C. 1601 et seq.).CommentsClose CommentsPermalink





(L) The Truth in Savings Act (12 U.S.C. 4301 et seq.).CommentsClose CommentsPermalink





(17) FEDERAL BANKING AGENCY- The term ‘Federal banking agency’ means the Board of Governors, the Comptroller of the Currency, the Director of the Office of Thrift Supervision, the Federal Deposit Insurance Corporation, or the National Credit Union Administration and the term ‘Federal banking agencies’ means all of those agencies.CommentsClose CommentsPermalink





(18) FINANCIAL ACTIVITY- The term ‘financial activity’ means any of the following activities:CommentsClose CommentsPermalink





(A) Deposit-taking activities.CommentsClose CommentsPermalink





(B) Extending credit and servicing loans, including--CommentsClose CommentsPermalink





(i) acquiring, brokering, or servicing loans or other extensions of credit;CommentsClose CommentsPermalink





(ii) engaging in any other activity usual in connection with extending credit or servicing loans, including performing appraisals of real estate and personal property and selling or servicing credit insurance or mortgage insurance.CommentsClose CommentsPermalink





(C) Check-guaranty services, including--CommentsClose CommentsPermalink





(i) authorizing a subscribing merchant to accept personal checks tendered by the merchant’s customers in payment for goods and services; andCommentsClose CommentsPermalink





(ii) purchasing from a subscribing merchant validly authorized checks that are subsequently dishonored.CommentsClose CommentsPermalink





(D) Collecting, analyzing, maintaining, and providing consumer report information or other account information by covered persons, including information relating to the credit history of consumers and providing the information to a credit grantor who is considering a consumer application for credit or who has extended credit to the borrower.CommentsClose CommentsPermalink





(E) Collection of debt related to any consumer financial product or service.CommentsClose CommentsPermalink





(F) Providing real estate settlement services, including providing title insurance.CommentsClose CommentsPermalink





(G) Leasing personal or real property or acting as agent, broker, or adviser in leasing such property if--CommentsClose CommentsPermalink





(i) the lease is on a non-operating basis;CommentsClose CommentsPermalink





(ii) the initial term of the lease is at least 90 days; andCommentsClose CommentsPermalink





(iii) in the case of leases involving real property, at the inception of the initial lease, the transaction is intended to result in ownership of the leased property to be transferred to the lessee, subject to standards prescribed by the Agency.CommentsClose CommentsPermalink





(H) Acting as an investment adviser to any person (not subject to regulation by or required to register with the Commodity Futures Trading Commission or the Securities and Exchange Commission).CommentsClose CommentsPermalink





(I) Acting as financial adviser to any person, including--CommentsClose CommentsPermalink





(i) providing financial and other related advisory services;CommentsClose CommentsPermalink





(ii) providing educational courses, and instructional materials to consumers on individual financial management matters; orCommentsClose CommentsPermalink





(iii) providing credit counseling, tax-planning or tax-preparation services to any person.CommentsClose CommentsPermalink





(J) Financial data processing, including providing data processing and data transmission services, facilities (including data processing and data transmission hardware, software, documentation, or operating personnel), databases, advice, and access to such services, facilities, or databases by any technological means, if--CommentsClose CommentsPermalink





(i) the data to be processed or furnished are financial, banking, or economic; andCommentsClose CommentsPermalink





(ii) the hardware provided in connection therewith is offered only in conjunction with software designed and marketed for the processing and transmission of financial, banking, or economic data, and where the general purpose hardware does not constitute more than 30 percent of the cost of any packaged offering.CommentsClose CommentsPermalink





(K) Money transmitting.CommentsClose CommentsPermalink





(L) Sale or issuance of stored value.CommentsClose CommentsPermalink





(M) Acting as a money services business.CommentsClose CommentsPermalink





(N) Acting as a custodian of money or any financial instrument.CommentsClose CommentsPermalink





(O) Any other activity that the Agency defines, by regulation, as a financial activity for the purposes of this title, except that the Agency shall not define engaging in the business of insurance as a financial activity (other than with respect to credit insurance, mortgage insurance, or title insurance, as described in this section).CommentsClose CommentsPermalink





(19) FINANCIAL PRODUCT OR SERVICE- The term ‘financial product or service’ means any product or service that, directly or indirectly, results from or is related to engaging in 1 or more financial activities.CommentsClose CommentsPermalink





(20) FOREIGN EXCHANGE- The term ‘foreign exchange’ means the exchange, for compensation, of currency of the United States or of a foreign government for currency of another government.CommentsClose CommentsPermalink





(21) INSURED DEPOSITORY INSTITUTION- The term ‘insured depository institution’ has the same meaning as in section 3 of the Federal Deposit Insurance Act.CommentsClose CommentsPermalink





(22) MONEY SERVICES BUSINESS- The term ‘money services business’ means a covered person that--CommentsClose CommentsPermalink





(A) receives currency, monetary value, or payment instruments for the purpose of exchanging or transmitting the same by any means, including transmission by wire, facsimile, electronic transfer, courier, the Internet, or through bill payment services, or other businesses that facilitate third-party transfers within the United States or to or from the United States; orCommentsClose CommentsPermalink





(B) issues payment instruments or stored value.CommentsClose CommentsPermalink





(23) MONEY TRANSMITTING- The term ‘money transmitting’ means the receipt by a covered person of currency, monetary value, or payment instruments for the purpose of transmitting the same to any third-party by any means, including transmission by wire, facsimile, electronic transfer, courier, the Internet, or through bill payment services.CommentsClose CommentsPermalink





(24) PAYMENT INSTRUMENT- The term ‘payment instrument’ means a check, draft, warrant, money order, traveler’s check, electronic instrument, or other instrument, payment of money, or monetary value (other than currency).CommentsClose CommentsPermalink





(25) PERSON- The term ‘person’ means an individual, partnership, company, corporation, association (incorporated or unincorporated), trust, estate, cooperative organization, or other entity.CommentsClose CommentsPermalink





(26) PERSON REGULATED BY THE COMMODITY FUTURES TRADING COMMISSION- The term ‘person regulated by the Commodity Futures Trading Commission’ means any futures commission merchant, commodity trading adviser, commodity pool operator, or introducing broker that is subject to the jurisdiction of the Commodity Futures Trading Commission under the Commodity Exchange Act, but only to the extent that the person acts in such capacity.CommentsClose CommentsPermalink





(27) PERSON REGULATED BY THE SECURITIES AND EXCHANGE COMMISSION- The term ‘person regulated by the Securities and Exchange Commission’ means--CommentsClose CommentsPermalink





(A) a broker or dealer that is required to be registered under the Securities Exchange Act of 1934;CommentsClose CommentsPermalink





(B) an investment adviser that is required to be registered under the Investment Advisers Act of 1940; orCommentsClose CommentsPermalink





(C) an investment company that is required to be registered under the Investment Company Act of 1940--CommentsClose CommentsPermalink





but only to the extent that the person acts in a registered capacity.CommentsClose CommentsPermalink





(28) PROVISION OF A CONSUMER FINANCIAL PRODUCT OR SERVICE- The term ‘provision of (or providing) a consumer financial product or service’ means the advertisement, marketing, solicitation, sale, disclosure, delivery, or account maintenance or servicing of a consumer financial product or service.CommentsClose CommentsPermalink





(29) SECRETARY- The term ‘Secretary’ means the Secretary of the Treasury.CommentsClose CommentsPermalink





(30) STANDARD CONSUMER FINANCIAL PRODUCT OR SERVICE- The term ‘standard consumer financial product or service’ means a consumer financial product or service containing terms, conditions, and features defined by the Agency.CommentsClose CommentsPermalink





(31) STATE- The term ‘State’ means any State, territory, or possession of the United States, the District of Columbia, Commonwealth of Puerto Rico, Commonwealth of the Northern Mariana Islands, Guam, American Samoa, or the United States Virgin Islands.CommentsClose CommentsPermalink





(32) STORED VALUE- The term ‘stored value’ means funds or monetary value represented in any electronic format, whether or not specially encrypted, and stored or capable of storage on electronic media in such a way as to be retrievable and transferred electronically, and includes a prepaid debit card or product, or any other similar product, regardless of whether the amount of the funds or monetary value may be increased or reloaded.CommentsClose CommentsPermalink

Subtitle A--Establishment of the AgencyCommentsClose CommentsPermalink

SEC. 111. ESTABLISHMENT OF THE CONSUMER FINANCIAL PROTECTION AGENCY.

(a) Agency Established- There is established the Consumer Financial Protection Agency as an independent agency in the executive branch to regulate the provision of consumer financial products or services under this title, the enumerated consumer laws, and the authorities transferred under subtitles F and H.CommentsClose CommentsPermalink





(b) Principal Office- The principal office of the Agency shall be located in the city of Washington, District of Columbia, at 1 or more sites.CommentsClose CommentsPermalink

SEC. 112. BOARD.

(a) Composition of the Board- The Agency shall have a Board that is composed of 5 members as follows:CommentsClose CommentsPermalink





(1) 4 members of the Board who shall be appointed by the President, by and with the advice and consent of the Senate--CommentsClose CommentsPermalink





(A) from among individuals who are citizens of the United States; andCommentsClose CommentsPermalink





(B) who have a strong competencies and experiences related to consumer financial products or services; andCommentsClose CommentsPermalink





(2) the head of the agency responsible for chartering and regulating national banks.CommentsClose CommentsPermalink





(b) Director of the Agency- From among the appointed Board members, the President shall designate 1 member of the Board to serve as the Director and the Director shall be the chief executive of the Agency.CommentsClose CommentsPermalink





(c) Terms of Appointed Board Members-CommentsClose CommentsPermalink





(1) IN GENERAL- An appointed Board member, including the Director of the Agency, shall serve for a term of 5 years.CommentsClose CommentsPermalink





(2) REMOVAL FOR CAUSE- The President may remove any appointed Board member for inefficiency, neglect of duty, or malfeasance in office.CommentsClose CommentsPermalink





(3) VACANCIES- Any member of the Board appointed to fill a vacancy occurring before the expiration of the term to which that member’s predecessor was appointed (including the Director of the Agency) shall be appointed only for the remainder of the term.CommentsClose CommentsPermalink





(4) CONTINUATION OF SERVICE- Each appointed Board member may continue to serve after the expiration of the term of office to which that member was appointed until a successor has been appointed by the President and confirmed by the Senate.CommentsClose CommentsPermalink





(5) INITIAL APPOINTMENTS STAGGERED- The appointed Board members (including the Director of the Agency) shall serve staggered terms, which initially shall be established by the President for terms of 2, 3, 4, and 5 years, respectively.CommentsClose CommentsPermalink





(d) Compensation-CommentsClose CommentsPermalink





(1) DIRECTOR- The Director shall receive compensation at the rate prescribed for Level I of the Executive Schedule under section 5313 of title 5, United States Code.CommentsClose CommentsPermalink





(2) OTHER APPOINTED BOARD MEMBERS- The 3 other appointed Board members shall each receive compensation at the rate prescribed for Level II of the Executive Schedule under section 5314 of title 5, United States Code.CommentsClose CommentsPermalink

SEC. 113. EXECUTIVE AND ADMINISTRATIVE POWERS.

(a) Powers- The Board may exercise all executive and administrative functions of the Agency, including to--CommentsClose CommentsPermalink





(1) establish rules for conducting the Agency’s general business in a manner not inconsistent with this title;CommentsClose CommentsPermalink





(2) bind the Agency and enter into contracts;CommentsClose CommentsPermalink





(3) direct the establishment of and maintain divisions or other offices within the Agency in order to fulfill the responsibilities of this title, the enumerated consumer laws, and the authorities transferred under subtitles F and H, and to satisfy the requirements of other applicable law;CommentsClose CommentsPermalink





(4) coordinate and oversee the operation of all administrative, enforcement, and research activities of the Agency;CommentsClose CommentsPermalink





(5) adopt and use a seal;CommentsClose CommentsPermalink





(6) determine the character of and the necessity for the Agency’s obligations and expenditures, and the manner in which they shall be incurred, allowed, and paid;CommentsClose CommentsPermalink





(7) delegate authority, at the Agency’s lawful discretion, to the Director or to a member of the Board or to any officer or employee of the Agency to take action under any provision of this title or under other applicable law;CommentsClose CommentsPermalink





(8) to implement this title and the Agency’s authorities under the enumerated consumer laws and under subtitles F and H through rules, orders, guidance, interpretations, statements of policy, examinations, and enforcement actions; andCommentsClose CommentsPermalink





(9) perform such other functions as may be authorized or required by law.CommentsClose CommentsPermalink





(b) Transacting Business-CommentsClose CommentsPermalink





(1) QUORUM- 3 members of the Board shall constitute a quorum for the transaction of business, except that if only 3 members of the Board are serving because of vacancies, 2 members of the Board shall constitute a quorum for the transaction of business.CommentsClose CommentsPermalink





(2) VOTING- Other than acts performed under delegated authority, the Board shall act through a majority vote of its members assembled.CommentsClose CommentsPermalink

SEC. 114. ADMINISTRATION.

(a) Officers- The Agency shall appoint the following officials:CommentsClose CommentsPermalink





(1) A secretary, who shall be charged with maintaining the records of the Agency and performing such other activities as the Board directs.CommentsClose CommentsPermalink





(2) A general counsel, who shall be charged with overseeing the legal affairs of the Agency and performing such other activities as the Board directs.CommentsClose CommentsPermalink





(3) An inspector general, who shall have the authority and functions of an inspector general of a designated Federal entity under the Inspector General Act of 1978 (5 U.S.C. App. 3).CommentsClose CommentsPermalink





(b) Personnel-CommentsClose CommentsPermalink





(1) APPOINTMENT-CommentsClose CommentsPermalink





(A) IN GENERAL- The Agency may fix the number of, and appoint and direct, all employees of the Agency.CommentsClose CommentsPermalink





(B) EXPEDITED HIRING- During the 2-year period beginning on the date of the enactment of this Act, the Agency may appoint, without regard to the provisions of sections 3309 through 3318, of title 5, United States Code, candidates directly to positions for which public notice has been given.CommentsClose CommentsPermalink





(2) COMPENSATION-CommentsClose CommentsPermalink





(A) PAY- The Agency shall fix, adjust, and administer the pay for all employees of the Agency without regard to the provisions of chapter 51 or subchapter III of chapter 53 of title 5, United States Code.CommentsClose CommentsPermalink





(B) BENEFITS- The Agency may provide additional benefits to Agency employees if the same type of benefits are then being provided by the Board of Governors or, if not then being provided, could be provided by the Board of Governors under applicable provisions of law, rule, or regulation.CommentsClose CommentsPermalink





(C) MINIMUM STANDARD- The Agency shall at all times provide compensation and benefits to classes of employees that, at a minimum, are equivalent to the compensation and benefits provided by the Board of Governors for the corresponding class of employees in any fiscal year.CommentsClose CommentsPermalink





(c) Specific Functional Units-CommentsClose CommentsPermalink





(1) RESEARCH- The Agency shall establish a unit whose functions shall include researching, analyzing, and reporting on--CommentsClose CommentsPermalink





(A) current and prospective developments in markets for consumer financial products or services, including market areas of alternative consumer financial products or services with high growth rates;CommentsClose CommentsPermalink





(B) consumer awareness, understanding, and use of disclosures and communications regarding consumer financial products or services;CommentsClose CommentsPermalink





(C) consumer awareness and understanding of costs, risks, and benefits of consumer financial products or services; andCommentsClose CommentsPermalink





(D) consumer behavior with respect to consumer financial products or services.CommentsClose CommentsPermalink





(2) COMMUNITY AFFAIRS- The Agency shall establish a unit whose functions shall include providing information, guidance, and technical assistance regarding the provision of consumer financial products or services to traditionally underserved consumers and communities.CommentsClose CommentsPermalink





(3) CONSUMER COMPLAINTS- The Agency shall establish a unit whose functions shall include--CommentsClose CommentsPermalink





(A) establishing a central database for collecting and tracking information on consumer complaints about consumer financial products or services and resolution of complaints; andCommentsClose CommentsPermalink





(B) sharing data and coordinating consumer complaints with Federal banking agencies, other Federal agencies, and State regulators.CommentsClose CommentsPermalink

SEC. 115. CONSUMER ADVISORY BOARD.

(a) Establishment Required- The Agency shall establish a Consumer Advisory Board to advise and consult with the Agency in the exercise of its functions under this title, the enumerated consumer laws, and to provide information on emerging practices in the consumer financial products or services industry.CommentsClose CommentsPermalink





(b) Membership- In appointing the members of the Consumer Advisory Board, the Agency shall seek to assemble experts in financial services, community development, and consumer financial products or services and seek representation of the interests of covered persons and consumers.CommentsClose CommentsPermalink





(c) Meetings- The Consumer Advisory Board shall meet from time to time at the call of the Agency, but, at a minimum, shall meet at least twice in each year.CommentsClose CommentsPermalink





(d) Compensation and Travel Expenses- Members of the Consumer Advisory Board who are not full-time employees of the United States shall--CommentsClose CommentsPermalink





(1) be entitled to receive compensation at a rate fixed by the Agency while attending meetings of the Consumer Advisory Board, including travel time; andCommentsClose CommentsPermalink





(2) be allowed travel expenses, including transportation and subsistence, while away from their homes or regular places of business.CommentsClose CommentsPermalink

SEC. 116. COORDINATION.

(a) Coordination With Other Federal Agencies and State Regulators- The Agency shall coordinate with the Securities and Exchange Commission, the Commodity Futures Trading Commission, and other Federal agencies and State regulators, as appropriate, to promote consistent regulatory treatment of consumer and investment products and services.CommentsClose CommentsPermalink





(b) Coordination of Consumer Education Initiatives-CommentsClose CommentsPermalink





(1) IN GENERAL- The Agency shall coordinate with each agency that is a member of the Financial Literacy and Education Commission established by the Financial Literacy and Education Improvement Act (20 U.S.C. 9701 et seq.) to assist each agency in enhancing its existing financial literacy and education initiatives to better achieve the goals in paragraph (2) and to ensure the consistency of such initiatives across Federal agencies.CommentsClose CommentsPermalink





(2) GOALS OF COORDINATION- In coordinating with the agencies described in paragraph (1), the Agency shall seek to improve efforts to educate consumers about financial matters generally, the management of their own financial affairs, and their judgments about the appropriateness of certain financial products.CommentsClose CommentsPermalink

SEC. 117. REPORTS TO THE CONGRESS.

(a) Reports Required- The Agency shall prepare and submit to the President and the appropriate committees of the Congress a report at the beginning of each regular session of the Congress, beginning with the session following the designated transfer date.CommentsClose CommentsPermalink





(b) Contents- The reports required by subsection (a) shall include--CommentsClose CommentsPermalink





(1) a list of the significant rules and orders adopted by the Agency, as well as other significant initiatives conducted by the Agency, during the preceding year and the Agency’s plan for rules, orders, or other initiatives to be undertaken during the upcoming period;CommentsClose CommentsPermalink





(2) an analysis of complaints about consumer financial products or services that the Agency has received and collected in its central database on complaints during the preceding year;CommentsClose CommentsPermalink





(3) a list, with a brief statement of the issues, of the public supervisory and enforcement actions to which the Agency is a party (including adjudication proceedings conducted under subtitle E) during the preceding year; andCommentsClose CommentsPermalink





(4) an appraisal of significant actions, including actions under Federal or State law, by State attorneys general or State regulators relating to this title, the authorities transferred under subtitles F and H, and the enumerated consumer laws.CommentsClose CommentsPermalink

SEC. 118. FUNDING; FEES AND ASSESSMENTS; PENALTIES AND FINES.

(a) Authorization of Appropriations- For the purposes of carrying out the authorities granted in this title and the enumerated consumer laws and transferred under subtitles F and H, there are appropriated to the Agency such sums as are necessary. Notwithstanding any other provision of law, such amounts shall be subject to apportionment under section 1517 of title 31, United States Code, and restrictions that generally apply to the use of appropriated funds in title 31, United States Code, and other laws.CommentsClose CommentsPermalink





(b) Fees and Assessments on Covered Persons-CommentsClose CommentsPermalink





(1) RECOVERY OF EXPENDED FUNDS- The Agency shall recover the amount of funds expended by the Agency under this title, through the collection of annual fees or assessments on covered persons.CommentsClose CommentsPermalink





(2) RULEMAKING- The Agency shall prescribe regulations to govern the collection of fees and assessments. Such regulations shall specify and define the basis of fees or assessments (such as the outstanding volume of consumer credit accounts, total assets under management, or consumer financial transactions), the amount and frequency of fees or assessments, and such other factors that the Agency deems appropriate.CommentsClose CommentsPermalink





(3) FEES AND ASSESSMENTS AS MISCELLANEOUS RECEIPTS- All fees and assessments collected under this title, the authorities transferred under subtitles F and H, or any enumerated consumer law shall be deposited into the Treasury as miscellaneous receipts.CommentsClose CommentsPermalink





(c) Penalties and Fines-CommentsClose CommentsPermalink





(1) ESTABLISHMENT OF VICTIMS RELIEF FUND- There is established in the Treasury of the United States a fund to be known as the ‘Consumer Financial Protection Agency Civil Penalty Fund’ (referred to in this section as the ‘Fund’). If the Agency obtains a civil penalty against any person in any judicial or administrative action under this title, the authorities transferred under subtitles F and H, or any enumerated consumer law, the Agency shall deposit into the Fund the amount of the penalty collected.CommentsClose CommentsPermalink





(2) PAYMENT TO VICTIMS- Amounts in the Fund shall be available to the Agency, without fiscal year limitation, for payments to the victims of activities for which civil penalties have been imposed under this title, the authorities transferred under subtitles F and H, or any enumerated consumer law.CommentsClose CommentsPermalink

SEC. 119. EFFECTIVE DATE.

This subtitle shall take effect on the date of the enactment of this Act.CommentsClose CommentsPermalink

Subtitle B--General Powers of the AgencyCommentsClose CommentsPermalink

SEC. 121. MANDATE AND OBJECTIVES.

(a) Mandate- The Agency shall seek to promote transparency, simplicity, fairness, accountability, and access in the market for consumer financial products or services.CommentsClose CommentsPermalink





(b) Objectives- The Agency is authorized to exercise its authorities granted in this title, in the enumerated consumer laws, and transferred under subtitles F and H for the purposes of ensuring that--CommentsClose CommentsPermalink





(1) consumers have, understand, and can use the information they need to make responsible decisions about consumer financial products or services;CommentsClose CommentsPermalink





(2) consumers are protected from abuse, unfairness, deception, and discrimination;CommentsClose CommentsPermalink





(3) markets for consumer financial products or services operate fairly and efficiently with ample room for sustainable growth and innovation; andCommentsClose CommentsPermalink





(4) traditionally underserved consumers and communities have access to financial services.CommentsClose CommentsPermalink

SEC. 122. AUTHORITIES.

(a) In General- The Agency is authorized to exercise its authorities granted in this title, in the enumerated consumer laws, and transferred under subtitles F and H, to administer, enforce, and otherwise implement the provisions of this title, the authorities transferred in subtitles F and H, and the enumerated consumer laws.CommentsClose CommentsPermalink





(b) Rulemaking, Orders, and Guidance-CommentsClose CommentsPermalink





(1) IN GENERAL- The Agency may prescribe rules and issue orders and guidance as may be necessary or appropriate to enable it to administer and carry out the purposes and objectives of this title, the authorities transferred under subtitles F and H, and the enumerated consumer laws, and to prevent evasions thereof.CommentsClose CommentsPermalink





(2) STANDARDS FOR RULEMAKING- In prescribing a rule under this title or pursuant to the authorities transferred under subtitles F and H or the enumerated consumer laws, the Agency shall--CommentsClose CommentsPermalink





(A) consider the potential benefits and costs to consumers and covered persons, including the potential reduction of consumers’ access to consumer financial products or services, resulting from such rule; andCommentsClose CommentsPermalink





(B) consult with the Federal banking agencies, or other Federal agencies, as appropriate, regarding the consistency of a proposed rule with prudential, market, or systemic objectives administered by such agencies.CommentsClose CommentsPermalink





(3) EXEMPTIONS-CommentsClose CommentsPermalink





(A) IN GENERAL- The Agency, by rule or order, may conditionally or unconditionally exempt any covered person or any consumer financial product or service or any class of covered persons or consumer financial products or services, from any provision of this title, any enumerated consumer law, or from any rule thereunder, as the Agency deems necessary or appropriate to carry out the purposes and objectives of this title taking into consideration the factors in subparagraph (B).CommentsClose CommentsPermalink





(B) FACTORS- In issuing an exemption by rule or order as permitted in subparagraph (A), the Agency shall as appropriate take into consideration the following--CommentsClose CommentsPermalink





(i) total assets of the covered person;CommentsClose CommentsPermalink





(ii) the volume of transactions involving consumer financial products or services in which the covered person engages;CommentsClose CommentsPermalink





(iii) the extent to which the covered person engages in 1 or more financial activities; andCommentsClose CommentsPermalink





(iv) existing laws or regulations which are applicable to the consumer financial product or service and the extent to which such laws or regulations provide consumers with adequate protections.CommentsClose CommentsPermalink





(c) Examinations and Reports-CommentsClose CommentsPermalink





(1) IN GENERAL- The Agency may on a periodic basis examine, or require reports from, a covered person for purposes of ensuring compliance with the requirements of this title, the enumerated consumer laws, and any regulations prescribed by the Agency under this title or pursuant to the authorities transferred under subtitles F and H, and enforcing compliance with such requirements.CommentsClose CommentsPermalink





(2) CONTENT OF REPORTS- The reports authorized in paragraph (1) may include such information as necessary to keep the Agency informed as to--CommentsClose CommentsPermalink





(A) the compliance systems or procedures of the covered person or any affiliate thereof, with applicable provisions of this title or any other law that the Agency has jurisdiction to enforce; andCommentsClose CommentsPermalink





(B) matters related to the provision of consumer financial products or services including the servicing or maintenance of accounts or extensions of credit.CommentsClose CommentsPermalink





(3) USE OF EXISTING REPORTS- In general, the Agency shall, to the fullest extent possible, use--CommentsClose CommentsPermalink





(A) reports that a covered person, or any affiliate thereof, has provided or been required to provide to a Federal or State agency; andCommentsClose CommentsPermalink





(B) information that has been reported publicly.CommentsClose CommentsPermalink





(4) REPORTS FROM NONDEPOSITORY COVERED PERSONS- The Agency may require reports regarding financial condition from covered persons which are not subject to the jurisdiction of a Federal banking agency or a comparable State regulator for the purpose of assessing the ability of such person to perform its obligations to consumers.CommentsClose CommentsPermalink





(5) ACCESS BY THE AGENCY TO REPORTS OF OTHER REGULATORS-CommentsClose CommentsPermalink





(A) EXAMINATION AND FINANCIAL CONDITION REPORTS- Upon providing reasonable assurances of confidentiality, the Agency shall have access to any report of examination or financial condition made by a Federal banking agency or other Federal agency having supervision of a covered person, and to all revisions made to any such report.CommentsClose CommentsPermalink





(B) PROVISION OF OTHER REPORTS TO AGENCY- In addition to the reports described in paragraph (a), a Federal banking agency may, in its discretion, furnish to the Agency any other report or other confidential supervisory information concerning any insured depository institution, any credit union, or other entity examined by such agency under authority of any Federal law.CommentsClose CommentsPermalink





(6) ACCESS BY OTHER REGULATORS TO REPORTS OF THE AGENCY- Upon providing reasonable assurances of confidentiality, a Federal banking agency, a State regulator, or any other Federal agency having supervision of a covered person shall have access to any report of examination made by the Agency with respect to the covered person, and to all revisions made to any such report.CommentsClose CommentsPermalink





(7) PRESERVATION OF AUTHORITY- No provision in paragraph (3) shall be construed as preventing the Agency from conducting an examination authorized by this title or under the authorities transferred under subtitles F and H or pursuant to any enumerated consumer law.CommentsClose CommentsPermalink





(d) Exclusive Rulemaking and Examination Authority- Notwithstanding any other provision of Federal law other than subsection (f), to the extent that a Federal law authorizes the Agency and another Federal agency to prescribe regulations, issue guidance, conduct examinations, or require reports under that law for purposes of assuring compliance with this title, any enumerated consumer law, the laws for which authorities were transferred under subtitles F and H, and any regulations prescribed under this title or pursuant to any such authority, the Agency shall have the exclusive authority to prescribe regulations, issue guidance, conduct examinations, require reports, or issue exemptions with regard to any person subject to that law.CommentsClose CommentsPermalink





(e) Primary Enforcement Authority-CommentsClose CommentsPermalink





(1) THE AGENCY TO HAVE PRIMARY ENFORCEMENT AUTHORITY- To the extent that a Federal law authorizes the Agency and another Federal agency to enforce that law, the Agency shall have primary authority to enforce that Federal law with respect to any person in accordance with this subsection.CommentsClose CommentsPermalink





(2) REFERRAL- Any Federal agency authorized to enforce a Federal law described in paragraph (1) may recommend in writing to the Agency that the Agency initiate an enforcement proceeding as the Agency is authorized by that Federal law or by this title. The recommendation shall be accompanied by a written explanation of the concerns giving rise to the recommendation.CommentsClose CommentsPermalink





(3) BACKSTOP ENFORCEMENT AUTHORITY OF OTHER FEDERAL AGENCY- If the Agency does not, before the end of the 120-day period beginning on the date on which the Agency receives a recommendation under paragraph (2), initiate an enforcement proceeding, the other agency may initiate an enforcement proceeding as permitted by that Federal law.CommentsClose CommentsPermalink





(f) Exceptions-CommentsClose CommentsPermalink





(1) DEPARTMENT OF JUSTICE- Nothing in this title shall affect the authorities of the Department of Justice.CommentsClose CommentsPermalink





(2) PERSONS REGULATED BY THE SECURITIES AND EXCHANGE COMMISSION-CommentsClose CommentsPermalink





(A) IN GENERAL- No provision of this title shall be construed as altering, amending, or affecting the authority of the Securities and Exchange Commission to adopt rules, initiate enforcement proceedings, or take any other action with respect to a person regulated by the Securities and Exchange Commission. The Agency shall have no authority to exercise any power to enforce this title with respect to a person regulated by the Securities and Exchange Commission.CommentsClose CommentsPermalink





(B) CONSULTATION AND COORDINATION- Notwithstanding subparagraph (A), the Securities and Exchange Commission shall consult and coordinate with the Agency with respect to any rule (including any advance notice of proposed rulemaking) regarding an investment product or service that is the same type of product as, or that competes directly with, a consumer financial product or service that is subject to the jurisdiction of the Agency under this title or under any other law.CommentsClose CommentsPermalink





(3) PERSONS REGULATED BY THE COMMODITY FUTURES TRADING COMMISSION-CommentsClose CommentsPermalink





(A) IN GENERAL- No provision of this title shall be construed as altering, amending, or affecting the authority of the Commodity Futures Trading Commission to adopt rules, initiate enforcement proceedings, or take any other action with respect to a person regulated by the Commodity Futures Trading Commission. The Agency shall have no authority to exercise any power to enforce this title with respect to a person regulated by the Commodity Futures Trading Commission.CommentsClose CommentsPermalink





(B) CONSULTATION AND COORDINATION- Notwithstanding subparagraph (A), the Commodity Futures Trading Commission shall consult and coordinate with the Agency with respect to any rule (including any advance notice of proposed rulemaking) regarding a product or service that is the same type of product as, or that competes directly with, a consumer financial product or service that is subject to the jurisdiction of the Agency under this title or under any other law.CommentsClose CommentsPermalink





(g) No Authority To Impose Usury Limit- No provision of this title shall be construed as conferring authority on the Agency to establish a usury limit applicable to an extension of credit offered or made by a covered person to a consumer, unless explicitly authorized by law.CommentsClose CommentsPermalink

SEC. 123. COLLECTION OF INFORMATION; CONFIDENTIALITY RULES.

(a) Collection of Information-CommentsClose CommentsPermalink





(1) IN GENERAL- In conducting research on the provision of consumer financial products or services, the Agency shall have the power to gather information from time to time regarding the organization, business conduct, and practices of covered persons.CommentsClose CommentsPermalink





(2) SPECIFIC AUTHORITY- In order to gather such information, the Agency shall have the power--CommentsClose CommentsPermalink





(A) to gather and compile information;CommentsClose CommentsPermalink





(B) to require persons to file with the Agency, in such form and within such reasonable period of time as the Agency may prescribe, by regulation or order, annual or special reports, or answers in writing to specific questions, furnishing information the Agency may require; andCommentsClose CommentsPermalink





(C) to make public such information obtained by it under this section as is in the public interest in reports or otherwise in the manner best suited for public information and use.CommentsClose CommentsPermalink





(b) Confidentiality Rules- The Agency shall prescribe regulations regarding the confidential treatment of information obtained from persons in connection with the exercise of its authorities under this title and the enumerated consumer laws and the authorities transferred under subtitles F and H.CommentsClose CommentsPermalink

SEC. 124. MONITORING; ASSESSMENTS OF SIGNIFICANT RULES; REPORTS.

(a) Monitoring-CommentsClose CommentsPermalink





(1) IN GENERAL- The Agency shall monitor for risks to consumers in the provision of consumer financial products or services, including developments in markets for such products or services.CommentsClose CommentsPermalink





(2) MEANS OF MONITORING- Such monitoring may be conducted by examinations of covered persons, analysis of reports obtained from covered persons, assessment of consumer complaints, surveys and interviews of covered persons and consumers, and review of available databases.CommentsClose CommentsPermalink





(3) CONSIDERATIONS- In allocating its resources to perform the monitoring required by this section, the Agency may consider, among other factors--CommentsClose CommentsPermalink





(A) likely risks and costs to consumers associated with buying or using a type of consumer financial product or service;CommentsClose CommentsPermalink





(B) consumers’ understanding of the risks of a type of consumer financial product or service;CommentsClose CommentsPermalink





(C) the state of the law that applies to the provision of a consumer financial product or service, including the extent to which the law is likely to adequately protect consumers;CommentsClose CommentsPermalink





(D) rates of growth in the provision of a consumer financial product or service;CommentsClose CommentsPermalink





(E) extent, if any, to which the risks of a consumer financial product or service may disproportionately affect traditionally underserved consumers, if any; orCommentsClose CommentsPermalink





(F) types, number, and other pertinent characteristics of covered persons that provide the product or service.CommentsClose CommentsPermalink





(4) REPORTS- The Agency shall publish at least 1 report of significant findings of its monitoring required by paragraph (1) in each calendar year, beginning in the calendar year that is 1 year after the designated transfer date.CommentsClose CommentsPermalink





(b) Assessment of Significant Rules-CommentsClose CommentsPermalink





(1) IN GENERAL- The Agency shall conduct an assessment of each significant regulation prescribed or order issued by the Agency under this title, under the authorities transferred under subtitles F and H or pursuant to any enumerated consumer law that addresses, among other relevant factors, the effectiveness of the regulation in meeting the purposes and objectives of this Act and the specific goals stated by the Agency.CommentsClose CommentsPermalink





(2) BASIS FOR ASSESSMENT- The assessment shall reflect available evidence and any data that the Agency reasonably may collect.CommentsClose CommentsPermalink





(3) REPORTS- The Agency shall publish a report of its assessment not later than 3 years after the effective date of the regulation or order, unless the Agency determines that 3 years is not sufficient time to study or review the impact of the regulation, but in no event shall the Agency publish a report thereof more than 5 years after the effective date of the regulation or order.CommentsClose CommentsPermalink





(4) PUBLIC COMMENTED REQUIRED- Before publishing a report of its assessment, the Agency shall invite public comment on recommendations for modifying, expanding, or eliminating the newly adopted significant regulation or order.CommentsClose CommentsPermalink





(c) Information Gathering- In conducting any monitoring or assessment required by this section, the Agency may gather information through a variety of methods, including by conducting surveys or interviews of consumers.CommentsClose CommentsPermalink

SEC. 125. AUTHORITY TO RESTRICT MANDATORY PRE-DISPUTE ARBITRATION.

The Agency, by regulation, may prohibit or impose conditions or limitations on the use of agreements between a covered person and a consumer that require the consumer to arbitrate any future dispute between the parties arising under this title or any enumerated consumer law if the Agency finds that such prohibition, imposition of conditions, or limitations are in the public interest and for the protection of consumers.CommentsClose CommentsPermalink

SEC. 126. EFFECTIVE DATE.

This subtitle shall take effect on the designated transfer date.CommentsClose CommentsPermalink

Subtitle C--Specific AuthoritiesCommentsClose CommentsPermalink

SEC. 131. PROHIBITING UNFAIR, DECEPTIVE, OR ABUSIVE ACTS OR PRACTICES.

(a) In General- The Agency may take any action authorized under subtitle E to prevent a person from committing or engaging in an unfair, deceptive, or abusive act or practice under Federal law in connection with any transaction with a consumer for a consumer financial product or service.CommentsClose CommentsPermalink





(b) Rulemaking Required-CommentsClose CommentsPermalink





(1) IN GENERAL- The Agency may prescribe regulations identifying as unlawful unfair, deceptive, or abusive acts or practices in connection with any transaction with a consumer for a consumer financial product or service.CommentsClose CommentsPermalink





(2) INCLUDES PREVENTION MEASURES- Regulations prescribed under this section may include requirements for the purpose of preventing such acts or practices.CommentsClose CommentsPermalink





(c) Unfairness-CommentsClose CommentsPermalink





(1) IN GENERAL- The Agency shall have no authority under this section to declare an act or practice in connection with a transaction with a consumer for a consumer financial product or service to be unlawful on the grounds that such act or practice is unfair unless the Agency has a reasonable basis to conclude that the act or practice causes or is likely to cause substantial injury to consumers which is not reasonably avoidable by consumers and such substantial injury is not outweighed by countervailing benefits to consumers or to competition.CommentsClose CommentsPermalink





(2) ESTABLISHED PUBLIC POLICY AS FACTOR- In determining whether an act or practice is unfair, the Agency may consider established public policies as evidence to be considered with all other evidence.CommentsClose CommentsPermalink





(d) Consultation- In prescribing a regulation under this section, the Agency shall consult with the Federal banking agencies, or other Federal agencies, as appropriate, concerning the consistency of the proposed regulation with prudential, market, or systemic objectives administered by such agencies.CommentsClose CommentsPermalink

SEC. 132. DISCLOSURES AND COMMUNICATIONS.

(a) In General- The Agency may prescribe regulations to ensure the appropriate and effective disclosure or communication to consumers of the costs, benefits, and risks associated with any consumer financial product or service.CommentsClose CommentsPermalink





(b) Reasonable Disclosures and Communications- Subject to regulations prescribed by the Agency, a covered person shall, with respect to disclosures or communications regarding any consumer financial product or service, make or provide to a consumer disclosures and communications that--CommentsClose CommentsPermalink





(1) balance communication of the benefits of the product or service with communication of significant risks and costs;CommentsClose CommentsPermalink





(2) prominently disclose the significant risks and costs, in reasonable proportion to the disclosure of the benefits;CommentsClose CommentsPermalink





(3) communicate significant risks and costs in a clear, concise, and timely manner designed to promote a consumer’s awareness and understanding of the risks and costs, as well as to use the information to make financial decisions; andCommentsClose CommentsPermalink





(4) comply with standards prescribed by the Agency.CommentsClose CommentsPermalink





(c) Basis for Rulemaking- In prescribing regulations under this section, the Agency shall consider available evidence about consumer awareness, understanding of, and responses to disclosures or communications about the risks, costs, and benefits of consumer financial products or services.CommentsClose CommentsPermalink





(d) Combined Mortgage Loan Disclosure- Within 1 year after the designated transfer date, the Agency shall propose for public comment regulations and model disclosures that combine the disclosures required under the Truth in Lending Act and the Real Estate Settlement Procedures Act into a single, integrated disclosure for mortgage loan transactions covered by those laws, unless the Agency determines that any proposal issued by the Board of Governors and the Department of Housing and Urban Development carries out the same purpose.CommentsClose CommentsPermalink

SEC. 133. SALES PRACTICES.

The Agency may prescribe regulations and issue orders and guidance regarding the manner, settings, and circumstances for the provision of any consumer financial products or services to ensure that the risks, costs, and benefits of the products or services, both initially and over the term of the products or services, are fully and accurately represented to consumers.CommentsClose CommentsPermalink

SEC. 134. PILOT DISCLOSURES.

(a) Pilot Disclosures- The Agency shall establish standards and procedures for approval of pilot disclosures to be provided or made available by a covered person to consumers in connection with the provision of a consumer financial product or service.CommentsClose CommentsPermalink





(b) Standards- The procedures shall provide that a pilot disclosure must be limited in time and scope and reasonably designed to contribute materially to the understanding of consumer awareness and understanding of, and responses to, disclosures or communications about the risks, costs, and benefits of consumer financial products or services.CommentsClose CommentsPermalink





(c) Transparency- The procedures shall provide for public disclosure of pilots, but the Agency may limit disclosure to the extent necessary to encourage covered persons to conduct effective pilots.CommentsClose CommentsPermalink

SEC. 135. ADOPTING OPERATIONAL STANDARDS TO DETER UNFAIR, DECEPTIVE, OR ABUSIVE PRACTICES.

(a) Authority To Prescribe Standards- The States are encouraged to prescribe standards applicable to covered persons who are not insured depository institutions or credit unions to deter and detect unfair, deceptive, abusive, fraudulent, or illegal transactions in the provision of consumer financial products or services, including standards for--CommentsClose CommentsPermalink





(1) background checks for principals, officers, directors, or key personnel of the covered person;CommentsClose CommentsPermalink





(2) registration, licensing, or certification;CommentsClose CommentsPermalink





(3) bond or other appropriate financial requirements to provide reasonable assurance of the ability of the covered person to perform its obligations to consumers;CommentsClose CommentsPermalink





(4) creating and maintaining records of transactions or accounts; orCommentsClose CommentsPermalink





(5) procedures and operations of the covered person relating to the provision of, or maintenance of accounts for, consumer financial products or services.CommentsClose CommentsPermalink





(b) Agency Authority To Prescribe Standards- The Agency may prescribe regulations establishing minimum standards under this section for any class of covered persons other than covered persons which are subject to the jurisdiction of a Federal banking agency or a comparable State regulator. The Agency may enforce under subtitle E compliance with standards adopted by the Agency or a State pursuant to this section for covered persons operating in that State.CommentsClose CommentsPermalink





(c) Consultation- In prescribing minimum standards under this section, the Agency shall consult with the State authorities, the Federal banking agencies, or other Federal agencies, as appropriate, concerning the consistency of the proposed regulation with prudential, market, or systemic objectives administered by such State authorities or such agencies.CommentsClose CommentsPermalink

SEC. 136. STANDARD CONSUMER FINANCIAL PRODUCTS OR SERVICES.

(a) Characteristics of Standard Consumer Financial Products or Services- Subject to regulations prescribed by the Agency under this section, a standard consumer financial product or service is a consumer financial product or service that--CommentsClose CommentsPermalink





(1) is or can be readily offered by covered persons that offer or seek to offer alternative consumer financial products or services;CommentsClose CommentsPermalink





(2) is transparent to consumers in its terms and features;CommentsClose CommentsPermalink





(3) poses lower risks to consumers;CommentsClose CommentsPermalink





(4) facilitates comparisons with and assessment of the benefits and costs of alternative consumer financial products or services; andCommentsClose CommentsPermalink





(5) contains the features or terms defined by the Agency for the product or service.CommentsClose CommentsPermalink





(b) Offering Standard Consumer Financial Products or Services-CommentsClose CommentsPermalink





(1) IN GENERAL- The Agency may prescribe regulations or issue guidance regarding the offer of a standard consumer financial product or service at or before the time an alternative consumer financial product or service is offered to a consumer, including--CommentsClose CommentsPermalink





(A) warnings to consumers about the heightened risks of alternative consumer financial products or services; orCommentsClose CommentsPermalink





(B) providing the consumer with a meaningful opportunity to decline to obtain the standard consumer financial product or service.CommentsClose CommentsPermalink





(2) RULEMAKING REGARDING THE OFFERING OF STANDARD CONSUMER FINANCIAL PRODUCTS OR SERVICES- The Agency may not require a covered person to offer a standard consumer financial product or service at or before the time an alternative consumer financial product or service is offered to a consumer unless the Agency prescribes regulations, after notice and comment, regarding the features or terms of the product or service.CommentsClose CommentsPermalink





(3) GENERAL APPLICABILITY- Regulations prescribed by the Agency under this section shall apply only to any covered person who--CommentsClose CommentsPermalink





(A) voluntarily offers or provides a consumer financial product or service that is of the same type, or in the same class, as a standard consumer financial product or service; orCommentsClose CommentsPermalink





(B) maintains an account or has a relationship with a consumer involving a product or service that is substantively similar to the standard product or service.CommentsClose CommentsPermalink

SEC. 137. DUTIES.

(a) In General-CommentsClose CommentsPermalink





(1) REGULATIONS ENSURING FAIR DEALING WITH CONSUMERS- The Agency shall prescribe regulations imposing duties on a covered person, or an employee of a covered person, or an agent or independent contractor for a covered person, who deals or communicates directly with consumers in the provision of a consumer financial product or service, as the Agency deems appropriate or necessary to ensure fair dealing with consumers.CommentsClose CommentsPermalink





(2) CONSIDERATIONS FOR DUTIES- In prescribing such regulations, the Agency shall consider whether--CommentsClose CommentsPermalink





(A) the covered person, employee, agent, or independent contractor represents implicitly or explicitly that the person, employee, agent, or contractor is acting in the interest of the consumer with respect to any aspect of the transaction;CommentsClose CommentsPermalink





(B) the covered person, employee, agent, or independent contractor provides the consumer with advice with respect to any aspect of the transaction;CommentsClose CommentsPermalink





(C) the consumer’s reliance on any advice from the covered person, employee, agent, or independent contractor would be reasonable and justifiable under the circumstances;CommentsClose CommentsPermalink





(D) the benefits to consumers of imposing a particular duty would outweigh the costs; andCommentsClose CommentsPermalink





(E) any other factors as the Agency considers appropriate.CommentsClose CommentsPermalink





(3) DUTIES RELATING TO COMPENSATION PRACTICES- The Agency may prescribe regulations establishing duties regarding compensation practices applicable to a covered person, employee, agent, or independent contractor who deals or communicates directly with a consumer in the provision of a consumer financial product or service for the purpose of promoting fair dealing with consumers. The Agency shall not prescribe a limit on the total dollar amount of compensation paid to any person.CommentsClose CommentsPermalink





(b) Administrative Proceedings-CommentsClose CommentsPermalink





(1) IN GENERAL- Any regulation prescribed by the Agency under this section shall be enforceable only by the Agency through an adjudication proceeding under subtitle E or by a State regulator through an appropriate administrative proceeding as permitted under State law.CommentsClose CommentsPermalink





(2) EXCLUSIVITY OF REMEDY- No action may be commenced in any court to enforce any requirement of a regulation prescribed under this section, and no court may exercise supplemental jurisdiction over a claim asserted under a regulation prescribed under this section based on allegations or evidence of conduct that otherwise may be subject to such regulation.CommentsClose CommentsPermalink





(3) RULE OF CONSTRUCTION- The Agency, the Attorney General, and any State attorney general or State regulator shall not be precluded from enforcing any other Federal or State law against a person with respect to conduct that may be subject to a regulation prescribed by the Agency under this section.CommentsClose CommentsPermalink





(c) Exclusions- This section shall not be construed as authorizing the Agency to prescribe regulations applicable to--CommentsClose CommentsPermalink





(1) an attorney licensed to practice law and in compliance with the applicable rules and standards of professional conduct, but only to the extent that the consumer financial product or service provided is within the attorney-client relationship with the consumer; orCommentsClose CommentsPermalink





(2) any trustee, custodian, or other person that holds a fiduciary duty in connection with a trust, including a fiduciary duty to a grantor or beneficiary of a trust, that is subject to and in compliance with the applicable law relating to such trust.CommentsClose CommentsPermalink

SEC. 138. CONSUMER RIGHTS TO ACCESS INFORMATION.

(a) In General- Subject to regulations prescribed by the Agency, a covered person shall make available to a consumer, in an electronic form usable by the consumer, information in the control or possession of the covered person concerning the consumer financial product or service that the consumer obtained from such covered person including information relating to any transaction, series of transactions, or to the account including costs, charges and usage data.CommentsClose CommentsPermalink





(b) Exceptions- A covered person shall not be required by this section to make available to the consumer--CommentsClose CommentsPermalink





(1) any confidential commercial information, including an algorithm used to derive credit scores or other risk scores or predictors;CommentsClose CommentsPermalink





(2) any information collected by the covered person for the purpose of preventing fraud or money laundering, or detecting, or making any report regarding other unlawful or potentially unlawful conduct;CommentsClose CommentsPermalink





(3) any information required to be kept confidential by any other law; orCommentsClose CommentsPermalink





(4) any information that the covered person cannot retrieve in the ordinary course of its business with respect to that information.CommentsClose CommentsPermalink





(c) No Duty To Maintain Records- No provision of this section shall be construed as imposing any duty on a covered person to maintain or keep any information about a consumer.CommentsClose CommentsPermalink





(d) Standardized Formats for Data- The Agency, by regulation, shall prescribe standards applicable to covered persons to promote the development and use of standardized formats for information, including through the use of machine readable files, to be made available to consumers under this section.CommentsClose CommentsPermalink





(e) Consultation and Coordination- The Agency shall, when prescribing any regulation under this section, consult and coordinate with the Federal banking agencies and the Federal Trade Commission to ensure that the regulations--CommentsClose CommentsPermalink





(1) impose substantively similar requirements on covered persons;CommentsClose CommentsPermalink





(2) take into account conditions under which covered persons do business both in the United States and in other countries; andCommentsClose CommentsPermalink





(3) do not require or promote the use of any particular technology in order to develop systems for compliance.CommentsClose CommentsPermalink

SEC. 139. PROHIBITED ACTS.

It shall be unlawful for any person to--CommentsClose CommentsPermalink





(1) advertise, market, offer, sell, enforce, or attempt to enforce, any term, agreement, change in terms, fee or charge in connection with a consumer financial product or service that is not in conformity with this title or applicable regulation prescribed or order issued by the Agency;CommentsClose CommentsPermalink





(2) fail or refuse to permit access to or copying of records, or fail or refuse to establish or maintain records, or fail or refuse to make reports or provide information to the Agency, as required by this title, an enumerated consumer law, or pursuant to the authorities transferred by subtitles F and H, or any regulation prescribed or order issued by the Agency this title or pursuant to any such authority; orCommentsClose CommentsPermalink





(3) knowingly or recklessly provide substantial assistance to another person in violation of the provisions of section 131, or any regulation prescribed or order issued under such section, and any such person shall be deemed to be in violation of that section to the same extent as the person to whom such assistance is provided.CommentsClose CommentsPermalink

SEC. 140. EFFECTIVE DATE.

This subtitle shall take effect on the designated transfer date.CommentsClose CommentsPermalink

Subtitle D--Preservation of State LawCommentsClose CommentsPermalink

SEC. 141. RELATION TO STATE LAW.

(a) In General-CommentsClose CommentsPermalink





(1) RULE OF CONSTRUCTION- This title shall not be construed as annulling, altering, or affecting, or exempting any person subject to the provisions of this title from complying with, the laws, regulations, orders, or interpretations, in effect in any State, except to the extent that such statute, regulation, order, or interpretation is inconsistent with the provisions of this title and then only to the extent of the inconsistency.CommentsClose CommentsPermalink





(2) GREATER PROTECTION UNDER STATE LAW- For the purposes of this subsection, a State statute, regulation, order, or interpretation is not inconsistent with the provisions of this title if the protection such statute, regulation, order, or interpretation affords consumers is greater than the protection provided under this title, as determined by the Agency. A determination regarding whether a State statute, regulation, order, or interpretation is inconsistent with the provisions of this title may be made by regulation, order or guidance adopted by the Agency on its own motion or in response to a nonfrivolous petition initiated by any interested person.CommentsClose CommentsPermalink





(b) Relation to Other Provisions of Enumerated Consumer Laws That Relate to State Law- No provision of this title, except as provided in section 175, shall be construed as modifying, limiting, or superseding the operation of any provision of an enumerated consumer law that relates to the application of State law with respect to such Federal law.CommentsClose CommentsPermalink

SEC. 142. PRESERVATION OF ENFORCEMENT POWERS OF STATES.

(a) In General-CommentsClose CommentsPermalink





(1) ACTION BY STATE- Any State attorney general may bring a civil action in the name of such State, as parens patriae on behalf of natural persons residing in such State, in any district court of the United States or State court having jurisdiction of the defendant, to secure monetary or equitable relief for violation of any provisions of this title or regulations issued thereunder.CommentsClose CommentsPermalink





(2) RULE OF CONSTRUCTION- No provision of this title shall be construed as modifying, limiting, or superseding the operation of any provision of an enumerated consumer law that relates to the authority of a State attorney general or State regulator to enforce such Federal law.CommentsClose CommentsPermalink





(b) Consultation Required-CommentsClose CommentsPermalink





(1) NOTICE-CommentsClose CommentsPermalink





(A) IN GENERAL- Before initiating any action in a court or other administrative or regulatory proceeding against any covered person to enforce any provision of this title, including any regulation prescribed by the Agency under this title, a State attorney general or State regulator shall timely provide a copy of the complete complaint to be filed and written notice describing such action or proceeding to the Agency, or the Agency’s designee.CommentsClose CommentsPermalink





(B) EMERGENCY ACTION- If prior notice is not practicable, the State attorney general or State regulator shall provide a copy of the complete complaint and the notice to the Agency immediately upon instituting the action or proceeding.CommentsClose CommentsPermalink





(C) CONTENTS OF NOTICE- The notification required under this section shall, at a minimum, describe--CommentsClose CommentsPermalink





(i) the identity of the parties;CommentsClose CommentsPermalink





(ii) the alleged facts underlying the proceeding; andCommentsClose CommentsPermalink





(iii) whether there may be a need to coordinate the prosecution of the proceeding so as not to interfere with any action, including any rulemaking, undertaken by the Agency or another Federal agency.CommentsClose CommentsPermalink





(2) AGENCY RESPONSE- In any action described in paragraph (1), the Agency may--CommentsClose CommentsPermalink





(A) intervene in the action as a party;CommentsClose CommentsPermalink





(B) upon intervening--CommentsClose CommentsPermalink





(i) remove the action to the appropriate United States district court, if the action was not originally brought there; andCommentsClose CommentsPermalink





(ii) be heard on all matters arising in the action; andCommentsClose CommentsPermalink





(C) appeal any order or judgment to the same extent as any other party in the proceeding may.CommentsClose CommentsPermalink





(c) Regulations- The Agency shall prescribe regulations to implement the requirements of this section and, from time to time, provide guidance in order to further coordinate actions with the State attorneys general and other regulators.CommentsClose CommentsPermalink





(d) Preservation of State Claims- Nothing in this section shall be construed as limiting the authority of a State attorney general or State regulator to bring an action or other regulatory proceeding arising solely under the law of that State.CommentsClose CommentsPermalink

SEC. 143. STATE LAW PREEMPTION STANDARDS FOR NATIONAL BANKS AND SUBSIDIARIES CLARIFIED.

(a) In General- Chapter one of title LXII of the Revised Statutes of the United States (12 U.S.C. 21 et seq.) is amended by inserting after section 5136B the following new section:CommentsClose CommentsPermalink

‘SEC. 5136C. STATE LAW PREEMPTION STANDARDS FOR NATIONAL BANKS AND SUBSIDIARIES CLARIFIED.

‘(a) Definitions- For purposes of this section, the following definitions shall apply:CommentsClose CommentsPermalink





‘(1) NATIONAL BANK- The term ‘national bank’ includes--CommentsClose CommentsPermalink





‘(A) any bank organized under the laws of the United States;CommentsClose CommentsPermalink





‘(B) any affiliate of a national bank;CommentsClose CommentsPermalink





‘(C) any subsidiary of a national bank; andCommentsClose CommentsPermalink





‘(D) any Federal branch established in accordance with the International Banking Act of 1978.CommentsClose CommentsPermalink





‘(2) OTHER DEFINITIONS- The terms ‘affiliate’, ‘subsidiary’, ‘includes’, and ‘including’ have the same meaning as in section 3 of the Federal Deposit Insurance Act.CommentsClose CommentsPermalink





‘(3) STATE CONSUMER LAW- The term ‘State consumer law’ means any law of a State that--CommentsClose CommentsPermalink





‘(A) accords rights to or protects the rights of its citizens in financial transactions concerning negotiation, sales, solicitation, disclosure, terms and conditions, advice, and remedies; orCommentsClose CommentsPermalink





‘(B) prevents counterparties, successors, and assigns of financial contracts from engaging in unfair or deceptive acts and practices.CommentsClose CommentsPermalink





‘(b) State Consumer Laws of General Application- Notwithstanding any other provision of Federal law and except as provided in subsection (d), any consumer protection provision in State consumer laws of general application, including any law relating to unfair or deceptive acts or practices, any consumer fraud law and repossession, foreclosure, and collection law, shall apply to any national bank.CommentsClose CommentsPermalink





‘(c) State Banking Laws Enacted Pursuant to Federal Law- Notwithstanding any other provision of Federal law and except as provided in subsection (d), any State consumer law that--CommentsClose CommentsPermalink





‘(1) is applicable to State banks; andCommentsClose CommentsPermalink





‘(2) was enacted pursuant to or in accordance with, and is not inconsistent with, an Act of Congress, including the Gramm-Leach-Bliley Act, the Consumer Credit Protection Act, and the Real Estate Settlement Procedures Act, that explicitly or by implication, permits States to exceed or supplement the requirements of any comparable Federal law,CommentsClose CommentsPermalink





shall apply to any national bank.CommentsClose CommentsPermalink





‘(d) Exceptions-CommentsClose CommentsPermalink





‘(1) IN GENERAL- Subsections (b) and (c) shall not apply with respect to any State consumer law if--CommentsClose CommentsPermalink





‘(A) the State consumer law discriminates against national banks; orCommentsClose CommentsPermalink





‘(B) the State consumer law is inconsistent with provisions of Federal law other than this title, but only to the extent of the inconsistency (as determined in accordance with the provision of the other Federal law).CommentsClose CommentsPermalink





‘(2) RULE FOR DETERMINING INCONSISTENCY- For purposes of paragraph (1)(B), a State consumer law is not inconsistent with Federal law if the protection the State consumer law affords consumers is greater than the protection provided under Federal law as determined by the Agency.CommentsClose CommentsPermalink





‘(e) No Negative Implications for Applicability of Other State Laws- No provision of this section shall be construed as altering or affecting the applicability, to national banks, of any State law which is not described in this section.CommentsClose CommentsPermalink





‘(f) Effect of Transfer of Transaction- State consumer law applicable to a transaction at the inception of the transaction may not be preempted under Federal law solely because a national bank subsequently acquires the asset or instrument that is the subject of the transaction.CommentsClose CommentsPermalink





‘(g) Denial of Preemption Not a Deprivation of a Civil Right- The preemption of any provision of the law of any State with respect to any national bank shall not be treated as a right, privilege, or immunity for purposes of section 1979 of the Revised Statutes of the United States (42 U.S.C. 1983).’.CommentsClose CommentsPermalink





(b) Clerical Amendment- The table of sections for chapter one of title LXII of the Revised Statutes of the United States is amended by inserting after the item relating to section 5136B the following new item:CommentsClose CommentsPermalink





‘5136C. State law preemption standards for national banks and subsidiaries clarified.’.CommentsClose CommentsPermalink

SEC. 144. VISITORIAL STANDARDS.

Section 5136C of the Revised Statutes of the United States (as added by section 143) is amended by adding at the end the following new subsections:CommentsClose CommentsPermalink





‘(h) Visitorial Powers-CommentsClose CommentsPermalink





‘(1) RULE OF CONSTRUCTION- No provision of this title which relates to visitorial powers or otherwise limits or restricts the supervisory, examination, or regulatory authority to which any national bank is subject shall be construed as limiting or restricting the authority of any attorney general (or other chief law enforcement officer) of any State to bring any action in any court of appropriate jurisdiction--CommentsClose CommentsPermalink





‘(A) to require a national bank to produce records relative to the investigation of violations of State consumer law, or Federal consumer laws;CommentsClose CommentsPermalink





‘(B) to enforce any applicable Federal or State law, as authorized by such law; orCommentsClose CommentsPermalink





‘(C) on behalf of residents of such State, to enforce any applicable provision of any Federal or State law against a national bank, as authorized by such law, or to seek relief and recover damages for such residents from any violation of any such law by any national bank.CommentsClose CommentsPermalink





‘(2) CONSULTATION- The attorney general (or other chief law enforcement officer) of any State shall consult with the head of the agency responsible for chartering and regulating national banks before acting under paragraph (1).CommentsClose CommentsPermalink





‘(i) Enforcement Actions- The ability of the head of the agency responsible for chartering and regulating national banks to bring an enforcement action under this title or section 5 of the Federal Trade Commission Act shall not be construed as precluding private parties from enforcing rights granted under Federal or State law in the courts.’.CommentsClose CommentsPermalink

SEC. 145. CLARIFICATION OF LAW APPLICABLE TO NONDEPOSITORY INSTITUTION SUBSIDIARIES.

Section 5136C of the Revised Statutes of the United States is amended by inserting after subsection (i) (as added by section 144) the following new subsection:CommentsClose CommentsPermalink





‘(j) Clarification of Law Applicable to Nondepository Institution Subsidiaries and Affiliates of National Banks-CommentsClose CommentsPermalink





‘(1) DEFINITIONS- For purposes of this section, the following definitions shall apply:CommentsClose CommentsPermalink





‘(A) DEPOSITORY INSTITUTION, SUBSIDIARY, AFFILIATE- The terms ‘depository institution’, ‘subsidiary’, and ‘affiliate’ have the same meanings as in section 3 of the Federal Deposit Insurance Act.CommentsClose CommentsPermalink





‘(B) NONDEPOSITORY INSTITUTION- The term ‘nondepository institution’ means any entity that is not a depository institution.CommentsClose CommentsPermalink





‘(2) IN GENERAL- No provision of this title shall be construed as annulling, altering, or affecting the applicability of State law to any nondepository institution, subsidiary, other affiliate, or agent of a national bank.’.CommentsClose CommentsPermalink

SEC. 146. STATE LAW PREEMPTION STANDARDS FOR FEDERAL SAVINGS ASSOCIATIONS AND SUBSIDIARIES CLARIFIED.

(a) In General- The Home Owners’ Loan Act (12 U.S.C. 1461 et seq.) is amended by inserting after section 5 the following new section:CommentsClose CommentsPermalink

‘SEC. 6. STATE LAW PREEMPTION STANDARDS FOR FEDERAL SAVINGS ASSOCIATIONS CLARIFIED.

‘(a) Definition- For purposes of this section--CommentsClose CommentsPermalink





‘(1) the terms ‘includes’ and ‘including’ have the same meaning as in section 3(t) of the Federal Deposit Insurance Act.CommentsClose CommentsPermalink





‘(2) the term ‘State consumer law’ means any law of a State that:CommentsClose CommentsPermalink





‘(A) accords rights to or protects the rights of its citizens in financial transactions concerning negotiation, sales, solicitation, disclosure, terms and conditions, advice, and remedies; orCommentsClose CommentsPermalink





‘(B) prevents counterparties, successors, and assigns of financial contracts from engaging in unfair or deceptive acts and practices.CommentsClose CommentsPermalink





‘(b) State Consumer Laws of General Application- Notwithstanding any other provision of Federal law and except as provided in subsection (c), any consumer protection provision in State consumer laws of general application, including any law relating to unfair or deceptive acts or practices, any consumer fraud law and repossession, foreclosure, and collection law, shall apply to any Federal savings association.CommentsClose CommentsPermalink





‘(c) Exceptions-CommentsClose CommentsPermalink





‘(1) IN GENERAL- Subsection (b) shall not apply with respect to any State law if--CommentsClose CommentsPermalink





‘(A) the State law discriminates against Federal savings associations; orCommentsClose CommentsPermalink





‘(B) the State consumer law is inconsistent with provisions of Federal law other than this Act, but only to the extent of the inconsistency (as determined in accordance with the provision of the other Federal law).CommentsClose CommentsPermalink





‘(2) RULE FOR DETERMINING INCONSISTENCY- For purposes of paragraph (1)(B), a State consumer law is not inconsistent with Federal law if the protection the State consumer law affords consumers is greater than the protection provided under Federal law, as determined by the Agency.CommentsClose CommentsPermalink





‘(d) State Banking or Thrift Laws Enacted Pursuant to Federal Law-CommentsClose CommentsPermalink





‘(1) IN GENERAL- Notwithstanding any other provision of Federal law and except as provided in paragraph (2), any State law that--CommentsClose CommentsPermalink





‘(A) is applicable to State savings associations (as defined in section 3 of the Federal Deposit Insurance Act); andCommentsClose CommentsPermalink





‘(B) was enacted pursuant to or in accordance with, and is not inconsistent with, an Act of Congress, including the Gramm-Leach-Bliley Act, the Consumer Credit Protection Act, and the Real Estate Settlement Procedures Act, that explicitly or by implication, permits States to exceed or supplement the requirements of any comparable Federal law,CommentsClose CommentsPermalink





shall apply to any Federal savings association.CommentsClose CommentsPermalink





‘(2) EXCEPTIONS- Paragraph (1) shall not apply with respect to any State law if--CommentsClose CommentsPermalink





‘(A) the State law discriminates against Federal savings associations; orCommentsClose CommentsPermalink





‘(B) the State consumer law is inconsistent with provisions of Federal law other than this Act, but only to the extent of the inconsistency (as determined in accordance with the provision of the other Federal law). For this purpose, a State consumer law is not inconsistent with Federal law if the protection the State consumer law affords consumers is greater than the protection provided under Federal law, as determined by the Agency.CommentsClose CommentsPermalink





‘(e) No Negative Implications for Applicability of Other State Laws- No provision of this section shall be construed as altering or affecting the applicability, to Federal savings associations, of any State law which is not described in this section.CommentsClose CommentsPermalink





‘(f) Effect of Transfer of Transaction- State consumer law applicable to a transaction at the inception of the transaction may not be preempted under Federal law solely because a Federal savings association subsequently acquires the asset or instrument that is the subject of the transaction.CommentsClose CommentsPermalink





‘(g) Denial of Preemption Not a Deprivation of a Civil Right- The preemption of any provision of the law of any State with respect to any Federal savings association shall not be treated as a right, privilege, or immunity for purposes of section 1979 of the Revised Statutes of the United States (42 U.S.C. 1983).’.CommentsClose CommentsPermalink





(b) Clerical Amendment- The table of sections for the Home Owners’ Loan Act (12 U.S.C. 1461 et seq.) is amended by striking the item relating to section 6 and inserting the following new item:CommentsClose CommentsPermalink





‘6. State law preemption standards for Federal savings associations and subsidiaries clarified.’.CommentsClose CommentsPermalink

SEC. 147. VISITORIAL STANDARDS.

Section 6 of the Home Owners’ Loan Act (as added by section 146 of this title) is amended by adding at the end the following new subsections:CommentsClose CommentsPermalink





‘(h) Visitorial Powers-CommentsClose CommentsPermalink





‘(1) IN GENERAL- No provision of this Act shall be construed as limiting or restricting the authority of any attorney general (or other chief law enforcement officer) of any State to bring any action in any court of appropriate jurisdiction--CommentsClose CommentsPermalink





‘(A) to require a Federal savings association to produce records relative to the investigation of violations of State consumer law, or Federal consumer laws;CommentsClose CommentsPermalink





‘(B) to enforce any applicable Federal or State law, as authorized by such law; orCommentsClose CommentsPermalink





‘(C) on behalf of residents of such State, to enforce any applicable provision of any Federal or State law against a Federal savings association, as authorized by such law, or to seek relief and recover damages for such residents from any violation of any such law by any Federal savings association.CommentsClose CommentsPermalink





‘(2) CONSULTATION- The attorney general (or other chief law enforcement officer) of any State shall consult with the Director or any successor agency before acting under paragraph (1).CommentsClose CommentsPermalink





‘(i) Enforcement Actions- The ability of the Director or any successor agency to bring an enforcement action under this Act or section 5 of the Federal Trade Commission Act shall not be construed as precluding private parties from enforcing rights granted under Federal or State law in the courts.’.CommentsClose CommentsPermalink

SEC. 148. CLARIFICATION OF LAW APPLICABLE TO NONDEPOSITORY INSTITUTION SUBSIDIARIES.

Section 6 of the Home Owners’ Loan Act is amended by adding after subsection (i) (as added by section 147) the following new subsection:CommentsClose CommentsPermalink





‘(j) Clarification of Law Applicable to Nondepository Institution Subsidiaries and Affiliates of Federal Savings Associations-CommentsClose CommentsPermalink





‘(1) DEFINITIONS- For purposes of this section, the following definitions shall apply:CommentsClose CommentsPermalink





‘(A) DEPOSITORY INSTITUTION, SUBSIDIARY, AFFILIATE- The terms ‘depository institution’, ‘subsidiary’, and ‘affiliate’ have the same meanings as in section 3 of the Federal Deposit Insurance Act.CommentsClose CommentsPermalink





‘(B) NONDEPOSITORY INSTITUTION- The term ‘nondepository institution’ means any entity that is not a depository institution.CommentsClose CommentsPermalink





‘(2) IN GENERAL- No provision of this title shall be construed as preempting the applicability of State law to any nondepository institution, subsidiary, other affiliate, or agent of a Federal savings association.’.CommentsClose CommentsPermalink

SEC. 149. EFFECTIVE DATE.

This subtitle shall take effect on the designated transfer date.CommentsClose CommentsPermalink

Subtitle E--Enforcement PowersCommentsClose CommentsPermalink

SEC. 151. DEFINITIONS.

For purposes of this subtitle, the following definitions shall apply:CommentsClose CommentsPermalink





(1) CIVIL INVESTIGATIVE DEMAND AND DEMAND- The terms ‘civil investigative demand’ and ‘demand’ mean any demand issued by the Agency.CommentsClose CommentsPermalink





(2) AGENCY INVESTIGATION- The term ‘Agency investigation’ means any inquiry conducted by an Agency investigator for the purpose of ascertaining whether any person is or has been engaged in any conduct that violates this title, any enumerated consumer law, or any regulation prescribed or order issued by the Agency under this title or under the authorities transferred under subtitles F and H.CommentsClose CommentsPermalink





(3) AGENCY INVESTIGATOR- The term ‘Agency investigator’ means any attorney or investigator employed by the Agency who is charged with the duty of enforcing or carrying into effect any provisions of this title, any enumerated consumer law, the authorities transferred under subtitles F and H, or any regulation prescribed or order issued under this title or pursuant to any such authority by the Agency.CommentsClose CommentsPermalink





(4) CUSTODIAN- The term ‘custodian’ means the custodian or any deputy custodian designated by the Agency.CommentsClose CommentsPermalink





(5) DOCUMENTARY MATERIAL- The term ‘documentary material’ includes the original or any copy of any book, record, report, memorandum, paper, communication, tabulation, chart, or other document.CommentsClose CommentsPermalink





(6) VIOLATION- The term ‘violation’ means any act or omission that, if proved, would constitute a violation of any provision of this title, any enumerated consumer law, any law for which authorities were transferred under subtitles F and H, or of any regulation prescribed or order issued by the Agency under this title or pursuant to any such authority.CommentsClose CommentsPermalink

SEC. 152. INVESTIGATIONS AND ADMINISTRATIVE DISCOVERY.

(a) Subpoenas-CommentsClose CommentsPermalink





(1) IN GENERAL- The Agency or an Agency investigator may issue subpoenas for the attendance and testimony of witnesses and the production of relevant papers, books, documents, or other material in connection with hearings under this title.CommentsClose CommentsPermalink





(2) FAILURE TO OBEY- In case of contumacy or refusal to obey a subpoena issued pursuant to this paragraph and served upon any person, the district court of the United States for any district in which such person is found, resides, or transacts business, upon application by the Agency or an Agency investigator and after notice to such person, shall have jurisdiction to issue an order requiring such person to appear and give testimony or to appear and produce documents or other material, or both.CommentsClose CommentsPermalink





(3) CONTEMPT- Any failure to obey an order of the court under this subsection may be punished by the court as a contempt thereof.CommentsClose CommentsPermalink





(b) Demands-CommentsClose CommentsPermalink





(1) IN GENERAL- Whenever the Agency has reason to believe that any person may be in possession, custody, or control of any documentary material or tangible things, or may have any information, relevant to a violation, the Agency may, before the institution of any proceedings under this title or under any enumerated consumer law or pursuant to the authorities transferred under subtitles F and H, issue in writing, and cause to be served upon such person, a civil investigative demand requiring such person to--CommentsClose CommentsPermalink





(A) produce such documentary material for inspection and copying or reproduction;CommentsClose CommentsPermalink





(B) submit such tangible things;CommentsClose CommentsPermalink





(C) file written reports or answers to questions;CommentsClose CommentsPermalink





(D) give oral testimony concerning documentary material or other information; orCommentsClose CommentsPermalink





(E) furnish any combination of such material, answers, or testimony.CommentsClose CommentsPermalink





(2) REQUIREMENTS- Each civil investigative demand shall state the nature of the conduct constituting the alleged violation which is under investigation and the provision of law applicable to such violation.CommentsClose CommentsPermalink





(3) PRODUCTION OF DOCUMENTS- Each civil investigative demand for the production of documentary material shall--CommentsClose CommentsPermalink





(A) describe each class of documentary material to be produced under the demand with such definiteness and certainty as to permit such material to be fairly identified;CommentsClose CommentsPermalink





(B) prescribe a return date or dates which will provide a reasonable period of time within which the material so demanded may be assembled and made available for inspection and copying or reproduction; andCommentsClose CommentsPermalink





(C) identify the custodian to whom such material shall be made available.CommentsClose CommentsPermalink





(4) PRODUCTION OF THINGS- Each civil investigative demand for the submission of tangible things shall--CommentsClose CommentsPermalink





(A) describe each class of tangible things to be submitted under the demand with such definiteness and certainty as to permit such things to be fairly identified;CommentsClose CommentsPermalink





(B) prescribe a return date or dates which will provide a reasonable period of time within which the things so demanded may be assembled and submitted; andCommentsClose CommentsPermalink





(C) identify the custodian to whom such things shall be submitted.CommentsClose CommentsPermalink





(5) DEMAND FOR WRITTEN REPORTS OR ANSWERS- Each civil investigative demand for written reports or answers to questions shall--CommentsClose CommentsPermalink





(A) propound with definiteness and certainty the reports to be produced or the questions to be answered;CommentsClose CommentsPermalink





(B) prescribe a date or dates at which time written reports or answers to questions shall be submitted; andCommentsClose CommentsPermalink





(C) identify the custodian to whom such reports or answers shall be submitted.CommentsClose CommentsPermalink





(6) ORAL TESTIMONY- Each civil investigative demand for the giving of oral testimony shall--CommentsClose CommentsPermalink





(A) prescribe a date, time, and place at which oral testimony shall be commenced; andCommentsClose CommentsPermalink





(B) identify a Agency investigator who shall conduct the investigation and the custodian to whom the transcript of such investigation shall be submitted.CommentsClose CommentsPermalink





(7) SERVICE-CommentsClose CommentsPermalink





(A) Any civil investigative demand may be served by any Agency investigator at any place within the territorial jurisdiction of any court of the United States.CommentsClose CommentsPermalink





(B) Any such demand or any enforcement petition filed under this section may be served upon any person who is not found within the territorial jurisdiction of any court of the United States, in such manner as the Federal Rules of Civil Procedure prescribe for service in a foreign nation.CommentsClose CommentsPermalink





(C) To the extent that the courts of the United States have authority to assert jurisdiction over such person consistent with due process, the United States District Court for the District of Columbia shall have the same jurisdiction to take any action respecting compliance with this section by such person that such district court would have if such person were personally within the jurisdiction of such district court.CommentsClose CommentsPermalink





(8) METHOD OF SERVICE- Service of any civil investigative demand or any enforcement petition filed under this section may be made upon a person, including any legal entity, by--CommentsClose CommentsPermalink





(A) delivering a duly executed copy of such demand or petition to the individual or to any partner, executive officer, managing agent, or general agent of such person, or to any agent of such person authorized by appointment or by law to receive service of process on behalf of such person;CommentsClose CommentsPermalink





(B) delivering a duly executed copy of such demand or petition to the principal office or place of business of the person to be served; orCommentsClose CommentsPermalink





(C) depositing a duly executed copy in the United States mails, by registered or certified mail, return receipt requested, duly addressed to such person at its principal office or place of business.CommentsClose CommentsPermalink





(9) PROOF OF SERVICE-CommentsClose CommentsPermalink





(A) A verified return by the individual serving any civil investigative demand or any enforcement petition filed under this section setting forth the manner of such service shall be proof of such service.CommentsClose CommentsPermalink





(B) In the case of service by registered or certified mail, such return shall be accompanied by the return post office receipt of delivery of such demand or enforcement petition.CommentsClose CommentsPermalink





(10) PRODUCTION OF DOCUMENTARY MATERIAL- The production of documentary material in response to a civil investigative demand shall be made under a sworn certificate, in such form as the demand designates, by the person, if a natural person, to whom the demand is directed or, if not a natural person, by any person having knowledge of the facts and circumstances relating to such production, to the effect that all of the documentary material required by the demand and in the possession, custody, or control of the person to whom the demand is directed has been produced and made available to the custodian.CommentsClose CommentsPermalink





(11) SUBMISSION OF TANGIBLE THINGS- The submission of tangible things in response to a civil investigative demand shall be made under a sworn certificate, in such form as the demand designates, by the person to whom the demand is directed or, if not a natural person, by any person having knowledge of the facts and circumstances relating to such production, to the effect that all of the tangible things required by the demand and in the possession, custody, or control of the person to whom the demand is directed have been submitted to the custodian.CommentsClose CommentsPermalink





(12) SEPARATE ANSWERS- Each reporting requirement or question in a civil investigative demand shall be answered separately and fully in writing under oath, unless it is objected to, in which event the reasons for the objection shall be stated in lieu of an answer, and it shall be submitted under a sworn certificate, in such form as the demand designates, by the person, if a natural person, to whom the demand is directed or, if not a natural person, by any person responsible for answering each reporting requirement or question, to the effect that all information required by the demand and in the possession, custody, control, or knowledge of the person to whom the demand is directed has been submitted.CommentsClose CommentsPermalink





(13) TESTIMONY-CommentsClose CommentsPermalink





(A) PROCEDURE-CommentsClose CommentsPermalink





(i) OATH AND RECORDATION- Any Agency investigator before whom oral testimony is to be taken shall put the witness on oath or affirmation and shall personally, or by any individual acting under his direction and in his presence, record the testimony of the witness.CommentsClose CommentsPermalink





(ii) TRANSCRIPTIONS- The testimony shall be taken stenographically and transcribed.CommentsClose CommentsPermalink





(iii) COPY TO CUSTODIAN- After the testimony is fully transcribed, the Agency investigator before whom the testimony is taken shall promptly transmit a copy of the transcript of the testimony to the custodian.CommentsClose CommentsPermalink





(B) PARTIES PRESENT- Any Agency investigator before whom oral testimony is to be taken shall exclude from the place where the testimony is to be taken all other persons except the person giving the testimony, his or her attorney, the officer before whom the testimony is to be taken, and any stenographer taking such testimony.CommentsClose CommentsPermalink





(C) LOCATION- The oral testimony of any person taken pursuant to a civil investigative demand shall be taken in the judicial district of the United States in which such person resides, is found, or transacts business, or in such other place as may be agreed upon by the Agency investigator before whom the oral testimony of such person is to be taken and such person.CommentsClose CommentsPermalink





(D) ATTORNEY REPRESENTATION-CommentsClose CommentsPermalink





(i) IN GENERAL- Any person compelled to appear under a civil investigative demand for oral testimony pursuant to this section may be accompanied, represented, and advised by an attorney.CommentsClose CommentsPermalink





(ii) CONFIDENTIAL ADVICE- The attorney may advise the person summoned, in confidence, either upon the request of such person or upon the initiative of the attorney, with respect to any question asked of such person.CommentsClose CommentsPermalink





(iii) OBJECTIONS- The person summoned or the attorney may object on the record to any question, in whole or in part, and shall briefly state for the record the reason for the objection.CommentsClose CommentsPermalink





(iv) REFUSAL TO ANSWER- An objection may properly be made, received, and entered upon the record when it is claimed that the person summoned is entitled to refuse to answer the question on grounds of any constitutional or other legal right or privilege, including the privilege against self-incrimination, but such person shall not otherwise object to or refuse to answer any question, and shall not otherwise interrupt the oral examination, directly or through such person’s attorney.CommentsClose CommentsPermalink





(v) PETITION FOR ORDER- If such person refuses to answer any question, the Agency may petition the district court of the United States pursuant to this section for an order compelling such person to answer such question.CommentsClose CommentsPermalink





(vi) BASIS FOR COMPELLING TESTIMONY- If such person refuses to answer any question on grounds of the privilege against self-incrimination, the testimony of such person may be compelled in accordance with the provisions of section 6004 of title 18, United States Code.CommentsClose CommentsPermalink





(E) TRANSCRIPTS-CommentsClose CommentsPermalink





(i) RIGHT TO EXAMINE- After the testimony of any witness is fully transcribed, the Agency investigator shall afford the witness (who may be accompanied by an attorney) a reasonable opportunity to examine the transcript.CommentsClose CommentsPermalink





(ii) READING THE TRANSCRIPT- The transcript shall be read to or by the witness, unless such examination and reading are waived by the witness.CommentsClose CommentsPermalink





(iii) REQUEST FOR CHANGES- Any changes in form or substance which the witness desires to make shall be entered and identified upon the transcript by the Agency investigator with a statement of the reasons given by the witness for making such changes.CommentsClose CommentsPermalink





(iv) SIGNATURE- The transcript shall be signed by the witness, unless the witness in writing waives the signing, is ill, cannot be found, or refuses to sign.CommentsClose CommentsPermalink





(v) AGENCY ACTION IN LIEU OF SIGNATURE- If the transcript is not signed by the witness during the 30-day period following the date upon which the witness is first afforded a reasonable opportunity to examine it, the Agency investigator shall sign the transcript and state on the record the fact of the waiver, illness, absence of the witness, or the refusal to sign, together with any reasons given for the failure to sign.CommentsClose CommentsPermalink





(F) CERTIFICATION BY INVESTIGATOR- The Agency investigator shall certify on the transcript that the witness was duly sworn by the investigator and that the transcript is a true record of the testimony given by the witness, and the Agency investigator shall promptly deliver the transcript or send it by registered or certified mail to the custodian.CommentsClose CommentsPermalink





(G) COPY OF TRANSCRIPT- The Agency investigator shall furnish a copy of the transcript (upon payment of reasonable charges for the transcript) to the witness only, except that the Agency may for good cause limit such witness to inspection of the official transcript of his testimony.CommentsClose CommentsPermalink





(H) WITNESS FEES- Any witness appearing for the taking of oral testimony pursuant to a civil investigative demand shall be entitled to the same fees and mileage which are paid to witnesses in the district courts of the United States.CommentsClose CommentsPermalink





(c) Confidential Treatment of Demand Material-CommentsClose CommentsPermalink





(1) IN GENERAL- Materials received as a result of a civil investigative demand shall be subject to requirements and procedures regarding confidentiality, in accordance with regulations established by the Agency.CommentsClose CommentsPermalink





(2) DISCLOSURE TO CONGRESS- No regulation established by the Agency regarding the confidentiality of materials submitted to, or otherwise obtained by, the Agency shall be intended to prevent disclosure to either House of Congress or to an appropriate committee of the Congress, except that the Agency may prescribe regulations allowing prior notice to any party that owns or otherwise provided the material to the Agency and has designated such material as confidential.CommentsClose CommentsPermalink





(d) Petition for Enforcement-CommentsClose CommentsPermalink





(1) IN GENERAL- Whenever any person fails to comply with any civil investigative demand duly served upon such person under this section, or whenever satisfactory copying or reproduction of material requested pursuant to the demand cannot be accomplished and such person refuses to surrender such material, the Agency, through such officers or attorneys as it may designate, may file, in the district court of the United States for any judicial district in which such person resides, is found, or transacts business, and serve upon such person, a petition for an order of such court for the enforcement of this section.CommentsClose CommentsPermalink





(2) SERVICE OF PROCESS- All process of any court to which application may be made as provided in this subsection may be served in any judicial district.CommentsClose CommentsPermalink





(e) Petition for Order Modifying or Setting Aside Demand-CommentsClose CommentsPermalink





(1) IN GENERAL- Not later than 20 days after the service of any civil investigative demand upon any person under subsection (b), or at any time before the return date specified in the demand, whichever period is shorter, or within such period exceeding 20 days after service or in excess of such return date as may be prescribed in writing, subsequent to service, by any Agency investigator named in the demand, such person may file with the Agency a petition for an order by the Agency modifying or setting aside the demand.CommentsClose CommentsPermalink





(2) COMPLIANCE DURING PENDENCY- The time permitted for compliance with the demand in whole or in part, as deemed proper and ordered by the Agency, shall not run during the pendency of such petition at the Agency, except that such person shall comply with any portions of the demand not sought to be modified or set aside.CommentsClose CommentsPermalink





(3) SPECIFIC GROUNDS- Such petition shall specify each ground upon which the petitioner relies in seeking such relief, and may be based upon any failure of the demand to comply with the provisions of this section, or upon any constitutional or other legal right or privilege of such person.CommentsClose CommentsPermalink





(f) Custodial Control- At any time during which any custodian is in custody or control of any documentary material, tangible things, reports, answers to questions, or transcripts of oral testimony given by any person in compliance with any civil investigative demand, such person may file, in the district court of the United States for the judicial district within which the office of such custodian is situated, and serve upon such custodian, a petition for an order of such court requiring the performance by such custodian of any duty imposed upon such custodian by this section or regulation prescribed by the Agency.CommentsClose CommentsPermalink





(g) Jurisdiction of Court-CommentsClose CommentsPermalink





(1) IN GENERAL- Whenever any petition is filed in any district court of the United States under this section, such court shall have jurisdiction to hear and determine the matter so presented, and to enter such order or orders as may be required to carry into effect the provisions of this section.CommentsClose CommentsPermalink





(2) APPEAL- Any final order so entered shall be subject to appeal pursuant to section 1291 of title 28, United States Code.CommentsClose CommentsPermalink

SEC. 153. HEARINGS AND ADJUDICATION PROCEEDINGS.

(a) In General- The Agency may conduct hearings and adjudication proceedings with respect to any person in the manner prescribed by chapter 5 of title 5, United States Code in order to ensure or enforce compliance with--CommentsClose CommentsPermalink





(1) the provisions of this title, including any regulations prescribed by the Agency under this title; andCommentsClose CommentsPermalink





(2) any other Federal law that the Agency is authorized to enforce, including an enumerated consumer law, and any regulations or order prescribed thereunder, unless such Federal law specifically limits the Agency from conducting a hearing or adjudication proceeding and only to the extent of such limitation.CommentsClose CommentsPermalink





(b) Special Rules for Cease-and-desist Proceedings-CommentsClose CommentsPermalink





(1) ISSUANCE-CommentsClose CommentsPermalink





(A) NOTICE OF CHARGES- If, in the opinion of the Agency, any covered person is engaging or has engaged in an activity that violates a law, regulation, or any condition imposed in writing on the person by the Agency, the Agency may issue and serve upon the person a notice of charges with respect to such violation.CommentsClose CommentsPermalink





(B) CONTENTS OF NOTICE- The notice shall contain a statement of the facts constituting any alleged violation and shall fix a time and place at which a hearing will be held to determine whether an order to cease-and-desist there from should issue against the person.CommentsClose CommentsPermalink





(C) TIME OF HEARING- A hearing under this subsection shall be fixed for a date not earlier than 30 days nor later than 60 days after service of such notice unless an earlier or a later date is set by the Agency at the request of any party so served.CommentsClose CommentsPermalink





(D) NONAPPEARANCE DEEMED TO BE CONSENT TO ORDER- Unless the party or parties so served shall appear at the hearing personally or by a duly authorized representative, they shall be deemed to have consented to the issuance of the cease-and-desist order.CommentsClose CommentsPermalink





(E) ISSUANCE OF ORDER- In the event of such consent, or if upon the record made at any such hearing, the Agency shall find that any violation specified in the notice of charges has been established, the Agency may issue and serve upon the person an order to cease-and-desist from any such violation or practice.CommentsClose CommentsPermalink





(F) INCLUDES REQUIREMENT FOR CORRECTIVE ACTION- Such order may, by provisions which may be mandatory or otherwise, require the person to cease-and-desist from the same, and, further, to take affirmative action to correct the conditions resulting from any such violation.CommentsClose CommentsPermalink





(2) EFFECTIVENESS OF ORDER- A cease-and-desist order shall take effect at the end of the 30-day period beginning on the date of the service of such order upon the covered person concerned (except in the case of a cease-and-desist order issued upon consent, which shall take effect at the time specified therein), and shall remain effective and enforceable as provided therein, except to such extent as it is stayed, modified, terminated, or set aside by action of the Agency or a reviewing court.CommentsClose CommentsPermalink





(3) DECISION AND APPEAL-CommentsClose CommentsPermalink





(A) PLACE OF AND PROCEDURES FOR HEARING- Any hearing provided for in this subsection shall be held in the Federal judicial district or in the territory in which the residence or home office of the person is located unless the person consents to another place, and shall be conducted in accordance with the provisions of chapter 5 of title 5 of the United States Code.CommentsClose CommentsPermalink





(B) TIME LIMIT FOR DECISION- After such hearing, and within 90 days after the Agency has notified the parties that the case has been submitted to it for final decision, the Agency shall--CommentsClose CommentsPermalink





(i) render its decision (which shall include findings of fact upon which its decision is predicated) and shall issue; andCommentsClose CommentsPermalink





(ii) serve upon each party to the proceeding an order or orders consistent with the provisions of this section. Judicial review of any such order shall be exclusively as provided in this subsection.CommentsClose CommentsPermalink





(C) MODIFICATION OF ORDER GENERALLY- Unless a petition for review is timely filed in a court of appeals of the United States, as hereinafter provided in paragraph (4), and thereafter until the record in the proceeding has been filed as so provided, the Agency may at any time, upon such notice and in such manner as it shall deem proper, modify, terminate, or set aside any such order.CommentsClose CommentsPermalink





(D) MODIFICATION OF ORDER AFTER FILING RECORD ON APPEAL- Upon such filing of the record, the Agency may modify, terminate, or set aside any such order with permission of the court.CommentsClose CommentsPermalink





(4) APPEAL TO COURT OF APPEALS-CommentsClose CommentsPermalink





(A) IN GENERAL- Any party to any proceeding under this subsection may obtain a review of any order served pursuant to this subsection (other than an order issued with the consent of the person concerned) by the filing in the court of appeals of the United States for the circuit in which the principal office of the covered person is located, or in the United States Court of Appeals for the District of Columbia Circuit, within 30 days after the date of service of such order, a written petition praying that the order of the Agency be modified, terminated, or set aside.CommentsClose CommentsPermalink





(B) TRANSMITTAL OF COPY TO THE AGENCY- A copy of such petition shall be forthwith transmitted by the clerk of the court to the Agency, and thereupon the Agency shall file in the court the record in the proceeding, as provided in section 2112 of title 28 of the United States Code.CommentsClose CommentsPermalink





(C) JURISDICTION OF COURT- Upon the filing of such petition, such court shall have jurisdiction, which upon the filing of the record shall except as provided in the last sentence of paragraph (3) be exclusive, to affirm, modify, terminate, or set aside, in whole or in part, the order of the agency.CommentsClose CommentsPermalink





(D) SCOPE OF REVIEW- Review of such proceedings shall be had as provided in chapter 7 of title 5 of the United States Code.CommentsClose CommentsPermalink





(E) FINALITY- The judgment and decree of the court shall be final, except that the same shall be subject to review by the Supreme Court upon certiorari, as provided in section 1254 of title 28 of the United States Code.CommentsClose CommentsPermalink





(5) NO STAY- The commencement of proceedings for judicial review under paragraph (4) shall not, unless specifically ordered by the court, operate as a stay of any order issued by the agency.CommentsClose CommentsPermalink





(c) Special Rules for Temporary Cease-and-desist Proceedings-CommentsClose CommentsPermalink





(1) ISSUANCE-CommentsClose CommentsPermalink





(A) IN GENERAL- Whenever the Agency determines that the violation specified in the notice of charges served upon a person pursuant to subsection (b), or the continuation thereof, is likely to cause the person to be insolvent or otherwise prejudice the interests of consumers before the completion of the proceedings conducted pursuant to subsection (b), the Agency may issue a temporary order requiring the covered person to cease-and-desist from any such violation or practice and to take affirmative action to prevent or remedy such insolvency or other condition pending completion of such proceedings.CommentsClose CommentsPermalink





(B) OTHER REQUIREMENTS- Any temporary order issued under this paragraph may include any requirement authorized under this subtitle.CommentsClose CommentsPermalink





(C) EFFECT DATE OF ORDER- Any temporary order issued under this paragraph shall take effect upon service upon the person and, unless set aside, limited, or suspended by a court in proceedings authorized by paragraph (2) of this subsection, shall remain effective and enforceable pending the completion of the administrative proceedings pursuant to such notice and until such time as the Agency shall dismiss the charges specified in such notice, or if a cease-and-desist order is issued against the person, until the effective date of such order.CommentsClose CommentsPermalink





(2) APPEAL- Within 10 days after the person concerned has been served with a temporary cease-and-desist order, the person may apply to the United States district court for the judicial district in which the home office of the covered person is located, or the United States District Court for the District of Columbia, for an injunction setting aside, limiting, or suspending the enforcement, operation, or effectiveness of such order pending the completion of the administrative proceedings pursuant to the notice of charges served upon the person under subsection (b), and such court shall have jurisdiction to issue such injunction.CommentsClose CommentsPermalink





(3) INCOMPLETE OR INACCURATE RECORDS-CommentsClose CommentsPermalink





(A) TEMPORARY ORDER- If a notice of charges served under subsection (b) specifies, on the basis of particular facts and circumstances, that a person’s books and records are so incomplete or inaccurate that the Agency is unable to determine the financial condition of that person or the details or purpose of any transaction or transactions that may have a material effect on the financial condition of that person, the Agency may issue a temporary order requiring--CommentsClose CommentsPermalink





(i) the cessation of any activity or practice which gave rise, whether in whole or in part, to the incomplete or inaccurate state of the books or records; orCommentsClose CommentsPermalink





(ii) affirmative action to restore such books or records to a complete and accurate state, until the completion of the proceedings under subsection (b)(1).CommentsClose CommentsPermalink





(B) EFFECTIVE PERIOD- Any temporary order issued under subparagraph (A)--CommentsClose CommentsPermalink





(i) shall take effect upon service; andCommentsClose CommentsPermalink





(ii) unless set aside, limited, or suspended by a court in proceedings under paragraph (2), shall remain in effect and enforceable until the earlier of--CommentsClose CommentsPermalink





(I) the completion of the proceeding initiated under subsection (b) in connection with the notice of charges; orCommentsClose CommentsPermalink





(II) the date the Agency determines, by examination or otherwise, that the person’s books and records are accurate and reflect the financial condition of the person.CommentsClose CommentsPermalink





(d) Special Rules for Enforcement of Orders-CommentsClose CommentsPermalink





(1) IN GENERAL- The Agency may in its discretion apply to the United States district court within the jurisdiction of which the principal office of the covered person is located, for the enforcement of any effective and outstanding notice or order issued under this section, and such court shall have jurisdiction and power to order and require compliance herewith.CommentsClose CommentsPermalink





(2) EXCEPTION- Except as otherwise provided in this subsection, no court shall have jurisdiction to affect by injunction or otherwise the issuance or enforcement of any notice or order or to review, modify, suspend, terminate, or set aside any such notice or order.CommentsClose CommentsPermalink





(e) Regulations- The Agency shall prescribe regulations establishing such procedures as may be necessary to carry out this section.CommentsClose CommentsPermalink