HR 3310 IHCommentsClose CommentsPermalink

To reform the financial regulatory system of the United States, and for other purposes.CommentsClose CommentsPermalink

July 23, 2009CommentsClose CommentsPermalink

Mr. BACHUS (for himself, Mr. BOEHNER, Mr. CANTOR, Mr. PENCE, Mr. SMITH of Texas, Mr. FRANKS of Arizona, Mr. ISSA, Mr. NEUGEBAUER, Mr. GARRETT of New Jersey, Mr. HENSARLING, Mr. PRICE of Georgia, Mrs. BIGGERT, Mrs. CAPITO, Mr. JONES, Mr. POSEY, Mr. LANCE, Mr. MARCHANT, Mr. ROYCE, Mr. LEE of New York, Mr. LUCAS, Mr. ROSKAM, Mrs. BACHMANN, Ms. JENKINS, Mr. BARRETT of South Carolina, Mr. SCALISE, Mr. GOODLATTE, Mr. GERLACH, and Mr. RYAN of Wisconsin) introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committees on Education and Labor, Transportation and Infrastructure, the Judiciary, Agriculture, Oversight and Government Reform, the Budget, Rules, and 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 reform the financial regulatory system of the United States, 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 Protection and Regulatory Enhancement Act’.CommentsClose CommentsPermalink

SEC. 2. TABLE OF CONTENTS.

Sec. 1. Short title.CommentsClose CommentsPermalink





Sec. 2. Table of contents.CommentsClose CommentsPermalink

TITLE I--RESOLUTION OF NON-BANK FINANCIAL INSTITUTIONS

Sec. 101. Amendments to title 28 of the United States Code.CommentsClose CommentsPermalink





Sec. 102. Amendments to title 11 of the United States Code.CommentsClose CommentsPermalink





Sec. 103. Effective date; application of amendments.CommentsClose CommentsPermalink

TITLE II--MARKET STABILITY AND CAPITAL ADEQUACY

Sec. 201. Establishment of Market Stability and Capital Adequacy Board.CommentsClose CommentsPermalink





Sec. 202. Functions of Board.CommentsClose CommentsPermalink





Sec. 203. Powers of Board.CommentsClose CommentsPermalink





Sec. 204. Responsibilities of Federal functional regulators.CommentsClose CommentsPermalink





Sec. 205. Staff of Board.CommentsClose CommentsPermalink





Sec. 206. Compensation and travel expenses.CommentsClose CommentsPermalink

TITLE III--REGULATORY CONSOLIDATION AND CONSUMER PROTECTION

Sec. 301. Establishment.CommentsClose CommentsPermalink





Sec. 302. Board of Directors.CommentsClose CommentsPermalink





Sec. 303. Powers and duties of the FIR.CommentsClose CommentsPermalink





Sec. 304. Allocation of responsibility among FIR divisions.CommentsClose CommentsPermalink





Sec. 305. Technical and conforming amendments relating to transfers of functions to the FIR.CommentsClose CommentsPermalink





Sec. 306. Office of Comptroller of the Currency and position of Comptroller of the Currency abolished.CommentsClose CommentsPermalink





Sec. 307. Office of Thrift Supervision and position of Director of the Office of Thrift Supervision abolished.CommentsClose CommentsPermalink





Sec. 308. Savings provisions.CommentsClose CommentsPermalink





Sec. 309. References in Federal law to Federal banking agencies.CommentsClose CommentsPermalink





Sec. 310. National Credit Union Administration moved within the FIR.CommentsClose CommentsPermalink





Sec. 311. Office of Consumer Protection.CommentsClose CommentsPermalink

TITLE IV--FEDERAL RESERVE REFORM

Sec. 401. GAO authority to audit the Federal Reserve System.CommentsClose CommentsPermalink





Sec. 402. Monetary policy and inflation targets.CommentsClose CommentsPermalink





Sec. 403. Reforms of section 13 emergency powers.CommentsClose CommentsPermalink

TITLE V--GOVERNMENT-SPONSORED ENTERPRISES REFORM

Sec. 501. Short title.CommentsClose CommentsPermalink





Sec. 502. Definitions.CommentsClose CommentsPermalink





Sec. 503. Termination of current conservatorship.CommentsClose CommentsPermalink





Sec. 504. Limitation of enterprise authority upon emergence from conservatorship.CommentsClose CommentsPermalink





Sec. 505. Requirement to periodically renew charter until wind down and dissolution.CommentsClose CommentsPermalink





Sec. 506. Required wind down of operations and dissolution of enterprise.CommentsClose CommentsPermalink

TITLE VI--CREDIT RATING AGENCY REFORM

Sec. 601. Clarification of designation.CommentsClose CommentsPermalink





Sec. 602. Elimination of security credit rating requirements in Federal law.CommentsClose CommentsPermalink





Sec. 603. Elimination of security credit rating requirements in regulations.CommentsClose CommentsPermalink

TITLE VII--ANTI-FRAUD PROVISIONS

Sec. 701. Authority to impose civil penalties in cease and desist proceedings.CommentsClose CommentsPermalink





Sec. 702. Formerly associated persons.CommentsClose CommentsPermalink





Sec. 703. Collateral bars.CommentsClose CommentsPermalink





Sec. 704. Unlawful margin lending.CommentsClose CommentsPermalink





Sec. 705. Nationwide service of subpoenas.CommentsClose CommentsPermalink





Sec. 706. Reauthorization of the Financial Crimes Enforcement Network.CommentsClose CommentsPermalink





Sec. 707. Fair fund improvements.CommentsClose CommentsPermalink





Sec. 708. Authority to contract for collection of delinquent judgments and orders.CommentsClose CommentsPermalink

TITLE I--RESOLUTION OF NON-BANK FINANCIAL INSTITUTIONSCommentsClose CommentsPermalink

SEC. 101. AMENDMENTS TO TITLE 28 OF THE UNITED STATES CODE.

Title 28 of the United States Code is amended--CommentsClose CommentsPermalink





(1) in section 1408 by striking ‘section 1409’ and inserting ‘sections 1409 and 1409A’,CommentsClose CommentsPermalink





(2) by inserting after section 1409 the following:CommentsClose CommentsPermalink

‘Sec. 1409A. Venue of cases involving non-bank financial institutions

‘A case under chapter 14 may be commenced in the district court of the United States for the district--CommentsClose CommentsPermalink





‘(1) in which the debtor has its principal place of business or principal assets in the United States if a Federal Reserve Bank is located in that district, orCommentsClose CommentsPermalink





‘(2) if venue does not exist under paragraph (1), in which there is a Federal Reserve Bank and in a Federal circuit in which the debtor has its principal place of business or principal assets in the United States.’, andCommentsClose CommentsPermalink





(3) by amending the table of sections of chapter 87 of such title to insert after the item relating to section 1408 the following:CommentsClose CommentsPermalink





‘1409A. Venue of cases involving non-bank financial institutions.’.CommentsClose CommentsPermalink

SEC. 102. AMENDMENTS TO TITLE 11 OF THE UNITED STATES CODE.

(a) Definitions- Section 101 of title 11, United States Code, is amended--CommentsClose CommentsPermalink





(1) by inserting after paragraph (26) the following:CommentsClose CommentsPermalink





‘(26A) The term ‘functional regulator’ means the Federal regulatory agency with the primary Federal regulatory authority over the debtor, such as an agency listed in section 509 of the Gramm-Leach-Bliley Act.’,CommentsClose CommentsPermalink





(2) by redesignating paragraphs (38A) and (38B) as paragraphs (38B) and (38C), respectively,CommentsClose CommentsPermalink





(3) by inserting after paragraph (38) the following:CommentsClose CommentsPermalink





‘(38A) the term ‘Market Stability and Capital Adequacy Board’ means the entity established in section 201 of the Consumer Protection and Regulator Enhancement Act.’, andCommentsClose CommentsPermalink





(4) by inserting after paragraph (40) the following:CommentsClose CommentsPermalink





‘(40A) The term ‘non-bank financial institution’ means an institution the business of which is engaging in financial activities that is not an insured depository institution.’.CommentsClose CommentsPermalink





(b) Applicability of Chapters- Section 103 of title 11, United States Code, is amended--CommentsClose CommentsPermalink





(1) in subsection (a) by striking ‘13’ and inserting ‘13, and 14’,CommentsClose CommentsPermalink





(2) by redesignating subsection (k) as subsection (l), andCommentsClose CommentsPermalink





(3) by inserting after subsection (j) the following:CommentsClose CommentsPermalink





‘(k) Chapter 14 applies only in a case under such chapter.’.CommentsClose CommentsPermalink





(c) Who May Be a Debtor- Section 109 of title 11, United States Code, is amended--CommentsClose CommentsPermalink





(1) in subsection (b)--CommentsClose CommentsPermalink





(A) in paragraph (2) by striking ‘or’ at the end,CommentsClose CommentsPermalink





(B) in paragraph (3) by striking the period at the end and insert and inserting ‘; or’, andCommentsClose CommentsPermalink





(C) by adding at the end the following:CommentsClose CommentsPermalink





‘(4) a non-bank financial institution that has not been a debtor under chapter 14 of this title.’,CommentsClose CommentsPermalink





(2) in subsection (d) by striking ‘or commodity broker’ and inserting ‘, commodity broker, or a non-bank financial institution’, andCommentsClose CommentsPermalink





(3) by adding at the end the following:CommentsClose CommentsPermalink





‘(i) Only a non-bank financial institution may be a debtor under chapter 14 of this title.’.CommentsClose CommentsPermalink





(d) Involuntary Cases- Section 303 of title 11, the United States Code, is amended--CommentsClose CommentsPermalink





(1) in subsection (a) by striking ‘or 11’ and inserting ‘, 11, or 14’, andCommentsClose CommentsPermalink





(2) in subsection (b) by striking ‘or 11’ and inserting ‘, 11, or 14’.CommentsClose CommentsPermalink





(e) Obtaining Credit- Section 364 of title 11, United States Code, is amended by adding at the end the following:CommentsClose CommentsPermalink





‘(g) Notwithstanding any other provision of this section, the trustee may not, and the court may not authorize the trustee to, obtain credit, if the source of that credit either directly or indirectly is the United States.’.CommentsClose CommentsPermalink





(f) Chapter 14- Title 11, United States Code, is amended--CommentsClose CommentsPermalink





(1) by inserting the following after chapter 13:CommentsClose CommentsPermalink

‘CHAPTER 14--ADJUSTMENT TO THE DEBTS OF A NON-BANK FINANCIAL INSTITUTION

‘1401. Inapplicability of other sections.CommentsClose CommentsPermalink





‘1402. Applicability of chapter 11 to cases under this chapter.CommentsClose CommentsPermalink





‘1403. Prepetition consultation.CommentsClose CommentsPermalink





‘1404. Appointment of trustee.CommentsClose CommentsPermalink





‘1405. Right to be heard.CommentsClose CommentsPermalink





‘1406. Right to communicate.CommentsClose CommentsPermalink





‘1407. Exemption with respect to certain contracts or agreements.CommentsClose CommentsPermalink





‘1408. Conversion or dismissal.CommentsClose CommentsPermalink

‘Sec. 1401. Inapplicability of other sections

‘Except as provided in section 1408, sections 362(b)(6), 362(b)(7), 559, 560, and 561 do not apply in a case under this chapter.CommentsClose CommentsPermalink

‘Sec. 1402. Applicability of chapter 11 to cases under this chapter

‘With the exception of sections 1104(d), 1109, 1112(a), 1115, and 1116, subchapters I, II, and III of chapter 11 apply in a case under this chapter.CommentsClose CommentsPermalink

‘Sec. 1403. Prepetition consultation

‘(a) Subject to subsection (b)--CommentsClose CommentsPermalink





‘(1) a non-bank financial institution may not be a debtor under this chapter unless that institution has, at least 10 days prior to the date of the filing of the petition by such institution, taken part in the consultation described in subsection (c); andCommentsClose CommentsPermalink





‘(2) a creditor may not commence an involuntary case under this chapter unless, at least 10 days prior to the date of the filing of the petition by such creditor, the creditor notifies the non-bank financial institution, the functional regulator, and the Market Stability and Capital Adequacy Board of its intent to file a petition and requests a consultation as described in subsection (c).CommentsClose CommentsPermalink





‘(b) If the non-bank financial institution, the functional regulator, and the Market Stability and Capital Adequacy Board, in consultation with any agency charged with administering a nonbankruptcy insolvency regime for any component of the debtor, certify that the immediate filing of a petition under section 301 or 303 is necessary, or that an immediate filing would be in the interests of justice, a petition may be filed notwithstanding subsection (a).CommentsClose CommentsPermalink





‘(c) The non-bank financial institution, the functional regulator, the Market Stability and Capital Adequacy Board, and any agency charged with administering a nonbankruptcy insolvency regime for any component of the debtor shall engage in prepetition consultation in order to attempt to avoid the need for the non-bank financial institution’s liquidation or reorganization in bankruptcy, to make any liquidation or reorganization of the non-bank financial institution under this title more orderly, or to aid in the nonbankruptcy resolution of any of the non-bank financial institution’s components under its nonbankruptcy insolvency regime. Such consultation shall specifically include the attempt to negotiate forbearance of claims between the non-bank financial institution and its creditors if such forbearance would likely help to avoid the commencement of a case under this title, would make any liquidation or reorganization under this title more orderly, or would aid in the nonbankruptcy resolution of any of the non-bank financial institution’s components under its nonbankruptcy insolvency regime. Additionally, the consultation shall consider whether, if a petition is filed under section 301 or 303, the debtor should file a motion for an exemption authorized by section 1407.CommentsClose CommentsPermalink





‘(d) The court may allow the consultation process to continue for 30 days after the petition, upon motion by the debtor or a creditor. Any post-petition consultation proceedings authorized should be facilitated by the court’s mediation services, under seal, and exclude ex parte communications.CommentsClose CommentsPermalink





‘(e) The Market Stability and Capital Adequacy Board and the functional regulator shall publish and transmit to Congress a report documenting the course of any consultation. Such report shall be published and transmitted to Congress within 30 days of the conclusion of the consultation.CommentsClose CommentsPermalink





‘(f) Nothing in this section shall be interpreted to set aside any of the limitations on the use of Federal funds set forth in the Consumer Protection and Regulator Enhancement Act or the amendments made by such Act.CommentsClose CommentsPermalink

‘Sec. 1404. Appointment of trustee

‘In applying section 1104 to a case under this chapter, if the court orders the appointment of a trustee or an examiner, if the trustee or an examiner dies or resigns during the case or is removed under section 324, or if a trustee fails to qualify under section 322, the functional regulator, in consultation with the Market Stability and Capital Adequacy Board, shall submit a list of five disinterested persons that are qualified and willing to serve as trustees in the case and the United States trustee shall appoint, subject to the court’s approval, one of such persons to serve as trustee in the case.CommentsClose CommentsPermalink

‘Sec. 1405. Right to be heard

‘(a) The functional regulator, the Market Stability and Capital Adequacy Board, the Federal Reserve, the Department of the Treasury, the Securities and Exchange Commission, and any domestic or foreign agency charged with administering a nonbankruptcy insolvency regime for any component of the debtor may raise and may appear and be heard on any issue in a case under this chapter, but may not appeal from any judgment, order, or decree entered in the case.CommentsClose CommentsPermalink





‘(b) A party in interest, including the debtor, the trustee, a creditors’ committee, an equity security holders’ committee, a creditor, an equity security holder, or any indenture trustee may raise, and may appear and be heard on, any issue in a case under this chapter.CommentsClose CommentsPermalink

‘Sec. 1406. Right to communicate

‘The court is entitled to communicate directly with, or to request information or assistance directly from, the functional regulator, the Market Stability and Capital Adequacy Board, the Board of Governors of the Federal Reserve System, the Department of the Treasury, or any agency charged with administering a nonbankruptcy insolvency regime for any component of the debtor, subject to the rights of a party in interest to notice and participation.CommentsClose CommentsPermalink

‘Sec. 1407. Exemption with respect to certain contracts or agreements

‘(a) Subject to subsection (b)--CommentsClose CommentsPermalink





‘(1) upon motion of the debtor, consented to by the Market Stability and Capital Adequacy Board--CommentsClose CommentsPermalink





‘(A) the debtor and the estate shall be exempt from the operation of sections 362(b)(6), 362(b)(7), 559, 560, and 561;CommentsClose CommentsPermalink





‘(B) if the Market Stability and Capital Adequacy Board consents to the filing of such motion by the debtor, the Board shall inform the court of its reasons for consenting; andCommentsClose CommentsPermalink





‘(C) the debtor may limit its motion, or the board may limit its consent, to exempt the debtor and the estate from the operation of section 362(b)(6), 362(b)(7), 559, 560, or 561, or any combination thereof; andCommentsClose CommentsPermalink





‘(2) if the Market Stability and Capital Adequacy Board does not consent to the filing of a motion by the debtor under paragraph (1), the debtor may file a motion to exempt the debtor and the estate from the operation of sections 362(b)(6), 362(b)(7), 559, 560, and 561.CommentsClose CommentsPermalink





‘(b) The court shall commence a hearing on a motion under subsection (a) not later than 5 days after the filing of the motion to determine whether to maintain, terminate, annul, modify, or condition the exemption under subsection (a)(1) or, in the case of a motion under subsection (a)(2), grant the exemption. The court shall request that the functional regulator and the Market Stability and Capital Adequacy Board file briefs on whether the court should maintain the exemption. The court shall decide the motion not later than 5 days after commencing such hearing unless--CommentsClose CommentsPermalink





‘(1) the parties in interest consent to a extension for a specific period of time; orCommentsClose CommentsPermalink





‘(2) except with respect to an exemption from the operation of section 559, the court sua sponte extends for 5 additional days the period for decision if such extension would be in the interests of justice or is required by compelling circumstances.CommentsClose CommentsPermalink





‘(c) The court shall maintain, terminate, annul, modify, or condition the exemption under subsection (a)(1), or, in the case of a motion under subsection (a)(2), grant the exemption only upon showing of good cause. In determining whether good cause has been shown, the court shall balance the interests of both debtor and creditors while attempting to preserve the debtor’s assets for repayment and reorganization of the debtors obligations, or to provide for a more orderly liquidation.CommentsClose CommentsPermalink

‘Sec. 1408. Conversion or dismissal

‘In applying section 1112 to a case under this chapter, the debtor may convert a case under this chapter to a case under chapter 7 of this title if the debtor may be a debtor under such chapter unless the debtor is not a debtor in possession.’, andCommentsClose CommentsPermalink





(2) by amending the table of chapters of such title by adding at the end the following:CommentsClose CommentsPermalink

1401’.CommentsClose CommentsPermalink

SEC. 103. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.

(a) Effective Date- Except as provided in subsection (b), this Act and the amendments made by this Act shall take effect on the date of the enactment of this Act.CommentsClose CommentsPermalink





(b) Application of Amendments- The amendments made by this Act shall apply only with respect to cases commenced under title 11 of the United States Code on or after the date of the enactment of this Act.CommentsClose CommentsPermalink

TITLE II--MARKET STABILITY AND CAPITAL ADEQUACYCommentsClose CommentsPermalink

SEC. 201. ESTABLISHMENT OF MARKET STABILITY AND CAPITAL ADEQUACY BOARD.

(a) In General- There is hereby established the Market Stability and Capital Adequacy Board (hereafter in this title referred to as the ‘Board’) as an independent establishment in the Executive Branch.CommentsClose CommentsPermalink





(b) Constitution of Board- Subject to paragraph (4), the Board shall have 11 members as follows:CommentsClose CommentsPermalink





(1) PUBLIC MEMBERS- The following shall be members of the Board--CommentsClose CommentsPermalink





(A) The Secretary of the Treasury.CommentsClose CommentsPermalink





(B) The Chairman of the Board of Governors of the Federal Reserve System.CommentsClose CommentsPermalink





(C) The Chairman of the Securities and Exchange Commission.CommentsClose CommentsPermalink





(D) The Chairperson of the Federal Deposit Insurance Corporation.CommentsClose CommentsPermalink





(E) The Chairman of the Commodity Futures Trading Commission.CommentsClose CommentsPermalink





(F) The Chairperson of the Financial Institutions Regulator.CommentsClose CommentsPermalink





(2) PRIVATE MEMBERS- The Board shall also have 5 members appointed by the President, by and with the advise and consent of the Senate, who shall be appointed from among individuals who--CommentsClose CommentsPermalink





(A) are specially qualified to serve on the Board by virtue of their education, training, and experience; andCommentsClose CommentsPermalink





(B) are not officers or employees of the Federal Government, including the Board of Governors of the Federal Reserve System.CommentsClose CommentsPermalink





(3) CHAIRPERSON- The Secretary of the Treasury shall serve as the Chairperson of the Board.CommentsClose CommentsPermalink





(4) DIRECTOR OF FHFA AS INTERIM MEMBER- Until such time as the charters of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation are both repealed pursuant to section 506(d), the Board shall consist of 12 members with the Director of the Federal Housing Finance Agency serving as a public member under paragraph (1).CommentsClose CommentsPermalink





(c) Appointments-CommentsClose CommentsPermalink





(1) TERM-CommentsClose CommentsPermalink





(A) IN GENERAL- Each appointed member shall be appointed for a term of 5 years.CommentsClose CommentsPermalink





(B) STAGGERED TERMS- Of the members of the Board first appointed under subsection (b)(2), as designated by the President at the time of appointment--CommentsClose CommentsPermalink





(i) 1 shall be appointed for a term of 5 years;CommentsClose CommentsPermalink





(ii) 1 shall be appointed for a term of 4 years;CommentsClose CommentsPermalink





(iii) 1 shall be appointed for a term of 3 years;CommentsClose CommentsPermalink





(iv) 1 shall be appointed for a term of 2 years; andCommentsClose CommentsPermalink





(v) 1 shall be appointed for a term of 1 year.CommentsClose CommentsPermalink





(2) INTERIM APPOINTMENTS- Any member appointed to fill a vacancy occurring before the expiration of the term for which such member’s predecessor was appointed shall be appointed only for the remainder of such term.CommentsClose CommentsPermalink





(3) CONTINUATION OF SERVICE- Each appointed member may continue to serve after the expiration of the term of office to which such member was appointed until a successor has been appointed and qualified.CommentsClose CommentsPermalink





(4) REAPPOINTMENT TO A 2ND TERM- Each member appointed to a term on the Board under subsection (b)(2), including an interim appointment under paragraph (2), may be reappointed by the President to serve 1 additional term.CommentsClose CommentsPermalink





(d) Vacancy-CommentsClose CommentsPermalink





(1) IN GENERAL- Any vacancy on the Board shall be filled in the manner in which the original appointment was made.CommentsClose CommentsPermalink





(2) ACTING OFFICIALS MAY SERVE- In the event of a vacancy in any position listed in subsection (b)(1) and pending the appointment of a successor, or during the absence or disability of the individual serving in such position, any acting official in such position shall be a member of the Board while such vacancy, absence or disability continues and the acting official continues acting in such position.CommentsClose CommentsPermalink





(e) Ineligibility for Other Offices-CommentsClose CommentsPermalink





(1) POSTSERVICE RESTRICTION- No member of the Board may hold any office, position, or employment in any financial institution or affiliate of a financial institution during--CommentsClose CommentsPermalink





(A) the time such member is in office; andCommentsClose CommentsPermalink





(B) the 2-year period beginning on the date such member ceases to serve on the Board.CommentsClose CommentsPermalink





(2) CERTIFICATION- Upon taking office, each member of the Board shall certify under oath that such member has complied with this subsection and such certification shall be filed with the secretary of the Board.CommentsClose CommentsPermalink





(f) Qualifications; Initial Meeting-CommentsClose CommentsPermalink





(1) POLITICAL PARTY AFFILIATION- Not more than 3 members of the Board appointed under subsection (b)(2) shall be from the same political party.CommentsClose CommentsPermalink





(2) QUALIFICATIONS GENERALLY- It is the sense of the Congress that individuals appointed to the Commission should be prominent United States citizens, with national recognition and significant depth of experience commensurate with the duties of the Board.CommentsClose CommentsPermalink





(3) SPECIFIC APPOINTMENT QUALIFICATIONS FOR CERTAIN APPOINTED MEMBERS-CommentsClose CommentsPermalink





(A) STATE BANK- Of the members appointed to the Board under subsection (b)(2), at least 1 shall be appointed from among individuals who have had experience as a State bank supervisor or senior management executive with a State depository institution.CommentsClose CommentsPermalink





(B) INSURANCE COMMISSIONER- Of the members appointed to the Board under subsection (b)(2), at least 1 shall be appointed from among individuals who have served as a State insurance commissioner or supervisor.CommentsClose CommentsPermalink





(4) INITIAL MEETING- The Board shall meet and begin the operations of the Board as soon as practicable but not later than the end of the 180-day period beginning the date of the enactment of this Act.CommentsClose CommentsPermalink





(g) Quorum- Four of the members of the Board designated under subsection (b)(1) and 3 members of the Board appointed under (b)(2) shall constitute a quorum.CommentsClose CommentsPermalink





(h) Quarterly Meetings- The Board shall meet upon the call of the chairperson or a majority of the members at least once in each calendar quarterCommentsClose CommentsPermalink

SEC. 202. FUNCTIONS OF BOARD.

(a) Principal Functions- The principal functions of the Board shall be to--CommentsClose CommentsPermalink





(1) monitor the interactions of various sectors of the financial system; andCommentsClose CommentsPermalink





(2) identify risks that could endanger the stability and soundness of the system.CommentsClose CommentsPermalink





(b) Specific Review Functions Included- In carrying out the functions described in subsection (a), the Board shall--CommentsClose CommentsPermalink





(1) review financial industry data collected from the appropriate functional regulators;CommentsClose CommentsPermalink





(2) review insurance industry data, in coordination with State insurance supervisors, for all lines of insurance other than health insurance;CommentsClose CommentsPermalink





(3) monitor government policies and initiatives;CommentsClose CommentsPermalink





(4) review risk management practices within financial regulatory agencies;CommentsClose CommentsPermalink





(5) review capital standards set by the appropriate functional regulators and make recommendations to ensure capital and leverage ratios match risks regulated entities are taking on;CommentsClose CommentsPermalink





(6) review transparency and regulatory understanding of risk exposures in the over-the-counter derivatives markets and make recommendations regarding the appropriate clearing of trades in those markets through central counterparties;CommentsClose CommentsPermalink





(7) make recommendations regarding any government or industry policies and practices that are exacerbating systemic risk; andCommentsClose CommentsPermalink





(8) take such other actions and make such other recommendations as the Board, in the discretion of the Board, determines to be appropriate.CommentsClose CommentsPermalink





(c) Reports to Federal Functional Regulators and the Congress- The Board shall periodically make a report to the Congress and the functional regulators on the findings, conclusions, and recommendations of the Board in a manner and within a time frame that allows the Congress and such regulators to act to contain risks posed by specific firms, industry practices, activities and interactions of entities under different regulatory regimes, or government policies.CommentsClose CommentsPermalink





(d) Testimony to Congress- Not later than February 20 and July 20 of each year, the Chairperson of the Board shall testify to the Congress at semiannual hearings before the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives, about the state of systemic risk in the financial services industry and proposals or recommendations by the Board to address any undue risk.CommentsClose CommentsPermalink





(e) Rule of Construction- No provision of this title shall be construed as giving the Board any enforcement authority over any financial institution.CommentsClose CommentsPermalink

SEC. 203. POWERS OF BOARD.

(a) Contracting- The Board may, to such extent and in such amounts as are provided in appropriation Acts, enter into contracts to enable the Board to discharge its duties under this title.CommentsClose CommentsPermalink





(b) Information From Federal Agencies-CommentsClose CommentsPermalink





(1) IN GENERAL- The Board may secure directly from any executive department, agency, or independent establishment, or any other instrumentality of the United States information and recommendations for the purposes of this title.CommentsClose CommentsPermalink





(2) DELIVERY OF REQUESTED INFORMATION- Each executive department, agency, or independent establishment, or any other instrumentality of the United States shall, to the extent authorized by law, furnish any information and recommendations requested under paragraph (1) directly to the Board, upon request made by the chairperson or any member designated by a majority of the Commission.CommentsClose CommentsPermalink





(3) RECEIPT, HANDLING, STORAGE, AND DISSEMINATION- Information shall only be received, handled, stored, and disseminated by members of the Board and its staff consistent with all applicable statutes, regulations, and Executive orders.CommentsClose CommentsPermalink





(c) Assistance From Federal Agencies-CommentsClose CommentsPermalink





(1) GENERAL SERVICES ADMINISTRATION- The Administrator of General Services shall provide to the Board on a reimbursable basis administrative support and other services for the performance of the Commission’s functions.CommentsClose CommentsPermalink





(2) OTHER DEPARTMENTS AND AGENCIES- In addition to the assistance prescribed in paragraph (1), departments and agencies of the United States may provide to the Commission such services, funds, facilities, staff, and other support services as they may determine advisable and as may be authorized by law, including agencies represented on the Board under section 201(b)(1).CommentsClose CommentsPermalink

SEC. 204. RESPONSIBILITIES OF FEDERAL FUNCTIONAL REGULATORS.

(a) Federal Functional Regulator Defined- For purposes of this title, the term ‘Federal functional regulator’ has the same meaning as in section 509(2) of the Gramm-Leach-Bliley Act, except that such term includes the Commodity Futures Trading Commission.CommentsClose CommentsPermalink





(b) Assessments and Reviews- In order to address current regulatory gaps, each Federal functional regulator shall, before each quarterly meeting of the Board,--CommentsClose CommentsPermalink





(1) assess the effects on macroeconomic stability of the activities of financial institutions that are subject to the jurisdiction of such agency;CommentsClose CommentsPermalink





(2) review how such financial institutions interact with entities outside the jurisdiction of such agency; andCommentsClose CommentsPermalink





(3) report the results of such assessment and review to the Board, together with such recommendations for administrative action as the agency determines to be appropriate.CommentsClose CommentsPermalink

SEC. 205. STAFF OF BOARD.

(a) Appointment and Compensation- The chairperson, in accordance with rules agreed upon by the Board and title 5, United States Code, may appoint and fix the compensation of a staff director and such other personnel as may be necessary to enable the Board to carry out its functions.CommentsClose CommentsPermalink





(b) Detailees- Any Federal Government employee may be detailed to the Board and such detailee shall retain the rights, status, and privileges of his or her regular employment without interruption.CommentsClose CommentsPermalink





(c) Consultant Services- The Board may procure the services of experts and consultants in accordance with section 3109 of title 5, United States Code, but at rates not to exceed the daily rate paid a person occupying a position at level IV of the Executive Schedule under section 5315 of title 5, United States Code.CommentsClose CommentsPermalink

SEC. 206. COMPENSATION AND TRAVEL EXPENSES.

(a) Compensation- Each member of the Board appointed under section 201(b)(2) may be compensated at not to exceed the daily equivalent of the annual rate of basic pay in effect for a position at level IV of the Executive Schedule under section 5315 of title 5, United States Code, for each day during which that member is engaged in the actual performance of the duties of the Board.CommentsClose CommentsPermalink





(b) Travel Expenses- While away from their homes or regular places of business in the performance of services for the Board, members of the Board shall be allowed travel expenses, including per diem in lieu of subsistence, in the same manner as persons employed intermittently in the Government service are allowed expenses under section 5703(b) of title 5, United States Code.CommentsClose CommentsPermalink

TITLE III--REGULATORY CONSOLIDATION AND CONSUMER PROTECTIONCommentsClose CommentsPermalink

SEC. 301. ESTABLISHMENT.

(a) In General- There is hereby established in the executive branch of the Government an independent agency to be known as the Financial Institutions Regulator (hereafter in this title referred to as the ‘FIR’).CommentsClose CommentsPermalink





(b) Divisions of the FIR- There are hereby established within the FIR--CommentsClose CommentsPermalink





(1) a division to be known as the Federal Banking Division; andCommentsClose CommentsPermalink





(2) a division to be known as the State Banking Division;CommentsClose CommentsPermalink





(c) Insured Depository Institution Defined- For purposes of this title, the term ‘insured depository institution’ has the meaning given to such term in section 3(c) of the Federal Deposit Insurance Act.CommentsClose CommentsPermalink

SEC. 302. BOARD OF DIRECTORS.

(a) In General- The management of the FIR shall be vested in a Board of Directors consisting of 5 members--CommentsClose CommentsPermalink





(1) 1 of whom shall be the Chairman of the FIR and who shall be appointed by the President, by and with the advice and consent of the Senate;CommentsClose CommentsPermalink





(2) 1 of whom shall be the head of the Federal Banking Division and who shall be appointed by the President, by and with the advice and consent of the Senate;CommentsClose CommentsPermalink





(3) 1 of whom shall be the head of the State Banking Division and who shall be appointed by the President, by and with the advice and consent of the Senate;CommentsClose CommentsPermalink





(4) 1 of whom shall be the Chairman of the National Credit Union Administration; andCommentsClose CommentsPermalink





(5) 1 of whom shall be the Chairperson of the Board of Directors of the Federal Deposit Insurance Corporation.CommentsClose CommentsPermalink





(b) Terms-CommentsClose CommentsPermalink





(1) 5-Year TERMS- Each member appointed under paragraphs (1), (2), and (3) of subsection (a) shall be appointed for a term of 5 years.CommentsClose CommentsPermalink





(2) INTERIM APPOINTMENTS- Any member appointed to fill a vacancy occurring before the end of the term to which such member’s predecessor was appointed shall be appointed only for the remainder of such term.CommentsClose CommentsPermalink





(3) CONTINUATION OF SERVICE- Any member may continue to serve after the expiration of the term of office to which such member was appointed until a successor has been appointed and confirmed.CommentsClose CommentsPermalink





(c) Vacancy- Any vacancy on the Board of Directors shall be filled in the manner in which the original appointment was made.CommentsClose CommentsPermalink





(d) Ineligibility for Other Offices-CommentsClose CommentsPermalink





(1) RESTRICTIONS ON EMPLOYMENT BY DEPOSITORY INSTITUTIONS- No member of the Board of Directors may hold any office, position, or employment in any insured depository institution or any affiliate (as defined in section 2(k) of the Bank Holding Company Act of 1956) of an insured depository institution during--CommentsClose CommentsPermalink





(A) the time such member is in office; andCommentsClose CommentsPermalink





(B) the 2-year period beginning on the date such member ceases to serve on the Board of Directors.CommentsClose CommentsPermalink





(2) OTHER RESTRICTIONS DURING SERVICE AS MEMBER- No member of the Board of Directors may--CommentsClose CommentsPermalink





(A) be an officer or director of any Federal Reserve bank or Federal home loan bank; orCommentsClose CommentsPermalink





(B) hold any stock in any insured depository institution or any affiliate (as defined in section 2(k) of the Bank Holding Company Act of 1956) of an insured depository institution.CommentsClose CommentsPermalink





(3) CERTIFICATION- Upon taking office, each member of the Board of Directors shall file a certification under oath with the secretary of the Board of Directors that such member has complied with the requirements of this subsection.CommentsClose CommentsPermalink

SEC. 303. POWERS AND DUTIES OF THE FIR.

(a) Regulation of National Banks-CommentsClose CommentsPermalink





(1) TRANSFER TO THE FIR- All functions of the Comptroller of the Currency are hereby transferred to the FIR.CommentsClose CommentsPermalink





(2) FIR POWERS- The FIR shall have all powers, duties, and authority which, before the date of the enactment of this Act, were vested in the Comptroller of the Currency under any provision of Federal law to the extent such provision applies to national banks or the office, officers, or employees of the Comptroller of the Currency.CommentsClose CommentsPermalink





(b) Regulation of Member Banks, Bank Holding Companies and Affiliates, and Various International Banking Entities-CommentsClose CommentsPermalink





(1) TRANSFER TO THE FIR- All functions of the Board of Governors of the Federal Reserve System (and any Federal reserve bank) relating to--CommentsClose CommentsPermalink





(A) the supervision and regulation of banks which are members of the Federal Reserve System,CommentsClose CommentsPermalink





(B) the supervision and regulation of bank holding companies and any subsidiary or affiliate of a bank holding company which is not a depository institution,CommentsClose CommentsPermalink





(C) the supervision and regulation of companies operating under section 25 or 25A of the Federal Reserve Act or the International Banking Act of 1978,CommentsClose CommentsPermalink





(D) the supervision and regulation of any company which is subject to supervision and regulation by the Board of Governors under any title of the Consumer Credit Protection Act, andCommentsClose CommentsPermalink





(E) the supervision and regulation of any foreign bank, any branch or agency of a foreign bank, and any commercial lending company controlled by a foreign bank,CommentsClose CommentsPermalink





are hereby transferred to the FIR.CommentsClose CommentsPermalink





(2) FIR POWERS- The FIR shall have all powers, duties, and authority which, before the date of the enactment of this Act, were vested in the Board of Governors of the Federal Reserve System under any provision of Federal law to the extent such provisions apply to banks or other companies described in any subparagraph of paragraph (1).CommentsClose CommentsPermalink





(c) Regulation of Savings Associations and Savings and Loan Holding Companies-CommentsClose CommentsPermalink





(1) TRANSFER TO THE FEDERAL BANKING DIVISION- All functions of the Director of the Office of Thrift Supervision are hereby transferred to the FIR.CommentsClose CommentsPermalink





(2) FIR POWERS- The FIR shall have all powers, duties, and authority which, before the date of the enactment of this Act, were vested in the Director of the Office of Thrift Supervision under any provision of Federal law to the extent such provision applies to savings associations, savings and loan holding companies, or the office, officers, or employees of the Director.CommentsClose CommentsPermalink





(d) Regulation of State Nonmember Banks-CommentsClose CommentsPermalink





(1) TRANSFER TO THE FIR- All functions of the Federal Deposit Insurance Corporation relating to the supervision and regulation of State nonmember banks, including savings banks, (other than insurance, conservatorship, or receivership functions) and foreign banks with insured branches (as defined in section 3(s)(3) of the Federal Deposit Insurance Act) are hereby transferred to the FIR.CommentsClose CommentsPermalink





(2) FIR POWERS- The FIR shall have all powers, duties, and authority which, before the date of the enactment of this Act, were vested in the Federal Deposit Insurance Corporation under any provision of Federal law to the extent such provisions apply to the supervision and regulation of State nonmember banks, including savings banks, (other than insurance, conservatorship, or receivership functions) and foreign banks with insured branches (as defined in section 3(s)(3) of the Federal Deposit Insurance Act).CommentsClose CommentsPermalink





(e) Regulations and Orders- In addition to any authority under any provision referred to in subsection (a), (b), (c), or (d), the FIR may prescribe such regulations and issue such orders as the FIR may determine to be appropriate to carry out the purposes of this title and the powers and duties of the FIR under this title and any provision referred to in any such subsection.CommentsClose CommentsPermalink





(f) No Intended Impact on Existing Rights and Judicial Precedent- Nothing in this section shall be construed--CommentsClose CommentsPermalink





(1) to impact any existing right or obligation under any function or power transferred to the FIR, solely by reason of such transfer; orCommentsClose CommentsPermalink





(2) to impact any judicial precedent established with respect to any function or power transferred to the FIR, solely by reason of such transfer.CommentsClose CommentsPermalink





(g) Effective Date- The provisions of this section shall take effect after the end of the 90-day period beginning on the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 304. ALLOCATION OF RESPONSIBILITY AMONG FIR DIVISIONS.

(a) Federal Banking Division- The Federal Banking Division shall have the primary responsibility for carrying out the FIR’s authority with respect to--CommentsClose CommentsPermalink





(1) national banking associations;CommentsClose CommentsPermalink





(2) foreign banks and Federal branches or agencies of a foreign bank;CommentsClose CommentsPermalink





(3) bank holding companies and any subsidiary or affiliate of a bank holding company which is not a depository institution, other than a bank holding company, subsidiary, or affiliate that consists solely of State banks that are insured banks (as such terms is defined in section 3(h) of the Federal Deposit Insurance Act (12 U.S.C. 1813(h));CommentsClose CommentsPermalink





(4) companies operating under section 25 or 25A of the Federal Reserve Act or the International Banking Act of 1978;CommentsClose CommentsPermalink





(5) commercial lending companies, other than a Federal agency;CommentsClose CommentsPermalink





(6) savings associations;CommentsClose CommentsPermalink





(7) savings and loan holding companies; andCommentsClose CommentsPermalink





(8) such additional areas as the Board of Directors may prescribe.CommentsClose CommentsPermalink





(b) State Banking Division- The State Banking Division shall have the primary responsibility for carrying out the FIR’s authority with respect to--CommentsClose CommentsPermalink





(1) any State bank that is an insured bank (as such terms is defined in section 3(h) of the Federal Deposit Insurance Act (12 U.S.C. 1813(h)));CommentsClose CommentsPermalink





(2) any bank holding company or subsidiary or affiliate of a bank holding company, if such bank holding company, subsidiary, or affiliate consists solely of State banks described in paragraph (1); andCommentsClose CommentsPermalink





(3) such additional areas as the Board of Directors may prescribe.CommentsClose CommentsPermalink

SEC. 305. TECHNICAL AND CONFORMING AMENDMENTS RELATING TO TRANSFERS OF FUNCTIONS TO THE FIR.

(a) Appropriate Federal Banking Agency Redefined- Section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)) is amended to read as follows:CommentsClose CommentsPermalink





‘(q) Appropriate Federal Banking Agency- The term ‘appropriate Federal banking agency’ means the Financial Institutions Regulator.’.CommentsClose CommentsPermalink





(b) Members of FDIC Board- Section 2(a)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1812(a)(1)) is amended--CommentsClose CommentsPermalink





(1) by striking subparagraph (A) and redesignating subparagraphs (B) and (C) as subparagraphs (A) and (B), respectively;CommentsClose CommentsPermalink





(2) in subparagraph (A) (as so redesignated by paragraph (1)), by striking ‘Director of the Office of Thrift Supervision’ and inserting ‘Chairman of the Financial Institutions Regulator’; andCommentsClose CommentsPermalink





(3) in subparagraph (B) (as so redesignated by paragraph (1)), by striking ‘3’ and inserting ‘4’.CommentsClose CommentsPermalink





(c) Effective Date- The provisions of this section shall take effect after the end of the 90-day period beginning on the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 306. OFFICE OF COMPTROLLER OF THE CURRENCY AND POSITION OF COMPTROLLER OF THE CURRENCY ABOLISHED.

(a) In General- Effective at the end of the 180-day period beginning on the date of the enactment of this Act, the Office of the Comptroller of the Currency and the position of Comptroller of the Currency are hereby abolished.CommentsClose CommentsPermalink





(b) Technical and Conforming Amendments- Effective at the end of the 180-day period beginning on the date of the enactment of this Act:CommentsClose CommentsPermalink





(1) Chapter nine of title VII of the Revised Statutes is amended by striking sections 324, 325, and 326.CommentsClose CommentsPermalink





(2) Subchapter I of chapter 3 of title 31, United States Code, is amended by striking section 307.CommentsClose CommentsPermalink

SEC. 307. OFFICE OF THRIFT SUPERVISION AND POSITION OF DIRECTOR OF THE OFFICE OF THRIFT SUPERVISION ABOLISHED.

(a) In General- Effective at the end of the 180-day period beginning on the date of the enactment of this Act, the Office of Thrift Supervision and the position of Director of the Office of Thrift Supervision are hereby abolished.CommentsClose CommentsPermalink





(b) Technical and Conforming Amendments- Effective at the end of the 180-day period beginning on the date of the enactment of this Act:CommentsClose CommentsPermalink





(1) Section 3 of the Home Owners’ Loan Act (12 U.S.C. 1462a) is amended by striking subsections (a) and (b).CommentsClose CommentsPermalink





(2) Subchapter I of chapter 3 of title 31, United States Code, is amended by striking section 309.CommentsClose CommentsPermalink

SEC. 308. SAVINGS PROVISIONS.

(a) Savings Provisions Relating to the Comptroller of the Currency-CommentsClose CommentsPermalink





(1) EXISTING RIGHTS, DUTIES, AND OBLIGATIONS NOT AFFECTED- Sections 303(a)(1) and 306 shall not affect the validity of any right, duty, or obligation of the United States, the Comptroller of the Currency, the Office of the Comptroller of the Currency, or any other person, which--CommentsClose CommentsPermalink





(A) arises under or pursuant to any provision of law referred to in section 303(a)(2); andCommentsClose CommentsPermalink





(B) existed on the day before the date of the enactment of this Act.CommentsClose CommentsPermalink





(2) CONTINUATION OF SUITS- No action or other proceeding commenced by or against the Comptroller of the Currency or the Office of the Comptroller of the Currency shall abate by reason of the enactment of this Act, except that the FIR shall be substituted for the Comptroller or Office as a party to any such action or proceeding.CommentsClose CommentsPermalink





(b) Savings Provisions Relating to the Board of Governors of the Federal Reserve System-CommentsClose CommentsPermalink





(1) EXISTING RIGHTS, DUTIES, AND OBLIGATIONS NOT AFFECTED- Section 303(b)(1) shall not affect the validity of any right, duty, or obligation of the United States, the Board of Governors of the Federal Reserve System, or any other person, which--CommentsClose CommentsPermalink





(A) arises under or pursuant to any provision of law referred to in section 303(b)(2); andCommentsClose CommentsPermalink





(B) existed on the day before the date of the enactment of this Act.CommentsClose CommentsPermalink





(2) CONTINUATION OF SUITS- No action or other proceeding commenced by or against the Board of Governors of the Federal Reserve System with respect to any function transferred to the FIR shall abate by reason of the enactment of this Act, except that the FIR shall be substituted for the Board of Governors as a party to any such action or proceeding.CommentsClose CommentsPermalink





(c) Savings Provisions Relating to the Director of the Office of Thrift Supervision-CommentsClose CommentsPermalink





(1) EXISTING RIGHTS, DUTIES, AND OBLIGATIONS NOT AFFECTED- Sections 303(c)(1) and 307 shall not affect the validity of any right, duty, or obligation of the United States, the Director of the Office of Thrift Supervision, the Office of Thrift Supervision, or any other person, which--CommentsClose CommentsPermalink





(A) arises under or pursuant to any provision of law referred to in section 303(c)(2); andCommentsClose CommentsPermalink





(B) existed on the day before the date of the enactment of this Act.CommentsClose CommentsPermalink





(2) CONTINUATION OF SUITS- No action or other proceeding commenced by or against the Director of the Office of Thrift Supervision or the Office of Thrift Supervision shall abate by reason of the enactment of this Act, except that the FIR shall be substituted for the Director or Office as a party to any such action or proceeding.CommentsClose CommentsPermalink





(d) Savings Provisions Relating to the Federal Deposit Insurance Corporation-CommentsClose CommentsPermalink





(1) EXISTING RIGHTS, DUTIES, AND OBLIGATIONS NOT AFFECTED- Section 303(d)(1) shall not affect the validity of any right, duty, or obligation of the United States, the Federal Deposit Insurance Corporation, the Board of Directors of such Corporation, or any other person, which--CommentsClose CommentsPermalink





(A) arises under or pursuant to any provision of law referred to in section 303(d)(2); andCommentsClose CommentsPermalink





(B) existed on the day before the date of the enactment of this Act.CommentsClose CommentsPermalink





(2) CONTINUATION OF SUITS- No action or other proceeding commenced by or against the Federal Deposit Insurance Corporation or the Board of Directors of such Corporation with respect to any function transferred to the FIR shall abate by reason of the enactment of this Act, except that the FIR may be substituted for the Corporation or Board of Directors, as the case may be, as a party to any such action or proceeding.CommentsClose CommentsPermalink





(e) Continuation of Orders, Resolutions, Determinations, and Regulations- All orders, resolutions, determinations, and regulations, which--CommentsClose CommentsPermalink





(1) have been issued, made, prescribed, or allowed to become effective by the Director of the Office of Thrift Supervision, the Comptroller of the Currency, the Federal Deposit Insurance Corporation, or the Board of Governors of the Federal Reserve System (including orders, resolutions, determinations, and regulations which relate to the conduct of conservatorships and receiverships), or by a court of competent jurisdiction, in the performance of functions which are transferred by this Act, andCommentsClose CommentsPermalink





(2) are in effect on the date this Act takes effect (or become effective after such date pursuant to the terms of the order, resolution, determination or regulation, as in effect on such date),CommentsClose CommentsPermalink





shall continue in effect according to the terms of such orders, resolutions, determinations, and regulations and shall be enforceable by or against the FIR until modified, terminated, set aside, or superseded in accordance with applicable law by the FIR, by any court of competent jurisdiction, or by operation of law.CommentsClose CommentsPermalink





(f) Effective Date- The provisions of this section shall take effect after the end of the 90-day period beginning on the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 309. REFERENCES IN FEDERAL LAW TO FEDERAL BANKING AGENCIES.

(a) Comptroller of the Currency and Director of the Office of Thrift Supervision- Any reference in any Federal law to the Comptroller of the Currency, the Office of the Comptroller of the Currency, the Director of the Office of Thrift Supervision, or the Office of Thrift Supervision shall be deemed to be a reference to the FIR.CommentsClose CommentsPermalink





(b) Board of Governors of the Federal Reserve System- Any reference in any Federal law to the Board of Governors of the Federal Reserve System in connection with any function of the Board under any provision of law referred to in section 304(b)(2) shall be deemed to be a reference to the FIR.CommentsClose CommentsPermalink





(c) Federal Deposit Insurance Corporation- Any reference in any Federal law to the Federal Deposit Insurance Corporation or the Board of Directors of such Corporation in connection with any function of the Corporation or Board of Directors under any provision of law referred to in section 303(d)(2) shall be deemed to be a reference to the FIR.CommentsClose CommentsPermalink





(d) Effective Date- The provisions of this section shall take effect after the end of the 90-day period beginning on the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 310. NATIONAL CREDIT UNION ADMINISTRATION MOVED WITHIN THE FIR.

(a) In General- The Nation Credit Union Administration is hereby moved within the FIR and shall be maintained as a distinct entity within the FIR.CommentsClose CommentsPermalink





(b) Effective Date- The provisions of this section shall take effect after the end of the 90-day period beginning on the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 311. OFFICE OF CONSUMER PROTECTION.

(a) Office of Consumer Protection- There is hereby established within the FIR an Office of Consumer Protection (hereinafter in this section referred to as the ‘Office’).CommentsClose CommentsPermalink





(b) Delegation of Authority to the Office- The Office shall have the primary responsibility for carrying out the FIR’s authority with respect to laws and regulations relating to consumer protection, including the authority of the FIR under the Consumer Credit Protection Act.CommentsClose CommentsPermalink





(c) Rulemaking Approval- No rule or regulation issued by the Office shall take effect unless the Board of Directors of the FIR approves such rule or regulation.CommentsClose CommentsPermalink





(d) Consumer Complaint Hotline and Website- The Office shall establish a toll-free hotline and a website for consumers to contact regarding inquiries or complaints related to insured depository institutions. Such hotline and website shall then refer such inquiries or complaints to the appropriate FIR division, which will then respond to the inquiry or complaint.CommentsClose CommentsPermalink





(e) Disclosure Review- Not less than once every 7 years, the Office shall undertake a comprehensive review of all public disclosures (including policies, procedures, guidelines, standards, and regulatory filings) made by the FIR and each division of the FIR. In making such review the Office shall perform a cost and benefit analysis of each such disclosure and determine if the policy of the FIR towards such disclosure should remain the same or be revised.CommentsClose CommentsPermalink





(f) Consumer Testing Requirement- Before prescribing any regulation pursuant to the authority of the FIR under the Consumer Credit Protection Act, the Office shall carry out consumer testing with respect to such regulation.CommentsClose CommentsPermalink





(g) Periodic Review of Regulations-CommentsClose CommentsPermalink





(1) REVIEW- Not less than once every 7 years, the Office shall undertake a comprehensive review of all regulations issued by the Office, the FIR, or any entity preceding the FIR, with respect to the authority of the FIR under the Consumer Credit Protection Act. In making such review, the Office shall perform a cost and benefit analysis of each regulation and determine if such regulation should remain the same or if such regulation should be revised.CommentsClose CommentsPermalink





(2) REPORT- After performing a review required by paragraph (1), the Office shall issue a report to the Congress describing the review process, any determinations made by the Office, and any revisions to regulations that the Office determined were needed.CommentsClose CommentsPermalink

TITLE IV--FEDERAL RESERVE REFORMCommentsClose CommentsPermalink

SEC. 401. GAO AUTHORITY TO AUDIT THE FEDERAL RESERVE SYSTEM.

(a) In General- Subsection (b) of section 714 of title 31, United States Code, is amended by striking all after ‘shall audit an agency’ and inserting a period.CommentsClose CommentsPermalink





(b) Audit- Section 714 of title 31, United States Code, is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink





‘(e) Audit and Report of the Federal Reserve System-CommentsClose CommentsPermalink





‘(1) IN GENERAL- The audit of the Board of Governors of the Federal Reserve System and the Federal reserve banks under subsection (b) shall be completed before the end of 2010.CommentsClose CommentsPermalink





‘(2) REPORT-CommentsClose CommentsPermalink





‘(A) REQUIRED- A report on the audit referred to in paragraph (1) shall be submitted by the Comptroller General to the Congress before the end of the 90-day period beginning on the date on which such audit is completed and made available to the Speaker of the House, the majority and minority leaders of the House of Representatives, the majority and minority leaders of the Senate, the Chairman and Ranking Member of the committee and each subcommittee of jurisdiction in the House of Representatives and the Senate, and any other Member of Congress who requests it.CommentsClose CommentsPermalink





‘(B) CONTENTS- The report under subparagraph (A) shall include a detailed description of the findings and conclusion of the Comptroller General with respect to the audit that is the subject of the report, together with such recommendations for legislative or administrative action as the Comptroller General may determine to be appropriate.’.CommentsClose CommentsPermalink

SEC. 402. MONETARY POLICY AND INFLATION TARGETS.

Section 2A of the Federal Reserve Act (12 U.S.C. 225a) is amended to read as follows:CommentsClose CommentsPermalink

‘SEC. 2A. MONETARY POLICY.

‘(a) Price Stability- The Board and the Federal Open Market Committee shall--CommentsClose CommentsPermalink





‘(1) establish an explicit numerical definition of the term ‘price stability’;CommentsClose CommentsPermalink





‘(2) implement such definition through inflation targets; andCommentsClose CommentsPermalink





‘(3) maintain a monetary policy that effectively promotes long-term price stability.CommentsClose CommentsPermalink





‘(b) Market Stability and Liquidity- Subsection (a) shall not be construed as a limitation on the authority or responsibility of the Board--CommentsClose CommentsPermalink





‘(1) to provide liquidity to markets in the event of a disruption that threatens the smooth functioning and stability of the financial sector; orCommentsClose CommentsPermalink





‘(2) to serve as a lender of last resort under this Act when the Board determines such action is necessary.’.CommentsClose CommentsPermalink

SEC. 403. REFORMS OF SECTION 13 EMERGENCY POWERS.

(a) Restrictions on Emergency Powers- The third undesignated paragraph of section 13 of the Federal Reserve Act is amended--CommentsClose CommentsPermalink





(1) by striking ‘In unusual and exigent’ and inserting the following:CommentsClose CommentsPermalink





‘(3) EMERGENCY AUTHORITY-CommentsClose CommentsPermalink





‘(A) IN GENERAL- In unusual and exigent’; andCommentsClose CommentsPermalink





(2) by adding at the end the following new subparagraph:CommentsClose CommentsPermalink





‘(B) REQUIREMENT FOR BROAD AVAILABILITY OF DISCOUNTS- Subject to the limitations provided under subparagraph (A), any authorization made pursuant to the authority provided under subparagraph (A) shall require discounts to be made broadly available to individuals, partnerships, and corporations within the market sector for which such authorization is being made.CommentsClose CommentsPermalink





‘(C) TRANSPARENCY AND OVERSIGHT-CommentsClose CommentsPermalink





‘(i) SECRETARY OF THE TREASURY APPROVAL REQUIRED; NOTICE TO THE CONGRESS- No authorization may be made pursuant to the authority provided under subparagraph (A) unless--CommentsClose CommentsPermalink





‘(I) such authorization is first approved by the Secretary of the Treasury; andCommentsClose CommentsPermalink





‘(II) the Secretary of the Treasury issues a notice to the Congress detailing what authorization the Secretary has approved.CommentsClose CommentsPermalink





‘(ii) PROGRAMS MOVED ON-BUDGET AFTER 90 DAYS- On and after the date that is 90 days after the date on which any authorization is made pursuant to the authority provided under subparagraph (A), all receipts and disbursements resulting from such authorization shall be counted as new budget authority, outlays, receipts, or deficit or surplus for purposes of--CommentsClose CommentsPermalink





‘(I) the budget of the United States Government as submitted by the President;CommentsClose CommentsPermalink





‘(II) the congressional budget; andCommentsClose CommentsPermalink





‘(III) the Balanced Budget and Emergency Deficit Control Act of 1985.CommentsClose CommentsPermalink





‘(D) JOINT RESOLUTION OF DISAPPROVAL-CommentsClose CommentsPermalink





‘(i) IN GENERAL- With respect to an authorization made pursuant to the authority provided under subparagraph (A), if, during the 90-day period beginning on the date the Congress receives a notice described under subparagraph (C)(i)(II) with respect to such authorization, there is enacted into law a joint resolution disapproving such authorization, any action taken under such authorization must be discontinued and unwound not later than the end of the 180-day period beginning on the date that such authorization was made.CommentsClose CommentsPermalink





‘(ii) CONTENTS OF JOINT RESOLUTION- For the purpose of this paragraph, the term ‘joint resolution’ means only a joint resolution--CommentsClose CommentsPermalink





‘(I) that is introduced not later than 3 calendar days after the date on which the notice referred to in clause (i) is received by the Congress;CommentsClose CommentsPermalink





‘(II) which does not have a preamble;CommentsClose CommentsPermalink





‘(III) the title of which is as follows: ‘Joint resolution relating to the disapproval of authorization under the emergency powers of the Federal Reserve Act’; andCommentsClose CommentsPermalink





‘(IV) the matter after the resolving clause of which is as follows: ‘That Congress disapproves the authorization contained in the notice submitted to the Congress by the Secretary of the Treasury on the date of XXXXXXX relating to XXXXXXX.’ (The blank spaces being appropriately filled in.).CommentsClose CommentsPermalink





‘(E) FAST TRACK CONSIDERATION IN HOUSE OF REPRESENTATIVES-CommentsClose CommentsPermalink





‘(i) RECONVENING- Upon receipt of a notice referred to in subparagraph (D)(i), the Speaker, if the House would otherwise be adjourned, shall notify the Members of the House that, pursuant to this section, the House shall convene not later than the second calendar day after receipt of such report.CommentsClose CommentsPermalink





‘(ii) REPORTING AND DISCHARGE- Any committee of the House of Representatives to which a joint resolution is referred shall report it to the House not later than 5 calendar days after the date of receipt of the notice referred to in subparagraph (D)(i). If a committee fails to report the joint resolution within that period, the committee shall be discharged from further consideration of the joint resolution and the joint resolution shall be referred to the appropriate calendar.CommentsClose CommentsPermalink





‘(iii) PROCEEDING TO CONSIDERATION- After each committee authorized to consider a joint resolution reports it to the House or has been discharged from its consideration, it shall be in order, not later than the sixth day after Congress receives the notice referred to in subparagraph (D)(i), to move to proceed to consider the joint resolution in the House. All points of order against the motion are waived. Such a motion shall not be in order after the House has disposed of a motion to proceed on the joint resolution. The previous question shall be considered as ordered on the motion to its adoption without intervening motion. The motion shall not be debatable. A motion to reconsider the vote by which the motion is disposed of shall not be in order.CommentsClose CommentsPermalink





‘(iv) CONSIDERATION- The joint resolution shall be considered as read. All points of order against the joint resolution and against its consideration are waived. The previous question shall be considered as ordered on the joint resolution to its passage without intervening motion except two hours of debate equally divided and controlled by the proponent and an opponent. A motion to reconsider the vote on passage of the joint resolution shall not be in order.CommentsClose CommentsPermalink





‘(F) FAST TRACK CONSIDERATION IN SENATE-CommentsClose CommentsPermalink





‘(i) RECONVENING- Upon receipt of a notice referred to in subparagraph (D)(i), if the Senate has adjourned or recessed for more than 2 days, the majority leader of the Senate, after consultation with the minority leader of the Senate, shall notify the Members of the Senate that, pursuant to this section, the Senate shall convene not later than the second calendar day after receipt of such message.CommentsClose CommentsPermalink





‘(ii) PLACEMENT ON CALENDAR- Upon introduction in the Senate, the joint resolution shall be placed immediately on the calendar.CommentsClose CommentsPermalink





‘(iii) FLOOR CONSIDERATION-CommentsClose CommentsPermalink





‘(I) IN GENERAL- Notwithstanding Rule XXII of the Standing Rules of the Senate, it is in order at any time during the period beginning on the 4th day after the date on which Congress receives a notice referred to in subparagraph (D)(i) and ending on the 6th day after the date on which Congress receives a notice referred to in subparagraph (D)(i) (even though a previous motion to the same effect has been disagreed to) to move to proceed to the consideration of the joint resolution, and all points of order against the joint resolution (and against consideration of the joint resolution) are waived. The motion to proceed is not debatable. The motion is not subject to a motion to postpone. A motion to reconsider the vote by which the motion is agreed to or disagreed to shall not be in order. If a motion to proceed to the consideration of the resolution is agreed to, the joint resolution shall remain the unfinished business until disposed of.CommentsClose CommentsPermalink





‘(II) DEBATE- Debate on the joint resolution, and on all debatable motions and appeals in connection therewith, shall be limited to not more than 10 hours, which shall be divided equally between the majority and minority leaders or their designees. A motion further to limit debate is in order and not debatable. An amendment to, or a motion to postpone, or a motion to proceed to the consideration of other business, or a motion to recommit the joint resolution is not in order.CommentsClose CommentsPermalink





‘(III) VOTE ON PASSAGE- The vote on passage shall occur immediately following the conclusion of the debate on a joint resolution, and a single quorum call at the conclusion of the debate if requested in accordance with the rules of the Senate.CommentsClose CommentsPermalink





‘(IV) RULINGS OF THE CHAIR ON PROCEDURE- Appeals from the decisions of the Chair relating to the application of the rules of the Senate, as the case may be, to the procedure relating to a joint resolution shall be decided without debate.CommentsClose CommentsPermalink





‘(G) RULES RELATING TO SENATE AND HOUSE OF REPRESENTATIVES-CommentsClose CommentsPermalink





‘(i) COORDINATION WITH ACTION BY OTHER HOUSE- If, before the passage by one House of a joint resolution of that House, that House receives from the other House a joint resolution, then the following procedures shall apply:CommentsClose CommentsPermalink





‘(I) The joint resolution of the other House shall not be referred to a committee.CommentsClose CommentsPermalink





‘(II) With respect to a joint resolution of the House receiving the resolution--CommentsClose CommentsPermalink

‘(aa) the procedure in that House shall be the same as if no joint resolution had been received from the other House; butCommentsClose CommentsPermalink

‘(bb) the vote on passage shall be on the joint resolution of the other House.CommentsClose CommentsPermalink

‘(ii) TREATMENT OF JOINT RESOLUTION OF OTHER HOUSE- If one House fails to introduce or consider a joint resolution under this section, the joint resolution of the other House shall be entitled to expedited floor procedures under this section.CommentsClose CommentsPermalink





‘(iii) TREATMENT OF COMPANION MEASURES- If, following passage of the joint resolution in the Senate, the Senate then receives the companion measure from the House of Representatives, the companion measure shall not be debatable.CommentsClose CommentsPermalink





‘(iv) VETOES- If the President vetoes the joint resolution, debate on a veto message in the Senate under this section shall be 1 hour equally divided between the majority and minority leaders or their designees.CommentsClose CommentsPermalink





‘(v) RULES OF HOUSE OF REPRESENTATIVES AND SENATE- This subparagraph and subparagraphs (D), (E), and (F) are enacted by Congress--CommentsClose CommentsPermalink





‘(I) as an exercise of the rulemaking power of the Senate and House of Representatives, respectively, and as such it is deemed a part of the rules of each House, respectively, but applicable only with respect to the procedure to be followed in that House in the case of a joint resolution, and it supersedes other rules only to the extent that it is inconsistent with such rules; andCommentsClose CommentsPermalink





‘(II) with full recognition of the constitutional right of either House to change the rules (so far as relating to the procedure of that House) at any time, in the same manner, and to the same extent as in the case of any other rule of that House.’.CommentsClose CommentsPermalink





(b) Current Programs Moved On-Budget- Not later than 90 days after the date of the enactment of this Act, all receipts and disbursements resulting from any authorization made before the date of the enactment of this Act pursuant to the authority granted by the third undesignated paragraph of section 13 of the Federal Reserve Act shall be counted as new budget authority, outlays, receipts, or deficit or surplus for purposes of--CommentsClose CommentsPermalink





(1) the budget of the United States Government as submitted by the President;CommentsClose CommentsPermalink





(2) the congressional budget; andCommentsClose CommentsPermalink





(3) the Balanced Budget and Emergency Deficit Control Act of 1985.CommentsClose CommentsPermalink

TITLE V--GOVERNMENT-SPONSORED ENTERPRISES REFORMCommentsClose CommentsPermalink

SEC. 501. SHORT TITLE.

This title may be cited as the ‘Government-Sponsored Enterprises Free Market Reform Act of 2009’.CommentsClose CommentsPermalink

SEC. 502. DEFINITIONS.

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





(1) CHARTER- The term ‘charter’ means--CommentsClose CommentsPermalink





(A) with respect to the Federal National Mortgage Association, the Federal National Mortgage Association Charter Act (12 U.S.C. 1716 et seq.); andCommentsClose CommentsPermalink





(B) with respect to the Federal Home Loan Mortgage Corporation, the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1451 et seq.).CommentsClose CommentsPermalink





(2) DIRECTOR- The term ‘Director’ means the Director of the Federal Housing Finance Agency.CommentsClose CommentsPermalink





(3) ENTERPRISE- The term ‘enterprise’ means--CommentsClose CommentsPermalink





(A) the Federal National Mortgage Association; andCommentsClose CommentsPermalink





(B) the Federal Home Loan Mortgage Corporation.CommentsClose CommentsPermalink





(4) GUARANTEE- The term ‘guarantee’ means, with respect to an enterprise, the credit support of the enterprise that is provided by the Federal Government through its charter as a Government-sponsored enterprise.CommentsClose CommentsPermalink

SEC. 503. TERMINATION OF CURRENT CONSERVATORSHIP.

(a) In General- Upon the expiration of the period referred to in subsection (b), the Director of the Federal Housing Finance Agency shall determine, with respect to each enterprise, if the enterprise is financially viable at that time and--CommentsClose CommentsPermalink





(1) if the Director determines that the enterprise is financially viable, immediately take all actions necessary to terminate the conservatorship for each of the enterprises; orCommentsClose CommentsPermalink





(2) if the Director determines that the enterprise is not financially viable, immediately appoint the Federal Housing Finance Agency as receiver under section 1367 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 and carry out such receivership under the authority of such section.CommentsClose CommentsPermalink





(b) Timing- The period referred to in this subsection is, with respect to an enterprise--CommentsClose CommentsPermalink





(1) except as provided in paragraph (2), the 24-month period beginning upon the date of the enactment of this Act; orCommentsClose CommentsPermalink





(2) if the Director determines before the expiration of the period referred to in paragraph (1) that the financial markets would be adversely affected without the extension of such period under this paragraph with respect to that enterprise, the 30-month period beginning upon the date of the enactment of this Act.CommentsClose CommentsPermalink





(c) Financial Viability- The Director may not determine that an enterprise is financially viable for purposes of subsection (a) if the Director determines that any of the conditions for receivership set forth in paragraph (3) or (4) of section 1367(a) of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4617(a)) exists at the time with respect to the enterprise.CommentsClose CommentsPermalink

SEC. 504. LIMITATION OF ENTERPRISE AUTHORITY UPON EMERGENCE FROM CONSERVATORSHIP.

(a) Revised Authority- Upon the expiration of the period referred to in section 503(b), if the Director makes the determination under section 503(a)(1), the following provisions shall take effect:CommentsClose CommentsPermalink





(1) PORTFOLIO LIMITATIONS- Subtitle B of title XIII of the Housing and Community Development Act of 1992 (12 U.S.C. 4611 et seq.) is amended by adding at the end the following new section:CommentsClose CommentsPermalink

‘SEC. 1369E. RESTRICTION ON MORTGAGE ASSETS OF ENTERPRISES.

‘(a) Restriction- No enterprise shall own, as of any applicable date in this subsection or thereafter, mortgage assets in excess of--CommentsClose CommentsPermalink





‘(1) upon the expiration of the period referred to in section 503(b) of the Government-Sponsored Enterprises Free Market Reform Act of 2009, $850,000,000,000; orCommentsClose CommentsPermalink





‘(2) on December 31 of each year thereafter, 80.0 percent of the aggregate amount of mortgage assets of the enterprise as of December 31 of the immediately preceding calendar year;CommentsClose CommentsPermalink





except that in no event shall an enterprise be required under this section to own less than $250,000,000,000 in mortgage assets.CommentsClose CommentsPermalink





‘(b) Definition of Mortgage Assets- For purposes of this section, the term ‘mortgage assets’ means, with respect to an enterprise, assets of such enterprise consisting of mortgages, mortgage loans, mortgage-related securities, participation certificates, mortgage-backed commercial paper, obligations of real estate mortgage investment conduits and similar assets, in each case to the extent such assets would appear on the balance sheet of such enterprise in accordance with generally accepted accounting principles in effect in the United States as of September 7, 2008 (as set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board from time to time; and without giving any effect to any change that may be made after September 7, 2008, in respect of Statement of Financial Accounting Standards No. 140 or any similar accounting standard).’.CommentsClose CommentsPermalink





(2) INCREASE IN MINIMUM CAPITAL REQUIREMENT- Section 1362 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4612), as amended by section 1111 of the Housing and Economic Recovery Act of 2008 (Public Law 110-289), is amended--CommentsClose CommentsPermalink





(A) in subsection (a), by striking ‘For purposes of this subtitle, the minimum capital level for each enterprise shall be’ and inserting ‘The minimum capital level established under subsection (g) for each enterprise may not be lower than’;CommentsClose CommentsPermalink





(B) in subsection (c)--CommentsClose CommentsPermalink





(i) by striking ‘subsections (a) and’ and inserting ‘subsection’;CommentsClose CommentsPermalink





(ii) by striking ‘regulated entities’ the first place such term appears and inserting ‘Federal Home Loan Banks’;CommentsClose CommentsPermalink





(iii) by striking ‘for the enterprises,’;CommentsClose CommentsPermalink





(iv) by striking ‘, or for both the enterprises and the banks,’;CommentsClose CommentsPermalink





(v) by striking ‘the level specified in subsection (a) for the enterprises or’; andCommentsClose CommentsPermalink





(vi) by striking ‘the regulated entities operate’ and inserting ‘such banks operate’;CommentsClose CommentsPermalink





(C) in subsection (d)(1)--CommentsClose CommentsPermalink





(i) by striking ‘subsections (a) and’ and inserting ‘subsection’; andCommentsClose CommentsPermalink





(ii) by striking ‘regulated entity’ each place such term appears and inserting ‘Federal home loan bank’;CommentsClose CommentsPermalink





(D) in subsection (e), by striking ‘regulated entity’ each place such term appears and inserting ‘Federal home loan bank’;CommentsClose CommentsPermalink





(E) in subsection (f)--CommentsClose CommentsPermalink





(i) by striking ‘the amount of core capital maintained by the enterprises,’; andCommentsClose CommentsPermalink





(ii) by striking ‘regulated entities’ and inserting ‘banks’; andCommentsClose CommentsPermalink





(F) by adding at the end the following new subsection:CommentsClose CommentsPermalink





‘(g) Establishment of Revised Minimum Capital Levels-CommentsClose CommentsPermalink





‘(1) IN GENERAL- The Director shall cause the enterprises to achieve and maintain adequate capital by establishing minimum levels of capital for the enterprises and by using such other methods as the Director deems appropriate.CommentsClose CommentsPermalink





‘(2) AUTHORITY- The Director shall have the authority to establish such minimum level of capital for an enterprise in excess of the level specified under subsection (a) as the Director, in the Director’s discretion, deems to be necessary or appropriate in light of the particular circumstances of the enterprise.CommentsClose CommentsPermalink





‘(h) Failure To Maintain Revised Minimum Capital Levels-CommentsClose CommentsPermalink





‘(1) UNSAFE AND UNSOUND PRACTICE OR CONDITION- Failure of an enterprise to maintain capital at or above its minimum level as established pursuant to subsection (c) of this section may be deemed by the Director, in his discretion, to constitute an unsafe and unsound practice or condition within the meaning of this title.CommentsClose CommentsPermalink





‘(2) DIRECTIVE TO ACHIEVE CAPITAL LEVEL-CommentsClose CommentsPermalink





‘(A) AUTHORITY- In addition to, or in lieu of, any other action authorized by law, including paragraph (1), the Director may issue a directive to an enterprise that fails to maintain capital at or above its required level as established pursuant to subsection (c) of this section.CommentsClose CommentsPermalink





‘(B) PLAN- Such directive may require the enterprise to submit and adhere to a plan acceptable to the Director describing the means and timing by which the enterprise shall achieve its required capital level.CommentsClose CommentsPermalink





‘(C) ENFORCEMENT- Any such directive issued pursuant to this paragraph, including plans submitted pursuant thereto, shall be enforceable under the provisions of subtitle C of this title to the same extent as an effective and outstanding order issued pursuant to subtitle C of this title which has become final.CommentsClose CommentsPermalink





‘(3) ADHERENCE TO PLAN-CommentsClose CommentsPermalink





‘(A) CONSIDERATION- The Director may consider such enterprise’s progress in adhering to any plan required under this subsection whenever such enterprise seeks the requisite approval of the Director for any proposal which would divert earnings, diminish capital, or otherwise impede such enterprise’s progress in achieving its minimum capital level.CommentsClose CommentsPermalink





‘(B) DENIAL- The Director may deny such approval where it determines that such proposal would adversely affect the ability of the enterprise to comply with such plan.’.CommentsClose CommentsPermalink





(3) REPEAL OF INCREASES TO CONFORMING LOAN LIMITS-CommentsClose CommentsPermalink





(A) REPEAL OF TEMPORARY INCREASES-CommentsClose CommentsPermalink





(i) ECONOMIC STIMULUS ACT OF 2008- Section 201 of the Economic Stimulus Act of 2008 (Public Law 110-185) is hereby repealed.CommentsClose CommentsPermalink





(ii) AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009- Section 1203 of division A of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5; 123 Stat. 225) is hereby repealed.CommentsClose CommentsPermalink





(B) REPEAL OF GENERAL LIMIT AND PERMANENT HIGH-COST AREA INCREASE- Paragraph (2) of section 302(b) of the Federal National Mortgage Association Charter Act (12 U.S.C. 1717(b)(2)) and paragraph (2) of section 305(a) of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) are each amended to read as such sections were in effect immediately before the enactment of the Housing and Economic Recovery Act of 2008 (Public Law 110-289).CommentsClose CommentsPermalink





(C) REPEAL OF NEW HOUSING PRICE INDEX- Section 1322 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as added by section 1124(d) of the Housing and Economic Recovery Act of 2008 (Public Law 110-289), is hereby repealed.CommentsClose CommentsPermalink





(D) REPEAL- Section 1124 of the Housing and Economic Recovery Act of 2008 (Public Law 110-289) is hereby repealed.CommentsClose CommentsPermalink





(E) ESTABLISHMENT OF CONFORMING LOAN LIMIT- For the year in which the expiration of the period referred to in section 503(b) of this section occurs, the limitations governing the maximum original principal obligation of conventional mortgages that may be purchased by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, referred to in section 302(b)(2) of the Federal National Mortgage Association Charter Act (12 U.S.C. 1717(b)(2)) and section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)), respectively, shall be considered to be--CommentsClose CommentsPermalink





(i) $417,000 for a mortgage secured by a single-family residence,CommentsClose CommentsPermalink





(ii) $533,850 for a mortgage secured by a 2-family residence,CommentsClose CommentsPermalink





(iii) $645,300 for a mortgage secured by a 3-family residence, andCommentsClose CommentsPermalink





(iv) $801,950 for a mortgage secured by a 4-family residence,CommentsClose CommentsPermalink





and such limits shall be adjusted effective each January 1 thereafter in accordance with such sections 302(b)(2) and 305(a)(2).CommentsClose CommentsPermalink





(F) PROHIBITION OF PURCHASE OF MORTGAGES EXCEEDING MEDIAN AREA HOME PRICE-CommentsClose CommentsPermalink





(i) FANNIE MAE- Section 302(b)(2) of the Federal National Mortgage Association Charter Act (12 U.S.C. 1717(b)(2)) is amended by adding at the end the following new sentence: ‘Notwithstanding any other provision of this title, the corporation may not purchase any mortgage for a property having a principal obligation that exceeds the median home price, for properties of the same size, for the area in which such property subject to the mortgage is located.’.CommentsClose CommentsPermalink





(ii) FREDDIE MAC- Section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) is amended by adding at the end the following new sentence: ‘Notwithstanding any other provision of this title, the Corporation may not purchase any mortgage for a property having a principal obligation that exceeds the median home price, for properties of the same size, for the area in which such property subject to the mortgage is located.’.CommentsClose CommentsPermalink





(4) REQUIREMENT TO PAY STATE AND LOCAL TAXES-CommentsClose CommentsPermalink





(A) FANNIE MAE- Paragraph (2) of section 309(c) of the Federal National Mortgage Association Charter Act (12 U.S.C. 1723a(c)(2)) is amended--CommentsClose CommentsPermalink





(i) by striking ‘shall be exempt from’ and inserting ‘shall be subject to’; andCommentsClose CommentsPermalink





(ii) by striking ‘except that any’ and inserting ‘and any’.CommentsClose CommentsPermalink





(B) FREDDIE MAC- Section 303(e) of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1452(e)) is amended--CommentsClose CommentsPermalink





(i) by striking ‘shall be exempt from’ and inserting ‘shall be subject to’; andCommentsClose CommentsPermalink





(ii) by striking ‘except that any’ and inserting ‘and any’.CommentsClose CommentsPermalink





(5) REPEALS RELATING TO REGISTRATION OF SECURITIES-CommentsClose CommentsPermalink





(A) FANNIE MAE-CommentsClose CommentsPermalink





(i) MORTGAGE-BACKED SECURITIES- Section 304(d) of the Federal National Mortgage Association Charter Act (12 U.S.C. 1719(d)) is amended by striking the fourth sentence.CommentsClose CommentsPermalink





(ii) SUBORDINATE OBLIGATIONS- Section 304(e) of the Federal National Mortgage Association Charter Act (12 U.S.C. 1719(e)) is amended by striking the fourth sentence.CommentsClose CommentsPermalink





(B) FREDDIE MAC- Section 306 of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1455) is amended by striking subsection (g).CommentsClose CommentsPermalink





(6) RECOUPMENT OF COSTS FOR FEDERAL GUARANTEE-CommentsClose CommentsPermalink





(A) ASSESSMENTS- The Director of the Federal Housing Finance Agency shall establish and collect from each enterprise assessments in the amount determined under subparagraph (B). In determining the method and timing for making such assessments, the Director shall take into consideration the determinations and conclusions of the study under subsection (b) of this section.CommentsClose CommentsPermalink





(B) DETERMINATION OF COSTS OF GUARANTEE- Assessments under subparagraph (A) with respect to an enterprise shall be in such amount as the Director determines necessary to recoup to the Federal Government the full value of the benefit the enterprise receives from the guarantee provided by the Federal Government for the obligations and financial viability of the enterprise, based upon the dollar value of such benefit in the market to such enterprise when not operating under conservatorship or receivership. To determine such amount, the Director shall establish a risk-based pricing mechanism as the Director considers appropriate, taking into consideration the determinations and conclusions of the study under subsection (b) of this section.CommentsClose CommentsPermalink





(C) TREATMENT OF RECOUPED AMOUNTS- The Director shall cover into the general fund of the Treasury any amounts received from assessments made under this paragraph.CommentsClose CommentsPermalink





(b) GAO Study Regarding Recoupment of Costs for Federal Government Guarantee- The Comptroller General of the United States shall conduct a study to determine a risk-based pricing mechanism to accurately determine the value of the benefit the enterprises receive from the guarantee provided by the Federal Government for the obligations and financial viability of the enterprises. Such study shall establish a dollar value of such benefit in the market to each enterprise when not operating under conservatorship or receivership, shall analyze various methods of the Federal Government assessing a charge for such value received (including methods involving an annual fee or a fee for each mortgage purchased or securitized), and shall make a recommendation of the best such method for assessing such charge. Not later than 12 months after the date of the enactment of this Act, the Comptroller General shall submit to the Congress a report setting forth the determinations and conclusions of such study.CommentsClose CommentsPermalink

SEC. 505. REQUIREMENT TO PERIODICALLY RENEW CHARTER UNTIL WIND DOWN AND DISSOLUTION.

(a) Required Renewal; Wind Down and Dissolution Upon Non-Renewal- Upon the expiration of the 3-year period that begins upon the expiration of the period referred to in section 503(b), unless the charter of an enterprise is renewed pursuant to subsection (b) of this section, section 506 (relating to wind down of operations and dissolution of enterprise) shall apply to the enterprise.CommentsClose CommentsPermalink





(b) Renewal Procedure-CommentsClose CommentsPermalink





(1) APPLICATION; TIMING- The Director shall provide for each enterprise to apply to the Director, before the expiration of the 3-year period under subsection (a), for renewal of the charter of the enterprise.CommentsClose CommentsPermalink





(2) STANDARD- The Director shall approve the application of an enterprise for the renewal of the charter of the enterprise if--CommentsClose CommentsPermalink





(A) the application includes a certification by the enterprise that the enterprise is financially sound and is complying with all provisions of, and amendments made by, section 504 of this title applicable to such enterprise; andCommentsClose CommentsPermalink





(B) the Director verifies that the certification made pursuant to subparagraph (A) is accurate.CommentsClose CommentsPermalink





(c) Option To Reapply- Nothing in this section may be construed to require an enterprise to apply under this section for renewal of the charter of the enterprise.CommentsClose CommentsPermalink

SEC. 506. REQUIRED WIND DOWN OF OPERATIONS AND DISSOLUTION OF ENTERPRISE.

(a) Applicability- This section shall apply to an enterprise--CommentsClose CommentsPermalink





(1) upon the expiration of the 3-year period referred to in such section 505(a), to the extent provided in such section; andCommentsClose CommentsPermalink





(2) if this section has not previously applied to the enterprise, upon the expiration of the 6-year period that begins upon the expiration of the period referred to in section 503(b).CommentsClose CommentsPermalink





(b) Wind Down- Upon the applicability of this section to an enterprise, the Director and the Secretary of the Treasury shall jointly take such action, and may prescribe such regulations and procedures, as may be necessary to wind down the operations of an enterprise as an entity chartered by the United States Government over the duration of the 10-year period beginning upon the applicability of this section to the enterprise (pursuant to subsection (a)) in an orderly manner consistent with this title and the ongoing obligations of the enterprise.CommentsClose CommentsPermalink





(c) Division of Assets and Liabilities; Authority To Establish Holding Corporation and Dissolution Trust Fund- The action and procedures required under subsection (b)--CommentsClose CommentsPermalink





(1) shall include the establishment and execution of plans to provide for an equitable division and distribution of assets and liabilities of the enterprise, including any liability of the enterprise to the United States Government or a Federal reserve bank that may continue after the end of the period described in subsection (b); andCommentsClose CommentsPermalink





(2) may provide for establishment of--CommentsClose CommentsPermalink





(A) a holding corporation organized under the laws of any State of the United States or the District of Columbia for the purposes of the reorganization and restructuring of the enterprise; andCommentsClose CommentsPermalink





(B) one or more trusts to which to transfer--CommentsClose CommentsPermalink





(i) remaining debt obligations of the enterprise, for the benefit of holders of such remaining obligations; orCommentsClose CommentsPermalink





(ii) remaining mortgages held for the purpose of backing mortgage-backed securities, for the benefit of holders of such remaining securities.CommentsClose CommentsPermalink





(d) Repeal of Charter- Effective upon the expiration of the 10-year period referred to in subsection (b) for an enterprise, the charter for the enterprise is repealed, except that the provisions of such charter in effect immediately before such repeal shall continue to apply with respect to the rights and obligations of any holders of outstanding debt obligations and mortgage-backed securities of the enterprise.CommentsClose CommentsPermalink

TITLE VI--CREDIT RATING AGENCY REFORMCommentsClose CommentsPermalink

SEC. 601. CLARIFICATION OF DESIGNATION.

(a) In General-CommentsClose CommentsPermalink





(1) SINGULAR- Each applicable law is amended by striking ‘nationally recognized statistical rating organization’ each place it appears and inserting ‘nationally registered statistical rating organization’.CommentsClose CommentsPermalink





(2) PLURAL- Each applicable law is amended by striking ‘nationally recognized statistical rating organizations’ each place it appears and inserting ‘nationally registered statistical rating organizations’.CommentsClose CommentsPermalink





(b) Applicable Laws- For purposes of this section, the term ‘applicable laws’ means--CommentsClose CommentsPermalink





(1) the Securities Exchange Act of 1934; andCommentsClose CommentsPermalink





(2) the Investment Advisers Act of 1940.CommentsClose CommentsPermalink

SEC. 602. ELIMINATION OF SECURITY CREDIT RATING REQUIREMENTS IN FEDERAL LAW.

(a) Securities Exchange Act of 1934- The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended--CommentsClose CommentsPermalink





(1) in section 3(a)(41), by striking ‘is rated in one of the two highest rating categories by at least one nationally recognized statistical rating organization, and’; andCommentsClose CommentsPermalink





(2) in section 3(a)(53)(A), by striking ‘is rated in 1 of the 4 highest rating categories by at least 1 nationally recognized statistical rating organization, and’.CommentsClose CommentsPermalink





(b) Investment Company Act of 1940- Section 6(a)(5)(A) of the Investment Company Act of 1940 (15 U.S.C. 80a-6(a)(5)(A)) is amended--CommentsClose CommentsPermalink





(1) in clause (ii), by adding ‘and’ at the end;CommentsClose CommentsPermalink





(2) in clause (iii), by striking ‘; and’ and inserting a period; andCommentsClose CommentsPermalink





(3) by striking clause (iv).CommentsClose CommentsPermalink





(c) Higher Education Act of 1965- Section 439 of the Higher Education Act of 1965 (20 U.S.C. 1087-2) is amended--CommentsClose CommentsPermalink





(1) by striking subsection (d)(5); andCommentsClose CommentsPermalink





(2) in subsection (r), by striking paragraph (11) and inserting the following:CommentsClose CommentsPermalink





‘(11) [Repealed]’.CommentsClose CommentsPermalink





(d) Launching Our Communities’ Access to Local Television Act of 2000- Section 1004(d)(2)(D) of the Launching Our Communities’ Access to Local Television Act of 2000 (47 U.S.C. 1103(d)(2)(D)) is amended--CommentsClose CommentsPermalink





(1) in clause (i)(II), by striking ‘, if the Board determines that such nonprofit corporation has one or more issues of outstanding long-term debt that is rated within the highest three rating categories of a nationally recognized statistical rating organization’; andCommentsClose CommentsPermalink





(2) by striking clause (ii) (and redesignating succeeding clauses accordingly).CommentsClose CommentsPermalink





(e) Employee Retirement Income Security Act of 1974- Section 4041(b)(5)(B) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1341(b)(5)(B)) is amended to read as follows:CommentsClose CommentsPermalink





‘(B) LIMITATION- Subparagraph (A) shall not apply to any transaction or series of transactions unless the employer maintaining the plan after the transaction or series of transactions employs at least 20 percent of the employees located in the United States who were employed by such employer immediately before the transaction or series of transactions.’.CommentsClose CommentsPermalink





(f) Chapter 6 of Title 23- Chapter 6 of title 23, United States Code, is amended--CommentsClose CommentsPermalink





(1) in section 601(a), by striking paragraph (3) and paragraph (10) and redesignating succeeding paragraphs accordingly;CommentsClose CommentsPermalink





(2) in section 602(b)(2), by amending subparagraph (B) to read as follows:CommentsClose CommentsPermalink





‘(B) [Repealed]’;CommentsClose CommentsPermalink





(3) in section 603(a)(3)--CommentsClose CommentsPermalink





(A) by striking ‘and each rating agency providing a preliminary rating opinion letter under section 602 (b)(2)(B)’; andCommentsClose CommentsPermalink





(B) by striking ‘, taking into account such letter’;CommentsClose CommentsPermalink





(4) in section 603(a), by striking paragraph (4);CommentsClose CommentsPermalink





(5) in section 603(b)(2), by striking ‘ or, if the secured loan does not receive an investment grade rating, the amount of the senior project obligations’;CommentsClose CommentsPermalink





(6) in section 604(a)(3)--CommentsClose CommentsPermalink





(A) by striking ‘and each rating agency providing a preliminary rating opinion letter under section 602 (b)(2)(B)’; andCommentsClose CommentsPermalink





(B) by striking ‘, taking into account such letter’;CommentsClose CommentsPermalink





(7) in section 604(a), by striking paragraph (4); andCommentsClose CommentsPermalink





(8) by striking section 604(a)(4).CommentsClose CommentsPermalink





(g) Federal Housing Enterprises Financial Safety and Soundness Act of 1992- Section 1319 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4519) is amended by striking ‘that is a nationally recognized statistical rating organization, as such term is defined in section 3(a) of the Securities Exchange Act of 1934,’.CommentsClose CommentsPermalink





(h) Revised Statutes- Section 5136A of title LXII of the Revised Statutes of the United States is amended--CommentsClose CommentsPermalink





(1) in subsection (a)(2)(E), by striking ‘applicable rating or other’;CommentsClose CommentsPermalink





(2) in the heading for subsection (a)(3) by striking ‘Rating or comparable requirement’ and inserting ‘Requirement’;CommentsClose CommentsPermalink





(3) by amending subsection (a)(3)(A) to read as follows:CommentsClose CommentsPermalink





‘(A) IN GENERAL- A national bank meets the requirements of this paragraph if the bank is 1 of the second 50 largest insured banks and meets such criteria as the Secretary of the Treasury and the Board of Governors of the Federal Reserve System may jointly establish by regulation.’;CommentsClose CommentsPermalink





(4) in the heading for subsection (f), by striking ‘maintain public rating or’; andCommentsClose CommentsPermalink





(5) in subsection (f)(1), by striking ‘applicable rating or other’.CommentsClose CommentsPermalink





(i) Federal Deposit Insurance Act- Section 28 of the Federal Deposit Insurance Act (12 U.S.C. 1831e) is amended by striking subsections (d) and (e) (and redesignating succeeding subsections accordingly).CommentsClose CommentsPermalink

SEC. 603. ELIMINATION OF SECURITY CREDIT RATING REQUIREMENTS IN REGULATIONS.

Not later than 3 months after the date of the enactment of this Act, each Federal agency and department shall modify any regulation promulgated by such agency or department that requires the use of an assessment of the creditworthiness of a security or money market instrument by removing such requirement from any such regulation.CommentsClose CommentsPermalink

TITLE VII--ANTI-FRAUD PROVISIONSCommentsClose CommentsPermalink

SEC. 701. AUTHORITY TO IMPOSE CIVIL PENALTIES IN CEASE AND DESIST PROCEEDINGS.

(a) Under the Securities Act of 1933- Section 8A of the Securities Act of 1933 (15 U.S.C. 77h-1) is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink





‘(g) Authority To Impose Money Penalties-CommentsClose CommentsPermalink





‘(1) GROUNDS FOR IMPOSING- In any cease-and-desist proceeding under subsection (a), the Commission may impose a civil penalty on a person if it finds, on the record after notice and opportunity for hearing, that--CommentsClose CommentsPermalink





‘(A) such person--CommentsClose CommentsPermalink





‘(i) is violating or has violated any provision of this title, or any rule or regulation thereunder; orCommentsClose CommentsPermalink





‘(ii) is or was a cause of the violation of any provision of this title, or any rule or regulation thereunder; andCommentsClose CommentsPermalink





‘(B) such penalty is in the public interest.CommentsClose CommentsPermalink





‘(2) MAXIMUM AMOUNT OF PENALTY-CommentsClose CommentsPermalink





‘(A) FIRST TIER- The maximum amount of penalty for each act or omission described in paragraph (1) shall be $6,500 for a natural person or $65,000 for any other person.CommentsClose CommentsPermalink





‘(B) SECOND TIER- Notwithstanding paragraph (A), the maximum amount of penalty for each such act or omission shall be $65,000 for a natural person or $325,000 for any other person if the act or omission described in paragraph (1) involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement.CommentsClose CommentsPermalink





‘(C) THIRD TIER- Notwithstanding paragraphs (A) and (B), the maximum amount of penalty for each such act or omission shall be $130,000 for a natural person or $650,000 for any other person if--CommentsClose CommentsPermalink





‘(i) the act or omission described in paragraph (1) involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement; andCommentsClose CommentsPermalink





‘(ii) such act or omission directly or indirectly resulted in substantial losses or created a significant risk of substantial losses to other persons or resulted in substantial pecuniary gain to the person who committed the act or omission.CommentsClose CommentsPermalink





‘(3) EVIDENCE CONCERNING ABILITY TO PAY- In any proceeding in which the Commission may impose a penalty under this section, a respondent may present evidence of the respondent’s ability to pay such penalty. The Commission may, in its discretion, consider such evidence in determining whether such penalty is in the public interest. Such evidence may relate to the extent of such person’s ability to continue in business and the collectability of a penalty, taking into account any other claims of the United States or third parties upon such person’s assets and the amount of such person’s assets.’.CommentsClose CommentsPermalink





(b) Under the Securities Exchange Act of 1934- Subsection (a) of section 21B of the Securities Exchange Act of 1934 (15 U.S.C. 78u-2(a)) is amended--CommentsClose CommentsPermalink





(1) by striking ‘(a) Commission Authority To Assess Money Penalties- In any proceeding’ and inserting the following:CommentsClose CommentsPermalink





‘(a) Commission Authority To Assess Money Penalties-CommentsClose CommentsPermalink





‘(1) IN GENERAL- In any proceeding’;CommentsClose CommentsPermalink





(2) by redesignating paragraphs (1) through (4) of such subsection as subparagraphs (A) through (D), respectively and moving such redesignated subparagraphs and the matter following such subparagraphs 2 ems to the right; andCommentsClose CommentsPermalink





(3) by adding at the end of such subsection the following new paragraph:CommentsClose CommentsPermalink





‘(2) CEASE-AND-DESIST PROCEEDINGS- In any proceeding instituted pursuant to section 21C of this title against any person, the Commission may impose a civil penalty if it finds, on the record after notice and opportunity for hearing, that such person--CommentsClose CommentsPermalink





‘(A) is violating or has violated any provision of this title, or any rule or regulation thereunder; orCommentsClose CommentsPermalink





‘(B) is or was a cause of the violation of any provision of this title, or any rule or regulation thereunder.’.CommentsClose CommentsPermalink





(c) Under the Investment Company Act of 1940- Paragraph (1) of section 9(d) of the Investment Company Act of 1940 (15 U.S.C. 80a-9(d)(1)) is amended--CommentsClose CommentsPermalink





(1) by striking ‘(1) AUTHORITY OF COMMISSION- In any proceeding’ and inserting the following:CommentsClose CommentsPermalink





‘(1) AUTHORITY OF COMMISSION-CommentsClose CommentsPermalink





‘(A) IN GENERAL- In any proceeding’;CommentsClose CommentsPermalink





(2) by redesignating subparagraphs (A) through (C) of such paragraph as clauses (i) through (iii), respectively and by moving such redesignated clauses and the matter following such subparagraphs 2 ems to the right; andCommentsClose CommentsPermalink





(3) by adding at the end of such paragraph the following new subparagraph:CommentsClose CommentsPermalink





‘(B) CEASE-AND-DESIST PROCEEDINGS- In any proceeding instituted pursuant to subsection (f) against any person, the Commission may impose a civil penalty if it finds, on the record after notice and opportunity for hearing, that such person--CommentsClose CommentsPermalink





‘(i) is violating or has violated any provision of this title, or any rule or regulation thereunder; orCommentsClose CommentsPermalink





‘(ii) is or was a cause of the violation of any provision of this title, or any rule or regulation thereunder.’.CommentsClose CommentsPermalink





(d) Under the Investment Advisers Act of 1940- Paragraph (1) of section 203(i) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-3(i)(1)) is amended--CommentsClose CommentsPermalink





(1) by striking ‘(1) AUTHORITY OF COMMISSION- In any proceeding’ and inserting the following:CommentsClose CommentsPermalink





‘(1) AUTHORITY OF COMMISSION-CommentsClose CommentsPermalink





‘(A) IN GENERAL- In any proceeding’;CommentsClose CommentsPermalink





(2) by redesignating subparagraphs (A) through (D) of such paragraph as clauses (i) through (iv), respectively and moving such redesignated clauses and the matter following such subparagraphs 2 ems to the right; andCommentsClose CommentsPermalink





(3) by adding at the end of such paragraph the following new subparagraph:CommentsClose CommentsPermalink





‘(B) CEASE-AND-DESIST PROCEEDINGS- In any proceeding instituted pursuant to subsection (k) against any person, the Commission may impose a civil penalty if it finds, on the record after notice and opportunity for hearing, that such person--CommentsClose CommentsPermalink





‘(i) is violating or has violated any provision of this title, or any rule or regulation thereunder; orCommentsClose CommentsPermalink





‘(ii) is or was a cause of the violation of any provision of this title, or any rule or regulation thereunder.’.CommentsClose CommentsPermalink

SEC. 702. FORMERLY ASSOCIATED PERSONS.

(a) Member or Employee of the Municipal Securities Rulemaking Board- Section 15B(c)(8) of the Securities Exchange Act of 1934 (15 U.S.C. 78o-4(c)(8)) is amended by striking ‘any member or employee’ and inserting ‘any person who is, or at the time of the alleged misconduct was, a member or employee’.CommentsClose CommentsPermalink





(b) Person Associated With a Government Securities Broker or Dealer- Section 15C of the Securities Exchange Act of 1934 (15 U.S.C. 78o-5) is amended--CommentsClose CommentsPermalink





(1) in subsection (c)(1)(C), by striking ‘or seeking to become associated,’ and inserting ‘seeking to become associated, or, at the time of the alleged misconduct, associated or seeking to become associated’;CommentsClose CommentsPermalink





(2) in subsection (c)(2)(A), by inserting ‘, seeking to become associated, or, at the time of the alleged misconduct, associated or seeking to become associated’ after ‘any person associated’; andCommentsClose CommentsPermalink





(3) in subsection (c)(2)(B), by inserting ‘, seeking to become associated, or, at the time of the alleged misconduct, associated or seeking to become associated’ after ‘any person associated’.CommentsClose CommentsPermalink





(c) Person Associated With a Member of a National Securities Exchange or Registered Securities Association- Section 21(a)(1) of the Securities Exchange Act of 1934 (15 U.S.C. 78u(a)(1)) is amended by inserting ‘, or, as to any act or practice, or omission to act, while associated with a member, formerly associated’ after ‘member or a person associated’.CommentsClose CommentsPermalink





(d) Participant of a Registered Clearing Agency- Section 21(a)(1) of the Securities Exchange Act of 1934 (15 U.S.C. 78u(a)(1)) is amended by inserting ‘or, as to any act or practice, or omission to act, while a participant, was a participant,’ after ‘in which such person is a participant,’.CommentsClose CommentsPermalink





(e) Officer or Director of a Self-regulatory Organization- Section 19(h)(4) of the Securities Exchange Act of 1934 (15 U.S.C. 78s(h)(4)) is amended--CommentsClose CommentsPermalink





(1) by striking ‘any officer or director’ and inserting ‘any person who is, or at the time of the alleged misconduct was, an officer or director’; andCommentsClose CommentsPermalink





(2) by striking ‘such officer or director’ and inserting ‘such person’.CommentsClose CommentsPermalink





(f) Officer or Director of an Investment Company- Section 36(a) of the Investment Company Act of 1940 (15 U.S.C. 80a-35(a)) is amended--CommentsClose CommentsPermalink





(1) by striking ‘a person serving or acting’ and inserting ‘a person who is, or at the time of the alleged misconduct was, serving or acting’; andCommentsClose CommentsPermalink





(2) by striking ‘such person so serves or acts’ and inserting ‘such person so serves or acts, or at the time of the alleged misconduct, so served or acted’.CommentsClose CommentsPermalink

SEC. 703. COLLATERAL BARS.

(a) Section 15(b)(6)(A) of the Securities Exchange Act of 1934- Section 15(b)(6)(A) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(b)(6)(A)) is amended by striking ‘12 months, or bar such person from being associated with a broker or dealer,’ and inserting ‘12 months, or bar any such person from being associated with a broker, dealer, investment adviser, municipal securities dealer, or transfer agent,’.CommentsClose CommentsPermalink





(b) Section 15B(c)(4) of the Securities Exchange Act of 1934- Section 15B(c)(4) of the Securities Exchange Act of 1934 (15 U.S.C. 78o-4(c)(4)) is amended by striking ‘twelve months or bar any such person from being associated with a municipal securities dealer,’ and inserting ‘twelve months or bar any such person from being associated with a broker, dealer, investment adviser, municipal securities dealer, or transfer agent,’.CommentsClose CommentsPermalink





(c) Section 17A(c)(4)(C) of the Securities Exchange Act of 1934- Section 17A(c)(4)(C) of the Securities Exchange Act of 1934 (15 U.S.C. 78q-1(c)(4)(C)) is amended by striking ‘twelve months or bar any such person from being associated with the transfer agent,’ and inserting ‘twelve months or bar any such person from being associated with any transfer agent, broker, dealer, investment adviser, or municipal securities dealer,’.CommentsClose CommentsPermalink





(d) Section 203(f) of the Investment Advisers Act of 1940- Section 203(f) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-3(f)) is amended by striking ‘twelve months or bar any such person from being associated with an investment adviser,’ and inserting ‘twelve months or bar any such person from being associated with an investment adviser, broker, dealer, municipal securities dealer, or transfer agent,’.CommentsClose CommentsPermalink

SEC. 704. UNLAWFUL MARGIN LENDING.

Section 7(c)(1)(A) of the Securities Exchange Act of 1934 (15 U.S.C. 78g(c)(1)(A)) is amended by striking ‘; and’ and inserting ‘; or’.CommentsClose CommentsPermalink

SEC. 705. NATIONWIDE SERVICE OF SUBPOENAS.

(a) Securities Act of 1933- Section 22(a) of the Securities Act of 1933 (15 U.S.C. 77v(a)) is amended by inserting after the second sentence the following: ‘In any action or proceeding instituted by the Commission under this title in a United States district court for any judicial district, subpoenas issued by or on behalf of such court to compel the attendance of witnesses or the production of documents or tangible things (or both) may be served in any other district. Such subpoenas may be served and enforced without application to the court or a showing of cause, notwithstanding the provisions of rule 45(b)(2), (c)(3)(A)(ii), and (c)(3)(B)(iii) of the Federal Rules of Civil Procedure.’.CommentsClose CommentsPermalink





(b) Securities Exchange Act of 1934- Section 27 of the Securities Exchange Act of 1934 (15 U.S.C. 78aa) is amended by inserting after the third sentence the following: ‘In any action or proceeding instituted by the Commission under this title in a United States district court for any judicial district, subpoenas issued by or on behalf of such court to compel the attendance of witnesses or the production of documents or tangible things (or both) may be served in any other district. Such subpoenas may be served and enforced without application to the court or a showing of cause, notwithstanding the provisions of rule 45(b)(2), (c)(3)(A)(ii), and (c)(3)(B)(iii) of the Federal Rules of Civil Procedure.’.CommentsClose CommentsPermalink





(c) Investment Company Act of 1940- Section 44 of the Investment Company Act of 1940 (15 U.S.C. 80a-43) is amended by inserting after the fourth sentence the following: ‘In any action or proceeding instituted by the Commission under this title in a United States district court for any judicial district, subpoenas issued by or on behalf of such court to compel the attendance of witnesses or the production of documents or tangible things (or both) may be served in any other district. Such subpoenas may be served and enforced without application to the court or a showing of cause, notwithstanding the provisions of rule 45(b)(2), (c)(3)(A)(ii), and (c)(3)(B)(iii) of the Federal Rules of Civil Procedure.’.CommentsClose CommentsPermalink





(d) Investment Advisers Act of 1940- Section 214 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-14) is amended by inserting after the third sentence the following: ‘In any action or proceeding instituted by the Commission under this title in a United States district court for any judicial district, subpoenas issued by or on behalf of such court to compel the attendance of witnesses or the production of documents or tangible things (or both) may be served in any other district. Such subpoenas may be served and enforced without application to the court or a showing of cause, notwithstanding the provisions of rule 45(b)(2), (c)(3)(A)(ii), and (c)(3)(B)(iii) of the Federal Rules of Civil Procedure.’.CommentsClose CommentsPermalink

SEC. 706. REAUTHORIZATION OF THE FINANCIAL CRIMES ENFORCEMENT NETWORK.

(a) Findings-CommentsClose CommentsPermalink





(1) The Congress finds as follows:CommentsClose CommentsPermalink





(A) The work of the Financial Crimes Enforcement Network (hereinafter in this section referred to as ‘FinCEN’) is essential to safeguard the United States financial system and its international affiliates from the abuses of financial crime, including terrorist financing, weapons of mass destruction proliferation, and money laundering.CommentsClose CommentsPermalink





(B) All avenues of financial intermediation are vulnerable to abuse by illicit actors, and FinCEN exercises the authorities of the Bank Secrecy Act over a broad range of financial institutions.CommentsClose CommentsPermalink





(2) The Congress further finds and recognizes the recent establishment by FinCEN of an International Programs Division to expand and enhance global financial intelligence sharing initiatives aimed at combating transnational crime threats facing United States financial markets, and takes note of FinCEN’s efforts to collaborate with foreign financial intelligence unit partners on analytical projects to identify and address emerging threats and vulnerabilities.CommentsClose CommentsPermalink





(3) The Congress further finds and recognizes the role of FinCEN in discovering and investigating widespread fraud in the mortgage market and elsewhere in the financial services industry. Alongside an effective licensing and registration system for all mortgage originators, a vigilant FinCEN is critical to the recovery of our housing markets and consumer confidence in both the home buying process and the financial services industry as a whole.CommentsClose CommentsPermalink





(b) Reauthorization- Section 310(d)(1) of title 31, United States Code, is amended by striking ‘such sums as may be necessary for fiscal years 2002, 2003, 2004, and 2005’ and inserting ‘not more than $105,500,000 for fiscal year 2010, and such sums as may be necessary for fiscal years 2011, 2012, 2013, and 2014’.CommentsClose CommentsPermalink





(c) Additional Financial Fraud Authorization of Appropriations- In addition to such other amounts otherwise made available or appropriated to FinCEN, there are authorized to be appropriated to FinCEN $15,000,000 to be used specifically for efforts to detect financial fraud. Such sums are authorized to remain available until expended.CommentsClose CommentsPermalink

SEC. 707. FAIR FUND IMPROVEMENTS.

(a) Amendment- Subsection (a) of section 308 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7246(a)) is amended to read as follows:CommentsClose CommentsPermalink





‘(a) Civil Penalties To Be Used for the Relief of Victims- If in any judicial or administrative action brought by the Commission under the securities laws (as such term is defined in section 3(a)(47) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(47)), the Commission obtains a civil penalty against any person for a violation of such laws, the amount of such civil penalty shall, on the motion or at the direction of the Commission, be added to and become part of a disgorgement fund or other fund established for the benefit of the victims of such violation.’.CommentsClose CommentsPermalink





(b) Conforming Amendments- Section 308 of such Act is amended--CommentsClose CommentsPermalink





(1) in subsection (b)--CommentsClose CommentsPermalink





(A) by striking ‘for a disgorgement fund described in subsection (a)’ and inserting ‘for a disgorgement fund or other fund described in subsection (a)’; andCommentsClose CommentsPermalink





(B) by striking ‘in the disgorgement fund’ and inserting ‘in such fund’; andCommentsClose CommentsPermalink





(2) by striking subsection (e).CommentsClose CommentsPermalink