Version	Word Count	Changes From Previous Version	Percent Change
Introduced in House	223,783	n/a	n/a
Engrossed in House	301,214	2,502	43%
Referred in Senate	299,585	8	0%
Engrossed Amendment Senate	283,985	9,370	90%
Enrolled Bill	383,013	4,478 Show Changes Hide Changes	50%

Display Version Introduced in House Engrossed in House Referred in Senate Engrossed Amendment Senate Enrolled Bill

Most commented sections:

• Paragraph 4,374 (1 comments)
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HR 4173 EAS

In the Senate of the United States,

May 20, 2010.

Resolved, That the bill from the House of Representatives (H.R.4173CommentsClose CommentsPermalink

) entitled ‘An Act to provide for financial regulatory reform, to protect consumers and investors, to enhance Federal understanding of insurance issues, to regulate the over-the-counter derivatives markets, and for other purposes.’, do pass with the following

AMENDMENTS:

Strike all after the enacting clause and insert the following:

One Hundred Eleventh Congress CommentsClose CommentsPermalink

CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.CommentsClose CommentsPermalink

(a) Short Title- This Act may be cited as the ‘Restoring American Financial Stability Act of 2010Dodd-Frank Wall Street Reform and Consumer Protection Act’.CommentsClose CommentsPermalink





(b) Table of Contents- The table of contents for this Act is as follows:CommentsClose CommentsPermalink





Sec. 1. Short title; table of contents.CommentsClose CommentsPermalink





Sec. 2. Definitions.CommentsClose CommentsPermalink





Sec. 3. Severability.CommentsClose CommentsPermalink





Sec. 4. Effective date.CommentsClose CommentsPermalink





Sec. 5. Budgetary effects.CommentsClose CommentsPermalink





Sec. 6. Antitrust savings clause.CommentsClose CommentsPermalink

TITLE I--FINANCIAL STABILITY

Sec. 101. Short title.CommentsClose CommentsPermalink





Sec. 102. Definitions.CommentsClose CommentsPermalink

Subtitle A--Financial Stability Oversight Council

Sec. 111. Financial Stability Oversight Council established.CommentsClose CommentsPermalink





Sec. 112. Council authority.CommentsClose CommentsPermalink





Sec. 113. Authority to require supervision and regulation of certain nonbank financial companies.CommentsClose CommentsPermalink





Sec. 114. Registration of nonbank financial companies supervised by the Board of Governors.CommentsClose CommentsPermalink





Sec. 115. Enhanced supervision and prudential standards for nonbank financial companies supervised by the Board of Governors and certain bank holding companies.CommentsClose CommentsPermalink





Sec. 116. Reports.CommentsClose CommentsPermalink





Sec. 117. Treatment of certain companies that cease to be bank holding companies.CommentsClose CommentsPermalink





Sec. 118. Council funding.CommentsClose CommentsPermalink





Sec. 119. Resolution of supervisory jurisdictional disputes among member agencies.CommentsClose CommentsPermalink





Sec. 120. Additional standards applicable to activities or practices for financial stability purposes.CommentsClose CommentsPermalink





Sec. 121. Mitigation of risks to financial stability.CommentsClose CommentsPermalink





Sec. 122. GAO Audit of Council.CommentsClose CommentsPermalink





Sec. 123. Study of the effects of size and complexity of financial institutions on capital market efficiency and economic growth.CommentsClose CommentsPermalink

Subtitle B--Office of Financial Research

Sec. 151. Definitions.CommentsClose CommentsPermalink





Sec. 152. Office of Financial Research established.CommentsClose CommentsPermalink





Sec. 153. Purpose and duties of the Office.CommentsClose CommentsPermalink





Sec. 154. Organizational structure; responsibilities of primary programmatic units.CommentsClose CommentsPermalink





Sec. 155. Funding.CommentsClose CommentsPermalink





Sec. 156. Transition oversight.CommentsClose CommentsPermalink

Subtitle C--Additional Board of Governors Authority for Certain Nonbank Financial Companies and Bank Holding Companies

Sec. 161. Reports by and examinations of nonbank financial companies supervised by the Board of Governors.CommentsClose CommentsPermalink





Sec. 162. Enforcement.CommentsClose CommentsPermalink





Sec. 163. Acquisitions.CommentsClose CommentsPermalink





Sec. 164. Prohibition against management interlocks between certain financial companies.CommentsClose CommentsPermalink





Sec. 165. Enhanced supervision and prudential standards for nonbank financial companies supervised by the Board of Governors and certain bank holding companies.CommentsClose CommentsPermalink





Sec. 166. Early remediation requirements.CommentsClose CommentsPermalink





Sec. 167. Affiliations.CommentsClose CommentsPermalink





Sec. 168. Regulations.CommentsClose CommentsPermalink





Sec. 169. Avoiding duplication.CommentsClose CommentsPermalink





Sec. 170. Safe harbor.CommentsClose CommentsPermalink





Sec. 171. Leverage and risk-based capital requirements.CommentsClose CommentsPermalink





Sec. 172. Examination and enforcement actions for insurance and orderly liquidation purposes.CommentsClose CommentsPermalink





Sec. 173. Access to United States financial market by foreign institutions.CommentsClose CommentsPermalink





Sec. 174. Studies and reports on holding company capital requirements.CommentsClose CommentsPermalink





Sec. 175. International policy coordination.CommentsClose CommentsPermalink





Sec. 176. Rule of construction.CommentsClose CommentsPermalink

TITLE II--ORDERLY LIQUIDATION AUTHORITY

Sec. 201. Definitions.CommentsClose CommentsPermalink





Sec. 202. Judicial review.CommentsClose CommentsPermalink





Sec. 203. Systemic risk determination.CommentsClose CommentsPermalink





Sec. 204. Orderly liquidation of covered financial companies.CommentsClose CommentsPermalink





Sec. 205. Orderly liquidation of covered brokers and dealers.CommentsClose CommentsPermalink





Sec. 206. Mandatory terms and conditions for all orderly liquidation actions.CommentsClose CommentsPermalink





Sec. 207. Directors not liable for acquiescing in appointment of receiver.CommentsClose CommentsPermalink





Sec. 208. Dismissal and exclusion of other actions.CommentsClose CommentsPermalink





Sec. 209. Rulemaking; non-conflicting law.CommentsClose CommentsPermalink





Sec. 210. Powers and duties of the cCorporation.CommentsClose CommentsPermalink





Sec. 211. Miscellaneous provisions.CommentsClose CommentsPermalink





Sec. 212. Prohibition of circumvention and prevention of conflicts of interest.CommentsClose CommentsPermalink





Sec. 213. Ban on certain activities by senior executives and directors.CommentsClose CommentsPermalink





Sec. 214. Prohibition on taxpayer funding.CommentsClose CommentsPermalink





Sec. 215. Study on secured creditor haircuts.CommentsClose CommentsPermalink





Sec. 216. Study on bankruptcy process for financial and nonbank financial institutionsCommentsClose CommentsPermalink





Sec. 217. Study on international coordination relating to bankruptcy process for nonbank financial institutionsCommentsClose CommentsPermalink

TITLE III--TRANSFER OF POWERS TO THE COMPTROLLER OF THE CURRENCY, THE CORPORATION, AND THE BOARD OF GOVERNORS

Sec. 300. Short title.CommentsClose CommentsPermalink





Sec. 301. Purposes.CommentsClose CommentsPermalink





Sec. 302. Definition.CommentsClose CommentsPermalink

Subtitle A--Transfer of Powers and Duties

Sec. 311. Transfer date.CommentsClose CommentsPermalink





Sec. 312. Powers and duties transferred.CommentsClose CommentsPermalink





Sec. 313. Abolishment.CommentsClose CommentsPermalink





Sec. 314. Amendments to the revised sRevised Statutes.CommentsClose CommentsPermalink





Sec. 315. Federal information policy.CommentsClose CommentsPermalink





Sec. 316. Savings provisions.CommentsClose CommentsPermalink





Sec. 317. References in Federal law to Federal banking agencies.CommentsClose CommentsPermalink





Sec. 318. Funding.CommentsClose CommentsPermalink





Sec. 319. Contracting and leasing authority.CommentsClose CommentsPermalink

Subtitle B--Transitional Provisions

Sec. 321. Interim use of funds, personnel, and property of the Office of Thrift Supervision.CommentsClose CommentsPermalink





Sec. 322. Transfer of employees.CommentsClose CommentsPermalink





Sec. 323. Property transferred.CommentsClose CommentsPermalink





Sec. 324. Funds transferred.CommentsClose CommentsPermalink





Sec. 325. Disposition of affairs.CommentsClose CommentsPermalink





Sec. 326. Continuation of services.CommentsClose CommentsPermalink





Sec. 327. Implementation plan and reports.CommentsClose CommentsPermalink

Subtitle C--Federal Deposit Insurance Corporation

Sec. 331. Deposit insurance reforms.CommentsClose CommentsPermalink





Sec. 332. Elimination of procyclical assessments.CommentsClose CommentsPermalink





Sec. 333. Enhanced access to information for deposit insurance purposes.CommentsClose CommentsPermalink





Sec. 334. Transition reserve ratio requirements to reflect new assessment base.CommentsClose CommentsPermalink





Sec. 335. Permanent increase in deposit and share insurance.CommentsClose CommentsPermalink





Sec. 336. Management of the Federal Deposit Insurance Corporation.CommentsClose CommentsPermalink

Subtitle D--Termination of Federal Thrift CharterOther Matters

Sec. 341. Termination of Federal savings associations.Sec. 342. Branching.CommentsClose CommentsPermalink





Sec. 342. Office of Minority and Women Inclusion.CommentsClose CommentsPermalink





Sec. 343. Insurance of transaction accounts.CommentsClose CommentsPermalink

TITLE IV--REGULATION OF ADVISERS TO HEDGE FUNDS AND OTHERS

Sec. 401. Short title.CommentsClose CommentsPermalink





Sec. 402. Definitions.CommentsClose CommentsPermalink





Sec. 403. Elimination of private adviser exemption; limited exemption for foreign private advisers; limited intrastate exemption.CommentsClose CommentsPermalink





Sec. 404. Collection of systemic risk data; reports; examinations; disclosures.CommentsClose CommentsPermalink





Sec. 405. Disclosure provision eliminatedamendment.CommentsClose CommentsPermalink





Sec. 406. Clarification of rulemaking authority.CommentsClose CommentsPermalink





Sec. 407. Exemption of venture capital fund advisers.CommentsClose CommentsPermalink





Sec. 408. Exemption of and record keeping by private equity fund advisers.CommentsClose CommentsPermalink





Sec. 409. Family offices.CommentsClose CommentsPermalink





Sec. 410. State and Federal responsibilities; asset threshold for Federal registration of investment advisers.CommentsClose CommentsPermalink





Sec. 411. Custody of client assets.CommentsClose CommentsPermalink





Sec. 412. Adjusting the accredited investor standard.CommentsClose CommentsPermalink





Sec. 413. GAO study and report on accredited investors.CommentsClose CommentsPermalink





Sec. 414. GAO study on self-regulatory organization for private funds.CommentsClose CommentsPermalink





Sec. 415. Commission study and report on short selling.CommentsClose CommentsPermalink





Sec. 416. Transition period.CommentsClose CommentsPermalink

TITLE V--INSURANCE

Subtitle A--Office of National Insurance

Sec. 501. Short title.CommentsClose CommentsPermalink





Sec. 502. Establishment of Office of National InsuranFederal Insurance Office.CommentsClose CommentsPermalink

Subtitle B--State-bBased Insurance Reform

Sec. 511. Short title.CommentsClose CommentsPermalink





Sec. 512. Effective date.CommentsClose CommentsPermalink

PART I--Nonadmitted Insurance

Sec. 521. Reporting, payment, and allocation of premium taxes.CommentsClose CommentsPermalink





Sec. 522. Regulation of nonadmitted insurance by insured’s home State.CommentsClose CommentsPermalink





Sec. 523. Participation in national producer database.CommentsClose CommentsPermalink





Sec. 524. Uniform standards for surplus lines eligibility.CommentsClose CommentsPermalink





Sec. 525. Streamlined application for commercial purchasers.CommentsClose CommentsPermalink





Sec. 526. GAO study of nonadmitted insurance market.CommentsClose CommentsPermalink





Sec. 527. Definitions.CommentsClose CommentsPermalink

PART II--Reinsurance

Sec. 531. Regulation of credit for reinsurance and reinsurance agreements.CommentsClose CommentsPermalink





Sec. 532. Regulation of reinsurer solvency.CommentsClose CommentsPermalink





Sec. 533. Definitions.CommentsClose CommentsPermalink

PART III--Rule of Construction

Sec. 541. Rule of construction.CommentsClose CommentsPermalink





Sec. 542. Severability.CommentsClose CommentsPermalink

TITLE VI--IMPROVEMENTS TO REGULATION OF BANK AND SAVINGS ASSOCIATION HOLDING COMPANIES AND DEPOSITORY INSTITUTIONS

Sec. 601. Short title.CommentsClose CommentsPermalink





Sec. 602. Definition.CommentsClose CommentsPermalink





Sec. 603. Moratorium and study on treatment of credit card banks, industrial loan companies, and certain other companies under the Bank Holding Company Act of 1956.CommentsClose CommentsPermalink





Sec. 604. Reports and examinations of holding companies; regulation of functionally regulated subsidiaries.CommentsClose CommentsPermalink





Sec. 605. Assuring consistent oversight of permissible activities of depository institution subsidiaries of holding companies.CommentsClose CommentsPermalink





Sec. 606. Requirements for financial holding companies to remain well capitalized and well managed.CommentsClose CommentsPermalink





Sec. 607. Standards for interstate acquisitions.CommentsClose CommentsPermalink





Sec. 608. Enhancing existing restrictions on bank transactions with affiliates.CommentsClose CommentsPermalink





Sec. 609. Eliminating exceptions for transactions with financial subsidiaries.CommentsClose CommentsPermalink





Sec. 610. Lending limits applicable to credit exposure on derivative transactions, repurchase agreements, reverse repurchase agreements, and securities lending and borrowing transactions.CommentsClose CommentsPermalink





Sec. 611. Application of national bank lending limits to insured State bankConsistent treatment of derivative transactions in lending limits.CommentsClose CommentsPermalink





Sec. 612. Restriction on conversions of troubled banks.CommentsClose CommentsPermalink





Sec. 613. De novo branching into States.CommentsClose CommentsPermalink





Sec. 614. Lending limits to insiders.CommentsClose CommentsPermalink





Sec. 615. Limitations on purchases of assets from insiders.CommentsClose CommentsPermalink





Sec. 616. Regulations regarding capital levels of holding companies.CommentsClose CommentsPermalink





Sec. 617. Elimination of elective investment bank holding company framework.CommentsClose CommentsPermalink





Sec. 618. Securities holding companies.CommentsClose CommentsPermalink





Sec. 619. Restrictions on capital market activity by banks and bank holding companies.Sec. 620Prohibitions on proprietary trading and certain relationships with hedge funds and private equity funds.CommentsClose CommentsPermalink





Sec. 620. Study of bank investment activities.CommentsClose CommentsPermalink





Sec. 621. Conflicts of interest.CommentsClose CommentsPermalink





Sec. 622. Concentration limits on large financial firms.CommentsClose CommentsPermalink





Sec. 623. Interstate merger transactions.CommentsClose CommentsPermalink





Sec. 624. Qualified thrift lenders.CommentsClose CommentsPermalink





Sec. 625. Treatment of dividends by certain mutual holding companies.CommentsClose CommentsPermalink





Sec. 626. Intermediate holding companies.CommentsClose CommentsPermalink





Sec. 627. Interest-bearing transaction accounts authorized.CommentsClose CommentsPermalink





Sec. 628. Credit card bank small business lending.CommentsClose CommentsPermalink

TITLE VII--WALL STREET TRANSPARENCY AND ACCOUNTABILITY

Sec. 701. Short title.CommentsClose CommentsPermalink

Subtitle A--Regulation of Over-the-Counter Swaps Markets

PART I--Regulatory Authority

Sec. 711. Definitions.CommentsClose CommentsPermalink





Sec. 712. Review of regulatory authority.CommentsClose CommentsPermalink





Sec. 713. Recommendations for changes to portfolio margining lawPortfolio margining conforming changes.CommentsClose CommentsPermalink





Sec. 714. Abusive swaps.CommentsClose CommentsPermalink





Sec. 715. Authority to prohibit participation in swap activities.CommentsClose CommentsPermalink





Sec. 716. Prohibition against Federal Government bailouts of swaps entities.CommentsClose CommentsPermalink





Sec. 717. New product approval--CFTC CFTC--SEC process.CommentsClose CommentsPermalink





Sec. 718. Determining status of novel derivative products.CommentsClose CommentsPermalink





Sec. 719. Studies.CommentsClose CommentsPermalink





Sec. 720. Memorandum.CommentsClose CommentsPermalink

PART II--Regulation of Swap Markets

Sec. 721. Definitions.CommentsClose CommentsPermalink





Sec. 722. Jurisdiction.CommentsClose CommentsPermalink





Sec. 723. Clearing.CommentsClose CommentsPermalink





Sec. 724. Swaps; segregation and bankruptcy treatment.CommentsClose CommentsPermalink





Sec. 725. Derivatives clearing organizations.CommentsClose CommentsPermalink





Sec. 726. Rulemaking on conflict of interest.CommentsClose CommentsPermalink





Sec. 727. Public reporting of swap transaction data.CommentsClose CommentsPermalink





Sec. 728. Swap data repositories.CommentsClose CommentsPermalink





Sec. 729. Reporting and recordkeeping.CommentsClose CommentsPermalink





Sec. 730. Large swap trader reporting.CommentsClose CommentsPermalink





Sec. 731. Registration and regulation of swap dealers and major swap participants.CommentsClose CommentsPermalink





Sec. 732. Conflicts of interest.CommentsClose CommentsPermalink





Sec. 733. Swap execution facilities.CommentsClose CommentsPermalink





Sec. 734. Derivatives transaction execution facilities and exempt boards of trade.CommentsClose CommentsPermalink





Sec. 735. Designated contract markets.CommentsClose CommentsPermalink





Sec. 736. Margin.CommentsClose CommentsPermalink





Sec. 737. Position limits.CommentsClose CommentsPermalink





Sec. 738. Foreign boards of trade.CommentsClose CommentsPermalink





Sec. 739. Legal certainty for swaps.CommentsClose CommentsPermalink





Sec. 740. Multilateral clearing organizations.CommentsClose CommentsPermalink





Sec. 741. Enforcement.CommentsClose CommentsPermalink





Sec. 742. Retail commodity transactions.CommentsClose CommentsPermalink





Sec. 743. Other authority.CommentsClose CommentsPermalink





Sec. 744. Restitution remedies.CommentsClose CommentsPermalink





Sec. 745. Enhanced compliance by registered entities.CommentsClose CommentsPermalink





Sec. 746. Insider trading.CommentsClose CommentsPermalink





Sec. 747. Antidisruptive practices authority.CommentsClose CommentsPermalink





Sec. 748. Commodity whistleblower incentives and protection.CommentsClose CommentsPermalink





Sec. 749. Conforming amendments.CommentsClose CommentsPermalink





Sec. 750. Study on oversight of carbon markets.CommentsClose CommentsPermalink





Sec. 751. Energy and Environmental Markets Advisory Cenvironmental markets advisory committee.CommentsClose CommentsPermalink





Sec. 752. International harmonization.CommentsClose CommentsPermalink





Sec. 753. Antimarket -manipulation authority.CommentsClose CommentsPermalink





Sec. 754. Effective date.CommentsClose CommentsPermalink

Subtitle B--Regulation of Security-Based Swap Markets

Sec. 761. Definitions under the Securities Exchange Act of 1934.CommentsClose CommentsPermalink





Sec. 762. Repeal of prohibition on regulation of security-based swap agreements.CommentsClose CommentsPermalink





Sec. 763. Amendments to the Securities Exchange Act of 1934.CommentsClose CommentsPermalink





Sec. 764. Registration and regulation of security-based swap dealers and major security-based swap participants.CommentsClose CommentsPermalink





Sec. 765. Rulemaking on conflict of interest.CommentsClose CommentsPermalink





Sec. 766. Reporting and recordkeeping.CommentsClose CommentsPermalink





Sec. 767. State gaming and bucket shop laws.CommentsClose CommentsPermalink





Sec. 768. Amendments to the Securities Act of 1933; treatment of security-based swaps.CommentsClose CommentsPermalink





Sec. 769. Definitions under the Investment Company Act of 1940.CommentsClose CommentsPermalink





Sec. 770. Definitions under the Investment Advisoers Act of 1940.CommentsClose CommentsPermalink





Sec. 771. Other authority.CommentsClose CommentsPermalink





Sec. 772. Jurisdiction.CommentsClose CommentsPermalink





Sec. 773. Civil penalties.CommentsClose CommentsPermalink





Sec. 774. Effective date.CommentsClose CommentsPermalink

TITLE VIII--PAYMENT, CLEARING, AND SETTLEMENT SUPERVISION

Sec. 801. Short title.CommentsClose CommentsPermalink





Sec. 802. Findings and purposes.CommentsClose CommentsPermalink





Sec. 803. Definitions.CommentsClose CommentsPermalink





Sec. 804. Designation of systemic importance.CommentsClose CommentsPermalink





Sec. 805. Standards for systemically important financial market utilities and payment, clearing, or settlement activities.CommentsClose CommentsPermalink





Sec. 806. Operations of designated financial market utilities.CommentsClose CommentsPermalink





Sec. 807. Examination of and enforcement actions against designated financial market utilities.CommentsClose CommentsPermalink





Sec. 808. Examination of and enforcement actions against financial institutions subject to standards for designated activities.CommentsClose CommentsPermalink





Sec. 809. Requests for information, reports, or records.CommentsClose CommentsPermalink





Sec. 810. Rulemaking.CommentsClose CommentsPermalink





Sec. 811. Other authority.CommentsClose CommentsPermalink





Sec. 812. Consultation.CommentsClose CommentsPermalink





Sec. 813. Common framework for designated clearing entity risk management.CommentsClose CommentsPermalink





Sec. 814. Effective date.CommentsClose CommentsPermalink

TITLE IX--INVESTOR PROTECTIONS AND IMPROVEMENTS TO THE REGULATION OF SECURITIES

Subtitle A--Increasing Investor Protection

Sec. 911. Investor Advisory Committee established.CommentsClose CommentsPermalink





Sec. 912. Clarification of authority of the Commission to engage in investor testing.CommentsClose CommentsPermalink





Sec. 913. Study and rulemaking regarding obligations of brokers, dealers, and investment advisers.CommentsClose CommentsPermalink





Sec. 914. Study on enhancing investment adviser examinations.CommentsClose CommentsPermalink





Sec. 915. Office of the Investor Advocate.CommentsClose CommentsPermalink





Sec. 9156. Streamlining of filing procedures for self-regulatory organizations.CommentsClose CommentsPermalink





Sec. 9167. Study regarding financial literacy among investors.CommentsClose CommentsPermalink





Sec. 9178. Study regarding mutual fund advertising.CommentsClose CommentsPermalink





Sec. 9189. Clarification of Commission authority to require investor disclosures before purchase of investment products and services.CommentsClose CommentsPermalink





Sec. 919. Study on conflicts of interest.Sec. 919AA. Study on conflicts of interest.CommentsClose CommentsPermalink





Sec. 919B. Study on improved investor access to information on investment advisers and broker-dealers.CommentsClose CommentsPermalink





Sec. 919BC. Study on financial planners and the use of financial designations.CommentsClose CommentsPermalink





Sec. 919D. Ombudsman.CommentsClose CommentsPermalink

Subtitle B--Increasing Regulatory Enforcement and Remedies

Sec. 921. Authority to issue rules related torestrict mandatory pre-dispute arbitration.CommentsClose CommentsPermalink





Sec. 922. Whistleblower protection.CommentsClose CommentsPermalink





Sec. 923. Conforming amendments for whistleblower protection.CommentsClose CommentsPermalink





Sec. 924. Implementation and transition provisions for whistleblower protection.CommentsClose CommentsPermalink





Sec. 925. Collateral bars.CommentsClose CommentsPermalink





Sec. 926. Disqualifying felons and other ‘bad actors’ from Regulation D Oofferings.CommentsClose CommentsPermalink





Sec. 927. Equal treatment of self-regulatory organization rules.CommentsClose CommentsPermalink





Sec. 928. Clarification that Ssection 205 of the Investment Advisers Act of 1940 does not apply to State-registered advisers.CommentsClose CommentsPermalink





Sec. 929. Unlawful margin lending.CommentsClose CommentsPermalink





Sec. 929A. Protection for employees of subsidiaries and affiliates of publicly traded companies.CommentsClose CommentsPermalink





Sec. 929B. FAIRair Fund amendments.CommentsClose CommentsPermalink





Sec. 929C. Increasing the borrowing limit on Treasury loans.CommentsClose CommentsPermalink





Sec. 929D. Lost and stolen securities.CommentsClose CommentsPermalink





Sec. 929E. Nationwide service of subpoenas.CommentsClose CommentsPermalink





Sec. 929F. Formerly associated persons.CommentsClose CommentsPermalink





Sec. 929G. Streamlined hiring authority for market specialists.CommentsClose CommentsPermalink





Sec. 929H. SIPC Reforms.CommentsClose CommentsPermalink





Sec. 929I. Protecting confidentiality of materials submitted to the Commission.CommentsClose CommentsPermalink





Sec. 929J. Expansion of audit information to be produced and exchanged.CommentsClose CommentsPermalink





Sec. 929K. Sharing privileged information with other authorities.CommentsClose CommentsPermalink





Sec. 929L. Enhanced application of antifraud provisions.CommentsClose CommentsPermalink





Sec. 929M. Aiding and abetting authority under the Securities Act and the Investment Company Act.CommentsClose CommentsPermalink





Sec. 929N. Authority to impose penalties for aiding and abetting violations of the Investment Advisers Act.CommentsClose CommentsPermalink





Sec. 929O. Aiding and abetting standard of knowledge satisfied by recklessness.CommentsClose CommentsPermalink





Sec. 929P. Strengthening enforcement by the Commission.CommentsClose CommentsPermalink





Sec. 929Q. Revision to recordkeeping rule.CommentsClose CommentsPermalink





Sec. 929R. Beneficial ownership and short-swing profit reporting.CommentsClose CommentsPermalink





Sec. 929S. Fingerprinting.CommentsClose CommentsPermalink





Sec. 929T. Equal treatment of self-regulatory organization rules.CommentsClose CommentsPermalink





Sec. 929U. Deadline for completing examinations, inspections and enforcement actions.CommentsClose CommentsPermalink





Sec. 929V. Security Investor Protection Act amendments.CommentsClose CommentsPermalink





Sec. 929W. Notice to missing security holders.CommentsClose CommentsPermalink





Sec. 929X. Short sale reforms.CommentsClose CommentsPermalink





Sec. 929Y. Study on extraterritorial private rights of action.CommentsClose CommentsPermalink





Sec. 929Z. GAO study on securities litigation.CommentsClose CommentsPermalink

Subtitle C--Improvements to the Regulation of Credit Rating Agencies

Sec. 931. Findings.CommentsClose CommentsPermalink





Sec. 932. Enhanced regulation, accountability, and transparency of nationally recognized statistical rating organizations.CommentsClose CommentsPermalink





Sec. 933. State of mind in private actions.CommentsClose CommentsPermalink





Sec. 934. Referring tips to law enforcement or regulatory authorities.CommentsClose CommentsPermalink





Sec. 935. Consideration of information from sources other than the issuer in rating decisions.CommentsClose CommentsPermalink





Sec. 936. Qualification standards for credit rating analysts.CommentsClose CommentsPermalink





Sec. 937. Timing of regulations.CommentsClose CommentsPermalink





Sec. 938. Universal ratings symbols.CommentsClose CommentsPermalink





Sec. 939. Removal of statutory references to credit ratings.CommentsClose CommentsPermalink





Sec. 939A. Review of reliance on ratings.CommentsClose CommentsPermalink





Sec. 939B. Elimination of exemption from fair disclosure rule.CommentsClose CommentsPermalink





Sec. 939C. Securities and Exchange Commission study on strengthening credit rating agency independence.CommentsClose CommentsPermalink





Sec. 939BD. Government Accountability Office study on alternative business models.CommentsClose CommentsPermalink





Sec. 939CE. Government Accountability Office study on the creation of an independent professional analyst organization.CommentsClose CommentsPermalink





Sec. 939D. Initial credit rating assignmentF. Study and rulemaking on assigned credit ratings.CommentsClose CommentsPermalink





Sec. 939G. Effect of Rule 436(g).CommentsClose CommentsPermalink





Sec. 939H. Sense of Congress.CommentsClose CommentsPermalink

Subtitle D--Improvements to the Asset-Backed Securitization Process

Sec. 941. Regulation of credit risk retention.CommentsClose CommentsPermalink





Sec. 942. Disclosures and reporting for asset-backed securities.CommentsClose CommentsPermalink





Sec. 943. Representations and warranties in asset-backed offerings.CommentsClose CommentsPermalink





Sec. 944. Exempted transactions under the Securities Act of 1933.CommentsClose CommentsPermalink





Sec. 945. Due diligence analysis and disclosure in asset-backed securities issues.CommentsClose CommentsPermalink





Sec. 946. Study on the macroeconomic effects of risk retention requirements.CommentsClose CommentsPermalink

Subtitle E--Accountability and Executive Compensation

Sec. 951. Shareholder vote on executive compensation disclosures.CommentsClose CommentsPermalink





Sec. 952. Compensation committee independence.CommentsClose CommentsPermalink





Sec. 953. Executive compensation disclosures.CommentsClose CommentsPermalink





Sec. 954. Recovery of erroneously awarded compensation.CommentsClose CommentsPermalink





Sec. 955. Disclosure regarding employee and director hedging.CommentsClose CommentsPermalink





Sec. 956. Excessive compensation by holding companies of depository institutionsnhanced compensation structure reporting.CommentsClose CommentsPermalink





Sec. 957. Voting by brokers.CommentsClose CommentsPermalink

Subtitle F--Improvements to the Management of the Securities and Exchange Commission

Sec. 961. Report and certification of internal supervisory controls.CommentsClose CommentsPermalink





Sec. 962. Triennial report on personnel management.CommentsClose CommentsPermalink





Sec. 963. Annual financial controls audit.CommentsClose CommentsPermalink





Sec. 964. Report on oversight of national securities associations.CommentsClose CommentsPermalink





Sec. 965. Compliance examiners.CommentsClose CommentsPermalink





Sec. 966. Suggestion program for employees of the Commission.CommentsClose CommentsPermalink





Sec. 967. Commission organizational study and reform.CommentsClose CommentsPermalink





Sec. 968. Study on SEC revolving door.CommentsClose CommentsPermalink

Subtitle G--Strengthening Corporate Governance

Sec. 971. Election of directors by majority vote in uncontested elections.Sec. 972. Proxy access.CommentsClose CommentsPermalink





Sec. 9732. Disclosures regarding chairman and CEO structures.CommentsClose CommentsPermalink

Subtitle H--Municipal Securities

Sec. 975. Regulation of municipal securities and changes to the board of the MSRB.CommentsClose CommentsPermalink





Sec. 976. Government Accountability Office study of increased disclosure to investors.CommentsClose CommentsPermalink





Sec. 977. Government Accountability Office study on the municipal securities markets.CommentsClose CommentsPermalink





Sec. 978. Study of funding for GovernmentFunding for Governmental Accounting Standards Board.CommentsClose CommentsPermalink





Sec. 979. Commission Office of Municipal Securities.CommentsClose CommentsPermalink

Subtitle I--Public Company Accounting Oversight Board, Portfolio Margining, and Other Matters

Sec. 981. Authority to share certain information with foreign authorities.CommentsClose CommentsPermalink





Sec. 982. Oversight of brokers and dealers.CommentsClose CommentsPermalink





Sec. 983. Portfolio margining.CommentsClose CommentsPermalink





Sec. 984. Loan or borrowing of securities.CommentsClose CommentsPermalink





Sec. 985. Technical corrections to Federal securities laws.CommentsClose CommentsPermalink





Sec. 986. Conforming amendments relating to repeal of the Public Utility Holding Company Act of 1935.CommentsClose CommentsPermalink





Sec. 987. Amendment to definition of material loss and nonmaterial losses to the Deposit Insurance Fund for purposes of Inspector General reviews.CommentsClose CommentsPermalink





Sec. 988. Amendment to definition of material loss and nonmaterial losses to the National Credit Union Share Insurance Fund for purposes of Inspector General reviews.CommentsClose CommentsPermalink





Sec. 989. Government Accountability Office study on proprietary trading.CommentsClose CommentsPermalink





Sec. 989A. Senior investor protections.CommentsClose CommentsPermalink





Sec. 989B. Designated Federal Entity Inspectors General Ientity inspectors general independence.CommentsClose CommentsPermalink





Sec. 989C. Strengthening Inspector General accountability.CommentsClose CommentsPermalink





Sec. 989D. Removal of inspectors gInspectors General of designated Federal entities.CommentsClose CommentsPermalink





Sec. 989E. Additional oversight of financial regulatory system.CommentsClose CommentsPermalink





Sec. 989F. GAO study of person to person lending.CommentsClose CommentsPermalink





Sec. 989G. Exemption for nonaccelerated filers.CommentsClose CommentsPermalink





Sec. 989H. Corrective responses by heads of certain establishments to deficiencies identified by Inspectors General.CommentsClose CommentsPermalink





Sec. 989I. GAO study regarding exemption for smaller issuers.CommentsClose CommentsPermalink





Sec. 989J. Further promoting the adoption of the NAIC Model Regulations that enhance protection of seniors and other consumers.CommentsClose CommentsPermalink

Subtitle J--Self-funding of the Securities and Exchange Commissioncurities and Exchange Commission Match Funding

Sec. 991. Securities and Exchange Commission self-match funding.CommentsClose CommentsPermalink

TITLE X--BUREAU OF CONSUMER FINANCIAL PROTECTION

Sec. 1001. Short title.CommentsClose CommentsPermalink





Sec. 1002. Definitions.CommentsClose CommentsPermalink

Subtitle A--Bureau of Consumer Financial Protection

Sec. 1011. Establishment of the Bureau of Consumer Financial Protection.CommentsClose CommentsPermalink





Sec. 1012. Executive and administrative powers.CommentsClose CommentsPermalink





Sec. 1013. Administration.CommentsClose CommentsPermalink





Sec. 1014. Consumer Advisory Board.CommentsClose CommentsPermalink





Sec. 1015. Coordination.CommentsClose CommentsPermalink





Sec. 1016. Appearances before and reports to Congress.CommentsClose CommentsPermalink





Sec. 1017. Funding; penalties and fines.CommentsClose CommentsPermalink





Sec. 1018. Effective date.CommentsClose CommentsPermalink

Subtitle B--General Powers of the Bureau

Sec. 1021. Purpose, objectives, and functions.CommentsClose CommentsPermalink





Sec. 1022. Rulemaking authority.CommentsClose CommentsPermalink





Sec. 1023. Review of Bureau regulations.CommentsClose CommentsPermalink





Sec. 1024. Supervision of nondepository covered persons.CommentsClose CommentsPermalink





Sec. 1025. Supervision of very large banks, savings associations, and credit unions.CommentsClose CommentsPermalink





Sec. 1026. Other banks, savings associations, and credit unions.CommentsClose CommentsPermalink





Sec. 1027. Limitations on authorities of the Bureau; preservation of authorities.CommentsClose CommentsPermalink





Sec. 1028. Authority to restrict mandatory pre-dispute arbitration.CommentsClose CommentsPermalink





Sec. 1029. Exclusion for auto dealers.CommentsClose CommentsPermalink





Sec. 1029A. Effective date.CommentsClose CommentsPermalink

Subtitle C--Specific Bureau Authorities

Sec. 1031. Prohibiting unfair, deceptive, or abusive acts or practices.CommentsClose CommentsPermalink





Sec. 1032. Disclosures.CommentsClose CommentsPermalink





Sec. 1033. Consumer rights to access information.CommentsClose CommentsPermalink





Sec. 1034. Response to consumer complaints and inquiries.CommentsClose CommentsPermalink





Sec. 1035. Private education loan ombudsman.CommentsClose CommentsPermalink





Sec. 1036. Prohibited acts.CommentsClose CommentsPermalink





Sec. 1037. Effective date.CommentsClose CommentsPermalink

Subtitle D--Preservation of State Law

Sec. 1041. Relation to State law.CommentsClose CommentsPermalink





Sec. 1042. Preservation of enforcement powers of States.CommentsClose CommentsPermalink





Sec. 1043. Preservation of existing contracts.CommentsClose CommentsPermalink





Sec. 1044. State law preemption standards for national banks and subsidiaries clarified.CommentsClose CommentsPermalink





Sec. 1045. Clarification of law applicable to nondepository institution subsidiaries.CommentsClose CommentsPermalink





Sec. 1046. State law preemption standards for Federal savings associations and subsidiaries clarified.CommentsClose CommentsPermalink





Sec. 1047. Visitorial standards for national banks and savings associations.CommentsClose CommentsPermalink





Sec. 1048. Effective date.CommentsClose CommentsPermalink

Subtitle E--Enforcement Powers

Sec. 1051. Definitions.CommentsClose CommentsPermalink





Sec. 1052. Investigations and administrative discovery.CommentsClose CommentsPermalink





Sec. 1053. Hearings and adjudication proceedings.CommentsClose CommentsPermalink





Sec. 1054. Litigation authority.CommentsClose CommentsPermalink





Sec. 1055. Relief available.CommentsClose CommentsPermalink





Sec. 1056. Referrals for criminal proceedings.CommentsClose CommentsPermalink





Sec. 1057. Employee protection.CommentsClose CommentsPermalink





Sec. 1058. Effective date.CommentsClose CommentsPermalink

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

Sec. 1061. Transfer of consumer financial protection functions.CommentsClose CommentsPermalink





Sec. 1062. Designated transfer date.CommentsClose CommentsPermalink





Sec. 1063. Savings provisions.CommentsClose CommentsPermalink





Sec. 1064. Transfer of certain personnel.CommentsClose CommentsPermalink





Sec. 1065. Incidental transfers.CommentsClose CommentsPermalink





Sec. 1066. Interim authority of the Secretary.CommentsClose CommentsPermalink





Sec. 1067. Transition oversight.CommentsClose CommentsPermalink

Subtitle G--Regulatory Improvements

Sec. 1071. Small business data collection.CommentsClose CommentsPermalink





Sec. 1072. GAO study on the effectiveness and impact of various appraisal methods.

Sec. 1073. Prohibited payments to mortgage originators.

Sec. 1074. Minimum standards for residential mortgage loans.

Sec. 1075. Prohibition on certain prepayment penalties.

Sec. 1076. Assistance for economically vulnerable individuals and families.CommentsClose CommentsPermalink




Sec. 10773. Remittance transfers.CommentsClose CommentsPermalink





Sec. 10784. Department of the Treasury study on ending the conservatorship of Fannie Mae, Freddie Mac, and reforming the housing finance system.CommentsClose CommentsPermalink





Sec. 1075. Reasonable fees and rules for payment card transactions.CommentsClose CommentsPermalink





Sec. 1076. Reverse mortgage study and regulations.CommentsClose CommentsPermalink





Sec. 1077. Report on private education loans and private educational lenders.CommentsClose CommentsPermalink





Sec. 1078. Study and report on credit scores.CommentsClose CommentsPermalink





Sec. 1079. Reasonable fees and rules for payment card transactionview, report, and program with respect to exchange facilitators.CommentsClose CommentsPermalink





Sec. 1079A. Use of Consumer ReportFinancial fraud provisions.CommentsClose CommentsPermalink

Subtitle H--Conforming Amendments

Sec. 1081. Amendments to the Inspector General Act.CommentsClose CommentsPermalink





Sec. 1082. Amendments to the Privacy Act of 1974.CommentsClose CommentsPermalink





Sec. 1083. Amendments to the Alternative Mortgage Transaction Parity Act of 1982.CommentsClose CommentsPermalink





Sec. 1084. Amendments to the Electronic Fund Transfer Act.CommentsClose CommentsPermalink





Sec. 1085. Amendments to the Equal Credit Opportunity Act.CommentsClose CommentsPermalink





Sec. 1086. Amendments to the Expedited Funds Availability Act.CommentsClose CommentsPermalink





Sec. 1087. Amendments to the Fair Credit Billing Act.CommentsClose CommentsPermalink





Sec. 1088. Amendments to the Fair Credit Reporting Act and the Fair and Accurate Credit Transactions Act of 2003.CommentsClose CommentsPermalink





Sec. 1089. Amendments to the Fair Debt Collection Practices Act.CommentsClose CommentsPermalink





Sec. 1090. Amendments to the Federal Deposit Insurance Act.CommentsClose CommentsPermalink





Sec. 1091. Amendment to Federal Financial Institutions Examination Council Act of 1978.CommentsClose CommentsPermalink





Sec. 1092. Amendments to the Federal Trade Commission Act.CommentsClose CommentsPermalink





Sec. 1093. Amendments to the Gramm-Leach-Bliley Act.CommentsClose CommentsPermalink





Sec. 1092. Amendments to the Home 4. Amendments to the Home Mortgage Disclosure Act of 1975.CommentsClose CommentsPermalink





Sec. 10935. Amendments to the Homeowners Protection Act of 1998.CommentsClose CommentsPermalink





Sec. 1094. Amendments to the Home 6. Amendments to the Home Ownership and Equity Protection Act of 1994.CommentsClose CommentsPermalink





Sec. 10957. Amendments to the Omnibus Appropriations Act, 2009.CommentsClose CommentsPermalink





Sec. 10968. Amendments to the Real Estate Settlement Procedures Act of 1974.CommentsClose CommentsPermalink





Sec. 10978A. Amendments to the Interstate Land Sales Full Disclosure Act.CommentsClose CommentsPermalink





Sec. 1099. Amendments to the Right to Financial Privacy Act of 1978.CommentsClose CommentsPermalink





Sec. 1098100. Amendments to the Secure and Fair Enforcement for Mortgage Licensing Act of 2008.CommentsClose CommentsPermalink





Sec. 1099100A. Amendments to the Truth in Lending Act.CommentsClose CommentsPermalink





Sec. 1100B. Amendments to the Truth in Savings Act.CommentsClose CommentsPermalink





Sec. 11010C. Amendments to the Telemarketing and Consumer Fraud and Abuse Prevention Act.CommentsClose CommentsPermalink





Sec. 11020D. Amendments to the Paperwork Reduction Act.CommentsClose CommentsPermalink





Sec. 11030E. Adjustments for inflation in the Truth in Lending Act.CommentsClose CommentsPermalink





Sec. 11040F. Use of consumer reports.CommentsClose CommentsPermalink





Sec. 1100G. Small business fairness and regulatory transparency.CommentsClose CommentsPermalink





Sec. 11050H. Effective date.CommentsClose CommentsPermalink

TITLE XI--FEDERAL RESERVE SYSTEM PROVISIONS

Sec. 11501. Federal Reserve Act amendments on emergency lending authority.CommentsClose CommentsPermalink





Sec. 1152. Reviews of special Federal Reserve credit02. Reviews of special Federal reserve credit facilities.CommentsClose CommentsPermalink





Sec. 11503. Public access to information.CommentsClose CommentsPermalink





Sec. 1154. Liquidity event determination.Sec. 11504. Liquidity event determination.CommentsClose CommentsPermalink





Sec. 1105. Emergency financial stabilization.CommentsClose CommentsPermalink





Sec. 11506. Additional related amendments.CommentsClose CommentsPermalink





Sec. 11507. Federal Reserve Act amendments on Federal reserve bank governance.CommentsClose CommentsPermalink





Sec. 1158. Amendments to the Federal Reserve Act relating to08. Federal Reserve Act amendments on supervision and regulation policy.CommentsClose CommentsPermalink





Sec. 11509. GAO audit of the Federal Reserve facilities; Ppublication of Board actions.CommentsClose CommentsPermalink

TITLE XII--IMPROVING ACCESS TO MAINSTREAM FINANCIAL INSTITUTIONS

Sec. 1201. Short title.CommentsClose CommentsPermalink





Sec. 1202. Purpose.CommentsClose CommentsPermalink





Sec. 1203. Definitions.CommentsClose CommentsPermalink





Sec. 1204. Expanded access to mainstream financial institutions.CommentsClose CommentsPermalink





Sec. 1205. Low-cost alternatives to payday loans.CommentsClose CommentsPermalink





Sec. 1206. Grants to establish loan-loss reserve funds.CommentsClose CommentsPermalink





Sec. 1207. Procedural provisions.CommentsClose CommentsPermalink





Sec. 1208. Authorization of appropriations.CommentsClose CommentsPermalink





Sec. 1209. Regulations.CommentsClose CommentsPermalink





Sec. 1210. Evaluation and reports to Congress.CommentsClose CommentsPermalink

TITLE XIII--PAY IT BACK ACT

Sec. 1301. Short title.CommentsClose CommentsPermalink





Sec. 1302. Amendment to reduce TARP authorization.CommentsClose CommentsPermalink





Sec. 1303. Report.CommentsClose CommentsPermalink





Sec. 1304. Amendments to Housing and Economic Recovery Act of 2008.CommentsClose CommentsPermalink





Sec. 1305. Federal Housing Finance Agency report.CommentsClose CommentsPermalink





Sec. 1306. Repayment of unobligated ARRA funds.CommentsClose CommentsPermalink

TITLE XIV--MISCELLANEOUSSec. 1401. Restrictions on use of Federal funds to finance bailouts of foreign governmentORTGAGE REFORM AND ANTI-PREDATORY LENDING ACT

Sec. 1491. Sense of Congress regarding the importance of government-sponsored enterprises reform to enhance the protection, limitation, and regulation of the terms of residential mortgage credit.CommentsClose CommentsPermalink





Sec. 1492. GAO study report on government efforts to combat mortgage foreclosure rescue scams and loan modification fraud.CommentsClose CommentsPermalink





Sec. 1493. Reporting of mortgage data by State.CommentsClose CommentsPermalink





Sec. 1494. Study of effect of drywall presence on foreclosures.CommentsClose CommentsPermalink





Sec. 1495. Definition.CommentsClose CommentsPermalink





Sec. 1496. Emergency mortgage relief.CommentsClose CommentsPermalink





Sec. 1497. Additional assistance for Neighborhood Stabilization Program.CommentsClose CommentsPermalink





Sec. 1498. Legal assistance for foreclosure-related issues.CommentsClose CommentsPermalink

TITLE XV--CONGO CONFLICT MINERALMISCELLANEOUS PROVISIONS

Sec. 1501. Sense of Congress on exploitation and trade of columbite-tantalite, cassiterite, gold, and wolframite originating in Democratic Republic of CongoRestrictions on use of United States funds for foreign governments; protection of American taxpayers.CommentsClose CommentsPermalink





Sec. 1502. Disclosure to Securities and Exchange Commission relating to columbite-tantalite, cassiterite, gold, and wolframite originating in Democratic Republic of CongoConflict minerals.CommentsClose CommentsPermalink





Sec. 1503. Reporting requirements regarding coal or other mine safety.CommentsClose CommentsPermalink





Sec. 1504. Disclosure of payments by resource extraction issuers.CommentsClose CommentsPermalink





Sec. 1505. Study by the Comptroller General.CommentsClose CommentsPermalink





Sec. 1506. Study on core deposits and brokered deposits.CommentsClose CommentsPermalink

Sec. 1601. Certain swaps, etc., not treated as section 1256 contracts.CommentsClose CommentsPermalink

SEC. 2. DEFINITIONS.CommentsClose CommentsPermalink

As used in this Act, the following definitions shall apply, except as the context otherwise requires or as otherwise specifically provided in this Act:CommentsClose CommentsPermalink





(1) AFFILIATE- The term ‘affiliate’ means any company that controls, is controlled by, or is under common control with another companyhas the same meaning as in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).CommentsClose CommentsPermalink





(2) APPROPRIATE FEDERAL BANKING AGENCY- On and after the transfer date, the term ‘appropriate Federal banking agency’ has the same meaning as in section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)), as amended by title III.CommentsClose CommentsPermalink





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





(4) BUREAU- The term ‘Bureau’ means the Bureau of Consumer Financial Protection established under title X.CommentsClose CommentsPermalink





(5) COMMISSION- The term ‘Commission’ means the Securities and Exchange Commission, except in the context of the Commodity Futures Trading Commission.CommentsClose CommentsPermalink





(6) COMMODITY FUTURES TERMS- The terms ‘futures commission merchant’, ‘swap’, ‘swap dealer’, ‘swap execution facility’, ‘derivatives clearing organization’, ‘board of trade’, ‘commodity trading advisor’, ‘commodity pool’, and ‘commodity pool operator’ have the same meanings as given the terms in section 1a of the Commodity Exchange Act (7 U.S.C. 1 et seq.).CommentsClose CommentsPermalink





(7) CORPORATION- The term ‘Corporation’ means the Federal Deposit Insurance Corporation.CommentsClose CommentsPermalink





(78) COUNCIL- The term ‘Council’ means the Financial Stability Oversight Council established under title I.CommentsClose CommentsPermalink





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





(910) FEDERAL BANKING AGENCY- The term--CommentsClose CommentsPermalink





(A) ‘Federal banking agency’ means, individually, the Board of Governors, the Office of the Comptroller of the Currency, and the Corporation; andCommentsClose CommentsPermalink





(B) ‘Federal banking agencies’ means all of the agencies referred to in subparagraph (A), collectively.CommentsClose CommentsPermalink





(101) FUNCTIONALLY REGULATED SUBSIDIARY- The term ‘functionally regulated subsidiary’ has the same meaning as in section 5(c)(5) of the Bank Holding Company Act of 1956 (12 U.S.C. 1844(c)(5)).CommentsClose CommentsPermalink





(112) PRIMARY FINANCIAL REGULATORY AGENCY- The term ‘primary financial regulatory agency’ means--CommentsClose CommentsPermalink





(A) the appropriate Federal banking agency, with respect to institutions described in section 3(q) of the Federal Deposit Insurance Act, except to the extent that an institution is or the activities of an institution are otherwise subject to the jurisdiction of an agency listdescribed in subparagraph (B), (C), (D), or (E);CommentsClose CommentsPermalink





(B) the Securities and Exchange Commission, with respect to--CommentsClose CommentsPermalink





(i) any broker or dealer that is registered with the Commission under the Securities Exchange Act of 1934;

(ii) any investment company that is registered with the Commission under the Investment Company Act of 1940;

(iii) any investment, with respect to the activities of the broker or dealer that require the broker or dealer to be registered under that Act;CommentsClose CommentsPermalink




(ii) any investment company that is registered with the Commission under the Investment Company Act of 1940, with respect to the activities of the investment company that require the investment company to be registered under that Act;CommentsClose CommentsPermalink





(iii) any investment adviser that is registered with the Commission under the Investment Advisers Act of 1940, with respect to the investment advisory activities of such company and activities that are incidental to such advisory activities;CommentsClose CommentsPermalink





and(iv) any clearing agency (iv) any clearing agency registered with the Commission under the Securities Exchange Act of 1934, with respect to the activities of the clearing agency that require the agency to be registered under such Act; CommentsClose CommentsPermalink





(v) any nationally recognized statistical rating organization registered with the Commission under the Securities Exchange Act of 1934;CommentsClose CommentsPermalink





(vi) any transfer agent registered with the Commission under the Securities Exchange Act of 1934;CommentsClose CommentsPermalink





(vii) any exchange registered as a national securities exchange with the Commission under the Securities Exchange Act of 1934;CommentsClose CommentsPermalink





(viii) any national securities association registered with the Commission under the Securities Exchange Act of 1934;CommentsClose CommentsPermalink





(ix) any securities information processor registered with the Commission under the Securities Exchange Act of 1934;CommentsClose CommentsPermalink





(x) the Municipal Securities Rulemaking Board established under the Securities Exchange Act of 1934;CommentsClose CommentsPermalink





(xi) the Public Company Accounting Oversight Board established under the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7211 et seq.);CommentsClose CommentsPermalink





(xii) the Securities Investor Protection Corporation established under the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.); andCommentsClose CommentsPermalink





(xiii) any security-based swap execution facility, security-based swap data repository, security-based swap dealer or major security-based swap participant registered with the Commission under the Securities Exchange Act of 1934, with respect to the security-based swap activities of the person that require such person to be registered under such Act;CommentsClose CommentsPermalink





(C) the Commodity Futures Trading Commission, with respect to any futures commission merchant, any commodity trading adviser, and any commodity--CommentsClose CommentsPermalink





(i) any futures commission merchant registered with the Commodity Futures Trading Commission under the Commodity Exchange Act (7 U.S.C. 1 et seq.), with respect to the activities of the futures commission merchant that require the futures commission merchant to be registered under that Act;CommentsClose CommentsPermalink





(ii) any commodity pool operator registered with the Commodity Futures Trading Commission under the Commodity Exchange Act, with respect to the commodities activities of such entity and activities that are incidental to such commodities activities (7 U.S.C. 1 et seq.), with respect to the activities of the commodity pool operator that require the commodity pool operator to be registered under that Act, or a commodity pool, as defined in that Act;CommentsClose CommentsPermalink





(iii) any commodity trading advisor or introducing broker registered with the Commodity Futures Trading Commission under the Commodity Exchange Act (7 U.S.C. 1 et seq.), with respect to the activities of the commodity trading advisor or introducing broker that require the commodity trading adviser or introducing broker to be registered under that Act;CommentsClose CommentsPermalink





(iv) any derivatives clearing organization registered with the Commodity Futures Trading Commission under the Commodity Exchange Act (7 U.S.C. 1 et seq.), with respect to the activities of the derivatives clearing organization that require the derivatives clearing organization to be registered under that Act;CommentsClose CommentsPermalink





(v) any board of trade designated as a contract market by the Commodity Futures Trading Commission under the Commodity Exchange Act (7 U.S.C. 1 et seq.);CommentsClose CommentsPermalink





(vi) any futures association registered with the Commodity Futures Trading Commission under the Commodity Exchange Act (7 U.S.C. 1 et seq.);CommentsClose CommentsPermalink





(vii) any retail foreign exchange dealer registered with the Commodity Futures Trading Commission under the Commodity Exchange Act (7 U.S.C. 1 et seq.), with respect to the activities of the retail foreign exchange dealer that require the retail foreign exchange dealer to be registered under that Act;CommentsClose CommentsPermalink





(viii) any swap execution facility, swap data repository, swap dealer, or major swap participant registered with the Commodity Futures Trading Commission under the Commodity Exchange Act (7 U.S.C. 1 et seq.) with respect to the swap activities of the person that require such person to be registered under that Act; andCommentsClose CommentsPermalink





(ix) any registered entity under the Commodity Exchange Act (7 U.S.C. 1 et seq.), with respect to the activities of the registered entity that require the registered entity to be registered under that Act;CommentsClose CommentsPermalink





(D) the State insurance authority of the State in which an insurance company is domiciled, with respect to the insurance activities and activities that are incidental to such insurance activities of an insurance company that is subject to supervision by the State insurance authority under State insurance law; andCommentsClose CommentsPermalink





(E) the Federal Housing Finance Agency, with respect to Federal Home Loan Banks or the Federal Home Loan Bank System, and with respect to the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation.CommentsClose CommentsPermalink





(123) PRUDENTIAL STANDARDS- The term ‘prudential standards’ means enhanced supervision and regulatory standards developed by the Board of Governors under section 115 or 165.CommentsClose CommentsPermalink





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





(145) SECURITIES TERMS- The--CommentsClose CommentsPermalink





(A) terms ‘broker’, ‘dealer’, ‘issuer’, ‘nationally recognized statistical ratings organization’, ‘security’, and ‘securities laws’ have the same meanings as in section 3 of the Securities Exchange Act of 1934 (15 U.S.C. 78c);CommentsClose CommentsPermalink





(B) term ‘investment adviser’ has the same meaning as in section 202 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-2); andCommentsClose CommentsPermalink





(C) term ‘investment company’ has the same meaning as in section 3 of the Investment Company Act of 1940 (15 U.S.C. 80a-3).CommentsClose CommentsPermalink





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





(167) TRANSFER DATE- The term ‘transfer date’ means the date established under section 311.CommentsClose CommentsPermalink





(178) OTHER INCORPORATED DEFINITIONS-CommentsClose CommentsPermalink





(A) FEDERAL DEPOSIT INSURANCE ACT- The terms ‘affiliate’, ‘bank’, ‘bank holding company’, ‘control’ (when used with respect to a depository institution), ‘deposit’, ‘depository institution’, ‘Federal depository institution’, ‘Federal savings association’, ‘foreign bank’, ‘including’, ‘insured branch’, ‘insured depository institution’, ‘national member bank’, ‘national nonmember bank’, ‘savings association’, ‘State bank’, ‘State depository institution’, ‘State member bank’, ‘State nonmember bank’, ‘State savings association’, and ‘subsidiary’ have the same meanings as in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).CommentsClose CommentsPermalink





(B) HOLDING COMPANIES- The term--CommentsClose CommentsPermalink





(i) ‘bank holding company’ has the same meaning as in section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 1841);CommentsClose CommentsPermalink





(ii) ‘financial holding company’ has the same meaning as in section 2(p) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(p)); andCommentsClose CommentsPermalink





(iii) ‘savings and loan holding company’ has the same meaning as in section 10 of the Home Owners’ Loan Act (12 U.S.C. 1467a(a)).CommentsClose CommentsPermalink

SEC. 3. SEVERABILITY.CommentsClose CommentsPermalink

If any provision of this Act, an amendment made by this Act, or the application of such provision or amendment to any person or circumstance is held to be unconstitutional, the remainder of this Act, the amendments made by this Act, and the application of the provisions of such to any person or circumstance shall not be affected thereby.CommentsClose CommentsPermalink

SEC. 4. EFFECTIVE DATE.CommentsClose CommentsPermalink

Except as otherwise specifically provided in this Act or the amendments made by this Act, this Act and such amendments shall take effect 1 day after the date of enactment of this Act.CommentsClose CommentsPermalink

TITLE I--FINANCIAL STABILITYCommentsClose CommentsPermalink

SEC. 101. SHORT TITLE.CommentsClose CommentsPermalink

This title may be cited as the ‘Financial Stability Act of 2010’.CommentsClose CommentsPermalink

SEC. 102. DEFINITIONS.CommentsClose CommentsPermalink

(a) In General- For purposes of this title, unless the context otherwise requires, the following definitions shall apply:CommentsClose CommentsPermalink





(1) BANK HOLDING COMPANY- The term ‘bank holding company’ has the same meaning as in section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 1841). A foreign bank or company that is treated as a bank holding company for purposes of the Bank Holding Company Act of 1956, pursuant to section 8(a) of the International Banking Act of 1978 (12 U.S.C. 3106(a)), shall be treated as a bank holding company for purposes of this title.CommentsClose CommentsPermalink





(2) CHAIRPERSON- The term ‘Chairperson’ means the Chairperson of the Council.CommentsClose CommentsPermalink





(3) MEMBER AGENCY- The term ‘member agency’ means an agency represented by a voting member of the Council.CommentsClose CommentsPermalink





(4) NONBANK FINANCIAL COMPANY DEFINITIONS-CommentsClose CommentsPermalink





(A) FOREIGN NONBANK FINANCIAL COMPANY- The term ‘foreign nonbank financial company’ means a company (other than a company that is, or is treated in the United States as, a bank holding company or a subsidiary thereof) that is--CommentsClose CommentsPermalink





(i) incorporated or organized in a country other than the United States; andCommentsClose CommentsPermalink





(ii) predominantly engaged in, including through a branch in the United States, financial activities, as defined in paragraph (6).CommentsClose CommentsPermalink





(B) U.S. NONBANK FINANCIAL COMPANY- The term ‘U.S. nonbank financial company’ means a company (other than a bank holding company or a subsidiary thereof, or a Farm Credit System institution , a Farm Credit System institution chartered and subject to the provisions of the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.)), or a national securities exchange (or parent thereof), clearing agency (or parent thereof, unless the parent is a bank holding company), security-based swap execution facility, or security-based swap data repository registered with the Commission, or a board of trade designated as a contract market (or parent thereof), or a derivatives clearing organization (or parent thereof, unless the parent is a bank holding company), swap execution facility or a swap data repository registered with the Commodity Futures Trading Commission), that is--CommentsClose CommentsPermalink





(i) incorporated or organized under the laws of the United States or any State; andCommentsClose CommentsPermalink





(ii) predominantly engaged in financial activities, as defined in paragraph (6).CommentsClose CommentsPermalink





(C) NONBANK FINANCIAL COMPANY- The term ‘nonbank financial company’ means a U.S. nonbank financial company and a foreign nonbank financial company.CommentsClose CommentsPermalink





(D) NONBANK FINANCIAL COMPANY SUPERVISED BY THE BOARD OF GOVERNORS- The term ‘nonbank financial company supervised by the Board of Governors’ means a nonbank financial company that the Council has determined under section 113 shall be supervised by the Board of Governors.CommentsClose CommentsPermalink





(5) OFFICE OF FINANCIAL RESEARCH- The term ‘Office of Financial Research’ means the office established under section 152.CommentsClose CommentsPermalink





(6) PREDOMINANTLY ENGAGED- A company is ‘predominantly engaged in financial activities’ if--CommentsClose CommentsPermalink





(A) the annual gross revenues derived by the company and all of its subsidiaries from activities that are financial in nature (as defined in section 4(k) of the Bank Holding Company Act of 1956) and, if applicable, from the ownership or control of one or more insured depository institutions, represents 85 percent or more of the consolidated annual gross revenues of the company; orCommentsClose CommentsPermalink





(B) the consolidated assets of the company and all of its subsidiaries related to activities that are financial in nature (as defined in section 4(k) of the Bank Holding Company Act of 1956) and, if applicable, related to the ownership or control of one or more insured depository institutions, represents 85 percent or more of the consolidated assets of the company.CommentsClose CommentsPermalink





(7) SIGNIFICANT INSTITUTIONS- The terms ‘significant nonbank financial company’ and ‘significant bank holding company’ have the meanings given those terms by rule of the Board of Governors.(b), but in no instance shall the term ‘significant nonbank financial company’ include those entities that are excluded under paragraph (4)(B).CommentsClose CommentsPermalink





(b) Definitional Criteria- The Board of Governors shall establish, by regulation, the requirements for determining if a company is predominantly engaged in financial activities, as defined in subsection (a)(6).CommentsClose CommentsPermalink





(c) Foreign Nonbank Financial Companies- For purposes of the authority of the Board of Governors under this title with respect to foreign nonbank financial companiespplication of subtitles A and C (other than section 113(b)) with respect to a foreign nonbank financial company, references in this title to ‘company’ or ‘subsidiary’ include only the United States activities and subsidiaries of such foreign company, except as otherwise provided.CommentsClose CommentsPermalink

Subtitle A--Financial Stability Oversight CouncilCommentsClose CommentsPermalink

SEC. 111. FINANCIAL STABILITY OVERSIGHT COUNCIL ESTABLISHED.CommentsClose CommentsPermalink

(a) Establishment- Effective on the date of enactment of this Act, there is established the Financial Stability Oversight Council.CommentsClose CommentsPermalink





(b) Membership- The Council shall consist of the following members:CommentsClose CommentsPermalink





(1) VOTING MEMBERS- The voting members, who shall each have 1 vote on the Council shall be--CommentsClose CommentsPermalink





(A) the Secretary of the Treasury, who shall serve as Chairperson of the Council;CommentsClose CommentsPermalink





(B) the Chairman of the Board of Governors;CommentsClose CommentsPermalink





(C) the Comptroller of the Currency;CommentsClose CommentsPermalink





(D) the Director of the Bureau;CommentsClose CommentsPermalink





(E) the Chairman of the Commission;CommentsClose CommentsPermalink





(F) the Chairperson of the Corporation;CommentsClose CommentsPermalink





(G) the Chairperson of the Commodity Futures Trading Commission;CommentsClose CommentsPermalink





(H) the Director of the Federal Housing Finance Agency;CommentsClose CommentsPermalink





and(I (I) the Chairman of the National Credit Union Administration Board; and CommentsClose CommentsPermalink





(J) an independent member appointed by the President, by and with the advice and consent of the Senate, having insurance expertise.CommentsClose CommentsPermalink





(2) NONVOTING MEMBERS- The Director of the Office of Financial Research--(A)nonvoting members, who shall serve in an advisory capacity as a nonvoting member of the Council; and(B) may, shall be--CommentsClose CommentsPermalink





(A) the Director of the Office of Financial Research;CommentsClose CommentsPermalink





(B) the Director of the Federal Insurance Office;CommentsClose CommentsPermalink





(C) a State insurance commissioner, to be designated by a selection process determined by the State insurance commissioners;CommentsClose CommentsPermalink





(D) a State banking supervisor, to be designated by a selection process determined by the State banking supervisors; andCommentsClose CommentsPermalink





(E) a State securities commissioner (or an officer performing like functions), to be designated by a selection process determined by such State securities commissioners.CommentsClose CommentsPermalink





(3) NONVOTING MEMBER PARTICIPATION- The nonvoting members of the Council shall not be excluded from any of the proceedings, meetings, discussions, or deliberations of the Council, except that the Chairperson may, upon an affirmative vote of the member agencies, exclude the nonvoting members from any of the proceedings, meetings, discussions, or deliberations of the Council.(c) when necessary to safeguard and promote the free exchange of confidential supervisory information.CommentsClose CommentsPermalink





(c) Terms; Vacancy-CommentsClose CommentsPermalink





(1) TERMS- The independent member of the Council shall serve for a term of 6 years, and each nonvoting member described in subparagraphs (C), (D), and (E) of subsection (b)(2) shall serve for a term of 2 years.CommentsClose CommentsPermalink





(2) VACANCY- Any vacancy on the Council shall be filled in the manner in which the original appointment was made.CommentsClose CommentsPermalink





(3) ACTING OFFICIALS MAY SERVE- In the event of a vacancy in the office of the head of a member agency or department, and pending the appointment of a successor, or during the absence or disability of the head of a member agency or department, the acting head of the member agency or department shall serve as a member of the Council in the place of that agency or department head.CommentsClose CommentsPermalink





(d) Technical and Professional Advisory Committees- The Council may appoint such special advisory, technical, or professional committees as may be useful in carrying out the functions of the Council, including an advisory committee consisting of State regulators, and the members of such committees may be members of the Council, or other persons, or both.CommentsClose CommentsPermalink





(e) Meetings-CommentsClose CommentsPermalink





(1) TIMING- The Council shall meet at the call of the Chairperson or a majority of the members then serving, but not less frequently than quarterly.CommentsClose CommentsPermalink





(2) RULES FOR CONDUCTING BUSINESS- The Council shall adopt such rules as may be necessary for the conduct of the business of the Council. Such rules shall be rules of agency organization, procedure, or practice for purposes of section 553 of title 5, United States Code.CommentsClose CommentsPermalink





(f) Voting- Unless otherwise specified, the Council shall make all decisions that it is authorized or required to make by a majority vote of the voting members then serving.CommentsClose CommentsPermalink





(g) Nonapplicability of FACA- The Federal Advisory Committee Act (5 U.S.C. App.) shall not apply to the Council, or to any special advisory, technical, or professional committee appointed by the Council, except that, if an advisory, technical, or professional committee has one or more members who are not employees of or affiliated with the United States Government, the Council shall publish a list of the names of the members of such committee.CommentsClose CommentsPermalink





(h) Assistance From Federal Agencies- Any department or agency of the United States may provide to the Council and any special advisory, technical, or professional committee appointed by the Council, such services, funds, facilities, staff, and other support services as the Council may determine advisable.CommentsClose CommentsPermalink





(i) Compensation of Members-CommentsClose CommentsPermalink





(1) FEDERAL EMPLOYEE MEMBERS- All members of the Council who are officers or employees of the United States shall serve without compensation in addition to that received for their services as officers or employees of the United States.CommentsClose CommentsPermalink





(2) COMPENSATION FOR NON-FEDERAL MEMBER- Section 5314 of title 5, United States Code, is amended by adding at the end the following:CommentsClose CommentsPermalink





‘Independent Member of the Financial Stability Oversight Council (1).’.CommentsClose CommentsPermalink





(j) Detail of Government Employees- Any employee of the Federal Government may be detailed to the Council without reimbursement, and such detail shall be without interruption or loss of civil service status or privilege. An employee of the Federal Government detailed to the Council shall report to and be subject to oversight by the Council during the assignment to the Council, and shall be compensated by the department or agency from which the employee was detailed.CommentsClose CommentsPermalink

SEC. 112. COUNCIL AUTHORITY.CommentsClose CommentsPermalink

(a) Purposes and Duties of the Council-CommentsClose CommentsPermalink





(1) IN GENERAL- The purposes of the Council are--CommentsClose CommentsPermalink





(A) to identify risks to the financial stability of the United States that could arise from the material financial distress or failure, or ongoing activities, of large, interconnected bank holding companies or nonbank financial companies, or that could arise outside the financial services marketplace;CommentsClose CommentsPermalink





(B) to promote market discipline, by eliminating expectations on the part of shareholders, creditors, and counterparties of such companies that the Government will shield them from losses in the event of failure; andCommentsClose CommentsPermalink





(C) to respond to emerging threats to the stability of the United States financial marketssystem.CommentsClose CommentsPermalink





(2) DUTIES- The Council shall, in accordance with this title--CommentsClose CommentsPermalink





(A) collect information from member agencies and other Federal and State financial regulatory agencies, other Federal and State financial regulatory agencies, the Federal Insurance Office and, if necessary to assess risks to the United States financial system, direct the Office of Financial Research to collect information from bank holding companies and nonbank financial companies;CommentsClose CommentsPermalink





(B) provide direction to, and request data and analyses from, the Office of Financial Research to support the work of the Council;CommentsClose CommentsPermalink





(C) monitor the financial services marketplace in order to identify potential threats to the financial stability of the United States;CommentsClose CommentsPermalink





(D) facilitate information to monitor domestic and international financial regulatory proposals and developments, including insurance and accounting issues, and to advise Congress and make recommendations in such areas that will enhance the integrity, efficiency, competitiveness, and stability of the U.S. financial markets;CommentsClose CommentsPermalink





(E) facilitate information sharing and coordination among the member agencies and other Federal and State agencies regarding domestic financial services policy development, rulemaking, examinations, reporting requirements, and enforcement actions;CommentsClose CommentsPermalink





(EF) recommend to the member agencies general supervisory priorities and principles reflecting the outcome of discussions among the member agencies;CommentsClose CommentsPermalink





(FG) identify gaps in regulation that could pose risks to the financial stability of the United States;CommentsClose CommentsPermalink





(GH) require supervision by the Board of Governors for nonbank financial companies that may pose risks to the financial stability of the United States in the event of their material financial distress or failure, pursuant to section 113;(H) make recommendations to the Board of Governors or because of their activities pursuant to section 113;CommentsClose CommentsPermalink





(I) make recommendations to the Board of Governors concerning the establishment of heightened prudential standards for risk-based capital, leverage, liquidity, contingent capital, resolution plans and credit exposure reports, concentration limits, enhanced public disclosures, and overall risk management for nonbank financial companies and large, interconnected bank holding companies supervised by the Board of Governors;CommentsClose CommentsPermalink





(IJ) identify systemically important financial market utilities and payment, clearing, and settlement activities (as that term is defined in title VIII), and require such utilities and activities to be subject to standards established by the Board of Governors;(J;CommentsClose CommentsPermalink





(K) make recommendations to primary financial regulatory agencies to apply new or heightened standards and safeguards for financial activities or practices that could create or increase risks of significant liquidity, credit, or other problems spreading among bank holding companies, nonbank financial companies, and United States financial markets;CommentsClose CommentsPermalink





(K) make determinations regarding exemptions in title VII, where necessary;(LL) review and, as appropriate, may submit comments to the Commission and any standard-setting body with respect to an existing or proposed accounting principle, standard, or procedure;CommentsClose CommentsPermalink





(M) provide a forum for--CommentsClose CommentsPermalink





(i) discussion and analysis of emerging market developments and financial regulatory issues; andCommentsClose CommentsPermalink





(ii) resolution of jurisdictional disputes among the members of the Council; andCommentsClose CommentsPermalink





(MN) annually report to and testify before Congress on--CommentsClose CommentsPermalink





(i) the activities of the Council;CommentsClose CommentsPermalink





(ii) significant financial market developments and potentialand regulatory developments, including insurance and accounting regulations and standards, along with an assessment of those developments on the stability of the financial system;CommentsClose CommentsPermalink





(iii) potential emerging threats to the financial stability of the United States;CommentsClose CommentsPermalink





(iiiv) all determinations made under section 113 or title VIII, and the basis for such determinations;CommentsClose CommentsPermalink





and(iv (v) all recommendations made under section 119 and the result of such recommendations; and CommentsClose CommentsPermalink





(vi) recommendations--CommentsClose CommentsPermalink





(I) to enhance the integrity, efficiency, competitiveness, and stability of United States financial markets;CommentsClose CommentsPermalink





(II) to promote market discipline; andCommentsClose CommentsPermalink





(III) to maintain investor confidence.CommentsClose CommentsPermalink





(b) Statements by Voting Members of the Council- At the time at which each report is submitted under subsection (a), each voting member of the Council shall--CommentsClose CommentsPermalink





(1) if such member believes that the Council, the Government, and the private sector are taking all reasonable steps to ensure financial stability and to mitigate systemic risk that would negatively affect the economy, submit a signed statement to Congress stating such belief; orCommentsClose CommentsPermalink





(2) if such member does not believe that all reasonable steps described under paragraph (1) are being taken, submit a signed statement to Congress stating what actions such member believes need to be taken in order to ensure that all reasonable steps described under paragraph (1) are taken.CommentsClose CommentsPermalink





(c) Testimony by the Chairperson- The Chairperson shall appear before the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate at an annual hearing, after the report is submitted under subsection (a)--CommentsClose CommentsPermalink





(1) to discuss the efforts, activities, objectives, and plans of the Council; andCommentsClose CommentsPermalink





(2) to discuss and answer questions concerning such report.CommentsClose CommentsPermalink





(d) Authority To Obtain Information-CommentsClose CommentsPermalink





(1) IN GENERAL- The Council may receive, and may request the submission of, any data or information from the Office of Financial Research and member agencies, member agencies, and the Federal Insurance Office, as necessary--CommentsClose CommentsPermalink





(A) to monitor the financial services marketplace to identify potential risks to the financial stability of the United States; orCommentsClose CommentsPermalink





(B) to otherwise carry out any of the provisions of this title.CommentsClose CommentsPermalink





(2) SUBMISSIONS BY THE OFFICE AND MEMBER AGENCIES- Notwithstanding any other provision of law, the Office of Financial Research and any member agency, any member agency, and the Federal Insurance Office, are authorized to submit information to the Council.CommentsClose CommentsPermalink





(3) FINANCIAL DATA COLLECTION-CommentsClose CommentsPermalink





(A) IN GENERAL- The Council, acting through the Office of Financial Research, may require the submission of periodic and other reports from any nonbank financial company or bank holding company for the purpose of assessing the extent to which a financial activity or financial market in which the nonbank financial company or bank holding company participates, or the nonbank financial company or bank holding company itself, poses a threat to the financial stability of the United States.CommentsClose CommentsPermalink





(B) MITIGATION OF REPORT BURDEN- Before requiring the submission of reports from any nonbank financial company or bank holding company that is regulated by a member agency or any primary financial regulatory agency, the Council, acting through the Office of Financial Research, shall coordinate with such agencies and shall, whenever possible, rely on information available from the Office of Financial Research or such agencies.CommentsClose CommentsPermalink





(4)C) MITIGATION IN CASE OF FOREIGN FINANCIAL COMPANIES- Before requiring the submission of reports from a company that is a foreign nonbank financial company or foreign-based bank holding company, the Council shall, acting through the Office of Financial Research, to the extent appropriate, consult with the appropriate foreign regulator of such company and, whenever possible, rely on information already being collected by such foreign regulator, with English translation.CommentsClose CommentsPermalink





(4) BACK-UP EXAMINATION BY THE BOARD OF GOVERNORS- If the Council is unable to determine whether the financial activities of a U.S. nonbank financial company pose a threat to the financial stability of the United States, based on information or reports obtained under paragraphs (1) and (3), discussions with management, and publicly available information, the Council may request the Board of Governors, and the Board of Governors is authorized, to conduct an examination of the nonbank financial company for the sole purpose of determining whether the nonbank financial company should be supervised by the Board of Governors for purposes of this title.(5) U.S. nonbank financial company for the sole purpose of determining whether the nonbank financial company should be supervised by the Board of Governors for purposes of this title.CommentsClose CommentsPermalink





(5) CONFIDENTIALITY-CommentsClose CommentsPermalink





(A) IN GENERAL- The Council, the Office of Financial Research, and the other member agencies shall maintain the confidentiality of any data, information, and reports submitted under this subsection and subtitle B.(B) title.CommentsClose CommentsPermalink





(B) RETENTION OF PRIVILEGE- The submission of any nonpublicly available data or information under this subsection and subtitle B shall not constitute a waiver of, or otherwise affect, any privilege arising under Federal or State law (including the rules of any Federal or State court) to which the data or information is otherwise subject.CommentsClose CommentsPermalink





(C) FREEDOM OF INFORMATION ACT- Section 552 of title 5, United States Code, including the exceptions thereunder, shall apply to any data or information submitted under this subsection and subtitle B.CommentsClose CommentsPermalink

SEC. 113. AUTHORITY TO REQUIRE SUPERVISION AND REGULATION OF CERTAIN NONBANK FINANCIAL COMPANIES.CommentsClose CommentsPermalink

(a) U.S. Nonbank Financial Companies Supervised by the Board of Governors-CommentsClose CommentsPermalink





(1) DETERMINATION- The Council, on a nondelegable basis and by a vote of not fewer than 2/3 of the2/3 of the voting members then serving, including an affirmative vote by the Chairperson, may determine that a U.S. nonbank financial company shall be supervised by the Board of Governors and shall be subject to prudential standards, in accordance with this title, if the Council determines that material financial distress at the U.S. nonbank financial company w, or the nature, scope, size, scale, concentration, interconnectedness, or mix of the activities of the U.S. nonbank financial company, could pose a threat to the financial stability of the United States.CommentsClose CommentsPermalink





(2) CONSIDERATIONS- Each determination under paragraph (1) shall be based on a consideration by the Council of--(A) the degree ofIn making a determination under paragraph (1), the Council shall consider--CommentsClose CommentsPermalink





(A) the extent of the leverage of the company;CommentsClose CommentsPermalink





(B) the amount and nature of the financial assets of the company;

(C) the amount and types of the liabilities of the company, including the degree of reliance on short-term funding;

(D) the extent and typesextent and nature of the off-balance-sheet exposures of the company;CommentsClose CommentsPermalink




(E) the extent and typesC) the extent and nature of the transactions and relationships of the company with other significant nonbank financial companies and significant bank holding companies;CommentsClose CommentsPermalink





(FD) the importance of the company as a source of credit for households, businesses, and State and local governments and as a source of liquidity for the United States financial system;CommentsClose CommentsPermalink





(G) the recommendation, if any, of a member of the Council;

(H) the operation of, or ownership interest in, any clearing, settlement, or payment business of the company;

(I) the extent to which--

(i)E) the importance of the company as a source of credit for low-income, minority, or underserved communities, and the impact that the failure of such company would have on the availability of credit in such communities;CommentsClose CommentsPermalink




(F) the extent to which assets are managed rather than owned by the company; and(ii), and the extent to which ownership of assets under management is diffuse;CommentsClose CommentsPermalink





and(J) any other (G) the nature, scope, size, scale, concentration, interconnectedness, and mix of the activities of the company; CommentsClose CommentsPermalink





(H) the degree to which the company is already regulated by 1 or more primary financial regulatory agencies;CommentsClose CommentsPermalink





(I) the amount and nature of the financial assets of the company;CommentsClose CommentsPermalink





(J) the amount and types of the liabilities of the company, including the degree of reliance on short-term funding; andCommentsClose CommentsPermalink





(K) any other risk-related factors that the Council deems appropriate.CommentsClose CommentsPermalink





(b) Foreign Nonbank Financial Companies Supervised by the Board of Governors-CommentsClose CommentsPermalink





(1) DETERMINATION- The Council, on a nondelegable basis and by a vote of not fewer than 2/3 of the2/3 of the voting members then serving, including an affirmative vote by the Chairperson, may determine that a foreign nonbank financial company that has substantial assets or operations in the United States shall be supervised by the Board of Governors and shall be subject to prudential standardsshall be supervised by the Board of Governors and shall be subject to prudential standards, in accordance with this title, if the Council determines that material financial distress at the foreign nonbank financial company w, or the nature, scope, size, scale, concentration, interconnectedness, or mix of the activities of the foreign nonbank financial company, could pose a threat to the financial stability of the United States.CommentsClose CommentsPermalink





(2) CONSIDERATIONS- Each determination under paragraph (1) shall be based on a consideration by the Council of--(A) the degree ofIn making a determination under paragraph (1), the Council shall consider--CommentsClose CommentsPermalink





(A) the extent of the leverage of the company;CommentsClose CommentsPermalink





(B) the amouextent and nature of the United States financial assets of the company;

(C) the amount and types of the liabilities of the company used to fund activities and operations in the United States, including the degree of reliance on short-term funding;

(D) the extent of the United States- related off-balance-sheet exposure of the company;(E) the extent and typs of the company;CommentsClose CommentsPermalink




(C) the extent and nature of the transactions and relationships of the company with other significant nonbank financial companies and bank holding companies;(Fsignificant bank holding companies;CommentsClose CommentsPermalink





(D) the importance of the company as a source of credit for United States households, businesses, and State and local governments, and as a source of liquidity for the United States financial system;CommentsClose CommentsPermalink





(G) the recommendation, if any, of a member of the Council;

(H) the extent to which--

(i)E) the importance of the company as a source of credit for low-income, minority, or underserved communities in the United States, and the impact that the failure of such company would have on the availability of credit in such communities;CommentsClose CommentsPermalink




(F) the extent to which assets are managed rather than owned by the company; and(ii) and the extent to which ownership of assets under management is diffuse;CommentsClose CommentsPermalink





and(I) any other (G) the nature, scope, size, scale, concentration, interconnectedness, and mix of the activities of the company; CommentsClose CommentsPermalink





(H) the extent to which the company is subject to prudential standards on a consolidated basis in its home country that are administered and enforced by a comparable foreign supervisory authority;CommentsClose CommentsPermalink





(I) the amount and nature of the United States financial assets of the company;CommentsClose CommentsPermalink





(J) the amount and nature of the liabilities of the company used to fund activities and operations in the United States, including the degree of reliance on short-term funding; andCommentsClose CommentsPermalink





(K) any other risk-related factors that the Council deems appropriate.CommentsClose CommentsPermalink





(c) Anti-evasion-CommentsClose CommentsPermalink





(1) DETERMINATIONS- In order to avoid evasion of this Act, the title, the Council, on its own initiative or at the request of the Board of Governors, may determine, on a nondelegable basis and by a vote of not fewer than 2/3 of the2/3 of the voting members then serving, including an affirmative vote by the Chairperson, that--CommentsClose CommentsPermalink





(A) material financial distress related to, or the nature, scope, size, scale, concentration, interconnectedness, or mix of, the financial activities conducted directly or indirectly by a company incorporated or organized under the laws of the United States or any State or the financial activities in the United States of a company incorporated or organized in a country other than the United States would pose a threat to the financial stability of the United States, based on consideration of the factors in subsection (b)(2);(B) the company isa)(2) or (b)(2), as applicable;CommentsClose CommentsPermalink





(B) the company is organized or operates in such a manner as to evade the application of this title;(C) such financial activities of the company shall be supervised by the Board of Governors and subject to prudential standards in accordance with this title andCommentsClose CommentsPermalink





(C) such financial activities of the company shall be supervised by the Board of Governors and subject to prudential standards in accordance with this title, consistent with paragraph (2); and(D) upon making a determination under subsection (c)(1), the Council shall submit a report to the appropriate3).CommentsClose CommentsPermalink





(2) REPORT- Upon making a determination under paragraph (1), the Council shall submit a report to the appropriate committees of Congress detailing the reasons for making such determination under this subsection.

(2) Consolidated supervision of only financial activities; Establishment of an intermediate holding company.

(A).CommentsClose CommentsPermalink




(3) CONSOLIDATED SUPERVISION OF ONLY FINANCIAL ACTIVITIES; ESTABLISHMENT OF AN INTERMEDIATE HOLDING COMPANY-CommentsClose CommentsPermalink





(A) ESTABLISHMENT OF AN INTERMEDIATE HOLDING COMPANY- Upon a determination under paragraph (1), the company may establish anthat is the subject of the determination may establish an intermediate holding company in which the financial activities of such company and its subsidiaries wishall be conducted (other than the activities described in section 167(b)(2)) in compliance with any regulations or guidance provided by the Board of Governors). Such intermediate holding company shall be subject to the supervision of the Board of Governors and to prudential standards under this title as if the intermediate holding company iswere a nonbank financial company supervised by the Board of Governors.CommentsClose CommentsPermalink





(B) ACTION OF THE BOARD OF GOVERNORS- To facilitate the supervision of the financial activities subject to the determination in paragraph (1), the Board of Governors may require a company to establish an intermediate holding company, as provided for in section 167, which would be subject to the supervision of the Board of Governors and to prudential standards under this title, as if the intermediate holding company is a nonbank financial company supervised by the Board of Governors.(3were a nonbank financial company supervised by the Board of Governors.CommentsClose CommentsPermalink





(4) NOTICE AND OPPORTUNITY FOR HEARING AND FINAL DETERMINATION; JUDICIAL REVIEW- Subsections (d), (f), and (g through (h) shall apply to determinations made by the Council pursuant to paragraph (1) in the same manner as such subsections apply to nonbank financial companies.CommentsClose CommentsPermalink





(45) COVERED FINANCIAL ACTIVITIES- For purposes of this subsection, the term ‘financial activities’ means activities that are financial in nature--CommentsClose CommentsPermalink





(A) means activities that are financial in nature (as defined in section 4(k) of the Bank Holding Company Act of 1956) and include;CommentsClose CommentsPermalink





(B) includes the ownership or control of one or more insured depository institutions and shall not include internal financial activities conducted for the company or any affiliates thereof including internal ; andCommentsClose CommentsPermalink





(C) does not include internal financial activities conducted for the company or any affiliate thereof, including internal treasury, investment, and employee benefit functions.CommentsClose CommentsPermalink





(56) ONLY FINANCIAL ACTIVITIES SUBJECT TO PRUDENTIAL SUPERVISION- Nonfinancial activities of the company shall not be subject to supervision by the Board of Governors and prudential standards of the Board. For purposes of this Act, the financial activities that are the subject of the determination in paragraph (1) shall be subject to the same requirements as a nonbank financial company supervised by the Board of Governors. Nothing in this paragraph shall prohibit or limit the authority of the Board of Governors to apply prudential standards under this title to the financial activities that are subject to the determination in paragraph (1).CommentsClose CommentsPermalink





(d) Reevaluation and Rescission- The Council shall--CommentsClose CommentsPermalink





(1) not less frequently than annually, reevaluate each determination made under subsections (a) and (b) with respect to easuch nonbank financial company supervised by the Board of Governors; andCommentsClose CommentsPermalink





(2) rescind any such determination, if the Council, by a vote of not fewer than 2/3 of the2/3 of the voting members then serving, including an affirmative vote by the Chairperson, determines that the nonbank financial company no longer meets the standards under subsection (a) or (b), as applicable.CommentsClose CommentsPermalink





(e) Notice and Opportunity for Hearing and Final Determination-CommentsClose CommentsPermalink





(1) IN GENERAL- The Council shall provide to a nonbank financial company written notice of a proposed determination of the Council, including an explanation of the basis of the proposed determination of the Council, that sucha nonbank financial company shall be supervised by the Board of Governors and shall be subject to prudential standards in accordance with this title.CommentsClose CommentsPermalink





(2) HEARING- Not later than 30 days after the date of receipt of any notice of a proposed determination under paragraph (1), the nonbank financial company may request, in writing, an opportunity for a written or oral hearing before the Council to contest the proposed determination. Upon receipt of a timely request, the Council shall fix a time (not later than 30 days after the date of receipt of the request) and place at which such company may appear, personally or through counsel, to submit written materials (or, at the sole discretion of the Council, oral testimony and oral argument).CommentsClose CommentsPermalink





(3) FINAL DETERMINATION- Not later than 60 days after the date of a hearing under paragraph (2), the Council shall notify the nonbank financial company of the final determination of the Council, which shall contain a statement of the basis for the decision of the Council.CommentsClose CommentsPermalink





(4) NO HEARING REQUESTED- If a nonbank financial company does not make a timely request for a hearing, the Council shall notify the nonbank financial company, in writing, of the final determination of the Council under subsection (a) or (b), as applicable, not later than 10 days after the date by which the company may request a hearing under paragraph (2).CommentsClose CommentsPermalink





(f) Emergency Exception-CommentsClose CommentsPermalink





(1) IN GENERAL- The Council may waive or modify the requirements of subsection (de) with respect to a nonbank financial company, if the Council determines, by a vote of not fewer than 2/3 of the2/3 of the voting members then serving, including an affirmative vote by the Chairperson, that such waiver or modification is necessary or appropriate to prevent or mitigate threats posed by the nonbank financial company to the financial stability of the United States.CommentsClose CommentsPermalink





(2) NOTICE- The Council shall provide notice of a waiver or modification under this paragraphsubsection to the nonbank financial company concerned as soon as practicable, but not later than 24 hours after the waiver or modification is granted.CommentsClose CommentsPermalink





(3) INTERNATIONAL COORDINATION- In making a determination under paragraph (1), the Council shall consult with the appropriate home country supervisor, if any, of the foreign nonbank financial company that is being considered for such a determination.CommentsClose CommentsPermalink





(4) OPPORTUNITY FOR HEARING- The Council shall allow a nonbank financial company to request, in writing, an opportunity for a written or oral hearing before the Council to contest a waiver or modification under this paragraph, not later than 10 days after the date of receipt of notice of thesubsection, not later than 10 days after the date of receipt of notice of the waiver or modification by the company. Upon receipt of a timely request, the Council shall fix a time (not later than 15 days after the date of receipt of the request) and place at which the nonbank financial company may appear, personally or through counsel, to submit written materials (or, at the sole discretion of the Council, oral testimony and oral argument).CommentsClose CommentsPermalink





(45) NOTICE OF FINAL DETERMINATION- Not later than 30 days after the date of any hearing under paragraph (34), the Council shall notify the subject nonbank financial company of the final determination of the Council under this paragraphsubsection, which shall contain a statement of the basis for the decision of the Council.CommentsClose CommentsPermalink





(g) Consultation- The Council shall consult with the primary financial regulatory agency, if any, for each nonbank financial company or subsidiary of a nonbank financial company that is being considered for supervision by the Board of Governors under this section before the Council makes any final determination with respect to such nonbank financial company under subsection (a), (b), or (c).CommentsClose CommentsPermalink





(h) Judicial Review- If the Council makes a final determination under this section with respect to a nonbank financial company, such nonbank financial company may, not later than 30 days after the date of receipt of the notice of final determination under subsection (d)(3) or (e)(42), (e)(3), or (f)(5), bring an action in the United States district court for the judicial district in which the home office of such nonbank financial company is located, or in the United States District Court for the District of Columbia, for an order requiring that the final determination be rescinded, and the court shall, upon review, dismiss such action or direct the final determination to be rescinded. Review of such an action shall be limited to whether the final determination made under this section was arbitrary and capricious.CommentsClose CommentsPermalink





(i) International Coordination- In exercising its duties under this title with respect to foreign nonbank financial companies, foreign-based bank holding companies, and cross-border activities and markets, the Council shall consult with appropriate foreign regulatory authorities, to the extent appropriate.CommentsClose CommentsPermalink

SEC. 114. REGISTRATION OF NONBANK FINANCIAL COMPANIES SUPERVISED BY THE BOARD OF GOVERNORS.CommentsClose CommentsPermalink

Not later than 180 days after the date of a final Council determination under section 113 that a nonbank financial company is to be supervised by the Board of Governors, such company shall register with the Board of Governors, on forms prescribed by the Board of Governors, which shall include such information as the Board of Governors, in consultation with the Council, may deem necessary or appropriate to carry out this title.CommentsClose CommentsPermalink

SEC. 115. ENHANCED SUPERVISION AND PRUDENTIAL STANDARDS FOR NONBANK FINANCIAL COMPANIES SUPERVISED BY THE BOARD OF GOVERNORS AND CERTAIN BANK HOLDING COMPANIES.CommentsClose CommentsPermalink

(a) In General-CommentsClose CommentsPermalink





(1) PURPOSE- In order to prevent or mitigate risks to the financial stability of the United States that could arise from the material financial distress or failure, failure, or ongoing activities of large, interconnected financial institutions, the Council may make recommendations to the Board of Governors concerning the establishment and refinement of prudential standards and reporting and disclosure requirements applicable to nonbank financial companies supervised by the Board of Governors and large, interconnected bank holding companies, that--CommentsClose CommentsPermalink





(A) are more stringent than those applicable to other nonbank financial companies and bank holding companies that do not present similar risks to the financial stability of the United States; andCommentsClose CommentsPermalink





(B) increase in stringency, based on the considerations identified in subsection (b)(3).CommentsClose CommentsPermalink





(2) LIMITATION ON BANK HOLDING COMPANIES- Any standards recommended under subsections (b) through (f) shall not apply to any bank holding company with total consolidated assets of less than $50,000,000,000. The Council mayRECOMMENDED APPLICATION OF REQUIRED STANDARDS- In making recommendations under this section, the Council may--CommentsClose CommentsPermalink





(A) differentiate among companies that are subject to heightened standards on an individual basis or by category, taking into consideration their capital structure, riskiness, complexity, financial activities (including the financial activities of their subsidiaries), size, and any other risk-related factors that the Council deems appropriate; orCommentsClose CommentsPermalink





(B) recommend an asset threshold greater than $50,000,000,000 for the applicability of any particular standard under those subsectionsthat is higher than $50,000,000,000 for the application of any standard described in subsections (c) through (g).CommentsClose CommentsPermalink





(b) Development of Prudential Standards-CommentsClose CommentsPermalink





(1) IN GENERAL- The recommendations of the Council under subsection (a) may include--CommentsClose CommentsPermalink





(A) risk-based capital requirements;CommentsClose CommentsPermalink





(B) leverage limits;CommentsClose CommentsPermalink





(C) liquidity requirements;CommentsClose CommentsPermalink





(D) resolution plan and credit exposure report requirements;CommentsClose CommentsPermalink





(E) concentration limits;CommentsClose CommentsPermalink





(F) a contingent capital requirement;CommentsClose CommentsPermalink





(G) enhanced public disclosures;CommentsClose CommentsPermalink





and(H (H) short-term debt limits; and CommentsClose CommentsPermalink





(I) overall risk management requirements.CommentsClose CommentsPermalink





(2) PRUDENTIAL STANDARDS FOR FOREIGN FINANCIAL COMPANIES- In making recommendations concerning the standards set forth in paragraph (1) that would apply to foreign nonbank financial companies supervised by the Board of Governors or foreign-based bank holding companies, the Council shall--CommentsClose CommentsPermalink





(A) give due regard to the principle of national treatment and competitive equityequality of competitive opportunity; andCommentsClose CommentsPermalink





(B) take into account the extent to which the foreign nonbank financial company or foreign-based bank holding company is subject on a consolidated basis to home country standards that are comparable to those applied to financial companies in the United States.CommentsClose CommentsPermalink





(3) CONSIDERATIONS- In making recommendations concerning prudential standards under paragraph (1), the Council shall--CommentsClose CommentsPermalink





(A) take into account differences among nonbank financial companies supervised by the Board of Governors and bank holding companies described in subsection (a), based on--CommentsClose CommentsPermalink





(i) the factors described in subsections (a) and (b) of section 113;CommentsClose CommentsPermalink





(ii) whether the company owns an insured depository institution;CommentsClose CommentsPermalink





(iii) nonfinancial activities and affiliations of the company; andCommentsClose CommentsPermalink





(iv) any other factors that the Council determines appropriate;CommentsClose CommentsPermalink





and(B) to the extent possible, ensure that small changes in the factors listed in subsections (a) and (b) of section 113 would not result in sharp, discontinuous changes in the prudential standards established under paragraph (1).(c)section 165; andCommentsClose CommentsPermalink





(C) adapt its recommendations as appropriate in light of any predominant line of business of such company, including assets under management or other activities for which particular standards may not be appropriate.CommentsClose CommentsPermalink





(c) Contingent Capital-CommentsClose CommentsPermalink





(1) STUDY REQUIRED- The Council shall conduct a study of the feasibility, benefits, costs, and structure of a contingent capital requirement for nonbank financial companies supervised by the Board of Governors and bank holding companies described in subsection (a), which study shall include--CommentsClose CommentsPermalink





(A) an evaluation of the degree to which such requirement would enhance the safety and soundness of companies subject to the requirement, promote the financial stability of the United States, and reduce risks to United States taxpayers;CommentsClose CommentsPermalink





(B) an evaluation of the characteristics and amounts of convertible debttingent capital that should be required;CommentsClose CommentsPermalink





(C) an analysis of potential prudential standards that should be used to determine whether the contingent capital of a company would be converted to equity in times of financial stress;CommentsClose CommentsPermalink





(D) an evaluation of the costs to companies, the effects on the structure and operation of credit and other financial markets, and other economic effects of requiring contingent capital;CommentsClose CommentsPermalink





(E) an evaluation of the effects of such requirement on the international competitiveness of companies subject to the requirement and the prospects for international coordination in establishing such requirement; andCommentsClose CommentsPermalink





(F) recommendations for implementing regulations.CommentsClose CommentsPermalink





(2) REPORT- The Council shall submit a report to Congress regarding the study required by paragraph (1) not later than 2 years after the date of enactment of this Act.CommentsClose CommentsPermalink





(3) RECOMMENDATIONS-CommentsClose CommentsPermalink





(A) IN GENERAL- Subsequent to submitting a report to Congress under paragraph (2), the Council may make recommendations to the Board of Governors to require any nonbank financial company supervised by the Board of Governors and any bank holding company described in subsection (a) to maintain a minimum amount of long-term hybrid debt that is contingent capital that is convertible to equity in times of financial stress.CommentsClose CommentsPermalink





(B) FACTORS TO CONSIDER- In making recommendations under this subsection, the Council shall consider--CommentsClose CommentsPermalink





(i) an appropriate transition period for implementation of a conversion under this subsection;CommentsClose CommentsPermalink





(ii) the factors described in subsection (b)(3);CommentsClose CommentsPermalink





(iii) capital requirements applicable to a nonbank financial company supervised by the Board of Governors or a bank holding company described in subsection (a), and subsidiaries thereof;CommentsClose CommentsPermalink





(iv) results of the study required by paragraph (1); andCommentsClose CommentsPermalink





(v) any other factor that the Council deems appropriate.CommentsClose CommentsPermalink





(d) Resolution Plan and Credit Exposure Reports-CommentsClose CommentsPermalink





(1) RESOLUTION PLAN- The Council may make recommendations to the Board of Governors concerning the requirement that each nonbank financial company supervised by the Board of Governors and each bank holding company described in subsection (a) report periodically to the Council, the Board of Governors, and the Corporation, the plan of such company for rapid and orderly resolution in the event of material financial distress or failure.CommentsClose CommentsPermalink





(2) CREDIT EXPOSURE REPORT- The Council may make recommendations to the Board of Governors concerning the advisability of requiring each nonbank financial company supervised by the Board of Governors and bank holding company described in subsection (a) to report periodically to the Council, the Board of Governors, and the Corporation on--CommentsClose CommentsPermalink





(A) the nature and extent to which the company has credit exposure to other significant nonbank financial companies and significant bank holding companies; andCommentsClose CommentsPermalink





(B) the nature and extent to which other such significant nonbank financial companies and significant bank holding companies have credit exposure to that company.CommentsClose CommentsPermalink





(e) Concentration Limits- In order to limit the risks that the failure of any individual company could pose to nonbank financial companies supervised by the Board of Governors or bank holding companies described in subsection (a), the Council may make recommendations to the Board of Governors to prescribe standards to limit such risks, as set forth in section 165.CommentsClose CommentsPermalink





(f) Enhanced Public Disclosures- The Council may make recommendations to the Board of Governors to require periodic public disclosures by bank holding companies described in subsection (a) and by nonbank financial companies supervised by the Board of Governors, in order to support market evaluation of the risk profile, capital adequacy, and risk management capabilities thereof.CommentsClose CommentsPermalink





(g) Short-term Debt Limits- The Council may make recommendations to the Board of Governors to require short-term debt limits to mitigate the risks that an over-accumulation of such debt could pose to bank holding companies described in subsection (a), nonbank financial companies supervised by the Board of Governors, or the financial system.CommentsClose CommentsPermalink

SEC. 116. REPORTS.CommentsClose CommentsPermalink

(a) In General- Subject to subsection (b), the Council, acting through the Office of Financial Research, may require a bank holding company with total consolidated assets of $50,000,000,000 or greater or a nonbank financial company supervised by the Board of Governors, and any subsidiary thereof, to submit certified reports to keep the Council informed as to--CommentsClose CommentsPermalink





(1) the financial condition of the company;CommentsClose CommentsPermalink





(2) systems for monitoring and controlling financial, operating, and other risks;CommentsClose CommentsPermalink





(3) transactions with any subsidiary that is a depository institution; andCommentsClose CommentsPermalink





(4) the extent to which the activities and operations of the company and any subsidiary thereof, could, under adverse circumstances, have the potential to disrupt financial markets or affect the overall financial stability of the United States.CommentsClose CommentsPermalink





(b) Use of Existing Reports-CommentsClose CommentsPermalink





(1) IN GENERAL- For purposes of compliance with subsection (a), the Council, acting through the Office of Financial Research, shall, to the fullest extent possible, use--CommentsClose CommentsPermalink





(A) reports that a bank holding company, nonbank financial company supervised by the Board of Governors, or any functionally regulated subsidiary of such company has been required to provide to other Federal or State regulatory agencies or to a relevant foreign supervisory authority;CommentsClose CommentsPermalink





(B) information that is otherwise required to be reported publicly; andCommentsClose CommentsPermalink





(C) externally audited financial statements.CommentsClose CommentsPermalink





(2) AVAILABILITY- Each bank holding company described in subsection (a) and nonbank financial company supervised by the Board of Governors, and any subsidiary thereof, shall provide to the Council, at the request of the Council, copies of all reports referred to in paragraph (1).CommentsClose CommentsPermalink





(3) CONFIDENTIALITY- The Council shall maintain the confidentiality of the reports obtained under subsection (a) and paragraph (1)(A) of this subsection.CommentsClose CommentsPermalink

SEC. 117. TREATMENT OF CERTAIN COMPANIES THAT CEASE TO BE BANK HOLDING COMPANIES.CommentsClose CommentsPermalink

(a) Applicability- This section shall apply to any entity or a successor entity that--(1--CommentsClose CommentsPermalink





(1) any entity that--CommentsClose CommentsPermalink





(A) was a bank holding company having total consolidated assets equal to or greater than $50,000,000,000 as of January 1, 2010; andCommentsClose CommentsPermalink





(2B) received financial assistance under or participated in the Capital Purchase Program established under the Troubled Asset Relief Program authorized by the Emergency Economic Stabilization Act of 2008; andCommentsClose CommentsPermalink





(2) any successor entity (as defined by the Board of Governors, in consultation with the Council) to an entity described in paragraph (1).CommentsClose CommentsPermalink





(b) Treatment- If an entity described in subsection (a) ceases to be a bank holding company at any time after January 1, 2010, then such entity shall be treated as a nonbank financial company supervised by the Board of Governors, as if the Council had made a determination under section 113 with respect to that entity.CommentsClose CommentsPermalink





(c) Appeal-CommentsClose CommentsPermalink





(1) REQUEST FOR HEARING- An entity may request, in writing, an opportunity for a written or oral hearing before the Council to appeal its treatment as a nonbank financial company supervised by the Board of Governors in accordance with this section. Upon receipt of the request, the Council shall fix a time (not later than 30 days after the date of receipt of the request) and place at which such entity may appear, personally or through counsel, to submit written materials (or, at the sole discretion of the Council, oral testimony and oral argument).CommentsClose CommentsPermalink





(2) DECISION-CommentsClose CommentsPermalink





(A) PROPOSED DECISION- A Council decision to grant an appeal under this subsection shall be made by a vote of not fewer than 2/3 of the voting members then serving, including an affirmative vote by the Chairperson. Not later than 60 days after the date of a hearing under paragraph (1), the Council shall submit a report to, and may testify before, the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives on the proposed decision of the Council regarding an appeal under paragraph (1), which report shall include a statement of the basis for the proposed decision of the Council.CommentsClose CommentsPermalink





(B) NOTICE OF FINAL DECISION- The Council shall notify the subject entity of the final decision of the Council regarding an appeal under paragraph (1), which notice shall contain a statement of the basis for the final decision of the Council, not later than 60 days after the later of--CommentsClose CommentsPermalink





(i) the date of the submission of the report under subparagraph (A); orCommentsClose CommentsPermalink





(ii) if the Committee on Banking, Housing, and Urban Affairs of the Senate or the Committee on Financial Services of the House of Representatives , not later than 1 year after the date of submission of the report under subparagraph (A), the Committee on Banking, Housing, and Urban Affairs of the Senate or the Committee on Financial Services of the House of Representatives holds one or more hearings regarding such report, the date of the last such hearing.CommentsClose CommentsPermalink





(C) CONSIDERATIONS- In making a decision regarding an appeal under paragraph (1), the Council shall consider whether the company meets the standards under section 113(a) or 113(b), as applicable, and the definition of the term ‘nonbank financial company’ under section 102. The decision of the Council shall be final, subject to the review under paragraph (3).CommentsClose CommentsPermalink





(3) REVIEW- If the Council denies an appeal under this subsection, the Council shall, not less frequently than annually, review and reevaluate the decision.CommentsClose CommentsPermalink

SEC. 118. COUNCIL FUNDING.CommentsClose CommentsPermalink

Any expenses of the Council shall be treated as expenses of, and paid by, the Office of Financial Research.CommentsClose CommentsPermalink

SEC. 119. RESOLUTION OF SUPERVISORY JURISDICTIONAL DISPUTES AMONG MEMBER AGENCIES.CommentsClose CommentsPermalink

(a) Request for Dispute Resolution- The Council shallCouncil Recommendation- The Council shall seek to resolve a dispute among 2 or more member agencies, if--CommentsClose CommentsPermalink





(1) a member agency has a dispute with another member agency about the respective jurisdiction over a particular bank holding company, nonbank financial company, or financial activity or product (excluding matters for which another dispute mechanism specifically has been provided under Federal lawtitle X);CommentsClose CommentsPermalink





(2) the Council determines that the disputing agencies cannot, after a demonstrated good faith effort, resolve the dispute without the intervention of the Council; andCommentsClose CommentsPermalink





(3) any of the member agencies involved in the dispute--CommentsClose CommentsPermalink





(A) provides all other disputants prior notice of the intent to request dispute resolution by the Council; andCommentsClose CommentsPermalink





(B) requests in writing, not earlier than 14 days after providing the notice described in subparagraph (A), that the Council seek to resolve the dispute.CommentsClose CommentsPermalink





(b) Council Decision- The Council shallRecommendation- The Council shall seek to resolve each dispute described in subsection (a)--CommentsClose CommentsPermalink





(1) within a reasonable time after receiving the dispute resolution request;CommentsClose CommentsPermalink





(2) after consideration of relevant information provided by each agency party to the dispute; andCommentsClose CommentsPermalink





(3) by agreeing with 1 of the disputants regarding the entirety of the matter, or by determining a compromise position.CommentsClose CommentsPermalink





(c) Form and Binding Effect- A Council decisof Recommendation- Any Council recommendation under this section shall--CommentsClose CommentsPermalink





(1) be in writing;CommentsClose CommentsPermalink





(2) include an explanation of the reasons therefor; andCommentsClose CommentsPermalink





(3) be binding on allapproved by the affirmative vote of 2/3 of the voting members of the Council then serving.CommentsClose CommentsPermalink





(d) Nonbinding Effect- Any recommendation made by the Council under subsection (c) shall not be binding on the Federal agencies that are parties to the dispute.CommentsClose CommentsPermalink

SEC. 120. ADDITIONAL STANDARDS APPLICABLE TO ACTIVITIES OR PRACTICES FOR FINANCIAL STABILITY PURPOSES.CommentsClose CommentsPermalink

(a) In General- The Council may issue recommendations to the primary financial regulatory agencies to apply new or provide for more stringent regulation of a financial activity by issuing recommendations to the primary financial regulatory agencies to apply new or heightened standards and safeguards, including standards enumerated in section 115, for a financial activity or practice conducted by bank holding companies or nonbank financial companies under their respective jurisdictions, if the Council determines that the conduct, scope, nature, size, scale, concentration, or interconnectedness of such activity or practice could create or increase the risk of significant liquidity, credit, or other problems spreading among bank holding companies and nonbank financial companies or the financial markets of the United States.(b), financial markets of the United States, or low-income, minority, or underserved communities.CommentsClose CommentsPermalink





(b) Procedure for Recommendations to Regulators-CommentsClose CommentsPermalink





(1) NOTICE AND OPPORTUNITY FOR COMMENT- The Council shall consult with the primary financial regulatory agencies and provide notice to the public and opportunity for comment for any proposed recommendation that the primary financial regulatory agencies apply new or heightened standards and safeguards for a financial activity or practice.CommentsClose CommentsPermalink





(2) CRITERIA- The new or heightened standards and safeguards for a financial activity or practice recommended under paragraph (1)--CommentsClose CommentsPermalink





(A) shall take costs to long-term economic growth into account; andCommentsClose CommentsPermalink





(B) may include prescribing the conduct of the activity or practice in specific ways (such as by limiting its scope, or applying particular capital or risk management requirements to the conduct of the activity) or prohibiting the activity or practice.CommentsClose CommentsPermalink





(c) Implementation of Recommended Standards-CommentsClose CommentsPermalink





(1) ROLE OF PRIMARY FINANCIAL REGULATORY AGENCY-CommentsClose CommentsPermalink





(A) IN GENERAL- Each primary financial regulatory agency may impose, require reports regarding, examine for compliance with, and enforce standards in accordance with this section with respect to those entities for which it is the primary financial regulatory agency.CommentsClose CommentsPermalink





(B) RULE OF CONSTRUCTION- The authority under this paragraph is in addition to, and does not limit, any other authority of a primary financial regulatory agency. Compliance by an entity with actions taken by a primary financial regulatory agency under this section shall be enforceable in accordance with the statutes governing the respective jurisdiction of the primary financial regulatory agency over the entity, as if the agency action were taken under those statutes.CommentsClose CommentsPermalink





(2) IMPOSITION OF STANDARDS- The primary financial regulatory agency shall impose the standards recommended by the Council in accordance with subsection (a), or similar standards that the Council deems acceptable, or shall explain in writing to the Council, not later than 90 days after the date on which the Council issues the recommendation, why the agency has determined not to follow the recommendation of the Council.CommentsClose CommentsPermalink





(d) Report to Congress- The Council shall report to Congress on--CommentsClose CommentsPermalink





(1) any recommendations issued by the Council under this section;CommentsClose CommentsPermalink





(2) the implementation of, or failure to implement such recommendation on the part of a primary financial regulatory, such recommendation on the part of a primary financial regulatory agency; andCommentsClose CommentsPermalink





(3) in any case in which no primary financial regulatory agency exists for the nonbank financial company conducting financial activities or practices referred to in subsection (a), recommendations for legislation that would prevent such activities or practices from threatening the stability of the financial system of the United States.CommentsClose CommentsPermalink





(e) Effect of Rescission of Identification-CommentsClose CommentsPermalink





(1) NOTICE- The Council may recommend to the relevant primary financial regulatory agency that a financial activity or practice no longer requires any standards or safeguards implemented under this section.CommentsClose CommentsPermalink





(2) DETERMINATION OF PRIMARY FINANCIAL REGULATORY AGENCY TO CONTINUE-CommentsClose CommentsPermalink





(A) IN GENERAL- Upon receipt of a recommendation under paragraph (1), a primary financial regulatory agency that has imposed standards under this section shall determine whether standards that it has imposed under this sectionuch standards should remain in effect.CommentsClose CommentsPermalink





(B) APPEAL PROCESS- Each primary financial regulatory agency that has imposed standards under this section shall promulgate regulations to establish a procedure under which entities under its jurisdiction may appeal a determination by such agency under this paragraph that standards imposed under this section should remain in effect.CommentsClose CommentsPermalink

SEC. 121. MITIGATION OF RISKS TO FINANCIAL STABILITY.CommentsClose CommentsPermalink

(a) Mitigatory Actions- If the Board of Governors determines that a bank holding company with total consolidated assets of $50,000,000,000 or more, or a nonbank financial company supervised by the Board of Governors, poses a grave threat to the financial stability of the United States, the Board of Governors, upon an affirmative vote of not fewer than 2/3 of the Council members 2/3 of the voting members of the Council then serving, shall require the subject company--(1)--CommentsClose CommentsPermalink





(1) limit the ability of the company to merge with, acquire, consolidate with, or otherwise become affiliated with another company;CommentsClose CommentsPermalink





(2) restrict the ability of the company to offer a financial product or products;CommentsClose CommentsPermalink





(3) require the company to terminate one or more activities;CommentsClose CommentsPermalink





(2) to impose conditions on the manner in which the company conducts one4) impose conditions on the manner in which the company conducts 1 or more activities; orCommentsClose CommentsPermalink





(3) if the Board of Governors determines that such action is5) if the Board of Governors determines that the actions described in paragraphs (1) through (4) are inadequate to mitigate a threat to the financial stability of the United States in its recommendation, require the company to sell or otherwise transfer assets or off-balance-sheet items to unaffiliated entities.CommentsClose CommentsPermalink





(b) Notice and Hearing-CommentsClose CommentsPermalink





(1) IN GENERAL- The Board of Governors, in consultation with the Council, shall provide to a company described in subsection (a) written notice that such company is being considered for mitigatory action pursuant to this section, including an explanation of the basis for, and description of, the proposed mitigatory action.CommentsClose CommentsPermalink





(2) HEARING- Not later than 30 days after the date of receipt of notice under paragraph (1), the company may request, in writing, an opportunity for a written or oral hearing before the Board of Governors to contest the proposed mitigatory action. Upon receipt of a timely request, the Board of Governors shall fix a time (not later than 30 days after the date of receipt of the request) and place at which such company may appear, personally or through counsel, to submit written materials (or, at the discretion of the Board of Governors, in consultation with the Council, oral testimony and oral argument).CommentsClose CommentsPermalink





(3) DECISION- Not later than 60 days after the date of a hearing under paragraph (2), or not later than 60 days after the provision of a notice under paragraph (1) if no hearing was held, the Board of Governors shall notify the company of the final decision of the Board of Governors, including the results of the vote of the Council, as described in subsection (a).CommentsClose CommentsPermalink





(c) Factors for Consideration- The Board of Governors and the Council shall take into consideration the factors set forth in subsection (a) or (b) of section 113, as applicable, in a determination described in subsection (a) and in a decision described in subsection (bmaking any determination under subsection (a).CommentsClose CommentsPermalink





(d) Application to Foreign Financial Companies- The Board of Governors may prescribe regulations regarding the application of this section to foreign nonbank financial companies supervised by the Board of Governors and foreign-based bank holding companies, giving due regard to the --CommentsClose CommentsPermalink





(1) giving due regard to the principle of national treatment and competitive equityequality of competitive opportunity; andCommentsClose CommentsPermalink





(2) taking into account the extent to which the foreign nonbank financial company or foreign-based bank holding company is subject on a consolidated basis to home country standards that are comparable to those applied to financial companies in the United States.CommentsClose CommentsPermalink

(a) Study Required-CommentsClose CommentsPermalink





(1) IN GENERAL- The Chairperson of the Council shall carry out a study of the economic impact of possible financial services regulatory limitations intended to reduce systemic risk. Such study shall estimate the benefits and costs on the efficiency of capital markets, on the financial sector, and on national economic growth, of--CommentsClose CommentsPermalink





(A) explicit or implicit limits on the maximum size of banks, bank holding companies, and other large financial institutions;CommentsClose CommentsPermalink





(B) limits on the organizational complexity and diversification of large financial institutions;CommentsClose CommentsPermalink





(C) requirements for operational separation between business units of large financial institutions in order to expedite resolution in case of failure;CommentsClose CommentsPermalink





(D) limits on risk transfer between business units of large financial institutions;CommentsClose CommentsPermalink





(E) requirements to carry contingent capital or similar mechanisms;CommentsClose CommentsPermalink





(F) limits on commingling of commercial and financial activities by large financial institutions;CommentsClose CommentsPermalink





(G) segregation requirements between traditional financial activities and trading or other high-risk operations in large financial institutions; andCommentsClose CommentsPermalink





(H) other limitations on the activities or structure of large financial institutions that may be useful to limit systemic risk.CommentsClose CommentsPermalink





(2) RECOMMENDATIONS- The study required by this section shall include recommendations for the optimal structure of any limits considered in subparagraphs (A) through (E), in order to maximize their effectiveness and minimize their economic impact.CommentsClose CommentsPermalink





(b) Report- Not later than the end of the 180-day period beginning on the date of enactment of this title, and not later than every 5 years thereafter, the Chairperson shall issue a report to the Congress containing any findings and determinations made in carrying out the study required under subsection (a).CommentsClose CommentsPermalink

Subtitle B--Office of Financial ResearchCommentsClose CommentsPermalink

SEC. 151. DEFINITIONS.CommentsClose CommentsPermalink

For purposes of this subtitle--CommentsClose CommentsPermalink





(1) the terms ‘Office’ and ‘Director’ mean the Office of Financial Research established under this subtitle and the Director thereof, respectively;CommentsClose CommentsPermalink





(2) the term ‘financial company’ has the same meaning as in title II, and includes an insured depository institution and an insurance company;CommentsClose CommentsPermalink





(3) the term ‘Data Center’ means the data center established under section 154;CommentsClose CommentsPermalink





(4) the term ‘Research and Analysis Center’ means the research and analysis center established under section 154;CommentsClose CommentsPermalink





(5) the term ‘financial transaction data’ means the structure and legal description of a financial contract, with sufficient detail to describe the rights and obligations between counterparties and make possible an independent valuation;CommentsClose CommentsPermalink





(6) the term ‘position data’--CommentsClose CommentsPermalink





(A) means data on financial assets or liabilities held on the balance sheet of a financial company, where positions are created or changed by the execution of a financial transaction; andCommentsClose CommentsPermalink





(B) includes information that identifies counterparties, the valuation by the financial company of the position, and information that makes possible an independent valuation of the position;CommentsClose CommentsPermalink





(7) the term ‘financial contract’ means a legally binding agreement between 2 or more counterparties, describing rights and obligations relating to the future delivery of items of intrinsic or extrinsic value among the counterparties; andCommentsClose CommentsPermalink





(8) the term ‘financial instrument’ means a financial contract in which the terms and conditions are publicly available, and the roles of one or more of the counterparties are assignable without the consent of any of the other counterparties (including common stock of a publicly traded company, government bonds, or exchange traded futures and options contracts).CommentsClose CommentsPermalink

SEC. 152. OFFICE OF FINANCIAL RESEARCH ESTABLISHED.CommentsClose CommentsPermalink

(a) Establishment- There is established within the Department of the Treasury the Office of Financial Research.CommentsClose CommentsPermalink





(b) Director-CommentsClose CommentsPermalink





(1) IN GENERAL- The Office shall be headed by a Director, who shall be appointed by the President, by and with the advice and consent of the Senate.CommentsClose CommentsPermalink





(2) TERM OF SERVICE- The Director shall serve for a term of 6 years, except that, in the event that a successor is not nominated and confirmed by the end of the term of service of a Director, the Director may continue to serve until such time as the next Director is appointed and confirmed.CommentsClose CommentsPermalink





(3) EXECUTIVE LEVEL- The Director shall be compensated at lLevel III of the Executive Schedule.CommentsClose CommentsPermalink





(4) PROHIBITION ON DUAL SERVICE- The individual serving in the position of Director may not, during such service, also serve as the head of any financial regulatory agency.CommentsClose CommentsPermalink





(5) RESPONSIBILITIES, DUTIES, AND AUTHORITY- The Director shall have sole discretion in the manner in which the Director fulfills the responsibilities and duties and exercises the authorities described in this subtitle.CommentsClose CommentsPermalink





(c) Budget- The Director, in consultation with the Chairperson, shall establish the annual budget of the Office.CommentsClose CommentsPermalink





(d) Office Personnel-CommentsClose CommentsPermalink





(1) IN GENERAL- The Director, in consultation with the Chairperson, may fix the number of, and appoint and direct, all employees of the Office.CommentsClose CommentsPermalink





(2) COMPENSATION- The Director, in consultation with the Chairperson, shall fix, adjust, and administer the pay for all employees of the Office, without regard to chapter 51 or subchapter III of chapter 53 of title 5, United States Code, relating to classification of positions and General Schedule pay rates.CommentsClose CommentsPermalink





(3) COMPARABILITY- Section 1206(a) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1833b(a)) is amended--CommentsClose CommentsPermalink





(A) by striking ‘Finance Board,’ and inserting ‘Finance Board, the Office of Financial Research, and the Bureau of Consumer Financial Protection’; andCommentsClose CommentsPermalink





(B) by striking ‘and the Office of Thrift Supervision,’.CommentsClose CommentsPermalink





(4) SENIOR EXECUTIVES- Section 3132(a)(1)(D) of title 5, United States Code, is amended by striking ‘and the National Credit Union Administration;’ and inserting ‘the National Credit Union Administration, the Bureau of Consumer Financial Protection, and the Office of Financial Research;’.CommentsClose CommentsPermalink





(e) Assistance From Federal Agencies- Any department or agency of the United States may provide to the Office and any special advisory, technical, or professional committees appointed by the Office, such services, funds, facilities, staff, and other support services as the Office may determine advisable. Any Federal Government employee may be detailed to the Office without reimbursement, and such detail shall be without interruption or loss of civil service status or privilege.CommentsClose CommentsPermalink





(f) Procurement of Temporary and Intermittent Services- The Director may procure temporary and intermittent services under section 3109(b) of title 5, United States Code, at rates for individuals which do not exceed the daily equivalent of the annual rate of basic pay prescribed for lLevel V of the Executive Schedule under section 5316 of such title.CommentsClose CommentsPermalink





(g) Contracting and Leasing Authority- Notwithstanding the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 251 et seq.) or any other provision of law, the Director may--

(1) enter into and perform contracts, execute instruments, and acquire, in any lawful manner, such goods and services, or personal or real property (or property interest), as the Director deems necessary to carry out the duties and responsibilities of the Office; and

(2) hold, maintain, sell, lease, or otherwise dispose of the property (or property interest) acquired under paragraph (1).

(h) Non-compete- The Director and any staff of the Office who hasPost-employment Prohibitions- The Secretary, with the concurrence of the Director of the Office of Government Ethics, shall issue regulations prohibiting the Director and any employee of the Office who has had access to the transaction or position data maintained by the Data Center or other business confidential information about financial entities required to report to the Office, may not, for a period of 1 year after last having acces from being employed by or providing advice or consulting services to a financial company, for a period of 1 year after last having had access in the course of official duties to such transaction or position data or business confidential information, be employed by or provide advice or consulting services to a financial company, regardless of whether that entity is required to report to the Office. For staff employees whose access to business confidential information was limited, the Director mayregulations may provide, on a case-by-case basis, for a shorter period of post-employment prohibition, provided that the shorter period does not compromise business confidential information.CommentsClose CommentsPermalink




(ih) Technical and Professional Advisory Committees- The Office, in consultation with the Chairperson, may appoint such special advisory, technical, or professional committees as may be useful in carrying out the functions of the Office, and the members of such committees may be staff of the Office, or other persons, or both.CommentsClose CommentsPermalink





(ji) Fellowship Program- The Office, in consultation with the Chairperson, may establish and maintain an academic and professional fellowship program, under which qualified academics and professionals shall be invited to spend not longer than 2 years at the Office, to perform research and to provide advanced training for Office personnel.CommentsClose CommentsPermalink





(kj) Executive Schedule Compensation- Section 5314 of title 5, United States Code, is amended by adding at the end the following new item:CommentsClose CommentsPermalink





‘Director of the Office of Financial Research.’.CommentsClose CommentsPermalink

SEC. 153. PURPOSE AND DUTIES OF THE OFFICE.CommentsClose CommentsPermalink

(a) Purpose and Duties- The purpose of the Office is to support the Council in fulfilling the purposes and duties of the Council, as set forth in subtitle A, and to support member agencies, by--CommentsClose CommentsPermalink





(1) collecting data on behalf of the Council, and providing such data to the Council and member agencies;CommentsClose CommentsPermalink





(2) standardizing the types and formats of data reported and collected;CommentsClose CommentsPermalink





(3) performing applied research and essential long-term research;CommentsClose CommentsPermalink





(4) developing tools for risk measurement and monitoring;CommentsClose CommentsPermalink





(5) performing other related services;CommentsClose CommentsPermalink





(6) making the results of the activities of the Office available to financial regulatory agencies; andCommentsClose CommentsPermalink





(7) assisting such member agencies in determining the types and formats of data authorized by this Act to be collected by such member agencies.CommentsClose CommentsPermalink





(b) Administrative Authority- The Office may--CommentsClose CommentsPermalink





(1) share data and information, including software developed by the Office, with the Council and member agencie, member agencies, and the Bureau of Economic Analysis, which shared data, information, and software--CommentsClose CommentsPermalink





(A) shall be maintained with at least the same level of security as is used by the Office; andCommentsClose CommentsPermalink





(B) may not be shared with any individual or entity without the permission of the Council;CommentsClose CommentsPermalink





(2) sponsor and conduct research projects; andCommentsClose CommentsPermalink





(3) assist, on a reimbursable basis, with financial analyses undertaken at the request of other Federal agencies that are not member agencies.CommentsClose CommentsPermalink





(c) Rulemaking Authority-CommentsClose CommentsPermalink





(1) SCOPE- The Office, in consultation with the Chairperson, shall issue rules, regulations, and orders only to the extent necessary to carry out the purposes and duties described in paragraphs (1), (2), and (7) of subsection (a).CommentsClose CommentsPermalink





(2) STANDARDIZATION- Member agencies, in consultation with the Office, shall implement regulations promulgated by the Office under paragraph (1) to standardize the types and formats of data reported and collected on behalf of the Council, as described in subsection (a)(2). If a member agency fails to implement such regulations prior to the expiration of the 3-year period following the date of publication of final regulations, the Office, in consultation with the Chairperson, may implement such regulations with respect to the financial entities under the jurisdiction of the member agency. This paragraph shall not supersede or interfere with the independent authority of a member agency under other law to collect data, in such format and manner as the member agency requires.CommentsClose CommentsPermalink





(d) Testimony-CommentsClose CommentsPermalink





(1) IN GENERAL- The Director of the Office shall report to and testify before the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives annually on the activities of the Office, including the work of the Data Center and the Research and Analysis Center, and the assessment of the Office of significant financial market developments and potential emerging threats to the financial stability of the United States.CommentsClose CommentsPermalink





(2) NO PRIOR REVIEW- No officer or agency of the United States shall have any authority to require the Director to submit the testimony required under paragraph (1) or other Ccongressional testimony to any officer or agency of the United States for approval, comment, or review prior to the submission of such testimony. Any such testimony to Congress shall include a statement that the views expressed therein are those of the Director and do not necessarily represent the views of the President.CommentsClose CommentsPermalink





(e) Additional Reports- The Director may provide additional reports to Congress concerning the financial stability of the United States. The Director shall notify the Council of any such additional reports provided to Congress.CommentsClose CommentsPermalink





(f) Subpoena-CommentsClose CommentsPermalink





(1) IN GENERAL- The Director may require from a financial company, by subpoena, the production of the data requested under subsection (a)(1) and section 154(b)(1), but only upon a written finding by the Director that--CommentsClose CommentsPermalink





(A) such data is required to carry out the functions described under this subtitle; andCommentsClose CommentsPermalink





(B) the Office has coordinated with such agency, as required under section 154(b)(1)(B)(ii).(2)the relevant primary financial regulatory agency, as required under section 154(b)(1)(B)(ii).CommentsClose CommentsPermalink





(2) FORMAT- Subpoenas under paragraph (1) shall bear the signature of the Director, and shall be served by any person or class of persons designated by the Director for that purpose.CommentsClose CommentsPermalink





(3) ENFORCEMENT- In the case of contumacy or failure to obey a subpoena, the subpoena shall be enforceable by order of any appropriate district court of the United States. Any failure to obey the order of the court may be punished by the court as a contempt of court.CommentsClose CommentsPermalink

SEC. 154. ORGANIZATIONAL STRUCTURE; RESPONSIBILITIES OF PRIMARY PROGRAMMATIC UNITS.CommentsClose CommentsPermalink

(a) In General- There are established within the Office, to carry out the programmatic responsibilities of the Office--CommentsClose CommentsPermalink





(1) the Data Center; andCommentsClose CommentsPermalink





(2) the Research and Analysis Center.CommentsClose CommentsPermalink





(b) Data Center-CommentsClose CommentsPermalink





(1) GENERAL DUTIES-CommentsClose CommentsPermalink





(A) DATA COLLECTION- The Data Center, on behalf of the Council, shall collect, validate, and maintain all data necessary to carry out the duties of the Data Center, as described in this subtitle. The data assembled shall be obtained from member agencies, commercial data providers, publicly available data sources, and financial entities under subparagraph (B).CommentsClose CommentsPermalink





(B) AUTHORITY-CommentsClose CommentsPermalink





(i) IN GENERAL- The Office may, as determined by the Council or by the Director in consultation with the Council, require the submission of periodic and other reports from any financial company for the purpose of assessing the extent to which a financial activity or financial market in which the financial company participates, or the financial company itself, poses a threat to the financial stability of the United States.CommentsClose CommentsPermalink





(ii) MITIGATION OF REPORT BURDEN- Before requiring the submission of a report from any financial company that is regulated by a member agency or any primary financial regulatory agency, the Office shall coordinate with such agencies, any primary financial regulatory agency, a foreign supervisory authority, or the Office shall coordinate with such agencies or authority, and shall, whenever possible, rely on information available from such agencies.(C) or authority.CommentsClose CommentsPermalink





(iii) COLLECTION OF FINANCIAL TRANSACTION AND POSITION DATA- The Office shall collect, on a schedule determined by the Director, in consultation with the Council, financial transaction data and position data from financial companies.CommentsClose CommentsPermalink





(C) RULEMAKING- The Office shall promulgate regulations pursuant to subsections (a)(1), (a)(2), (a)(7), and (c)(1) of section 153 regarding the type and scope of the data to be collected by the Data Center under this paragraph.CommentsClose CommentsPermalink





(2) RESPONSIBILITIES-CommentsClose CommentsPermalink





(A) PUBLICATION- The Data Center shall prepare and publish, in a manner that is easily accessible to the public--CommentsClose CommentsPermalink





(i) a financial company reference database;CommentsClose CommentsPermalink





(ii) a financial instrument reference database; andCommentsClose CommentsPermalink





(iii) formats and standards for Office data, including standards for reporting financial transaction and position data to the Office.CommentsClose CommentsPermalink





(B) CONFIDENTIALITY- The Data Center shall not publish any confidential data under subparagraph (A).CommentsClose CommentsPermalink





(3) INFORMATION SECURITY- The Director shall ensure that data collected and maintained by the Data Center are kept secure and protected against unauthorized disclosure.CommentsClose CommentsPermalink





(4) CATALOG OF FINANCIAL ENTITIES AND INSTRUMENTS- The Data Center shall maintain a catalog of the financial entities and instruments reported to the Office.CommentsClose CommentsPermalink





(5) AVAILABILITY TO THE COUNCIL AND MEMBER AGENCIES- The Data Center shall make data collected and maintained by the Data Center available to the Council and member agencies, as necessary to support their regulatory responsibilities.CommentsClose CommentsPermalink





(6) OTHER AUTHORITY- The Office shall, after consultation with the member agencies, provide certain data to financial industry participants and to the general public to increase market transparency and facilitate research on the financial system, to the extent that intellectual property rights are not violated, business confidential information is properly protected, and the sharing of such information poses no significant threats to the financial system of the United States.CommentsClose CommentsPermalink





(c) Research and Analysis Center-CommentsClose CommentsPermalink





(1) GENERAL DUTIES- The Research and Analysis Center, on behalf of the Council, shall develop and maintain independent analytical capabilities and computing resources--CommentsClose CommentsPermalink





(A) to develop and maintain metrics and reporting systems for risks to the financial stability of the United States;CommentsClose CommentsPermalink





(B) to monitor, investigate, and report on changes in system-wide risk levels and patterns to the Council and Congress;CommentsClose CommentsPermalink





(C) to conduct, coordinate, and sponsor research to support and improve regulation of financial entities and markets;CommentsClose CommentsPermalink





(D) to evaluate and report on stress tests or other stability-related evaluations of financial entities overseen by the member agencies;CommentsClose CommentsPermalink





(E) to maintain expertise in such areas as may be necessary to support specific requests for advice and assistance from financial regulators;CommentsClose CommentsPermalink





(F) to investigate disruptions and failures in the financial markets, report findings, and make recommendations to the Council based on those findings;CommentsClose CommentsPermalink





(G) to conduct studies and provide advice on the impact of policies related to systemic risk; andCommentsClose CommentsPermalink





(H) to promote best practices for financial risk management.CommentsClose CommentsPermalink





(d) Reporting Responsibilities-CommentsClose CommentsPermalink





(1) REQUIRED REPORTS- Not later than 2 years after the date of enactment of this Act, and not later than 120 days after the end of each fiscal year thereafter, the Office shall prepare and submit a report to Congress.CommentsClose CommentsPermalink





(2) CONTENT- Each report required by this subsection shall assess the state of the United States financial system, including--CommentsClose CommentsPermalink





(A) an analysis of any threats to the financial stability of the United States;CommentsClose CommentsPermalink





(B) the status of the efforts of the Office in meeting the mission of the Office; andCommentsClose CommentsPermalink





(C) key findings from the research and analysis of the financial system by the Office.CommentsClose CommentsPermalink

SEC. 155. FUNDING.CommentsClose CommentsPermalink

(a) Financial Research Fund-CommentsClose CommentsPermalink





(1) FUND ESTABLISHED- There is established in the Treasury of the United States a separate fund to be known as the ‘Financial Research Fund’.CommentsClose CommentsPermalink





(2) FUND RECEIPTS- All amounts provided to the Office under subsection (c), and all assessments that the Office receives under subsection (d) shall be deposited into the Financial Research Fund.CommentsClose CommentsPermalink





(3) INVESTMENTS AUTHORIZED-CommentsClose CommentsPermalink





(A) AMOUNTS IN FUND MAY BE INVESTED- The Director may request the Secretary to invest the portion of the Financial Research Fund that is not, in the judgment of the Director, required to meet the needs of the Office.CommentsClose CommentsPermalink





(B) ELIGIBLE INVESTMENTS- Investments shall be made by the Secretary in obligations of the United States or obligations that are guaranteed as to principal and interest by the United States, with maturities suitable to the needs of the Financial Research Fund, as determined by the Director.CommentsClose CommentsPermalink





(4) INTEREST AND PROCEEDS CREDITED- The interest on, and the proceeds from the sale or redemption of, any obligations held in the Financial Research Fund shall be credited to and form a part of the Financial Research Fund.CommentsClose CommentsPermalink





(b) Use of Funds-CommentsClose CommentsPermalink





(1) IN GENERAL- Funds obtained by, transferred to, or credited to the Financial Research Fund shall be immediately available to the Office, and shall remain available until expended, to pay the expenses of the Office in carrying out the duties and responsibilities of the Office.CommentsClose CommentsPermalink





(2) FEES, ASSESSMENTS, AND OTHER FUNDS NOT GOVERNMENT FUNDS- Funds obtained by, transferred to, or credited to the Financial Research Fund shall not be construed to be Government funds or appropriated monieeys.CommentsClose CommentsPermalink





(3) AMOUNTS NOT SUBJECT TO APPORTIONMENT- Notwithstanding any other provision of law, amounts in the Financial Research Fund shall not be subject to apportionment for purposes of chapter 15 of title 31, United States Code, or under any other authority, or for any other purpose.CommentsClose CommentsPermalink





(c) Interim Funding- During the 2-year period following the date of enactment of this Act, the Board of Governors shall provide to the Office an amount sufficient to cover the expenses of the Office.CommentsClose CommentsPermalink





(d) Permanent Self-funding- (1) IN GENERAL- Beginning 2 years after the date of enactment of this Act, the Secretary shall establish, by regulation, and with the approval of the Council, an assessment schedule, including the assessment base and rates, applicable to bank holding companies with total consolidated assets of $50,000,000,000 or greater and nonbank financial companies supervised by the Board of Governors, that takes into account differences among such companies, based on the considerations for establishing the prudential standards under section 115, to collect assessments equal to the estimated total expenses of the Office.(2) SHORTFALL- To the extent that the assessments under paragraph (1) do not fully cover the total expenses of the Office, the Board of Governors shall provide to the Office an amount sufficient to cover the differentotal expenses of the Office.CommentsClose CommentsPermalink

SEC. 156. TRANSITION OVERSIGHT.CommentsClose CommentsPermalink

(a) Purpose- The purpose of this section is to ensure that the Office--CommentsClose CommentsPermalink





(1) has an orderly and organized startup;CommentsClose CommentsPermalink





(2) attracts and retains a qualified workforce; andCommentsClose CommentsPermalink





(3) establishes comprehensive employee training and benefits programs.CommentsClose CommentsPermalink





(b) Reporting Requirement-CommentsClose CommentsPermalink





(1) IN GENERAL- The Office shall submit an annual report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives that includes the plans described in paragraph (2).CommentsClose CommentsPermalink





(2) PLANS- The plans described in this paragraph are as follows:CommentsClose CommentsPermalink





(A) TRAINING AND WORKFORCE DEVELOPMENT PLAN- The Office shall submit a training and workforce development plan that includes, to the extent practicable--CommentsClose CommentsPermalink





(i) identification of skill and technical expertise needs and actions taken to meet those requirements;CommentsClose CommentsPermalink





(ii) steps taken to foster innovation and creativity;CommentsClose CommentsPermalink





(iii) leadership development and succession planning; andCommentsClose CommentsPermalink





(iv) effective use of technology by employees.CommentsClose CommentsPermalink





(B) WORKPLACE FLEXIBILITY PLAN- The Office shall submit a workforce flexibility plan that includes, to the extent practicable--CommentsClose CommentsPermalink





(i) telework;CommentsClose CommentsPermalink





(ii) flexible work schedules;CommentsClose CommentsPermalink





(iii) phased retirement;CommentsClose CommentsPermalink





(iv) reemployed annuitants;CommentsClose CommentsPermalink





(v) part-time work;CommentsClose CommentsPermalink





(vi) job sharing;CommentsClose CommentsPermalink





(vii) parental leave benefits and childcare assistance;CommentsClose CommentsPermalink





(viii) domestic partner benefits;CommentsClose CommentsPermalink





(ix) other workplace flexibilities; orCommentsClose CommentsPermalink





(x) any combination of the items described in clauses (i) through (ix).CommentsClose CommentsPermalink





(C) RECRUITMENT AND RETENTION PLAN- The Office shall submit a recruitment and retention plan that includes, to the extent practicable, provisions relating to--CommentsClose CommentsPermalink





(i) the steps necessary to target highly qualified applicant pools with diverse backgrounds;CommentsClose CommentsPermalink





(ii) streamlined employment application processes;CommentsClose CommentsPermalink





(iii) the provision of timely notification of the status of employment applications to applicants; andCommentsClose CommentsPermalink





(iv) the collection of information to measure indicators of hiring effectiveness.CommentsClose CommentsPermalink





(c) Expiration- The reporting requirement under subsection (b) shall terminate 5 years after the date of enactment of this Act.CommentsClose CommentsPermalink





(d) Rule of Construction- Nothing in this section may be construed to affect--CommentsClose CommentsPermalink





(1) a collective bargaining agreement, as that term is defined in section 7103(a)(8) of title 5, United States Code, that is in effect on the date of enactment of this Act; orCommentsClose CommentsPermalink





(2) the rights of employees under chapter 71 of title 5, United States Code.CommentsClose CommentsPermalink

Subtitle C--Additional Board of Governors Authority for Certain Nonbank Financial Companies and Bank Holding CompaniesCommentsClose CommentsPermalink

SEC. 161. REPORTS BY AND EXAMINATIONS OF NONBANK FINANCIAL COMPANIES BY THE BOARD OF GOVERNORS.CommentsClose CommentsPermalink

(a) Reports-CommentsClose CommentsPermalink





(1) IN GENERAL- The Board of Governors may require each nonbank financial company supervised by the Board of Governors, and any subsidiary thereof, to submit reports under oath, to keep the Board of Governors informed as to--CommentsClose CommentsPermalink





(A) the financial condition of the company or subsidiary, systems of the company or subsidiary for monitoring and controlling financial, operating, and other risks, and the extent to which the activities and operations of the company or subsidiary pose a threat to the financial stability of the United States; andCommentsClose CommentsPermalink





(B) compliance by the company or subsidiary with the requirements of this subtitle.CommentsClose CommentsPermalink





(2) USE OF EXISTING REPORTS AND INFORMATION- In carrying out subsection (a), the Board of Governors shall, to the fullest extent possible, use--CommentsClose CommentsPermalink





(A) reports and supervisory information that a nonbank financial company or subsidiary thereof has been required to provide to other Federal or State regulatory agencies;CommentsClose CommentsPermalink





(B) information otherwise obtainable from Federal or State regulatory agencies;CommentsClose CommentsPermalink





(C) information that is otherwise required to be reported publicly; andCommentsClose CommentsPermalink





(D) externally audited financial statements of such company or subsidiary.CommentsClose CommentsPermalink





(3) AVAILABILITY- Upon the request of the Board of Governors, a nonbank financial company supervised by the Board of Governors, or a subsidiary thereof, shall promptly provide to the Board of Governors any information described in paragraph (2).CommentsClose CommentsPermalink





(b) Examinations-CommentsClose CommentsPermalink





(1) IN GENERAL- Subject to paragraph (2), the Board of Governors may examine any nonbank financial company supervised by the Board of Governors and any subsidiary of such company, to determineinform the Board of Governors of--CommentsClose CommentsPermalink





(A) the nature of the operations and financial condition of the company and such subsidiary;CommentsClose CommentsPermalink





(B) the financial, operational, and other risks within the companof the company or such subsidiary that may pose a threat to the safety and soundness of such company or to the financial stability of the United States;(C) the systems for subsidiary or to the financial stability of the United States;CommentsClose CommentsPermalink





(C) the systems for monitoring and controlling such risks; andCommentsClose CommentsPermalink





(D) compliance by the company with the requirements of this subor such subsidiary with the requirements of this title.CommentsClose CommentsPermalink





(2) USE OF EXAMINATION REPORTS AND INFORMATION- For purposes of this subsection, the Board of Governors shall, to the fullest extent possible, rely on reports of examination of any depository institution subsidiarysubsidiary depository institution or functionally regulated subsidiary made by the primary financial regulatory agency for that subsidiary, and on information described in subsection (a)(2).CommentsClose CommentsPermalink





(c) Coordination With Primary Financial Regulatory Agency- The Board of Governors shall--CommentsClose CommentsPermalink





(1) provide to the primary financial regulatory agency for any company or subsidiary, reasonable notice before requiring a report, requesting information,reasonable notice to, and consult with, the primary financial regulatory agency for any subsidiary before requiring a report or commencing an examination of such subsidiary under this section; andCommentsClose CommentsPermalink





(2) avoid duplication of examination activities, reporting requirements, and requests for information, to the extentfullest extent possible.CommentsClose CommentsPermalink

SEC. 162. ENFORCEMENT.CommentsClose CommentsPermalink

(a) In General- Except as provided in subsection (b), a nonbank financial company supervised by the Board of Governors and any subsidiaries of such company (other than any depository institution subsidiary) shall be subject to the provisions of subsections (b) through (n) of section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818), in the same manner and to the same extent as if the company were a bank holding company, as provided in section 8(b)(3) of the Federal Deposit Insurance Act (12 U.S.C. 1818(b)(3)).CommentsClose CommentsPermalink





(b) Enforcement Authority for Functionally Regulated Subsidiaries-CommentsClose CommentsPermalink





(1) REFERRAL- If the Board of Governors determines that a condition, practice, or activity of a depository institution subsidiary or functionally regulated subsidiary of a nonbank financial company supervised by the Board of Governors does not comply with the regulations or orders prescribed by the Board of Governors under this Act, or otherwise poses a threat to the financial stability of the United States, the Board of Governors may recommend, in writing, to the primary financial regulatory agency for the subsidiary that such agency initiate a supervisory action or enforcement proceeding. The recommendation shall be accompanied by a written explanation of the concerns giving rise to the recommendation.CommentsClose CommentsPermalink





(2) BACK-UP AUTHORITY OF THE BOARD OF GOVERNORS- If, during the 60-day period beginning on the date on which the primary financial regulatory agency receives a recommendation under paragraph (1), the primary financial regulatory agency does not take supervisory or enforcement action against a subsidiary that is acceptable to the Board of Governors, the Board of Governors (upon a vote of its members) may take the recommended supervisory or enforcement action, as if the subsidiary were a bank holding company subject to supervision by the Board of Governors.CommentsClose CommentsPermalink

SEC. 163. ACQUISITIONS.CommentsClose CommentsPermalink

(a) Acquisitions of Banks; Treatment as a Bank Holding Company- For purposes of section 3 of the Bank Holding Company Act of 1956 (12 U.S.C. 1842), a nonbank financial company supervised by the Board of Governors shall be deemed to be, and shall be treated as, a bank holding company.CommentsClose CommentsPermalink





(b) Acquisition of Nonbank Companies-CommentsClose CommentsPermalink





(1) PRIOR NOTICE FOR LARGE ACQUISITIONS- Notwithstanding section 4(k)(6)(B) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(k)(6)(B)), a bank holding company with total consolidated assets equal to or greater than $50,000,000,000 or a nonbank financial company supervised by the Board of Governors shall not acquire direct or indirect ownership or control of any voting shares of any company (other than an insured depository institution) that is engaged in activities described in section 4(k) of the Bank Holding Company Act of 1956 having total consolidated assets of $10,000,000,000 or more, without providing written notice to the Board of Governors in advance of the transaction.CommentsClose CommentsPermalink





(2) EXEMPTIONS- The prior notice requirement in paragraph (1) shall not apply with regard to the acquisition of shares that would qualify for the exemptions in section 4(c) or section 4(k)(4)(E) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(c) and (k)(4)(E)).CommentsClose CommentsPermalink





(3) NOTICE PROCEDURES- The notice procedures set forth in section 4(j)(1) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(j)(1)), without regard to section 4(j)(3) of that Act, shall apply to an acquisition of any company (other than an insured depository institution) by a bank holding company with total consolidated assets equal to or greater than $50,000,000,000 or a nonbank financial company supervised by the Board of Governors, as described in paragraph (1), including any such company engaged in activities described in section 4(k) of that Act.CommentsClose CommentsPermalink





(4) STANDARDS FOR REVIEW- In addition to the standards provided in section 4(j)(2) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(j)(2)), the Board of Governors shall consider the extent to which the proposed acquisition would result in greater or more concentrated risks to global or United States financial stability or the United States economy.CommentsClose CommentsPermalink





(5) HART-SCOTT-RODINO FILING REQUIREMENT- Solely for purposes of section 7A(c)(8) of the Clayton Act (15 U.S.C. 18a(c)(8)), the transactions subject to the requirements of paragraph (1) shall be treated as if Board of Governors approval is not required.CommentsClose CommentsPermalink

SEC. 164. PROHIBITION AGAINST MANAGEMENT INTERLOCKS BETWEEN CERTAIN FINANCIAL COMPANIES.CommentsClose CommentsPermalink

A nonbank financial company supervised by the Board of Governors shall be treated as a bank holding company for purposes of the Depository Institutions Management Interlocks Act (12 U.S.C. 3201 et seq.), except that the Board of Governors shall not exercise the authority provided in section 7 of that Act (12 U.S.C. 3207) to permit service by a management official of a nonbank financial company supervised by the Board of Governors as a management official of any bank holding company with total consolidated assets equal to or greater than $50,000,000,000, or other nonaffiliated nonbank financial company supervised by the Board of Governors (other than to provide a temporary exemption for interlocks resulting from a merger, acquisition, or consolidation).CommentsClose CommentsPermalink

SEC. 165. ENHANCED SUPERVISION AND PRUDENTIAL STANDARDS FOR NONBANK FINANCIAL COMPANIES SUPERVISED BY THE BOARD OF GOVERNORS AND CERTAIN BANK HOLDING COMPANIES.CommentsClose CommentsPermalink

(a) In General-CommentsClose CommentsPermalink





(1) PURPOSE- In order to prevent or mitigate risks to the financial stability of the United States that could arise from the material financial distress or failure, or ongoing activities, of large, interconnected financial institutions, the Board of Governors shall, on its own or pursuant to recommendations by the Council under section 115, establish prudential standards and reporting and disclosure requirements applicable tofor nonbank financial companies supervised by the Board of Governors and large, interconnected bank holding companiesbank holding companies with total consolidated assets equal to or greater than $50,000,000,000 that--CommentsClose CommentsPermalink





(A) are more stringent than the standards and requirements applicable to nonbank financial companies and bank holding companies that do not present similar risks to the financial stability of the United States; andCommentsClose CommentsPermalink





(B) increase in stringency, based on the considerations identified in subsection (b)(3).CommentsClose CommentsPermalink





(2) LIMITATION ON BANK HOLDING COMPANIES- Any standards established under subsections (b) through (f) shall not apply to any bank holding company with total consolidated assets of less than $50,000,000,000, but the Board of Governors mayTAILORED APPLICATION-CommentsClose CommentsPermalink





(A) IN GENERAL- In prescribing more stringent prudential standards under this section, the Board of Governors may, on its own or pursuant to a recommendation by the Council in accordance with section 115, differentiate among companies on an individual basis or by category, taking into consideration their capital structure, riskiness, complexity, financial activities (including the financial activities of their subsidiaries), size, and any other risk-related factors that the Board of Governors deems appropriate.CommentsClose CommentsPermalink





(B) ADJUSTMENT OF THRESHOLD FOR APPLICATION OF CERTAIN STANDARDS- The Board of Governors may, pursuant to a recommendation by the Council in accordance with section 115, establish an asset threshold greater than $50,000,000,000 for the applicability of any particular standard under subsections (b) through (fabove $50,000,000,000 for the application of any standard established under subsections (c) through (g).CommentsClose CommentsPermalink





(b) Development of Prudential Standards-CommentsClose CommentsPermalink





(1) IN GENERAL-CommentsClose CommentsPermalink





(A) REQUIRED STANDARDS- The Board of Governors shall, by regulation or order, establish prudential standards for nonbank financial companies supervised by the Board of Governors and bank holding companies described in subsection (a), that shall include--CommentsClose CommentsPermalink





(i) risk-based capital requirements;(ii) and leverage limits;(i, unless the Board of Governors, in consultation with the Council, determines that such requirements are not appropriate for a company subject to more stringent prudential standards because of the activities of such company (such as investment company activities or assets under management) or structure, in which case, the Board of Governors shall apply other standards that result in similarly stringent risk controls;CommentsClose CommentsPermalink





(ii) liquidity requirements;CommentsClose CommentsPermalink





(iii) overall risk management requirements;CommentsClose CommentsPermalink





(iv) resolution plan and credit exposure report requirements; andCommentsClose CommentsPermalink





(v) concentration limits.CommentsClose CommentsPermalink





(B) ADDITIONAL STANDARDS AUTHORIZED- The Board of Governors may, by regulation or order, establish establish additional prudential standards for nonbank financial companies supervised by the Board of Governors and bank holding companies described in subsection (a), that include--CommentsClose CommentsPermalink





(i) a contingent capital requirement;CommentsClose CommentsPermalink





(ii) enhanced public disclosures;CommentsClose CommentsPermalink





and(iii) overall risk management requirements (iii) short-term debt limits; and CommentsClose CommentsPermalink





(iv) such other prudential standards as the Board or Governors, on its own or pursuant to a recommendation made by the Council in accordance with section 115, determines are appropriate.CommentsClose CommentsPermalink





(2) PRUDENTIAL STANDARDS FOR FOREIGN FINANCIAL COMPANIES- In applying the standards set forth in paragraph (1) to foreign nonbank financial companies supervised by the Board of Governors and to foreign-based bank holding companies, the Board of Governors shallany foreign nonbank financial company supervised by the Board of Governors or foreign-based bank holding company, the Board of Governors shall--CommentsClose CommentsPermalink





(A) give due regard to the principle of national treatment and competitive equityequality of competitive opportunity; andCommentsClose CommentsPermalink





(B) take into account the extent to which the foreign financial company is subject on a consolidated basis to home country standards that are comparable to those applied to financial companies in the United States.CommentsClose CommentsPermalink





(3) CONSIDERATIONS- In prescribing prudential standards under paragraph (1), the Board of Governors shall--CommentsClose CommentsPermalink





(A) take into account differences among nonbank financial companies supervised by the Board of Governors and bank holding companies described in subsection (a), based on--CommentsClose CommentsPermalink





(i) the factors described in subsections (a) and (b) of section 113;CommentsClose CommentsPermalink





(ii) whether the company owns an insured depository institution;CommentsClose CommentsPermalink





(iii) nonfinancial activities and affiliations of the company; andCommentsClose CommentsPermalink





(iv) any other risk-related factors that the Board of Governors determines appropriate;CommentsClose CommentsPermalink





(B) to the extent possible, ensure that small changes in the factors listed in subsections (a) and (b) of section 113 would not result in sharp, discontinuous changes in the prudential standards established under paragraph (1) of this subsection;CommentsClose CommentsPermalink





and(C) take into account any recommendations of the Council under section 115; andCommentsClose CommentsPermalink





(D) adapt the required standards as appropriate in light of any predominant line of business of such company, including assets under management or other activities for which particular standards may not be appropriate.CommentsClose CommentsPermalink





(4) REPORT- The Board of Governors shall submit an annual report to Congress regarding theCONSULTATION- Before imposing prudential standards or any other requirements pursuant to this section, including notices of deficiencies in resolution plans and more stringent requirements or divestiture orders resulting from such notices, that are likely to have a significant impact on a functionally regulated subsidiary or depository institution subsidiary of a nonbank financial company supervised by the Board of Governors or a bank holding company described in subsection (a), the Board of Governors shall consult with each Council member that primarily supervises any such subsidiary with respect to any such standard or requirement.CommentsClose CommentsPermalink





(5) REPORT- The Board of Governors shall submit an annual report to Congress regarding the implementation of the prudential standards required pursuant to paragraph (1), including the use of such standards to mitigate risks to the financial stability of the United States.CommentsClose CommentsPermalink





(c) Contingent Capital-CommentsClose CommentsPermalink





(1) IN GENERAL- Subsequent to submission by the Council of a report to Congress under section 115(c), the Board of Governors may promulgatissue regulations that require each nonbank financial company supervised by the Board of Governors and bank holding companies described in subsection (a) to maintain a minimum amount of long-term hybrid debt that is contingent capital that is convertible to equity in times of financial stress.CommentsClose CommentsPermalink





(2) FACTORS TO CONSIDER- In establishing regulations under this subsection, the Board of Governors shall consider--(A) the results of the study issuing regulations under this subsection, the Board of Governors shall consider--CommentsClose CommentsPermalink





(A) the results of the study undertaken by the Council, and any recommendations of the Council, under section 115(c);CommentsClose CommentsPermalink





(B) an appropriate transition period for implementation of a conversioncontingent capital under this subsection;CommentsClose CommentsPermalink





(C) the factors described in subsection (b)(3)(A);CommentsClose CommentsPermalink





(D) capital requirements applicable to the nonbank financial company supervised by the Board of Governors or a bank holding company described in subsection (a), and subsidiaries thereof; andCommentsClose CommentsPermalink





(E) any other factor that the Board of Governors deems appropriate.CommentsClose CommentsPermalink





(d) Resolution Plan and Credit Exposure Reports-CommentsClose CommentsPermalink





(1) RESOLUTION PLAN- The Board of Governors shall require each nonbank financial company supervised by the Board of Governors and bank holding companies described in subsection (a) to report periodically to the Board of Governors, the Council, and the Corporation the plan of such company for rapid and orderly resolution in the event of material financial distress or failure, which shall include--CommentsClose CommentsPermalink





(A) information regarding the manner and extent to which any insured depository institution affiliated with the company is adequately protected from risks arising from the activities of any nonbank subsidiaries of the company;CommentsClose CommentsPermalink





(B) full descriptions of the ownership structure, assets, liabilities, and contractual obligations of the company;CommentsClose CommentsPermalink





(C) identification of the cross-guarantees tied to different securities, identification of major counterparties, and a process for determining to whom the collateral of the company is pledged; andCommentsClose CommentsPermalink





(D) any other information that the Board of Governors and the Corporation jointly require by rule or order.CommentsClose CommentsPermalink





(2) CREDIT EXPOSURE REPORT- The Board of Governors shall require each nonbank financial company supervised by the Board of Governors and bank holding companies described in subsection (a) to report periodically to the Board of Governors, the Council, and the Corporation on--CommentsClose CommentsPermalink





(A) the nature and extent to which the company has credit exposure to other significant nonbank financial companies and significant bank holding companies; andCommentsClose CommentsPermalink





(B) the nature and extent to which other significant nonbank financial companies and significant bank holding companies have credit exposure to that company.CommentsClose CommentsPermalink





(3) REVIEW- The Board of Governors and the Corporation shall review the information provided in accordance with this subsection by each nonbank financial company supervised by the Board of Governors and bank holding company described in subsection (a).CommentsClose CommentsPermalink





(4) NOTICE OF DEFICIENCIES- If the Board of Governors and the Corporation jointly determine, based on their review under paragraph (3), that the resolution plan of a nonbank financial company supervised by the Board of Governors or a bank holding company described in subsection (a) is not credible or would not facilitate an orderly resolution of the company under title 11, United States Code--CommentsClose CommentsPermalink





(A) the Board of Governors and the Corporation shall notify the company, as applicable, of the of the deficiencies in the resolution plan; andCommentsClose CommentsPermalink





(B) the company shall resubmit the resolution plan within a timeframe determined by the Board of Governors and the Corporation, with revisions demonstrating that the plan is credible and would result in an orderly resolution under title 11, United States Code, including any proposed changes in business operations and corporate structure to facilitate implementation of the plan.CommentsClose CommentsPermalink





(5) FAILURE TO RESUBMIT CREDIBLE PLAN-CommentsClose CommentsPermalink





(A) IN GENERAL- If a nonbank financial company supervised by the Board of Governors or a bank holding company described in subsection (a) fails to timely resubmit the resolution plan as required under paragraph (4), with such revisions as are required under subparagraph (B), the Board of Governors and the Corporation may jointly impose more stringent capital, leverage, or liquidity requirements, or restrictions on the growth, activities, or operations of the company, or any subsidiary thereof, until such time as the company resubmits a plan that remedies the deficiencies.CommentsClose CommentsPermalink





(B) DIVESTITURE- The Board of Governors and the Corporation, in consultation with the Council, may jointly direct a nonbank financial company supervised by the Board of Governors or a bank holding company described in subsection (a), by order, to divest certain assets or operations identified by the Board of Governors and the Corporation, to facilitate an orderly resolution of such company under title 11, United States Code, in the event of the failure of such company, in any case in which--CommentsClose CommentsPermalink





(i) the Board of Governors and the Corporation have jointly imposed more stringent requirements on the company pursuant to subparagraph (A); andCommentsClose CommentsPermalink





(ii) the company has failed, within the 2-year period beginning on the date of the imposition of such requirements under subparagraph (A), to resubmit the resolution plan with such revisions as were required under paragraph (4)(B).CommentsClose CommentsPermalink





(6) NO LIMITING EFFECT- A resolution plan submitted in accordance with this subsection shall not be binding on a bankruptcy court, a receiver appointed under title II, or any other authority that is authorized or required to resolve the nonbank financial company supervised by the Board, any bank holding company, or any subsidiary or affiliate of the foregoing.CommentsClose CommentsPermalink





(7) NO PRIVATE RIGHT OF ACTION- No private right of action may be based on any resolution plan submitted in accordance with this subsection.CommentsClose CommentsPermalink





(8) RULES- Not later than 18 months after the date of enactment of this Act, the Board of Governors and the Corporation shall jointly issue final rules implementing this subsection.CommentsClose CommentsPermalink





(e) Concentration Limits-CommentsClose CommentsPermalink





(1) STANDARDS- In order to limit the risks that the failure of any individual company could pose to a nonbank financial company supervised by the Board of Governors or a bank holding company described in subsection (a), the Board of Governors, by regulation, shall prescribe standards that limit such risks.CommentsClose CommentsPermalink





(2) LIMITATION ON CREDIT EXPOSURE- The regulations prescribed by the Board of Governors under paragraph (1) shall prohibit each nonbank financial company supervised by the Board of Governors and bank holding company described in subsection (a) from having credit exposure to any unaffiliated company that exceeds 25 percent of the capital stock and surplus (or such lower amount as the Board of Governors may determine by regulation to be necessary to mitigate risks to the financial stability of the United States) of the company.CommentsClose CommentsPermalink





(3) CREDIT EXPOSURE- For purposes of paragraph (2), ‘credit exposure’ to a company means--CommentsClose CommentsPermalink





(A) all extensions of credit to the company, including loans, deposits, and lines of credit;CommentsClose CommentsPermalink





(B) all repurchase agreements and reverse repurchase agreements with the company;(C) all securities borrowing and lending transactions with the company, to the extent that such transactions , and all securities borrowing and lending transactions with the company, to the extent that such transactions create credit exposure for the nonbank financial company supervised by the Board of Governors or a bank holding company described in subsection (a);CommentsClose CommentsPermalink





(DC) all guarantees, acceptances, or letters of credit (including endorsement or standby letters of credit) issued on behalf of the company;CommentsClose CommentsPermalink





(ED) all purchases of or investment in securities issued by the company;CommentsClose CommentsPermalink





(FE) counterparty credit exposure to the company in connection with a derivative transaction between the nonbank financial company supervised by the Board of Governors or a bank holding company described in subsection (a) and the company; andCommentsClose CommentsPermalink





(GF) any other similar transactions that the Board of Governors, by regulation, determines to be a credit exposure for purposes of this section.CommentsClose CommentsPermalink





(4) ATTRIBUTION RULE- For purposes of this subsection, any transaction by a nonbank financial company supervised by the Board of Governors or a bank holding company described in subsection (a) with any person is a transaction with a company, to the extent that the proceeds of the transaction are used for the benefit of, or transferred to, that company.CommentsClose CommentsPermalink





(5) RULEMAKING- The Board of Governors may issue such regulations and orders, including definitions consistent with this section, as may be necessary to administer and carry out this subsection.CommentsClose CommentsPermalink





(6) EXEMPTIONS- This subsection shall not apply to any Federal home loan bank. The Board of Governors may, by regulation or order, exempt transactions, in whole or in part, from the definition of the term ‘credit exposure’ for purposes of this subsection, if the Board of Governors finds that the exemption is in the public interest and is consistent with the purpose of this subsection.CommentsClose CommentsPermalink





(7) TRANSITION PERIOD-CommentsClose CommentsPermalink





(A) IN GENERAL- This subsection and any regulations and orders of the Board of Governors under this subsection shall not be effective until 3 years after the date of enactment of this Act.CommentsClose CommentsPermalink





(B) EXTENSION AUTHORIZED- The Board of Governors may extend the period specified in subparagraph (A) for not longer than an additional 2 years.CommentsClose CommentsPermalink





(f) Enhanced Public Disclosures- The Board of Governors may prescribe, by regulation, periodic public disclosures by nonbank financial companies supervised by the Board of Governors and bank holding companies described in subsection (a) in order to support market evaluation of the risk profile, capital adequacy, and risk management capabilities thereof.CommentsClose CommentsPermalink





(g) Short-term Debt Limits-CommentsClose CommentsPermalink





(1) IN GENERAL- In order to mitigate the risks that an over-accumulation of short-term debt could pose to financial companies and to the stability of the United States financial system, the Board of Governors may, by regulation, prescribe a limit on the amount of short-term debt, including off-balance sheet exposures, that may be accumulated by any bank holding company described in subsection (a) and any nonbank financial company supervised by the Board of Governors.CommentsClose CommentsPermalink





(2) BASIS OF LIMIT- Any limit prescribed under paragraph (1) shall be based on the short-term debt of the company described in paragraph (1) as a percentage of capital stock and surplus of the company or on such other measure as the Board of Governors considers appropriate.CommentsClose CommentsPermalink





(3) SHORT-TERM DEBT DEFINED- For purposes of this subsection, the term ‘short-term debt’ means such liabilities with short-dated maturity that the Board of Governors identifies, by regulation, except that such term does not include insured deposits.CommentsClose CommentsPermalink





(4) RULEMAKING AUTHORITY- In addition to prescribing regulations under paragraphs (1) and (3), the Board of Governors may prescribe such regulations, including definitions consistent with this subsection, and issue such orders, as may be necessary to carry out this subsection.CommentsClose CommentsPermalink





(5) AUTHORITY TO ISSUE EXEMPTIONS AND ADJUSTMENTS- Notwithstanding the Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.), the Board of Governors may, if it determines such action is necessary to ensure appropriate heightened prudential supervision, with respect to a company described in paragraph (1) that does not control an insured depository institution, issue to such company an exemption from or adjustment to the limit prescribed under paragraph (1).CommentsClose CommentsPermalink





(h) Risk Committee-CommentsClose CommentsPermalink





(1) NONBANK FINANCIAL COMPANIES SUPERVISED BY THE BOARD OF GOVERNORS- The Board of Governors shall require each nonbank financial company supervised by the Board of Governors that is a publicly traded company to establish a risk committee, as set forth in paragraph (3), not later than 1 year after the date of receipt of a notice of final determination under section 113(de)(3) with respect to such nonbank financial company supervised by the Board of Governors.CommentsClose CommentsPermalink





(2) CERTAIN BANK HOLDING COMPANIES-CommentsClose CommentsPermalink





(A) MANDATORY REGULATIONS- The Board of Governors shall issue regulations requiring each bank holding company that is a publicly traded company and that has total consolidated assets of not less than $10,000,000,000 to establish a risk committee, as set forth in paragraph (3).CommentsClose CommentsPermalink





(B) PERMISSIVE REGULATIONS- The Board of Governors may require each bank holding company that is a publicly traded company and that has total consolidated assets of less than $10,000,000,000 to establish a risk committee, as set forth in paragraph (3), as determined necessary or appropriate by the Board of Governors to promote sound risk management practices.CommentsClose CommentsPermalink





(3) RISK COMMITTEE- A risk committee required by this subsection shall--CommentsClose CommentsPermalink





(A) be responsible for the oversight of the enterprise-wide risk management practices of the nonbank financial company supervised by the Board of Governors or bank holding company described in subsection (a), as applicable;CommentsClose CommentsPermalink





(B) include such number of independent directors as the Board of Governors may determine appropriate, based on the nature of operations, size of assets, and other appropriate criteria related to the nonbank financial company supervised by the Board of Governors or a bank holding company described in subsection (a), as applicable; andCommentsClose CommentsPermalink





(C) include at least 1 risk management expert having experience in identifying, assessing, and managing risk exposures of large, complex firms.CommentsClose CommentsPermalink





(4) RULEMAKING- The Board of Governors shall issue final rules to carry out this subsection, not later than 1 year after the transfer date, to take effect not later than 15 months after the transfer date.CommentsClose CommentsPermalink





(hi) Stress Tests-CommentsClose CommentsPermalink





The Board of Governors shall conduct (1) BY THE BOARD OF GOVERNORS- CommentsClose CommentsPermalink





(A) ANNUAL TESTS REQUIRED- The Board of Governors, in coordination with the appropriate primary financial regulatory agencies and the Federal Insurance Office, shall conduct annual analyses in which nonbank financial companies supervised by the Board of Governors and bank holding companies described in subsection (a) are subject to evaluation of whether thesuch companies have the capital, on a total consolidated basis, necessary to absorb losses as a result of adverse economic conditions.CommentsClose CommentsPermalink





The Board of Governors (B) TEST PARAMETERS AND CONSEQUENCES- The Board of Governors-- CommentsClose CommentsPermalink





(i) shall provide for at least 3 different sets of conditions under which the evaluation required by this subsection shall be conducted, including baseline, adverse, and severely adverse;CommentsClose CommentsPermalink





(ii) may require the tests described in subparagraph (A) at bank holding companies and nonbank financial companies, in addition to those for which annual tests are required under subparagraph (A);CommentsClose CommentsPermalink





(iii) may develop and apply such other analytic techniques as are necessary to identify, measure, and monitor risks to the financial stability of the United States;CommentsClose CommentsPermalink





(iv) shall require the companies described in subparagraph (A) to update their resolution plans required under subsection (d)(1), as the Board of Governors determines appropriate, based on the results of the analyses; andCommentsClose CommentsPermalink





(v) shall publish a summary of the results of the tests required under subparagraph (A) or clause (ii) of this subparagraph.CommentsClose CommentsPermalink





(2) BY THE COMPANY-CommentsClose CommentsPermalink





(A) REQUIREMENT- A nonbank financial company supervised by the Board of Governors and a bank holding company described in subsection (a) shall conduct semiannual stress tests. All other financial companies that have total consolidated assets of more than $10,000,000,000 and are regulated by a primary Federal financial regulatory agency shall conduct annual stress tests. The tests required under this subparagraph shall be conducted in accordance with the regulations prescribed under subparagraph (C).CommentsClose CommentsPermalink





(B) REPORT- A company required to conduct stress tests under subparagraph (A) shall submit a report to the Board of Governors and to its primary financial regulatory agency at such time, in such form, and containing such information as the primary financial regulatory agency shall require.CommentsClose CommentsPermalink





(C) REGULATIONS- Each Federal primary financial regulatory agency, in coordination with the Board of Governors and the Federal Insurance Office, shall issue consistent and comparable regulations to implement this paragraph that shall--CommentsClose CommentsPermalink





(i) define the term ‘stress test’ for purposes of this paragraph;CommentsClose CommentsPermalink





(ii) establish methodologies for the conduct of stress tests required by this paragraph that shall provide for at least 3 different sets of conditions, including baseline, adverse, and severely adverse;CommentsClose CommentsPermalink





(iii) establish the form and content of the report required by subparagraph (B); andCommentsClose CommentsPermalink





(iv) require companies subject to this paragraph to publish a summary of the results of the required stress tests.CommentsClose CommentsPermalink





(j) Leverage Limitation-CommentsClose CommentsPermalink





(1) REQUIREMENT- The Board of Governors shall require a bank holding company with total consolidated assets equal to or greater than $50,000,000,000 or a nonbank financial company supervised by the Board of Governors to maintain a debt to equity ratio of no more than 15 to 1, upon a determination by the Council that such company poses a grave threat to the financial stability of the United States and that the imposition of such requirement is necessary to mitigate the risk that such company poses to the financial stability of the United States. Nothing in this paragraph shall apply to a Federal home loan bank.CommentsClose CommentsPermalink





(2) CONSIDERATIONS- In making a determination under this subsection, the Council shall consider the factors described in subsections (a) and (b) of section 113 and any other risk-related factors that the Council deems appropriate.CommentsClose CommentsPermalink





(3) REGULATIONS- The Board of Governors shall promulgate regulations to establish procedures and timelines for complying with the requirements of this subsection.CommentsClose CommentsPermalink





(k) Inclusion of Off-balance-sheet Activities in Computing Capital Requirements-CommentsClose CommentsPermalink





(1) IN GENERAL- In the case of any bank holding company described in subsection (a) or nonbank financial company supervised by the Board of Governors, the computation of capital for purposes of meeting capital requirements shall take into account any off-balance-sheet activities of the company.CommentsClose CommentsPermalink





(2) EXEMPTIONS- If the Board of Governors determines that an exemption from the requirement under paragraph (1) is appropriate, the Board of Governors may exempt a company, or any transaction or transactions engaged in by such company, from the requirements of paragraph (1).CommentsClose CommentsPermalink





(3) OFF-BALANCE-SHEET ACTIVITIES DEFINED- For purposes of this subsection, the term ‘off-balance-sheet activities’ means an existing liability of a company that is not currently a balance sheet liability, but may become one upon the happening of some future event, including the following transactions, to the extent that they may create a liability:CommentsClose CommentsPermalink





(A) Direct credit substitutes in which a bank substitutes its own credit for a third party, including standby letters of credit.CommentsClose CommentsPermalink





(B) Irrevocable letters of credit that guarantee repayment of commercial paper or tax-exempt securities.CommentsClose CommentsPermalink





(C) Risk participations in bankers’ acceptances.CommentsClose CommentsPermalink





(D) Sale and repurchase agreements.CommentsClose CommentsPermalink





(E) Asset sales with recourse against the seller.CommentsClose CommentsPermalink





(F) Interest rate swaps.CommentsClose CommentsPermalink





(G) Credit swaps.CommentsClose CommentsPermalink





(H) Commodities contracts.CommentsClose CommentsPermalink





(I) Forward contracts.CommentsClose CommentsPermalink





(J) Securities contracts.CommentsClose CommentsPermalink





(K) Such other activities or transactions as the Board of Governors may, by rule, define.CommentsClose CommentsPermalink

SEC. 166. EARLY REMEDIATION REQUIREMENTS.CommentsClose CommentsPermalink

(a) In General- The Board of Governors, in consultation with the Council and the Corporation, shall prescribe regulations establishing requirements to provide for the early remediation of financial distress of a nonbank financial company supervised by the Board of Governors or a bank holding company described in section 165(a), except that nothing in this subsection authorizes the provision of financial assistance from the Federal Government.CommentsClose CommentsPermalink





(b) Purpose of the Early Remediation Requirements- The purpose of the early remediation requirements under subsection (a) shall be to establish a series of specific remedial actions to be taken by a nonbank financial company supervised by the Board of Governors or a bank holding company described in section 165(a) that is experiencing increasing financial distress, in order to minimize the probability that the company will become insolvent and the potential harm of such insolvency to the financial stability of the United States.CommentsClose CommentsPermalink





(c) Remediation Requirements- The regulations prescribed by the Board of Governors under subsection (a) shall--CommentsClose CommentsPermalink





(1) define measures of the financial condition of the company, including regulatory capital, liquidity measures, and other forward-looking indicators; andCommentsClose CommentsPermalink





(2) establish requirements that increase in stringency as the financial condition of the company declines, including--CommentsClose CommentsPermalink





(A) requirements in the initial stages of financial decline, including limits on capital distributions, acquisitions, and asset growth; andCommentsClose CommentsPermalink





(B) requirements at later stages of financial decline, including a capital restoration plan and capital-raising requirements, limits on transactions with affiliates, management changes, and asset sales.CommentsClose CommentsPermalink

SEC. 167. AFFILIATIONS.CommentsClose CommentsPermalink

(a) Affiliations- Nothing in this subtitle shall be construed to require a nonbank financial company supervised by the Board of Governors, or a company that controls a nonbank financial company supervised by the Board of Governors, to conform the activities thereof to the requirements of section 4 of the Bank Holding Company Act of 1956 (12 U.S.C. 1843).CommentsClose CommentsPermalink





(b) Requirement-CommentsClose CommentsPermalink





(1) IN GENERAL-CommentsClose CommentsPermalink





If a nonbank financial company supervised by the Board of Governors(A) BOARD AUTHORITY- If a nonbank financial company supervised by the Board of Governors conducts activities other than those that are determined to be financial in nature or incidental thereto under section 4(k) of the Bank Holding Company Act of 1956, the Board of Governors may require such company to establish and conduct all or a portion of such activities that are determined to be financial in nature or incidental thereto in or through an intermediate holding company established pursuant to regulation of the Board of Governors, not later than 90 days (or such longer period as the Board of Governors may deem appropriate) after the date on which the nonbank financial company supervised by the Board of Governors wais notified of the determination under section 113(a)of the Board of Governors under this section.CommentsClose CommentsPermalink





(B) NECESSARY ACTIONS- Notwithstanding subparagraph (A), the Board of Governors shall require a nonbank financial company supervised by the Board of Governors to establish an intermediate holding company if the Board of Governors makes a determination that the establishment of such intermediate holding company is necessary to--CommentsClose CommentsPermalink





(i) appropriately supervise activities that are determined to be financial in nature or incidental thereto; orCommentsClose CommentsPermalink





(ii) to ensure that supervision by the Board of Governors does not extend to the commercial activities of such nonbank financial company.CommentsClose CommentsPermalink





(2) INTERNAL FINANCIAL ACTIVITIES- For purposes of this subsection, activities that are determined to be financial in nature or incidental thereto under section 4(k) of the Bank Holding Company Act of 1956, as described in paragraph (1), shall not include internal financial activities conducted for a nonbank financial company supervised by the Board of Governors or any affiliate, including internal , including internal treasury, investment, and employee benefit functions. With respect to any internal financial activity of such company during the year prior to the date of enactment of this Act, such companyengaged in for the company or an affiliate and a non-affiliate of such company during the year prior to the date of enactment of this Act, such company (or an affiliate that is not an intermediate holding company or subsidiary of an intermediate holding company) may continue to engage in such activity as long as at least 2/3 of the assets or 2/3 , as long as not less than 2/3 of the assets or 2/3 of the revenues generated from the activity are from or attributable to such company or an affiliate, subject to review by the Board of Governors, to determine whether engaging in such activity presents undue risk to such company or to the financial stability of the United States.CommentsClose CommentsPermalink





(3) SOURCE OF STRENGTH- A company that directly or indirectly controls an intermediate holding company established under this section shall serve as a source of strength to its subsidiary intermediate holding company.CommentsClose CommentsPermalink





(4) PARENT COMPANY REPORTS- The Board of Governors may, from time to time, require reports under oath from a company that controls an intermediate holding company, and from the appropriate officers or directors of such company, solely for purposes of ensuring compliance with the provisions of this section, including assessing the ability of the company to serve as a source of strength to its subsidiary intermediate holding company pursuant to paragraph (3) and enforcing such compliance.CommentsClose CommentsPermalink





(5) LIMITED PARENT COMPANY ENFORCEMENT-CommentsClose CommentsPermalink





(A) IN GENERAL- In addition to any other authority of the Board of Governors, the Board of Governors may enforce compliance with the provisions of this subsection that are applicable to any company described in paragraph (1) that controls an intermediate holding company under section 8 of the Federal Deposit Insurance Act, and such company shall be subject to such section (solely for such purposes) in the same manner and to the same extent as if such company were a bank holding company.CommentsClose CommentsPermalink





(B) APPLICATION OF OTHER ACT- Any violation of this subsection by any company that controls an intermediate holding company may also be treated as a violation of the Federal Deposit Insurance Act for purposes of subparagraph (A).CommentsClose CommentsPermalink





(C) NO EFFECT ON OTHER AUTHORITY- No provision of this paragraph shall be construed as limiting any authority of the Board of Governors or any other Federal agency under any other provision of law.CommentsClose CommentsPermalink





(c) Regulations- The Board of Governors--CommentsClose CommentsPermalink





(1) shall promulgate regulations to establish the criteria for determining whether to require a nonbank financial company supervised by the Board of Governors to establish an intermediate holding company under subsection (ab); andCommentsClose CommentsPermalink





(2) may promulgate regulations to establish any restrictions or limitations on transactions between an intermediate holding company or a nonbank financial company supervised by the Board of Governors and its affiliates, as necessary to prevent unsafe and unsound practices in connection with transactions between such company, or any subsidiary thereof, and its parent company or affiliates that are not subsidiaries of such company, except that such regulations shall not restrict or limit any transaction in connection with the bona fide acquisition or lease by an unaffiliated person of assets, goods, or services.CommentsClose CommentsPermalink

SEC. 168. REGULATIONS.CommentsClose CommentsPermalink

Except as otherwise specified in this subtitle, not later than 18 months after the transfer date, the Board of Governors shall issue final regulations to implement this subtitle and the amendments made by this subtitleThe Board of Governors shall have authority to issue regulations to implement subtitles A and C and the amendments made thereunder. Except as otherwise specified in subtitle A or C, not later than 18 months after the effective date of this Act, the Board of Governors shall issue final regulations to implement subtitles A and C, and the amendments made thereunder.CommentsClose CommentsPermalink

SEC. 169. AVOIDING DUPLICATION.CommentsClose CommentsPermalink

The Board of Governors shall take any action that the Board of Governors deems appropriate to avoid imposing requirements under this subtitle that are duplicative of requirements applicable to bank holding companies and nonbank financial companies under other provisions of law.CommentsClose CommentsPermalink

SEC. 170. SAFE HARBOR.CommentsClose CommentsPermalink

(a) Regulations- The Board of Governors shall promulgate regulations on behalf of, and in consultation with, the Council setting forth the criteria for exempting certain types or classes of U.S. nonbank financial companies or foreign nonbank financial companies from supervision by the Board of Governors.CommentsClose CommentsPermalink





(b) Considerations- In developing the criteria under subsection (a), the Board of Governors shall take into account the factors for consideration described in subsections (a) and (b) of section 113 in determining whether a U.S. nonbank financial company or foreign nonbank financial company shall be supervised by the Board of Governors.CommentsClose CommentsPermalink





(c) Rule of Construction- Nothing in this section shall be construed to require supervision by the Board of Governors of a U.S. nonbank financial company or foreign nonbank financial company, if such company does not meet the criteria for exemption established under subsection (a).CommentsClose CommentsPermalink





(d) UpdateRevisions-CommentsClose CommentsPermalink





(1) IN GENERAL- The Board of Governors shall, in consultation with the Council, review the regulations promulgated under subsection (a), not less frequently than every 5 years, and based upon the review, the Board of Governors may revise such regulations on behalf of, and in consultation with, the Council to update as necessary the criteria set forth in such regulations.CommentsClose CommentsPermalink





(e) Transition Period- No revisions under subsection (d2) TRANSITION PERIOD- No revisions under paragraph (1) shall take effect before the end of the 2-year period after the date of publication of such revisions in final form.CommentsClose CommentsPermalink





(f) Report- The Chairperson of the Board of Governors and the Chairperson of the Council shall submit a joint report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives not later than 30 days after the date of the issuance in final form of thee) Report- The Chairman of the Board of Governors and the Chairperson of the Council shall submit a joint report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives not later than 30 days after the date of the issuance in final form of regulations under subsection (a), or any subsequent revision to such regulations under subsection (d), as applicable. Such report shall include, at a minimum, the rationale for exemption and empirical evidence to support the criteria for exemption.CommentsClose CommentsPermalink

SEC. 171. LEVERAGE AND RISK-BASED CAPITAL REQUIREMENTS.CommentsClose CommentsPermalink

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





(1) GENERALLY APPLICABLE LEVERAGE CAPITAL REQUIREMENTS- The term ‘generally applicable leverage capital requirements’ means--CommentsClose CommentsPermalink





(A) the minimum ratios of tier 1 capital to average total assets, as established by the appropriate Federal banking agencies to apply to insured depository institutions under the prompt corrective action regulations implementing section 38 of the Federal Deposit Insurance Act, regardless of total consolidated asset size or foreign financial exposure; andCommentsClose CommentsPermalink





(B) includes the regulatory capital components in the numerator of that capital requirement, average total assets in the denominator of that capital requirement, and the required ratio of the numerator to the denominator.CommentsClose CommentsPermalink





(2) GENERALLY APPLICABLE RISK-BASED CAPITAL REQUIREMENTS- The term ‘generally applicable risk-based capital requirements’ means--CommentsClose CommentsPermalink





(A) the risk-based capital requirements as established by the appropriate Federal banking agencies to apply to insured depository institutions under the agency’s Prompt Corrective Action regulations that implement, as established by the appropriate Federal banking agencies to apply to insured depository institutions under the prompt corrective action regulations implementing section 38 of the Federal Deposit Insurance Act, regardless of total consolidated asset size or foreign financial exposure; andCommentsClose CommentsPermalink





(B) includes the regulatory capital components in the numerator of those capital requirements, the risk-weighted assets in the denominator of those capital requirements, and the required ratio of the numerator to the denominator.CommentsClose CommentsPermalink





(3) DEFINITION OF DEPOSITORY INSTITUTION HOLDING COMPANY- The term ‘depository institution holding company’ means a bank holding company or a savings and loan holding company (as those terms are defined in section 3 of the Federal Deposit Insurance Act) that is organized in the United States, including any bank or savings and loan holding company that is owned or controlled by a foreign organization, but does not include the foreign organization.CommentsClose CommentsPermalink





(b) Minimum Capital Requirements-CommentsClose CommentsPermalink





(1) MINIMUM LEVERAGE CAPITAL REQUIREMENTS- The appropriate Federal banking agencies shall establish minimum leverage capital requirements on a consolidated basis for insured depository institutions, depository institution holding companies, and nonbank financial companies identified under section 113supervised by the Board of Governors. The minimum leverage capital requirements established under this paragraph shall not be less than the generally applicable leverage capital requirements, which shall serve as a floor for any capital requirements that the agency may require, nor quantitatively lower than the generally applicable leverage capital requirements that were in effect for insured depository institutions as of the date of enactment of this Act.CommentsClose CommentsPermalink





(2) MINIMUM RISK-BASED CAPITAL REQUIREMENTS- The appropriate Federal banking agencies shall establish minimum risk-based capital requirements on a consolidated basis for insured depository institutions, depository institution holding companies, and nonbank financial companies identified under section 113supervised by the Board of Governors. The minimum risk-based capital requirements established under this paragraph shall not be less than the generally applicable risk-based capital requirements, which shall serve as a floor for any capital requirements that the agency may require, nor quantitatively lower than the generally applicable risk-based capital requirements that were in effect for insured depository institutions as of the date of enactment of this Act.CommentsClose CommentsPermalink





(3) INVESTMENTS IN FINANCIAL SUBSIDIARIES- For purposes of this section, investments in financial subsidiaries that insured depository institutions are required to deduct from regulatory capital under section 5136A of the Revised Statutes of the United States or section 46(a)(2) of the Federal Deposit Insurance Act need not be deducted from regulatory capital by depository institution holding companies or nonbank financial companies supervised by the Board of Governors, unless such capital deduction is required by the Board of Governors or the primary financial regulatory agency in the case of nonbank financial companies supervised by the Board of Governors.CommentsClose CommentsPermalink





(4) EFFECTIVE DATES AND PHASE-IN PERIODS-CommentsClose CommentsPermalink





(A) DEBT OR EQUITY INSTRUMENTS ON OR AFTER MAY 19, 2010- For debt or equity instruments issued on or after May 19, 2010, by depository institution holding companies or by nonbank financial companies supervised by the Board of Governors, this section shall be deemed to have become effective as of May 19, 2010.CommentsClose CommentsPermalink





(B) DEBT OR EQUITY INSTRUMENTS ISSUED BEFORE MAY 19, 2010- For debt or equity instruments issued before May 19, 2010, by depository institution holding companies or by nonbank financial companies supervised by the Board of Governors, any regulatory capital deductions required under this section shall be phased in incrementally over a period of 3 years, with the phase-in period to begin on January 1, 2013, except as set forth in subparagraph (C).CommentsClose CommentsPermalink





(C) DEBT OR EQUITY INSTRUMENTS OF SMALLER INSTITUTIONS- For debt or equity instruments issued before May 19, 2010, by depository institution holding companies with total consolidated assets of less than $15,000,000,000 as of December 31, 2009, and by organizations that were mutual holding companies on May 19, 2010, the capital deductions that would be required for other institutions under this section are not required as a result of this section.CommentsClose CommentsPermalink





(D) DEPOSITORY INSTITUTION HOLDING COMPANIES NOT PREVIOUSLY SUPERVISED BY THE BOARD OF GOVERNORS- For any depository institution holding company that was not supervised by the Board of Governors as of May 19, 2010, the requirements of this section, except as set forth in subparagraphs (A) and (B), shall be effective 5 years after the date of enactment of this ActCommentsClose CommentsPermalink





(E) CERTAIN BANK HOLDING COMPANY SUBSIDIARIES OF FOREIGN BANKING ORGANIZATIONS- For bank holding company subsidiaries of foreign banking organizations that have relied on Supervision and Regulation Letter SR-01-1 issued by the Board of Governors (as in effect on May 19, 2010), the requirements of this section, except as set forth in subparagraph (A), shall be effective 5 years after the date of enactment of this Act.CommentsClose CommentsPermalink





(5) EXCEPTIONS- This section shall not apply to--CommentsClose CommentsPermalink





(A) debt or equity instruments issued to the United States or any agency or instrumentality thereof pursuant to the Emergency Economic Stabilization Act of 2008, and prior to October 4, 2010;CommentsClose CommentsPermalink





(B) any Federal home loan bank; orCommentsClose CommentsPermalink





(C) any small bank holding company that is subject to the Small Bank Holding Company Policy Statement of the Board of Governors, as in effect on May 19, 2010.CommentsClose CommentsPermalink





(6) STUDY AND REPORT ON SMALL INSTITUTION ACCESS TO CAPITAL-CommentsClose CommentsPermalink





(A) STUDY REQUIRED- The Comptroller General of the United States, after consultation with the Federal banking agencies, shall conduct a study of access to capital by smaller insured depository institutions.CommentsClose CommentsPermalink





(B) SCOPE- For purposes of this study required by subparagraph (A), the term ‘smaller insured depository institution’ means an insured depository institution with total consolidated assets of $5,000,000,000 or less.CommentsClose CommentsPermalink





(C) REPORT TO CONGRESS- Not later than 18 months after the date of enactment of this Act, the Comptroller General of the United States shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a report summarizing the results of the study conducted under subparagraph (A), together with any recommendations for legislative or regulatory action that would enhance the access to capital of smaller insured depository institutions, in a manner that is consistent with safe and sound banking operations.CommentsClose CommentsPermalink





(7) CAPITAL REQUIREMENTS TO ADDRESS ACTIVITIES THAT POSE RISKS TO THE FINANCIAL SYSTEM-CommentsClose CommentsPermalink





(A) IN GENERAL- Subject to the recommendations of the Council, in accordance with section 120, the Federal banking agencies shall develop capital requirements applicable to all institutions covered by this section that insured depository institutions, depository institution holding companies, and nonbank financial companies supervised by the Board of Governors that address the risks that the activities of such institutions pose, not only to the institution engaging in the activity, but to other public and private stakeholders in the event of adverse performance, disruption, or failure of the institution or the activity.CommentsClose CommentsPermalink





(B) CONTENT- Such rules shall address, at a minimum, the risks arising from--CommentsClose CommentsPermalink





(i) significant volumes of activity in derivatives, securitized products purchased and sold, financial guarantees purchased and sold, securities borrowing and lending, and repurchase agreements and reverse repurchase agreements;CommentsClose CommentsPermalink





(ii) concentrations in assets for which the values presented in financial reports are based on models rather than historical cost or prices deriving from deep and liquid 2-way markets; andCommentsClose CommentsPermalink





(iii) concentrations in market share for any activity that would substantially disrupt financial markets if the institution is forced to unexpectedly cease the activity.CommentsClose CommentsPermalink

TITLE II--ORDERLY LIQUIDATION AUTHORITYCommentsClose CommentsPermalink

SEC. 201. DEFINITIONS.CommentsClose CommentsPermalink

(a) In General- In this title, the following definitions shall apply:CommentsClose CommentsPermalink





(1) ADMINISTRATIVE EXPENSES OF THE RECEIVER- The term ‘administrative expenses of the receiver’ includes--CommentsClose CommentsPermalink





(A) the actual, necessary costs and expenses incurred by the Corporation as receiver for a covered financial company in liquidating a covered financial company; andCommentsClose CommentsPermalink





(B) any obligations that the Corporation as receiver for a covered financial company determines are necessary and appropriate to facilitate the smooth and orderly liquidation of the covered financial company.CommentsClose CommentsPermalink





(2) BANKRUPTCY CODE- The term ‘Bankruptcy Code’ means title 11, United States Code.CommentsClose CommentsPermalink





(3) BRIDGE FINANCIAL COMPANY- The term ‘bridge financial company’ means a new financial company organized by the Corporation in accordance with section 210(h) for the purpose of resolving a covered financial company.CommentsClose CommentsPermalink





(4) CLAIM- The term ‘claim’ means any right ofto payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured.CommentsClose CommentsPermalink





(5) COMPANY- The term ‘company’ has the same meaning as in section 2(b) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(b)), except that such term includes any company described in paragraph (11), the majority of the securities of which are owned by the United States or any State.CommentsClose CommentsPermalink





(6) COURT- The term ‘Court’ means the United States District Court for the District of Columbia, unless the context otherwise requires.CommentsClose CommentsPermalink





(7) COVERED BROKER OR DEALER- The term ‘covered broker or dealer’ means a covered financial company that is a broker or dealer that--CommentsClose CommentsPermalink





(A) is registered with the Commission under section 15(b) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(b)); andCommentsClose CommentsPermalink





(B) is a member of SIPC.CommentsClose CommentsPermalink





(78) COVERED FINANCIAL COMPANY- The term ‘covered financial company’--CommentsClose CommentsPermalink





(A) means a financial company for which a determination has been made under section 203(b); andCommentsClose CommentsPermalink





(B) does not include an insured depository institution.CommentsClose CommentsPermalink





(89) COVERED SUBSIDIARY- The term ‘covered subsidiary’ means a subsidiary of a covered financial company, other than--CommentsClose CommentsPermalink





(A) an insured depository institution;CommentsClose CommentsPermalink





(B) an insurance company; orCommentsClose CommentsPermalink





(C) a covered broker or dealer.CommentsClose CommentsPermalink





(910) DEFINITIONS RELATING TO COVERED BROKERS AND DEALERS- The terms ‘customer’, ‘customer name securities’, ‘customer property’, and ‘net equity’ in the context of a covered broker or dealer, have the same meanings as in section 16 of the Securities Investor Protection Act of 1970 (15 U.S.C. 78lll).CommentsClose CommentsPermalink





(101) FINANCIAL COMPANY- The term ‘financial company’ means any company that--CommentsClose CommentsPermalink





(A) is incorporated or organized under any provision of Federal law or the laws of any State;CommentsClose CommentsPermalink





(B) is--CommentsClose CommentsPermalink





(i) a bank holding company, as defined in section 2(a) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(a)), and including any company described in paragraph (5);CommentsClose CommentsPermalink





(ii) a nonbank financial company supervised by the Board of Governors;CommentsClose CommentsPermalink





(iii) any company that is predominantly engaged in activities that the Board of Governors has determined are financial in nature or incidental thereto for purposes of section 4(k) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(k)) other than a company described in clause (i) or (ii); orCommentsClose CommentsPermalink





(iv) any subsidiary of any company described in any of clauses (i) through (iii) that is predominantly engaged in activities that the Board of Governors has determined are financial in nature or incidental thereto for purposes of section 4(k) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(k)) (other than a subsidiary that is an insured depository institution or an insurance company); andCommentsClose CommentsPermalink





(C) is not a Farm Credit System institution chartered under and subject to the provisions of the Farm Credit Act of 1971, as amended (12 U.S.C. 2001 et seq.), a governmental entity, or a regulated entity, as defined under section 1303(20) of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4502(20)).CommentsClose CommentsPermalink





(112) FUND- The term ‘Fund’ means the Orderly Liquidation Fund established under section 210(n).CommentsClose CommentsPermalink





(123) INSURANCE COMPANY- The term ‘insurance company’ means any entity that is--CommentsClose CommentsPermalink





(A) engaged in the business of insurance;CommentsClose CommentsPermalink





(B) subject to regulation by a State insurance regulator; andCommentsClose CommentsPermalink





(C) covered by a State law that is designed to specifically deal with the rehabilitation, liquidation, or insolvency of an insurance company.CommentsClose CommentsPermalink





(134) NONBANK FINANCIAL COMPANY- The term ‘nonbank financial company’ has the same meaning as in section 102(a)(4)(C).CommentsClose CommentsPermalink





(14) NONBANK FINANCIAL COMPANY SUPERVISED BY THE BOARD OF5) NONBANK FINANCIAL COMPANY SUPERVISED BY THE BOARD OF GOVERNORS- The term ‘nonbank financial company supervised by the Board of Governors’ has the same meaning as in section 102(a)(3)(D).(15) COURT- The term ‘Court’ means the United States District Court for the District of Columbia4)(D).CommentsClose CommentsPermalink





(16) SIPC- The term ‘SIPC’ means the Securities Investor Protection Corporation.CommentsClose CommentsPermalink





(b) Definitional Criteria- For purpose of the definition of the term ‘financial company’ under subsection (a)(101), no company shall be deemed to be predominantly engaged in activities that the Board of Governors has determined are financial in nature or incidental thereto for purposes of section 4(k) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(k)), if the consolidated revenues of such company from such activities constitute less than 85 percent of the total consolidated revenues of such company, as the Corporation, in consultation with the Secretary, shall establish by regulation. In determining whether a company is a financial company under this title, the consolidated revenues derived from the ownership or control of a depository institution shall be included.CommentsClose CommentsPermalink

SEC. 202. JUDICIAL REVIEW.CommentsClose CommentsPermalink

(a) Commencement of Orderly Liquidation-CommentsClose CommentsPermalink





(1) PETITION TO DISTRICT COURT-CommentsClose CommentsPermalink





(A) DISTRICT COURT REVIEW-CommentsClose CommentsPermalink





(i) PETITION TO DISTRICT COURT- Subsequent to a determination by the Secretary under section 203 that a financial company satisfies the criteria in section 203(b), the Secretary shall notify the Corporation and the covered financial company. If the board of directors (or body performing similar functions) of the covered financial company acquiesces or consents to the appointment of the Corporation as a receiver, the Secretary shall appoint the Corporation as a receiver. If the board of directors (or body performing similar functions) of the covered financial company does not acquiesce or consent to the appointment of the Corporation as receiver, the Secretary shall petition the United States District Court for the District of Columbia for an order authorizing the Secretary to appoint the Corporation as a receiver.CommentsClose CommentsPermalink





(ii) FORM AND CONTENT OF ORDER- The Secretary shall present all relevant findings and the recommendation made pursuant to section 203(a) to the Court. The petition shall be filed under seal.CommentsClose CommentsPermalink





(iii) DETERMINATION- On a strictly confidential basis, and without any prior public disclosure, the Court, after notice to the covered financial company and a hearing in which the covered financial company may oppose the petition, shall determine whether the determination of the Secretary that the covered financial company is in default or in danger of default and satisfies the definition of a financial company under section 201(10a)(11) is arbitrary and capricious.CommentsClose CommentsPermalink





(iv) ISSUANCE OF ORDER- If the Court determines that the determination of the Secretary that the covered financial company is in default or in danger of default and satisfies the definition of a financial company under section 201(10a)(11)--CommentsClose CommentsPermalink





(I) is not arbitrary and capricious, the Court shall issue an order immediately authorizing the Secretary to appoint the Corporation as receiver of the covered financial company; orCommentsClose CommentsPermalink





(II) is arbitrary and capricious, the Court shall immediately provide to the Secretary a written statement of each reason supporting its determination, and afford the Secretary an immediate opportunity to amend and refile the petition under clause (i).CommentsClose CommentsPermalink





(v) PETITION GRANTED BY OPERATION OF LAW- If the Court does not make a determination within 24 hours of receipt of the petition--CommentsClose CommentsPermalink





(I) the petition shall be granted by operation of law;CommentsClose CommentsPermalink





(II) the Secretary shall appoint the Corporation as receiver; andCommentsClose CommentsPermalink





(III) liquidation under this title shall automatically and without further notice or action be commenced and the Corporation may immediately take all actions authorized under this title.CommentsClose CommentsPermalink





(B) EFFECT OF DETERMINATION- The determination of the Court under subparagraph (A) shall be final, and shall be subject to appeal only in accordance with paragraph (2). The decision shall not be subject to any stay or injunction pending appeal. Upon conclusion of its proceedings under subparagraph (A), the Court shall provide immediately for the record a written statement of each reason supporting the decision of the Court, and shall provide copies thereof to the Secretary and the covered financial company.CommentsClose CommentsPermalink





(C) CRIMINAL PENALTIES- A person who recklessly discloses a determination of the Secretary under section 203(b) or a petition of the Secretary under subparagraph (A), or the pendency of court proceedings as provided for under subparagraph (A), shall be fined not more than $250,000, or imprisoned for not more than 5 years, or both.CommentsClose CommentsPermalink





(2) APPEAL OF DECISIONS OF THE DISTRICT COURT-CommentsClose CommentsPermalink





(A) APPEAL TO COURT OF APPEALS-CommentsClose CommentsPermalink





(i) IN GENERAL- Subject to clause (ii), the United States Court of Appeals for the District of Columbia Circuit shall have jurisdiction of an appeal of a final decision of the Court filed by the Secretary or a covered financial company, through its board of directors, notwithstanding section 210(a)(1)(A)(i), not later than 30 days after the date on which the decision of the Court is rendered or deemed rendered under this subsection.CommentsClose CommentsPermalink





(ii) CONDITION OF JURISDICTION- The Court of Appeals shall have jurisdiction of an appeal by a covered financial company only if the covered financial company did not acquiesce or consent to the appointment of a receiver by the Secretary under paragraph (1)(A).CommentsClose CommentsPermalink





(iii) EXPEDITION- The Court of Appeals shall consider any appeal under this subparagraph on an expedited basis.CommentsClose CommentsPermalink





(iv) SCOPE OF REVIEW- For an appeal taken under this subparagraph, review shall be limited to whether the determination of the Secretary that a covered financial company is in default or in danger of default and satisfies the definition of a financial company under section 201(10a)(11) is arbitrary and capricious.CommentsClose CommentsPermalink





(B) APPEAL TO THE SUPREME COURT-CommentsClose CommentsPermalink





(i) IN GENERAL- A petition for a writ of certiorari to review a decision of the Court of Appeals under subparagraph (A) may be filed by the Secretary or the covered financial company, through its board of directors, notwithstanding section 210(a)(1)(A)(i), with the Supreme Court of the United States, not later than 30 days after the date of the final decision of the Court of Appeals, and the Supreme Court shall have discretionary jurisdiction to review such decision.CommentsClose CommentsPermalink





(ii) WRITTEN STATEMENT- In the event of a petition under clause (i), the Court of Appeals shall immediately provide for the record a written statement of each reason for its decision.CommentsClose CommentsPermalink





(iii) EXPEDITION- The Supreme Court shall consider any petition under this subparagraph on an expedited basis.CommentsClose CommentsPermalink





(iv) SCOPE OF REVIEW- Review by the Supreme Court under this subparagraph shall be limited to whether the determination of the Secretary that the covered financial company is in default or in danger of default and satisfies the definition of a financial company under section 201(10a)(11) is arbitrary and capricious.CommentsClose CommentsPermalink





(b) Establishment and Transmittal of Rules and Procedures-CommentsClose CommentsPermalink





(1) IN GENERAL- Not later than 6 months after the date of enactment of this Act, the Court shall establish such rules and procedures as may be necessary to ensure the orderly conduct of proceedings, including rules and procedures to ensure that the 24-hour deadline is met and that the Secretary shall have an ongoing opportunity to amend and refile petitions under subsection (a)(1).CommentsClose CommentsPermalink





(2) PUBLICATION OF RULES- The rules and procedures established under paragraph (1), and any modifications of such rules and procedures, shall be recorded and shall be transmitted to--CommentsClose CommentsPermalink





(A) the Committee on the Judiciary of the Senate;CommentsClose CommentsPermalink





(B) the Committee on Banking, Housing, and Urban Affairs of the Senate;CommentsClose CommentsPermalink





(C) the Committee on the Judiciary of the House of Representatives; andCommentsClose CommentsPermalink





(D) the Committee on Financial Services of the House of Representatives.CommentsClose CommentsPermalink





(c) Provisions Applicable to Financial Companies-CommentsClose CommentsPermalink





(1) BANKRUPTCY CODE- Except as provided in this subsection, the provisions of the Bankruptcy Code and rules issued thereunder, and not the provisions of this title, shall apply to financial companies that are not covered financial companies for which the Corporation has been appointed as receiver.(2) or otherwise applicable insolvency law, and not the provisions of this title, shall apply to financial companies that are not covered financial companies for which the Corporation has been appointed as receiver.CommentsClose CommentsPermalink





(2) THIS TITLE- The provisions of this title shall exclusively apply to and govern all matters relating to covered financial companies for which the Corporation is appointed as receiver, and no provisions of the Bankruptcy Code or the rules issued thereunder shall apply in such cases, except as expressly provided in this title.CommentsClose CommentsPermalink





(d) Time Limit on Receivership Authority-CommentsClose CommentsPermalink





(1) BASELINE PERIOD- Any appointment of the Corporation as receiver under this section shall terminate at the end of the 3-year period beginning on the date on which such appointment is made.CommentsClose CommentsPermalink





(2) EXTENSION OF TIME LIMIT- The time limit established in paragraph (1) may be extended by the Corporation for up to 1 additional year, if the Chairperson of the Corporation determines and certifies in writing to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives that continuation of the receivership is necessary--CommentsClose CommentsPermalink





(A) to--CommentsClose CommentsPermalink





(i) maximize the net present value return from the sale or other disposition of the assets of the covered financial company; orCommentsClose CommentsPermalink





(ii) minimize the amount of loss realized upon the sale or other disposition of the assets of the covered financial company; andCommentsClose CommentsPermalink





(B) to protect the stability of the financial system of the United States.CommentsClose CommentsPermalink





(3) SECOND EXTENSION OF TIME LIMIT-CommentsClose CommentsPermalink





(A) IN GENERAL- The time limit under this subsection, as extended under paragraph (2), may be extended for up to 1 additional year, if the Chairperson of the Corporation, with the concurrence of the Secretary, submits the certifications described in paragraph (2).CommentsClose CommentsPermalink





(B) ADDITIONAL REPORT REQUIRED- Not later than 30 days after the date of commencement of the extension under subparagraph (A), the Corporation shall submit a report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives describing the need for the extension and the specific plan of the Corporation to conclude the receivership before the end of the second extension.CommentsClose CommentsPermalink





(4) ONGOING LITIGATION- The time limit under this subsection, as extended under paragraph (3), may be further extended solely for the purpose of completing ongoing litigation in which the Corporation as receiver is a party, provided that the appointment of the Corporation as receiver shall terminate not later than 90 days after the date of completion of such litigation, if--CommentsClose CommentsPermalink





(A) the Council determines that the Corporation used its best efforts to conclude the receivership in accordance with its plan before the end of the time limit described in paragraph (3);CommentsClose CommentsPermalink





(B) the Council determines that the completion of longer-term responsibilities in the form of ongoing litigation justifies the need for an extension; andCommentsClose CommentsPermalink





(C) the Corporation submits a report approved by the Council not later than 30 days after the date of the determinations by the Council under subparagraphs (A) and (B) to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives, describing--CommentsClose CommentsPermalink





(i) the ongoing litigation justifying the need for an extension; andCommentsClose CommentsPermalink





(ii) the specific plan of the Corporation to complete the litigation and conclude the receivership.CommentsClose CommentsPermalink





(5) REGULATIONS- The Corporation may issue regulations governing the termination of receiverships under this title.CommentsClose CommentsPermalink





(6) NO LIABILITY- The Corporation and the Deposit Insurance Fund shall not be liable for unresolved claims arising from the receivership after the termination of the receivership.CommentsClose CommentsPermalink





(e) Study of Bankruptcy and Orderly Liquidation Process for Financial Companies-CommentsClose CommentsPermalink





(1) STUDY-CommentsClose CommentsPermalink





(A) IN GENERAL- The Administrative Office of the United States Courts and the Comptroller General of the United States shall each monitor the activities of the Court, and each such Office shall conduct separate studies regarding the bankruptcy and orderly liquidation process for financial companies under the Bankruptcy Code.CommentsClose CommentsPermalink





(B) ISSUES TO BE STUDIED- In conducting the study under subparagraph (A), the Administrative Office of the United States Courts and the Comptroller General of the United States each shall evaluate--CommentsClose CommentsPermalink





(i) the effectiveness of chapter 7 or chapter 11 of the Bankruptcy Code in facilitating the orderly liquidation or reorganization of financial companies;CommentsClose CommentsPermalink





(ii) ways to maximize the efficiency and effectiveness of the Court; andCommentsClose CommentsPermalink





(iii) ways to make the orderly liquidation process under the Bankruptcy Code for financial companies more effective.CommentsClose CommentsPermalink





(2) REPORTS- Not later than 1 year after the date of enactment of this Act, in each successive year until the third year, and every fifth year after that date of enactment, the Administrative Office of the United States Courts and the Comptroller General of the United States shall submit to the Committee on Banking, Housing, and Urban Affairs and the Committee on the Judiciary of the Senate and the Committee on Financial Services and the Committee on the Judiciary of the House of Representatives separate reports summarizing the results of the studies conducted under paragraph (1).CommentsClose CommentsPermalink





(f) Study of International Coordination Relating to Bankruptcy Process for Financial Companies-CommentsClose CommentsPermalink





(1) STUDY-CommentsClose CommentsPermalink





(A) IN GENERAL- The Comptroller General of the United States shall conduct a study regarding international coordination relating to the orderly liquidation of financial companies under the Bankruptcy Code.CommentsClose CommentsPermalink





(B) ISSUES TO BE STUDIED- In conducting the study under subparagraph (A), the Comptroller General of the United States shall evaluate, with respect to the bankruptcy process for financial companies--CommentsClose CommentsPermalink





(i) the extent to which international coordination currently exists;CommentsClose CommentsPermalink





(ii) current mechanisms and structures for facilitating international cooperation;CommentsClose CommentsPermalink





(iii) barriers to effective international coordination; andCommentsClose CommentsPermalink





(iv) ways to increase and make more effective international coordination.CommentsClose CommentsPermalink





(2) REPORT- Not later than 1 year after the date of enactment of this Act, the Comptroller General of the United States shall submit to the Committee on Banking, Housing, and Urban Affairs and the Committee on the Judiciary of the Senate and the Committee on Financial Services and the Committee on the Judiciary of the House of Representatives and the Secretary a report summarizing the results of the study conducted under paragraph (1).CommentsClose CommentsPermalink





(g) Study of Prompt Corrective Action Implementation by the Appropriate Federal Agencies-CommentsClose CommentsPermalink





(1) STUDY- The Comptroller General of the United States shall conduct a study regarding the implementation of prompt corrective action by the appropriate Federal banking agencies.CommentsClose CommentsPermalink





(2) ISSUES TO BE STUDIED- In conducting the study under paragraph (1), the Comptroller General shall evaluate--CommentsClose CommentsPermalink





(A) the effectiveness of implementation of prompt corrective action by the appropriate Federal banking agencies and the resolution of insured depository institutions by the Corporation; andCommentsClose CommentsPermalink





(B) ways to make prompt corrective action a more effective tool to resolve the insured depository institutions at the least possible long-term cost to the Deposit Insurance Fund.CommentsClose CommentsPermalink





(3) REPORT TO COUNCIL- Not later than 1 years after the date of enactment of this Act, the Comptroller General shall submit a report to the Council on the results of the study conducted under this subsection.CommentsClose CommentsPermalink





(4) COUNCIL REPORT OF ACTION- Not later than 6 months after the date of receipt of the report from the Comptroller General under paragraph (3), the Council shall submit a report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives on actions taken in response to the report, including any recommendations made to the Federal primary financial regulatory agencies under section 120.CommentsClose CommentsPermalink

SEC. 203. SYSTEMIC RISK DETERMINATION.CommentsClose CommentsPermalink

(a) Written Recommendation and Determination-CommentsClose CommentsPermalink





(1) VOTE REQUIRED-CommentsClose CommentsPermalink





(A) IN GENERAL- On their own initiative, or at the request of the Secretary, the Corporation and the Board of Governors shall consider whether to make a written recommendation described in paragraph (2) with respect to whether the Secretary should appoint the Corporation as receiver for a financial company. Such recommendation shall be made upon a vote of not fewer than 2/3 of the members of the Board of Governors then serving and 2/3 of the members of the board of directors of the Corporation then serving.CommentsClose CommentsPermalink





(B) CASES INVOLVING COVERED BROKERS OR DEALERS- In the case of a covered broker or dealer, or in which the largest United States subsidiary (as measured by total assets as of the end of the previous calendar quarter) of a financial company is a covered broker or dealer, the Commission and the Board of Governors, at the request of the Secretary, or on their own initiative, shall consider whether to make the written recommendation described in paragraph (2) with respect to the financial company. Subject to the requirements in paragraph (2), such recommendation shall be made upon a vote of not fewer than 2/3 of the members of the Board of Governors then serving and2/3 of the members of the Board of Governors then serving and 2/3 of the members of the Commission then serving, and in consultation with the Corporation.CommentsClose CommentsPermalink





(C) CASES INVOLVING INSURANCE COMPANIES- In the case of an insurance company, or in which the largest United States subsidiary (as measured by total assets as of the end of the previous calendar quarter) of a financial company is an insurance company, the Director of the Federal Insurance Office and the Board of Governors, at the request of the Secretary or on their own initiative, shall consider whether to make the written recommendation described in paragraph (2) with respect to the financial company. Subject to the requirements in paragraph (2), such recommendation shall be made upon a vote of not fewer than 2/3 of the Board of Governors then serving and the affirmative approval of the Director of the Federal Insurance Office, and in consultation with the Corporation.CommentsClose CommentsPermalink





(2) RECOMMENDATION REQUIRED- Any written recommendation pursuant to paragraph (1) shall contain--CommentsClose CommentsPermalink





(A) an evaluation of whether the financial company is in default or in danger of default;CommentsClose CommentsPermalink





(B) a description of the effect that the default of the financial company would have on financial stability in the United States;CommentsClose CommentsPermalink





(C) a recommendation regarding the nature and the extent of actions to be taken under this title regarding the financial company;(Ddescription of the effect that the default of the financial company would have on economic conditions or financial stability for low income, minority, or underserved communities;CommentsClose CommentsPermalink





(D) a recommendation regarding the nature and the extent of actions to be taken under this title regarding the financial company;CommentsClose CommentsPermalink





(E) an evaluation of the likelihood of a private sector alternative to prevent the default of the financialcompany;(E company;CommentsClose CommentsPermalink





(F) an evaluation of why a case under the Bankruptcy Code is not appropriate for the financial company;CommentsClose CommentsPermalink





(FG) an evaluation of the effects on creditors, counterparties, and shareholders of the financial company and other market participants; andCommentsClose CommentsPermalink





(GH) an evaluation of whether the company satisfies the definition of a financial company under section 201.CommentsClose CommentsPermalink





(b) Determination by the Secretary- Notwithstanding any other provision of Federal or State law, the Secretary shall take action in accordance with section 202(a)(1)(A), if, upon the written recommendation under subsection (a), the Secretary (in consultation with the President) determines that--CommentsClose CommentsPermalink





(1) the financial company is in default or in danger of default;CommentsClose CommentsPermalink





(2) the failure of the financial company and its resolution under otherwise applicable Federal or State law would have serious adverse effects on financial stability in the United States;CommentsClose CommentsPermalink





(3) no viable private sector alternative is available to prevent the default of the financial company;CommentsClose CommentsPermalink





(4) any effect on the claims or interests of creditors, counterparties, and shareholders of the financial company and other market participants as a result of actions to be taken under this title is appropriate, given the impact that any action taken under this title would have on financial stability in the United States;CommentsClose CommentsPermalink





(5) any action under section 204 would avoid or mitigate such adverse effects, taking into consideration the effectiveness of the action in mitigating potential adverse effects on the financial system, the cost to the general fund of the Treasury, and the potential to increase excessive risk taking on the part of creditors, counterparties, and shareholders in the financial company;CommentsClose CommentsPermalink





(6) a Federal regulatory agency has ordered the financial company to convert all of its convertible debt instruments that are subject to the regulatory order; andCommentsClose CommentsPermalink





(7) the company satisfies the definition of a financial company under section 201.CommentsClose CommentsPermalink





(c) Documentation and Review-CommentsClose CommentsPermalink





(1) IN GENERAL- The Secretary shall--CommentsClose CommentsPermalink





(A) document any determination under subsection (b);CommentsClose CommentsPermalink





(B) retain the documentation for review under paragraph (2); andCommentsClose CommentsPermalink





(C) notify the covered financial company and the Corporation of such determination.CommentsClose CommentsPermalink





(2) REPORT TO CONGRESS- Not later than 24 hours after the date of appointment of the Corporation as receiver for a covered financial company, the Secretary shall provide written notice of the recommendations and determinations reached in accordance with subsections (a) and (b) to the Majority Leader and the Minority Leader of the Senate and the Speaker and the Minority Leader of the House of Representatives, the Committee on Banking, Housing, and Urban Affairs of the Senate, and the Committee on Financial Services of the House of Representatives, which shall consist of a summary of the basis for the determination, including, to the extent available at the time of the determination--CommentsClose CommentsPermalink





(A) the size and financial condition of the covered financial company;CommentsClose CommentsPermalink





(B) the sources of capital and credit support that were available to the covered financial company;CommentsClose CommentsPermalink





(C) the operations of the covered financial company that could have had a significant impact on financial stability, markets, or both;CommentsClose CommentsPermalink





(D) identification of the banks and financial companies which may be able to provide the services offered by the covered financial company;CommentsClose CommentsPermalink





(E) any potential international ramifications of resolution of the covered financial company under other applicable insolvency law;CommentsClose CommentsPermalink





(F) an estimate of the potential effect of the resolution of the covered financial company under other applicable insolvency law on the financial stability of the United States;CommentsClose CommentsPermalink





(G) the potential effect of the appointment of a receiver by the Secretary on consumers;CommentsClose CommentsPermalink





(H) the potential effect of the appointment of a receiver by the Secretary on the financial system, financial markets, and banks and other financial companies; andCommentsClose CommentsPermalink





(I) whether resolution of the covered financial company under other applicable insolvency law would cause banks or other financial companies to experience severe liquidity distress.CommentsClose CommentsPermalink





(3) REPORTS TO CONGRESS AND THE PUBLIC-CommentsClose CommentsPermalink





(A) IN GENERAL- Not later than 60 days after the date of appointment of the Corporation as receiver for a covered financial company, the Corporation shall file a report with the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives--CommentsClose CommentsPermalink





(i) setting forth information on the financial condition of the covered financial company as of the date of the appointment, including a description of its assets and liabilities;CommentsClose CommentsPermalink





(ii) describing the plan of, and actions taken by, the Corporation to wind down the covered financial company;CommentsClose CommentsPermalink





(iii) explaining each instance in which the Corporation waived any applicable requirements of part 366 of title 12, Code of Federal Regulations (or any successor thereto) with respect to conflicts of interest by any person in the private sector who was retained to provide services to the Corporation in connection with such receivership;CommentsClose CommentsPermalink





(iv) describing the reasons for the provision of any funding to the receivership out of the Fund;CommentsClose CommentsPermalink





(v) setting forth the expected costs of the orderly liquidation of the covered financial company;CommentsClose CommentsPermalink





(vi) setting forth the identity of any claimant that is treated in a manner different from other similarly situated claimants under subsection (b)(4), (d)(4), or (h)(5)(E), the amount of any additional payment to such claimant under subsection (d)(4), and the reason for any such action; andCommentsClose CommentsPermalink





(vii) which report the Corporation shall publish on an online website maintained by the Corporation, subject to maintaining appropriate confidentiality.CommentsClose CommentsPermalink





(B) AMENDMENTS- The Corporation shall, on a timely basis, not less frequently than quarterly, amend or revise and resubmit the reports prepared under this paragraph, as necessary.CommentsClose CommentsPermalink





(C) CONGRESSIONAL TESTIMONY- The Corporation and the primary financial regulatory agency, if any, of the financial company for which the Corporation was appointed receiver under this title shall appear before Congress, if requested, not later than 30 days after the date on which the Corporation first files the reports required under subparagraph (A).CommentsClose CommentsPermalink





(4) DEFAULT OR IN DANGER OF DEFAULT- For purposes of this title, a financial company shall be considered to be in default or in danger of default if, as determined in accordance with subsection (b)--CommentsClose CommentsPermalink





(A) a case has been, or likely will promptly be, commenced with respect to the financial company under the Bankruptcy Code;CommentsClose CommentsPermalink





(B) the financial company has incurred, or is likely to incur, losses that will deplete all or substantially all of its capital, and there is no reasonable prospect for the company to avoid such depletion;CommentsClose CommentsPermalink





(C) the assets of the financial company are, or are likely to be, less than its obligations to creditors and others; orCommentsClose CommentsPermalink





(D) the financial company is, or is likely to be, unable to pay its obligations (other than those subject to a bona fide dispute) in the normal course of business.CommentsClose CommentsPermalink





(5) GAO REVIEW- The Comptroller General of the United States shall review and report to Congress on any determination under subsection (b), that results in the appointment of the Corporation as receiver, including--CommentsClose CommentsPermalink





(A) the basis for the determination;CommentsClose CommentsPermalink





(B) the purpose for which any action was taken pursuant thereto;CommentsClose CommentsPermalink





(C) the likely effect of the determination and such action on the incentives and conduct of financial companies and their creditors, counterparties, and shareholders; andCommentsClose CommentsPermalink





(D) the likely disruptive effect of the determination and such action on the reasonable expectations of creditors, counterparties, and shareholders, taking into account the impact any action under this title would have on financial stability in the United States, including whether the rights of such parties will be disrupted.CommentsClose CommentsPermalink





(d) Corporation Policies and Procedures- As soon as is practicable after the date of enactment of this Act, the Corporation shall establish policies and procedures that are acceptable to the Secretary governing the use of funds available to the Corporation to carry out this title, including the terms and conditions for the provision and use of funds under sections 204(d), 210(h)(2)(G)(iv), and 210(h)(9).CommentsClose CommentsPermalink





(e) Treatment of Insurance Companies and Insurance Company Subsidiaries-CommentsClose CommentsPermalink





(1) IN GENERAL- Notwithstanding subsection (b), if an insurance company is a covered financial company or a subsidiary or affiliate of a covered financial company, the liquidation or rehabilitation of such insurance company, and any subsidiary or affiliate of such company that is not excepted under paragraph (2), shall be conducted as provided under suchapplicable State law.CommentsClose CommentsPermalink





(2) EXCEPTION FOR SUBSIDIARIES AND AFFILIATES- The requirement of paragraph (1) shall not apply with respect to any subsidiary or affiliate of an insurance company that is not itself an insurance company.CommentsClose CommentsPermalink





(3) BACKUP AUTHORITY- Notwithstanding paragraph (1), with respect to a covered financial company described in paragraph (1), if, after the end of the 60-day period beginning on the date on which a determination is made under section 202(a) with respect to such company, the appropriate regulatory agency has not filed the appropriate judicial action in the appropriate State court to place such company into orderly liquidation under the laws and requirements of the State, the Corporation shall have the authority to stand in the place of the appropriate regulatory agency and file the appropriate judicial action in the appropriate State court to place such company into orderly liquidation under the laws and requirements of the State.CommentsClose CommentsPermalink

SEC. 204. ORDERLY LIQUIDATION OF COVERED FINANCIAL COMPANIES.CommentsClose CommentsPermalink

(a) Purpose of Orderly Liquidation Authority- It is the purpose of this title to provide the necessary authority to liquidate failing financial companies that pose a significant risk to the financial stability of the United States in a manner that mitigates such risk and minimizes moral hazard. The authority provided in this title shall be exercised in the manner that best fulfills such purpose, so that--CommentsClose CommentsPermalink





(1) creditors and shareholders will bear the losses of the financial company;CommentsClose CommentsPermalink





(2) management responsible for the condition of the financial company will not be retained; andCommentsClose CommentsPermalink





(3) the Corporation and other appropriate agencies will take all steps necessary and appropriate to assure that all parties, including management and third parties, having responsibility for the condition of the financial company , directors, and third parties, having responsibility for the condition of the financial company bear losses consistent with their responsibility, including actions for damages, restitution, and recoupment of compensation and other gains not compatible with such responsibility.CommentsClose CommentsPermalink





(b) Corporation as Receiver- Upon the appointment of the Corporation under section 202, the Corporation shall act as the receiver for the covered financial company, with all of the rights and obligations set forth in this title.CommentsClose CommentsPermalink





(c) Consultation- The Corporation, as receiver--CommentsClose CommentsPermalink





(1) shall consult with the primary financial regulatory agency or agencies of the covered financial company and its covered subsidiaries for purposes of ensuring an orderly liquidation of the covered financial company;CommentsClose CommentsPermalink





(2) may consult with, or under subsection (a)(1)(B)(v) or (a)(1)(L) of section 210, acquire the services of, any outside experts, as appropriate to inform and aid the Corporation in the orderly liquidation process;CommentsClose CommentsPermalink





(3) shall consult with the primary financial regulatory agency or agencies of any subsidiaries of the covered financial company that are not covered subsidiaries, and coordinate with such regulators regarding the treatment of such solvent subsidiaries and the separate resolution of any such insolvent subsidiaries under other governmental authority, as appropriate; andCommentsClose CommentsPermalink





(4) shall consult with the Commission and the Securities Investor Protection Corporation in the case of any covered financial company for which the Corporation has been appointed as receiver that is a broker or dealer registered with the Commission under section 15(b) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(b)) and is a member of the Securities Investor Protection Corporation, for the purpose of determining whether to transfer to a bridge financial company organized by the Corporation as receiver, without consent of any customer, customer accounts of the covered financial company.CommentsClose CommentsPermalink





(d) Funding for Orderly Liquidation- Upon its appointment as receiver for a covered financial company, and thereafter as the Corporation may, in its discretion, determine to be necessary or appropriate, the Corporation may make available to the receivership, subject to the conditions set forth in section 206 and subject to the plan described in section 210(n)(11), funds for the9), funds for the orderly liquidation of the covered financial company. All funds provided by the Corporation under this subsection shall have a priority of claims under subparagraph (A) or (B) of section 210(b)(1), as applicable, including funds used for--CommentsClose CommentsPermalink





(1) making loans to, or purchasing any debt obligation of, the covered financial company or any covered subsidiary;CommentsClose CommentsPermalink





(2) purchasing or guaranteeing against loss the assets of the covered financial company or any covered subsidiary, directly or through an entity established by the Corporation for such purpose;CommentsClose CommentsPermalink





(3) assuming or guaranteeing the obligations of the covered financial company or any covered subsidiary to 1 or more third parties;CommentsClose CommentsPermalink





(4) taking a lien on any or all assets of the covered financial company or any covered subsidiary, including a first priority lien on all unencumbered assets of the covered financial company or any covered subsidiary to secure repayment of any transactions conducted under this subsection;CommentsClose CommentsPermalink





(5) selling or transferring all, or any part, of such acquired assets, liabilities, or obligations of the covered financial company or any covered subsidiary; andCommentsClose CommentsPermalink





(6) making payments pursuant to subsections (b)(4), (d)(4), and (h)(5)(E) of section 210.CommentsClose CommentsPermalink

SEC. 205. ORDERLY LIQUIDATION OF COVERED BROKERS AND DEALERS.CommentsClose CommentsPermalink

(a) Appointment of SIPC as Trustee for Protection of Customer Securities and Property-CommentsClose CommentsPermalink





(1) APPOINTMENT- Upon the appointment of the Corporation as receiver for any covered broker or dealer, the Corporation shall appoint, without any need for court approval, the Securities Investor Protection Corporation to act as trustee for liquidation under the Securities Investor the liquidation under the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.) of the covered broker or dealer.CommentsClose CommentsPermalink





(2) ACTIONS BY SIPC-CommentsClose CommentsPermalink





(A) FILING- Upon appointment of SIPC under paragraph (1), SIPC shall promptly file with any Federal district court of competent jurisdiction specified in section 21 or 27 of the Securities Exchange Act of 1934 (15 U.S.C. 78u, 78aa), an application for a protective decree under the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.) as to the covered broker or dealer. The Federal district court shall accept and approve the filing, including outside of normal business hours, and shall immediately issue the protective decree as to the covered broker or dealer.CommentsClose CommentsPermalink





(B) ADMINISTRATION BY SIPC- Following entry of the protective decree, and except as otherwise provided in this section, the determination of claims and the liquidation of assets retained in the receivership of the covered broker or dealer and not transferred to the bridge financial company shall be administered under the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.) by SIPC, as trustee for the covered broker or dealer.CommentsClose CommentsPermalink





(C) DEFINITION OF FILING DATE- For purposes of the liquidation proceeding, the term ‘filing date’ means the date on which the Corporation is appointed as receiver of the covered broker or dealer.CommentsClose CommentsPermalink





(D) DETERMINATION OF CLAIMS- As trustee for the covered broker or dealer, SIPC shall determine and satisfy, consistent with this title and with the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.), all claims against the covered broker or dealer arising on or before the filing date.CommentsClose CommentsPermalink





(b) Powers and Duties of SIPC-CommentsClose CommentsPermalink





(1) IN GENERAL- Except as provided in this section, upon its appointment as trustee for the liquidation of a covered broker or dealer, SIPC shall have all of the powers and duties provided by the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.), including, without limitation, all rights of action against third parties, but shall have noand shall conduct such liquidation in accordance with the terms of the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.), except that SIPC shall have no powers or duties with respect to assets and liabilities transferred by the Corporation from the covered broker or dealer to any bridge financial company established in accordance with this title.CommentsClose CommentsPermalink





(2) LIMITATION OF POWERS- The exercise by SIPC of powers and functions as trustee under subsection (a) shall not impair or impede the exercise of the powers and duties of the Corporation with regard to--CommentsClose CommentsPermalink





(A) any action, except as otherwise provided in this title--CommentsClose CommentsPermalink





(i) to make funds available under section 204(d);CommentsClose CommentsPermalink





(ii) to organize, establish, operate, or terminate any bridge financial company;CommentsClose CommentsPermalink





(iii) to transfer assets and liabilities;CommentsClose CommentsPermalink





(iv) to enforce or repudiate contracts; orCommentsClose CommentsPermalink





(v) to take any other action relating to such bridge financial company under section 210; orCommentsClose CommentsPermalink





(B) determining claims under subsection (de).CommentsClose CommentsPermalink





(3) PROTECTIVE DECREE- SIPC and the Corporation, in consultation with the Commission, shall jointly determine the terms of the protective decree to be filed by SIPC with any court of competent jurisdiction under section 21 or 27 of the Securities Exchange Act of 1934 (15 U.S.C. 78u, 78aa), as required by subsection (a).CommentsClose CommentsPermalink





(4) QUALIFIED FINANCIAL CONTRACTS- Notwithstanding any provision of the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.) to the contrary (including section 5(b)(2)(C) of that Act (15 U.S.C. 78eee(b)(2)(C))), the rights and obligations of any party to a qualified financial contract (as that term is defined in section 210(c)(8)) to which a covered broker or dealer described in subsection (a)for which the Corporation has been appointed receiver is a party shall be governed exclusively by section 210, including the limitations and restrictions contained in section 210(c)(10)(B).CommentsClose CommentsPermalink





(c) Limitation on Court Action- Except as otherwise provided in this title, no court may take any action, including any action pursuant to the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.) or the Bankruptcy Code, to restrain or affect the exercise of powers or functions of the Corporation as receiver for a covered broker or dealer and any claims against the Corporation as such receiver shall be determined in accordance with subsection (e) and such claims shall be limited to money damages.CommentsClose CommentsPermalink





(d) Actions by Corporation as Receiver-CommentsClose CommentsPermalink





(1) IN GENERAL- Notwithstanding any other provision of this title, no action taken by the Corporation, as receiver with respect to a covered broker or dealer, shall--CommentsClose CommentsPermalink





(A) adversely affect the rights of a customer to customer property or customer name securities;CommentsClose CommentsPermalink





(B) diminish the amount or timely payment of net equity claims of customers; orCommentsClose CommentsPermalink





(C) otherwise impair the recoveries provided to a customer under the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.).CommentsClose CommentsPermalink





(2) NET PROCEEDS- The net proceeds from any transfer, sale, or disposition of assets of the covered broker or dealer, or proceeds thereof by the Corporation as receiver for the covered broker or dealer shall be for the benefit of the estate of the covered broker or dealer, as provided in this title.CommentsClose CommentsPermalink





(e) Claims Against the Corporation as Receiver- Any claim against the Corporation as receiver for a covered broker or dealer for assets transferred to a bridge financial company established with respect to such covered broker or dealer--CommentsClose CommentsPermalink





(1) shall be determined in accordance with section 210(a)(2); andCommentsClose CommentsPermalink





(2) may be reviewed by the appropriate district or territorial court of the United States in accordance with section 210(a)(5).CommentsClose CommentsPermalink





(f) Satisfaction of Customer Claims-CommentsClose CommentsPermalink





(1) OBLIGATIONS TO CUSTOMERS- Notwithstanding any other provision of this title, all obligations of a covered broker or dealer or of any bridge financial company established with respect to such covered broker or dealer to a customer relating to, or net equity claims based upon, customer property or customer name securities shall be promptly discharged by SIPC, the Corporation, or the bridge financial company, as applicable, by the delivery of securities or the making of payments to or for the account of such customer, in a manner and in an amount at least as beneficial to the customer as would have been the case had the covered broker or dealer been subject toactual proceeds realized from the liquidation of the covered broker or dealer under this title been distributed in a proceeding under the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.) without the appointment of the Corporation as receiver and without any transfer of assets or liabilities to a bridge financial company, and with a filing date as of the date on which the Corporation is appointed as receiver.CommentsClose CommentsPermalink





(2) SATISFACTION OF CLAIMS BY SIPC- SIPC, as trustee for a covered broker or dealer, shall satisfy customer claims in the manner and amount provided under the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.), as if the appointment of the Corporation as receiver had not occurred, and with a filing date as of the date on which the Corporation is appointed as receiver. The Corporation shall satisfy customer claims, to the extent that a customer would have received more securities or cash with respect to the allocation of customer property had the covered financial company been subject to a proceeding under the Securities Investor Protection Act (15 U.S.C. 78aaa et seq.) without the appointment of the Corporation as receiver, and with a filing date as of the date on which the Corporation is appointed as receiver.CommentsClose CommentsPermalink





(g) Priorities-CommentsClose CommentsPermalink





(1) CUSTOMER PROPERTY- As trustee for a covered broker or dealer, SIPC shall allocate customer property and deliver customer name securities in accordance with section 8(c) of the Securities Investor Protection Act of 1970 (15 U.S.C. 78fff-2(c)).CommentsClose CommentsPermalink





(2) OTHER CLAIMS- All claims other than those described in paragraph (1) (including any unpaid claim by a customer for the allowed net equity claim of such customer from customer property) shall be paid in accordance with the priorities in section 210(b).CommentsClose CommentsPermalink





(h) Rulemaking- The Commission and the Corporation, after consultation with SIPC, shall jointly issue rules to implement this section.CommentsClose CommentsPermalink

SEC. 206. MANDATORY TERMS AND CONDITIONS FOR ALL ORDERLY LIQUIDATION ACTIONS.CommentsClose CommentsPermalink

In taking action under this title, the Corporation shall--CommentsClose CommentsPermalink





(1) determine that such action is necessary for purposes of the financial stability of the United States, and not for the purpose of preserving the covered financial company;CommentsClose CommentsPermalink





(2) ensure that the shareholders of a covered financial company do not receive payment until after all other claims and the Fund are fully paid;CommentsClose CommentsPermalink





(3) ensure that unsecured creditors bear losses in accordance with the priority of claim provisions in section 210;CommentsClose CommentsPermalink





(4) ensure that management responsible for the failed condition of the covered financial company is removed (if such management has not already been removed at the time at which the Corporation is appointed receiver);CommentsClose CommentsPermalink





and(5 (5) ensure that the members of the board of directors (or body performing similar functions) responsible for the failed condition of the covered financial company are removed, if such members have not already been removed at the time the Corporation is appointed as receiver; and CommentsClose CommentsPermalink





(6) not take an equity interest in or become a shareholder of any covered financial company or any covered subsidiary.CommentsClose CommentsPermalink

SEC. 207. DIRECTORS NOT LIABLE FOR ACQUIESCING IN APPOINTMENT OF RECEIVER.CommentsClose CommentsPermalink

The members of the board of directors (or body performing similar functions) of a covered financial company shall not be liable to the shareholders or creditors thereof for acquiescing in or consenting in good faith to the appointment of the Corporation as receiver for the covered financial company under section 203.CommentsClose CommentsPermalink

SEC. 208. DISMISSAL AND EXCLUSION OF OTHER ACTIONS.CommentsClose CommentsPermalink

(a) In General- Effective as of the date of the appointment of the Corporation as receiver for the covered financial company under section 202 or the appointment of SIPC as trustee for a covered broker or dealer under section 205, as applicable, any case or proceeding commenced with respect to the covered financial company under the Bankruptcy Code or the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.) shall be dismissed, upon notice to the Bankruptcy Cbankruptcy court (with respect to a case commenced under the Bankruptcy Code), and upon notice to SIPC (with respect to a covered broker or dealer) and no such case or proceeding may be commenced with respect to a covered financial company at any time while the orderly liquidation is pending.CommentsClose CommentsPermalink





(b) Revesting of Assets- Effective as of the date of appointment of the Corporation as receiver, the assets of a covered financial company shall, to the extent they have vested in any entity other than the covered financial company as a result of any case or proceeding commenced with respect to the covered financial company under the Bankruptcy Code, the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.), or any similar provision of State liquidation or insolvency law applicable to the covered financial company, revest in the covered financial company.CommentsClose CommentsPermalink





(c) Limitation- Notwithstanding subsections (a) and (b), any order entered or other relief granted by a bankruptcy court prior to the date of appointment of the Corporation as receiver shall continue with the same validity as if an orderly liquidation had not been commenced.CommentsClose CommentsPermalink

SEC. 209. RULEMAKING; NON-CONFLICTING LAW.CommentsClose CommentsPermalink

The Corporation shall, in consultation with the Council, prescribe such rules or regulations as the Corporation considers necessary or appropriate to implement this title, including rules and regulations with respect to the rights, interests, and priorities of creditors, counterparties, security entitlement holders, or other persons with respect to any covered financial company or any assets or other property of or held by such covered financial company, and address the potential for conflicts of interest between or among individual receiverships established under this title or under the Federal Deposit Insurance Act. To the extent possible, the Corporation shall seek to harmonize applicable rules and regulations promulgated under this section with the insolvency laws that would otherwise apply to a covered financial company.CommentsClose CommentsPermalink

SEC. 210. POWERS AND DUTIES OF THE CORPORATION.CommentsClose CommentsPermalink

(a) Powers and Authorities-CommentsClose CommentsPermalink





(1) GENERAL POWERS-CommentsClose CommentsPermalink





(A) SUCCESSOR TO COVERED FINANCIAL COMPANY- The Corporation shall, upon appointment as receiver for a covered financial company under this title, succeed to--CommentsClose CommentsPermalink





(i) all rights, titles, powers, and privileges of the covered financial company and its assets, and of any stockholder, member, officer, or director of such company; andCommentsClose CommentsPermalink





(ii) title to the books, records, and assets of any previous receiver or other legal custodian of such covered financial company.CommentsClose CommentsPermalink





(B) OPERATION OF THE COVERED FINANCIAL COMPANY DURING THE PERIOD OF ORDERLY LIQUIDATION- The Corporation, as receiver for a covered financial company, may--CommentsClose CommentsPermalink





(i) take over the assets of and operate the covered financial company with all of the powers of the members or shareholders, the directors, and the officers of the covered financial company, and conduct all business of the covered financial company;CommentsClose CommentsPermalink





(ii) collect all obligations and money owed to the covered financial company;CommentsClose CommentsPermalink





(iii) perform all functions of the covered financial company, in the name of the covered financial company;CommentsClose CommentsPermalink





(iv) manage the assets and property of the covered financial company, consistent with maximization of the value of the assets in the context of the orderly liquidation; andCommentsClose CommentsPermalink





(v) provide by contract for assistance in fulfilling any function, activity, action, or duty of the Corporation as receiver.CommentsClose CommentsPermalink





(C) FUNCTIONS OF COVERED FINANCIAL COMPANY OFFICERS, DIRECTORS, AND SHAREHOLDERS-(i) IN GENERAL- The Corporation may provide for the exercise of any function by any member or stockholder, director, or officer of any covered financial company for which the Corporation has been appointed as receiver under this title.CommentsClose CommentsPermalink





(ii) PRESUMPTION- There shall be a strong presumption that the Corporation, as receiver for a covered financial company, will remove management responsible for the failed condition of the covered financial company.

(D) ADDITIONAL POWERS AS RECEIVER- The Corporation shall, as receiver for a covered financial company, and subject to all legally enforceable and perfected security interests and all legally enforceable security entitlements in respect of assets held by the covered financial company, liquidate, and wind-up the affairs of a covered financial company, including taking steps to realize upon the assets of the covered financial company, in such manner as the Corporation deems appropriate, including through the sale of assets, the transfer of assets to a bridge financial company established under subsection (h), or the exercise of any other rights or privileges granted to the receiver under this section.CommentsClose CommentsPermalink




(E) ADDITIONAL POWERS WITH RESPECT TO FAILING SUBSIDIARIES OF A COVERED FINANCIAL COMPANY-CommentsClose CommentsPermalink





(i) IN GENERAL- In any case in which a receiver is appointed for a covered financial company under section 202, the Corporation may appoint itself as receiver of any subsidiary (other than an insured depository institution, any covered broker or dealer, or an insurance company)covered subsidiary of the covered financial company that is organized under Federal law or the laws of any State, if the Corporation and the Secretary jointly determine that--CommentsClose CommentsPermalink





(I) the covered subsidiary is in default or in danger of default;CommentsClose CommentsPermalink





(II) such action would avoid or mitigate serious adverse effects on the financial stability or economic conditions of the United States; andCommentsClose CommentsPermalink





(III) such action would facilitate the orderly liquidation of the covered financial company.CommentsClose CommentsPermalink





(ii) TREATMENT AS COVERED FINANCIAL COMPANY- If the Corporation is appointed as receiver of a subsidiary of a covered financial company under clause (i), thecovered subsidiary of a covered financial company under clause (i), the covered subsidiary shall thereafter be considered a covered financial company under this title, and the Corporation shall thereafter have all the powers and rights with respect to that covered subsidiary as it has with respect to a covered financial company under this title.CommentsClose CommentsPermalink





(F) ORGANIZATION OF BRIDGE COMPANIES- The Corporation, as receiver for a covered financial company, may organize a bridge financial company under subsection (h).CommentsClose CommentsPermalink





(G) MERGER; TRANSFER OF ASSETS AND LIABILITIES-CommentsClose CommentsPermalink





(i) IN GENERAL- Subject to clauses (ii) and (iii), the Corporation, as receiver for a covered financial company, may--CommentsClose CommentsPermalink





(I) merge the covered financial company with another company; orCommentsClose CommentsPermalink





(II) transfer any asset or liability of the covered financial company (including any assets and liabilities held by the covered financial company for security entitlement holders, any customer property, or any assets and liabilities associated with any trust or custody business) without obtaining any approval, assignment, or consent with respect to such transfer.CommentsClose CommentsPermalink





(ii) FEDERAL AGENCY APPROVAL; ANTITRUST REVIEW- With respect to a transaction described in clause (i)(I) that requires approval by a Federal agency--CommentsClose CommentsPermalink





(I) the transaction may not be consummated before the 5th calendar day after the date of approval by the Federal agency responsible for such approval;CommentsClose CommentsPermalink





(II) if, in connection with any such approval, a report on competitive factors is required, the Federal agency responsible for such approval shall promptly notify the Attorney General of the United States of the proposed transaction, and the Attorney General shall provide the required report not later than 10 days after the date of the request; andCommentsClose CommentsPermalink





(III) if notification under section 7A of the Clayton Act is required with respect to such transaction, then the required waiting period shall end on the 15th day after the date on which the Attorney General and the Federal Trade Commission receive such notification, unless the waiting period is terminated earlier under subsection (b)(2) of such section 7A, or is extended pursuant to subsection (e)(2) of such section 7A.CommentsClose CommentsPermalink





(iii) SETOFF- Subject to the other provisions of this title, any transferee of assets from a receiver, including a bridge financial company, shall be subject to such claims or rights as would prevail over the rights of such transferee in such assets under applicable noninsolvency law.CommentsClose CommentsPermalink





(H) PAYMENT OF VALID OBLIGATIONS- The Corporation, as receiver for a covered financial company, shall, to the extent that funds are available, pay all valid obligations of the covered financial company that are due and payable at the time of the appointment of the Corporation as receiver, in accordance with the prescriptions and limitations of this title.CommentsClose CommentsPermalink





(I) APPLICABLE NONINSOLVENCY LAW- Except as may otherwise be provided in this title, the applicable noninsolvency law shall be determined by the noninsolvency choice of law rules otherwise applicable to the claims, rights, titles, persons, or entities at issue.CommentsClose CommentsPermalink





(J) SUBPOENA AUTHORITY-CommentsClose CommentsPermalink





(i) IN GENERAL- The Corporation, as receiver for a covered financial company, may, for purposes of carrying out any power, authority, or duty with respect to the covered financial company (including determining any claim against the covered financial company and determining and determining and realizing upon any asset of any person in the course of collecting money due the covered financial company), exercise any power established under section 8(n) of the Federal Deposit Insurance Act, as if the Corporation were the appropriate Federal banking agency for the covered financial company, and the covered financial company were an insured depository institution.CommentsClose CommentsPermalink





(ii) RULE OF CONSTRUCTION- This subparagraph may not be construed as limiting any rights that the Corporation, in any capacity, might otherwise have to exercise any powers described in clause (i) or under any other provision of law.CommentsClose CommentsPermalink





(K) INCIDENTAL POWERS- The Corporation, as receiver for a covered financial company, may exercise all powers and authorities specifically granted to receivers under this title, and such incidental powers as shall be necessary to carry out such powers under this title.CommentsClose CommentsPermalink





(L) UTILIZATION OF PRIVATE SECTOR- In carrying out its responsibilities in the management and disposition of assets from the covered financial company, the Corporation, as receiver for a covered financial company, may utilize the services of private persons, including real estate and loan portfolio asset management, property management, auction marketing, legal, and brokerage services, if such services are available in the private sector, and the Corporation determines that utilization of such services is practicable, efficient, and cost effective.CommentsClose CommentsPermalink





(M) SHAREHOLDERS AND CREDITORS OF COVERED FINANCIAL COMPANY- Notwithstanding any other provision of law, the Corporation, as receiver for a covered financial company, shall succeed by operation of law to the rights, titles, powers, and privileges described in subparagraph (A), and shall terminate all rights and claims that the stockholders and creditors of the covered financial company may have against the assets of the covered financial company or the Corporation arising out of their status as stockholders or creditors, except for their right to payment, resolution, or other satisfaction of their claims, as permitted under this section. The Corporation shall ensure that shareholders and unsecured creditors bear losses, consistent with the priority of claims provisions under this section.CommentsClose CommentsPermalink





(N) COORDINATION WITH FOREIGN FINANCIAL AUTHORITIES- The Corporation, as receiver for a covered financial company, shall coordinate, to the maximum extent possible, with the appropriate foreign financial authorities regarding the orderly liquidation of any covered financial company that has assets or operations in a country other than the United States.CommentsClose CommentsPermalink





(O) RESTRICTION ON TRANSFERS TO BRIDGE FINANCIAL COMPANY-CommentsClose CommentsPermalink





(i) SELECTION OF ACCOUNTS FOR TRANSFER- If the Corporation establishes one or more bridge financial companies with respect to a covered broker or dealer, the Corporation shall transfer to a bridge financial company, all customer accounts of the covered financial companone of such bridge financial companies, all customer accounts of the covered broker or dealer, and all associated customer name securities and customer property, unless the Corporation, after consulting with the Commission and SIPC, determines that--CommentsClose CommentsPermalink





(I) the customer accounts, customer name securities, and customer property are likely to be promptly transferred to another covered broker or dealerbroker or dealer that is registered with the Commission under section 15(b) of the Securities Exchange Act of 1934 (15 U.S.C. 73o(b)) and is a member of SIPC; orCommentsClose CommentsPermalink





(II) the transfer of the accounts to a bridge financial company would materially interfere with the ability of the Corporation to avoid or mitigate serious adverse effects on financial stability or economic conditions in the United States.CommentsClose CommentsPermalink





(ii) TRANSFER OF PROPERTY- SIPC, as trustee for the liquidation of the covered broker or dealer, and the Commission, shall provide any and all reasonable assistance necessary to complete such transfers by the Corporation.CommentsClose CommentsPermalink





(iii) CUSTOMER CONSENT AND COURT APPROVAL NOT REQUIRED- Neither customer consent nor court approval shall be required to transfer any customer accounts and associatedor associated customer name securities or customer property to a bridge financial company in accordance with this section.CommentsClose CommentsPermalink





(iv) NOTIFICATION OF SIPC AND SHARING OF INFORMATION- The Corporation shall identify to SIPC the customer accounts and associated customer name securities and customer property transferred to the bridge financial company. The Corporation and SIPC shall cooperate in the sharing of any information necessary for each entity to discharge its obligations under this title and under the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.) including by providing access to the books and records of the covered financial company and any bridge financial company established in accordance with this title.CommentsClose CommentsPermalink





(2) DETERMINATION OF CLAIMS-CommentsClose CommentsPermalink





(A) IN GENERAL- The Corporation, as receiver for a covered financial company, shall report on claims, as set forth in section 203(c)(3). Subject to paragraph (4) of this subsection, the Corporation, as receiver for a covered financial company, shall determine claims in accordance with the requirements of this subsection and regulations prescribed under section 209.CommentsClose CommentsPermalink





(B) NOTICE REQUIREMENTS- The Corporation, as receiver for a covered financial company, in any case involving the liquidation or winding up of the affairs of a covered financial company, shall--CommentsClose CommentsPermalink





(i) promptly publish a notice to the creditors of the covered financial company to present their claims, together with proof, to the receiver by a date specified in the notice, which shall be not earlier than 90 days after the date of publication of such notice; andCommentsClose CommentsPermalink





(ii) republish such notice 1 month and 2 months, respectively, after the date of publication under clause (i).CommentsClose CommentsPermalink





(C) MAILING REQUIRED- The Corporation as receiver shall mail a notice similar to the notice published under clause (i) or (ii) of subparagraph (B), at the time of such publication, to any creditor shown on the books and records of the covered financial company--CommentsClose CommentsPermalink





(i) at the last address of the creditor appearing in such books;CommentsClose CommentsPermalink





(ii) in any claim filed by the claimant; orCommentsClose CommentsPermalink





(iii) upon discovery of the name and address of a claimant not appearing on the books and records of the covered financial company, not later than 30 days after the date of the discovery of such name and address.CommentsClose CommentsPermalink





(3) PROCEDURES FOR RESOLUTION OF CLAIMS-CommentsClose CommentsPermalink





(A) DECISION PERIOD-CommentsClose CommentsPermalink





(i) IN GENERAL- Prior to the 180th day after the date on which a claim against a covered financial company is filed with the Corporation as receiver, or such later date as may be agreed as provided in clause (ii), the Corporation shall notify the claimant whether it accepts or objects tollows or disallows the claim, in accordance with subparagraphs (B), (C), and (D).CommentsClose CommentsPermalink





(ii) EXTENSION OF TIME- By written agreement executed not later than 180 days after the date on which a claim against a covered financial company is filed with the Corporation, the period described in clause (i) may be extended by written agreement between the claimant and the Corporation. Failure to notify the claimant of any disallowance within the time period set forth in clause (i), as it may be extended by agreement under this clause, shall be deemed to be a disallowance of such claim, and the claimant may file or continue an action in court, as provided in paragraph (4).CommentsClose CommentsPermalink





(iii) MAILING OF NOTICE SUFFICIENT- The requirements of clause (i) shall be deemed to be satisfied if the notice of any decision with respect to any claim is mailed to the last address of the claimant which appears--CommentsClose CommentsPermalink





(I) on the books, records, or both of the covered financial company;CommentsClose CommentsPermalink





(II) in the claim filed by the claimant; orCommentsClose CommentsPermalink





(III) in documents submitted in proof of the claim.CommentsClose CommentsPermalink





(iv) CONTENTS OF NOTICE OF DISALLOWANCE- If the Corporation as receiver objects todisallows any claim filed under clause (i), the notice to the claimant shall contain--CommentsClose CommentsPermalink





(I) a statement of each reason for the disallowance; andCommentsClose CommentsPermalink





(II) the procedures required to file or continue an action in court, as provided in paragraph (4).CommentsClose CommentsPermalink





(B) ALLOWANCE OF PROVEN CLAIM- The receiver shall allow any claim received by the receiver on or before the date specified in the notice under paragraph (2)(B)(i), which is proved to the satisfaction of the receiver.CommentsClose CommentsPermalink





(C) DISALLOWANCE OF CLAIMS FILED AFTER END OF FILING PERIOD-CommentsClose CommentsPermalink





(i) IN GENERAL- Except as provided in clause (ii), claims filed after the date specified in the notice published under paragraph (2)(B)(i) shall be disallowed, and such disallowance shall be final.CommentsClose CommentsPermalink





(ii) CERTAIN EXCEPTIONS- Clause (i) shall not apply with respect to any claim filed by a claimant after the date specified in the notice published under paragraph (2)(B)(i), and such claim may be considered by the receiver under subparagraph (B), if--CommentsClose CommentsPermalink





(I) the claimant did not receive notice of the appointment of the receiver in time to file such claim before such date; andCommentsClose CommentsPermalink





(II) such claim is filed in time to permit payment of such claim.CommentsClose CommentsPermalink





(D) AUTHORITY TO DISALLOW CLAIMS-CommentsClose CommentsPermalink





(i) IN GENERAL- The Corporation may object todisallow any portion of any claim by a creditor or claim of a security, preference, setoff, or priority which is not proved to the satisfaction of the Corporation.CommentsClose CommentsPermalink





(ii) PAYMENTS TO UNDERSECURED CREDITORS- In the case of a claim against a covered financial company that is secured by any property or other asset of such covered financial company, the receiver--CommentsClose CommentsPermalink





(I) may treat the portion of such claim which exceeds an amount equal to the fair market value of such property or other asset as an unsecured claim; andCommentsClose CommentsPermalink





(II) may not make any payment with respect to such unsecured portion of the claim, other than in connection with the disposition of all claims of unsecured creditors of the covered financial company.CommentsClose CommentsPermalink





(iii) EXCEPTIONS- No provision of this paragraph shall apply with respect to--CommentsClose CommentsPermalink





(I) any extension of credit from any Federal reserve bank, or the Corporation, to any covered financial company; orCommentsClose CommentsPermalink





(II) subject to clause (ii), any legally enforceable and perfected security interest in the assets of the covered financial company securing any such extension of credit.CommentsClose CommentsPermalink





(E) LEGAL EFFECT OF FILING-CommentsClose CommentsPermalink





(i) STATUTE OF LIMITATIONS TOLLED- For purposes of any applicable statute of limitations, the filing of a claim with the receiver shall constitute a commencement of an action.CommentsClose CommentsPermalink





(ii) NO PREJUDICE TO OTHER ACTIONS- Subject to paragraph (8), the filing of a claim with the receiver shall not prejudice any right of the claimant to continue any action which was filed before the date of appointment of the receiver for the covered financial company.CommentsClose CommentsPermalink





(4) JUDICIAL DETERMINATION OF CLAIMS-CommentsClose CommentsPermalink





(A) IN GENERAL- Subject to subparagraph (B), a claimant may file suit on a claim (or continue an action commenced before the date of appointment of the Corporation as receiver) in the district or territorial court of the United States for the district within which the principal place of business of the covered financial company is located (and such court shall have jurisdiction to hear such claim).CommentsClose CommentsPermalink





(B) TIMING- A claim under subparagraph (A) may be filed before the end of the 60-day period beginning on the earlier of--CommentsClose CommentsPermalink





(i) the end of the period described in paragraph (3)(A)(i) (or, if extended by agreement of the Corporation and the claimant, the period described in paragraph (3)(A)(ii)) with respect to any claim against a covered financial company for which the Corporation is receiver; orCommentsClose CommentsPermalink





(ii) the date of any notice of disallowance of such claim pursuant to paragraph (3)(A)(i).CommentsClose CommentsPermalink





(C) STATUTE OF LIMITATIONS- If any claimant fails to file suit on such claim (or to continue an action on such claim commenced before the date of appointment of the Corporation as receiver) prior to the end of the 60-day period described in subparagraph (B), the claim shall be deemed to be disallowed (other than any portion of such claim which was allowed by the receiver) as of the end of such period, such disallowance shall be final, and the claimant shall have no further rights or remedies with respect to such claim.CommentsClose CommentsPermalink





(5) EXPEDITED DETERMINATION OF CLAIMS-CommentsClose CommentsPermalink





(A) PROCEDURE REQUIRED- The Corporation shall establish a procedure for expedited relief outside of the claims process established under paragraph (3), for any claimant that alleges--CommentsClose CommentsPermalink





(i) the existence ofhaving a legally valid and enforceable or perfected security interest in property of a covered financial company, or is an entitlement holder that has obtained or control of any legally valid and enforceable security entitlement in respect of any asset held by the covered financial company for which the Corporation has been appointed receiver; andCommentsClose CommentsPermalink





(ii) that irreparable injury will occur if the claims procedure established under paragraph (3) is followed.CommentsClose CommentsPermalink





(B) DETERMINATION PERIOD- Prior to the end of the 90-day period beginning on the date on which a claim is filed in accordance with the procedures established pursuant to subparagraph (A), the Corporation shall--CommentsClose CommentsPermalink





(i) determine--CommentsClose CommentsPermalink





(I) whether to allow or disallow such claim, or any portion thereof; orCommentsClose CommentsPermalink





(II) whether such claim should be determined pursuant to the procedures established pursuant to paragraph (3);CommentsClose CommentsPermalink





(ii) notify the claimant of the determination; andCommentsClose CommentsPermalink





(iii) if the claim is disallowed, provide a statement of each reason for the disallowance and the procedure for obtaining a judicial determination.CommentsClose CommentsPermalink





(C) PERIOD FOR FILING OR RENEWING SUIT- Any claimant who files a request for expedited relief shall be permitted to file suit (or continue a suit filed before the date of appointment of the Corporation as receiver seeking a determination of the rights of the claimant with respect to such security interest (or such security entitlement) after the earlier of--CommentsClose CommentsPermalink





(i) the end of the 90-day period beginning on the date of the filing of a request for expedited relief; orCommentsClose CommentsPermalink





(ii) the date on which the Corporation denies the claim or a portion thereof.CommentsClose CommentsPermalink





(D) STATUTE OF LIMITATIONS- If an action described in subparagraph (C) is not filed, or the motion to renew a previously filed suit is not made, before the end of the 30-day period beginning on the date on which such action or motion may be filed in accordance with subparagraph (C), the claim shall be deemed to be disallowed as of the end of such period (other than any portion of such claim which was allowed by the receiver), such disallowance shall be final, and the claimant shall have no further rights or remedies with respect to such claim.CommentsClose CommentsPermalink





(E) LEGAL EFFECT OF FILING-CommentsClose CommentsPermalink





(i) STATUTE OF LIMITATIONS TOLLED- For purposes of any applicable statute of limitations, the filing of a claim with the receiver shall constitute a commencement of an action.CommentsClose CommentsPermalink





(ii) NO PREJUDICE TO OTHER ACTIONS- Subject to paragraph (8), the filing of a claim with the receiver shall not prejudice any right of the claimant to continue any action which was filed before the appointment of the Corporation as receiver for the covered financial company.CommentsClose CommentsPermalink





(6) AGREEMENTS AGAINST INTEREST OF THE RECEIVER- No agreement that tends to diminish or defeat the interest of the Corporation as receiver in any asset acquired by the receiver under this section shall be valid against the receiver, unless such agreement--CommentsClose CommentsPermalink





(A) is in writing;CommentsClose CommentsPermalink





(B) was executed by an authorized officer or representative of the covered financial company, or confirmed in the ordinary course of business by the covered financial company; andCommentsClose CommentsPermalink





(C) has been, since the time of its execution, an official record of the company or the party claiming under the agreement provides documentation, acceptable to the receiver, of such agreement and its authorized execution or confirmation by the covered financial company.CommentsClose CommentsPermalink





(7) PAYMENT OF CLAIMS-CommentsClose CommentsPermalink





(A) IN GENERAL- Subject to subparagraph (B), the Corporation as receiver may, in its discretion and to the extent that funds are available, pay creditor claims, in such manner and amounts as are authorized under this section, which are--CommentsClose CommentsPermalink





(i) allowed by the receiver;CommentsClose CommentsPermalink





(ii) approved by the receiver pursuant to a final determination pursuant to paragraph (3) or (5), as applicable; orCommentsClose CommentsPermalink





(iii) determined by the final judgment of a court of competent jurisdiction.CommentsClose CommentsPermalink





(B) LIMITATION- A creditor shall, in no event, receive less than the amount that the creditor is entitled to receive under paragraphs (2) and (3) of subsection (d), as applicable.CommentsClose CommentsPermalink





(C) PAYMENT OF DIVIDENDS ON CLAIMS- The Corporation as receiver may, in its sole discretion, and to the extent otherwise permitted by this section, pay dividends on proven claims at any time, and no liability shall attach to the Corporation as receiver, by reason of any such payment or for failure to pay dividends to a claimant whose claim is not proved at the time of any such payment.CommentsClose CommentsPermalink





(D) RULEMAKING BY THE CORPORATION- The Corporation may prescribe such rules, including definitions of terms, as the Corporation deems appropriate to establish an interest rate for or to make payments of post-insolvency interest to creditors holding proven claims against the receivership estate of a covered financial company, except that no such interest shall be paid until the Corporation as receiver has satisfied the principal amount of all creditor claims.CommentsClose CommentsPermalink





(8) SUSPENSION OF LEGAL ACTIONS-CommentsClose CommentsPermalink





(A) IN GENERAL- After the appointment of the Corporation as receiver for a covered financial company, the Corporation may request a stay in any judicial action or proceeding in which such covered financial company is or becomes a party, for a period of not to exceed 90 days.CommentsClose CommentsPermalink





(B) GRANT OF STAY BY ALL COURTS REQUIRED- Upon receipt of a request by the Corporation pursuant to subparagraph (A), the court shall grant such stay as to all parties.CommentsClose CommentsPermalink





(9) ADDITIONAL RIGHTS AND DUTIES-CommentsClose CommentsPermalink





(A) PRIOR FINAL ADJUDICATION- The Corporation shall abide by any final, non-appealable judgment of any court of competent jurisdiction that was rendered before the appointment of the Corporation as receiver.CommentsClose CommentsPermalink





(B) RIGHTS AND REMEDIES OF RECEIVER- In the event of any appealable judgment, the Corporation as receiver shall--CommentsClose CommentsPermalink





(i) have all the rights and remedies available to the covered financial company (before the date of appointment of the Corporation as receiver under section 202) and the Corporation, including removal to Federal court and all appellate rights; andCommentsClose CommentsPermalink





(ii) not be required to post any bond in order to pursue such remedies.CommentsClose CommentsPermalink





(C) NO ATTACHMENT OR EXECUTION- No attachment or execution may be issued by any court upon assets in the possession of the Corporation as receiver for a covered financial company.CommentsClose CommentsPermalink





(D) LIMITATION ON JUDICIAL REVIEW- Except as otherwise provided in this title, no court shall have jurisdiction over--CommentsClose CommentsPermalink





(i) any claim or action for payment from, or any action seeking a determination of rights with respect to, the assets of any covered financial company for which the Corporation has been appointed receiver, including any assets which the Corporation may acquire from itself as such receiver; orCommentsClose CommentsPermalink





(ii) any claim relating to any act or omission of such covered financial company or the Corporation as receiver.CommentsClose CommentsPermalink





(E) DISPOSITION OF ASSETS- In exercising any right, power, privilege, or authority as receiver in connection with any covered financial company for which the Corporation is acting as receiver under this section, the Corporation shall, to the greatest extent practicable, conduct its operations in a manner that--CommentsClose CommentsPermalink





(i) maximizes the net present value return from the sale or disposition of such assets;CommentsClose CommentsPermalink





(ii) minimizes the amount of any loss realized in the resolution of cases;CommentsClose CommentsPermalink





(iii) mitigates the potential for serious adverse effects to the financial system;CommentsClose CommentsPermalink





(iv) ensures timely and adequate competition and fair and consistent treatment of offerors; andCommentsClose CommentsPermalink





(v) prohibits discrimination on the basis of race, sex, or ethnic group in the solicitation and consideration of offers.CommentsClose CommentsPermalink





(10) STATUTE OF LIMITATIONS FOR ACTIONS BROUGHT BY RECEIVER-CommentsClose CommentsPermalink





(A) IN GENERAL- Notwithstanding any provision of any contract, the applicable statute of limitations with regard to any action brought by the Corporation as receiver for a covered financial company shall be--CommentsClose CommentsPermalink





(i) in the case of any contract claim, the longer of--CommentsClose CommentsPermalink





(I) the 6-year period beginning on the date on which the claim accrues; orCommentsClose CommentsPermalink





(II) the period applicable under State law; andCommentsClose CommentsPermalink





(ii) in the case of any tort claim, the longer of--CommentsClose CommentsPermalink





(I) the 3-year period beginning on the date on which the claim accrues; orCommentsClose CommentsPermalink





(II) the period applicable under State law.CommentsClose CommentsPermalink





(B) DATE ON WHICH A CLAIM ACCRUES- For purposes of subparagraph (A), the date on which the statute of limitations begins to run on any claim described in subparagraph (A) shall be the later of--CommentsClose CommentsPermalink





(i) the date of the appointment of the Corporation as receiver under this title; orCommentsClose CommentsPermalink





(ii) the date on which the cause of action accrues.CommentsClose CommentsPermalink





(C) REVIVAL OF EXPIRED STATE CAUSES OF ACTION-CommentsClose CommentsPermalink





(i) IN GENERAL- In the case of any tort claim described in clause (ii) for which the applicable statute of limitations under State law has expired not more than 5 years before the date of appointment of the Corporation as receiver for a covered financial company, the Corporation may bring an action as receiver on such claim without regard to the expiration of the statute of limitations.CommentsClose CommentsPermalink





(ii) CLAIMS DESCRIBED- A tort claim referred to in clause (i) is a claim arising from fraud, intentional misconduct resulting in unjust enrichment, or intentional misconduct resulting in substantial loss to the covered financial company.CommentsClose CommentsPermalink





(11) AVOIDABLE TRANSFERS-CommentsClose CommentsPermalink





(A) FRAUDULENT TRANSFERS- The Corporation, as receiver for any covered financial company, may avoid a transfer of any interest of the covered financial company in property, or any obligation incurred by the covered financial company, that was made or incurred at or within 2 years before the time of commencementdate on which the Corporation was appointed receiver, if--CommentsClose CommentsPermalink





(i) the covered financial company voluntarily or involuntarily--CommentsClose CommentsPermalink





(I) made such transfer or incurred such obligation with actual intent to hinder, delay, or defraud any entity to which the covered financial company was or became, on or after the date on which such transfer was made or such obligation was incurred, indebted; orCommentsClose CommentsPermalink





(II) received less than a reasonably equivalent value in exchange for such transferor obligation; andCommentsClose CommentsPermalink





(ii) the covered financial company voluntarily or involuntarily--CommentsClose CommentsPermalink





(I) was insolvent on the date that such transfer was made or such obligation was incurred, or became insolvent as a result of such transfer or obligation;CommentsClose CommentsPermalink





(II) was engaged in business or a transaction, or was about to engage in business or a transaction, for which any property remaining with the covered financial company was an unreasonably small capital;CommentsClose CommentsPermalink





(III) intended to incur, or believed that the covered financial company would incur, debts that would be beyond the ability of the covered financial company to pay as such debts matured; orCommentsClose CommentsPermalink





(IV) made such transfer to or for the benefit of an insider, or incurred such obligation to or for the benefit of an insider, under an employment contract and not in the ordinary course of business.CommentsClose CommentsPermalink





(B) PREFERENTIAL TRANSFERS- The Corporation as receiver for any covered financial company may avoid a transfer of an interest of the covered financial company in property--CommentsClose CommentsPermalink





(i) to or for the benefit of a creditor;CommentsClose CommentsPermalink





(ii) for or on account of an antecedent debt that was owed by the covered financial company before the transfer was made;CommentsClose CommentsPermalink





(iii) that was made while the covered financial company was insolvent;CommentsClose CommentsPermalink





(iv) that was made--CommentsClose CommentsPermalink





(I) 90 days or less before the date on which the Corporation was appointed receiver; orCommentsClose CommentsPermalink





(II) more than 90 days, but less than 1 year before the date on which the Corporation was appointed receiver, if such creditor at the time of the transfer was an insider; andCommentsClose CommentsPermalink





(v) that enables the creditor to receive more than the creditor would receive if--CommentsClose CommentsPermalink





(I) the covered financial company had been liquidated under chapter 7 of the Bankruptcy Code;CommentsClose CommentsPermalink





(II) the transfer had not been made; andCommentsClose CommentsPermalink





(III) the creditor received payment of such debt to the extent provided by the provisions of chapter 7 of the Bankruptcy Code.CommentsClose CommentsPermalink





(C) POST-RECEIVERSHIP TRANSACTIONS- The Corporation as receiver for any covered financial company may avoid a transfer of property of the receivership that occurred after the Corporation was appointed receiver that was not authorized under this title by the Corporation as receiver.CommentsClose CommentsPermalink





(D) RIGHT OF RECOVERY- To the extent that a transfer is avoided under subparagraph (A), (B), or (C), the Corporation may recover, for the benefit of the covered financial company, the property transferred or, if a court so orders, the value of such property (at the time of such transfer) from--CommentsClose CommentsPermalink





(i) the initial transferee of such transfer or the person for whose benefit such transfer was made; orCommentsClose CommentsPermalink





(ii) any immediate or mediate transferee of any such initial transferee.CommentsClose CommentsPermalink





(E) RIGHTS OF TRANSFEREE OR OBLIGEE- The Corporation may not recover under subparagraph (D)(ii) from--CommentsClose CommentsPermalink





(i) any transferee that takes for value, including in satisfaction of or to secure a present or antecedent debt, in good faith, and without knowledge of the voidability of the transfer avoided; orCommentsClose CommentsPermalink





(ii) any immediate or mediate good faith transferee of such transferee.CommentsClose CommentsPermalink





(F) DEFENSES- Subject to the other provisions of this title--CommentsClose CommentsPermalink





(i) a transferee or obligee from which the Corporation seeks to recover a transfer or to avoid an obligation under subparagraph (A), (B), (C), or (D) shall have the same defenses available to a transferee or obligee from which a trustee seeks to recover a transfer or avoid an obligation under sections 547, 548, and 549 of the Bankruptcy Code; andCommentsClose CommentsPermalink





(ii) the authority of the Corporation to recover a transfer or avoid an obligation shall be subject to subsections (b) and (c) of section 546, section 547(c), and section 548(c) of the Bankruptcy Code.CommentsClose CommentsPermalink





(G) RIGHTS UNDER THIS SECTION- The rights of the Corporation as receiver under this section shall be superior to any rights of a trustee or any other party (other than a Federal agency) under the Bankruptcy Code.CommentsClose CommentsPermalink





(H) RULES OF CONSTRUCTION; DEFINITIONS- For purposes of--CommentsClose CommentsPermalink





(i) subparagraphs (A) and (B)--CommentsClose CommentsPermalink





(I) the term ‘insider’ has the same meaning as in section 101(31) of the Bankruptcy Code;CommentsClose CommentsPermalink





(II) a transfer is made when such transfer is so perfected that a bona fide purchaser from the covered financial company against whom applicable law permits such transfer to be perfected cannot acquire an interest in the property transferred that is superior to the interest in such property of the transferee, but if such transfer is not so perfected before the date on which the Corporation is appointed as receiver for the covered financial company, such transfer is made immediately before the date of such appointment; andCommentsClose CommentsPermalink





(III) the term ‘value’ means property, or satisfaction or securing of a present or antecedent debt of the covered financial company, but does not include an unperformed promise to furnish support to the covered financial company; andCommentsClose CommentsPermalink





(ii) subparagraph (B)--CommentsClose CommentsPermalink





(I) the covered financial company is presumed to have been insolvent on and during the 90-day period immediately preceding the date of appointment of the Corporation as receiver; andCommentsClose CommentsPermalink





(II) the term ‘insolvent’ has the same meaning as in section 101(32) of the Bankruptcy Code.CommentsClose CommentsPermalink





(12) SETOFF-CommentsClose CommentsPermalink





(A) GENERALLY- Except as otherwise provided in this title, any right of a creditor to offset a mutual debt owed by the creditor to any covered financial company that arose before the Corporation was appointed as receiver for the covered financial company against a claim of such creditor may be asserted if enforceable under applicable noninsolvency law, except to the extent that--CommentsClose CommentsPermalink





(i) the claim of the creditor against the covered financial company is disallowed;CommentsClose CommentsPermalink





(ii) the claim was transferred, by an entity other than the covered financial company, to the creditor--CommentsClose CommentsPermalink





(I) after the Corporation was appointed as receiver of the covered financial company; orCommentsClose CommentsPermalink





(II)(aa) after the 90-day period preceding the date on which the Corporation was appointed as receiver for the covered financial company; andCommentsClose CommentsPermalink





(bb) while the covered financial company was insolvent (except for a setoff in connection with a qualified financial contract); orCommentsClose CommentsPermalink





(iii) the debt owed to the covered financial company was incurred by the covered financial company--CommentsClose CommentsPermalink





(I) after the 90-day period preceding the date on which the Corporation was appointed as receiver for the covered financial company;CommentsClose CommentsPermalink





(II) while the covered financial company was insolvent; andCommentsClose CommentsPermalink





(III) for the purpose of obtaining a right of setoff against the covered financial company (except for a setoff in connection with a qualified financial contract).CommentsClose CommentsPermalink





(B) INSUFFICIENCY-CommentsClose CommentsPermalink





(i) IN GENERAL- Except with respect to a setoff in connection with a qualified financial contract, if a creditor offsets a mutual debt owed to the covered financial company against a claim of the covered financial company on or within the 90-day period preceding the date on which the Corporation is appointed as receiver for the covered financial company, the Corporation may recover from the creditor the amount so offset, to the extent that any insufficiency on the date of such setoff is less than the insufficiency on the later of--CommentsClose CommentsPermalink





(I) the date that is 90 days before the date on which the Corporation is appointed as receiver for the covered financial company; orCommentsClose CommentsPermalink





(II) the first day on which there is an insufficiency during the 90-day period preceding the date on which the Corporation is appointed as receiver for the covered financial company.CommentsClose CommentsPermalink





(ii) DEFINITION OF INSUFFICIENCY- In this subparagraph, the term ‘insufficiency’ means the amount, if any, by which a claim against the covered financial company exceeds a mutual debt owed to the covered financial company by the holder of such claim.CommentsClose CommentsPermalink





(C) INSOLVENCY- The term ‘insolvent’ has the same meaning as in section 101(32) of the Bankruptcy Code.CommentsClose CommentsPermalink





(D) PRESUMPTION OF INSOLVENCY- For purposes of this paragraph, the covered financial company is presumed to have been insolvent on and during the 90-day period preceding the date of appointment of the Corporation as receiver.CommentsClose CommentsPermalink





(E) LIMITATION- Nothing in this paragraph (12) shall be the basis for any right of setoff where no such right exists under applicable noninsolvency law.CommentsClose CommentsPermalink





(F) PRIORITY CLAIM- Except as otherwise provided in this title, the Corporation as receiver for the covered financial company may sell or transfer any assets free and clear of the setoff rights of any party, except that such party shall be entitled to a claim, subordinate to the claims payable under subparagraphs (A), (B), (C), and (D) of subsection (b)(1), but senior to all other unsecured liabilities defined in subsection (b)(1)(E), in an amount equal to the value of such setoff rights.CommentsClose CommentsPermalink





(13) ATTACHMENT OF ASSETS AND OTHER INJUNCTIVE RELIEF- Subject to paragraph (14), any court of competent jurisdiction may, at the request of the Corporation as receiver for a covered financial company, issue an order in accordance with Rule 65 of the Federal Rules of Civil Procedure, including an order placing the assets of any person designated by the Corporation under the control of the court and appointing a trustee to hold such assets.CommentsClose CommentsPermalink





(14) STANDARDS-CommentsClose CommentsPermalink





(A) SHOWING- Rule 65 of the Federal Rules of Civil Procedure shall apply with respect to any proceeding under paragraph (13), without regard to the requirement that the applicant show that the injury, loss, or damage is irreparable and immediate.CommentsClose CommentsPermalink





(B) STATE PROCEEDING- If, in the case of any proceeding in a State court, the court determines that rules of civil procedure available under the laws of the State provide substantially similar protections of the right of the parties to due process as provided under Rule 65 (as modified with respect to such proceeding by subparagraph (A)), the relief sought by the Corporation pursuant to paragraph (14) may be requested under the laws of such State.CommentsClose CommentsPermalink





(15) TREATMENT OF CLAIMS ARISING FROM BREACH OF CONTRACTS EXECUTED BY THE CORPORATION AS RECEIVER- Notwithstanding any other provision of this title, any final and non-appealable judgment for monetary damages entered against the Corporation as receiver for a covered financial company for the breach of an agreement executed or approved by the Corporation after the date of its appointment shall be paid as an administrative expense of the receiver. Nothing in this paragraph shall be construed to limit the power of a receiver to exercise any rights under contract or law, including to terminate, breach, cancel, or otherwise discontinue such agreement.CommentsClose CommentsPermalink





(16) ACCOUNTING AND RECORDKEEPING REQUIREMENTS-CommentsClose CommentsPermalink





(A) IN GENERAL- The Corporation as receiver for a covered financial company shall, consistent with the accounting and reporting practices and procedures established by the Corporation, maintain a full accounting of each receivership or other disposition of any covered financial company.CommentsClose CommentsPermalink





(B) ANNUAL ACCOUNTING OR REPORT- With respect to each receivership to which the Corporation is appointed, the Corporation shall make an annual accounting or report, as appropriate, available to the Secretary and the Comptroller General of the United States.CommentsClose CommentsPermalink





(C) AVAILABILITY OF REPORTS- Any report prepared pursuant to subparagraph (B) and section 203(c)(3) shall be made available to the public by the Corporation.CommentsClose CommentsPermalink





(D) RECORDKEEPING REQUIREMENT-CommentsClose CommentsPermalink





(i) IN GENERAL- The Corporation shall prescribe such regulations and establish such retention schedules as are necessary to maintain the documents and records of the Corporation generated in exercising the authorities of this title and the records of a covered financial company for which the Corporation is appointed receiver, with due regard for--CommentsClose CommentsPermalink





(I) the avoidance of duplicative record retention; andCommentsClose CommentsPermalink





(II) the expected evidentiary needs of the Corporation as receiver for a covered financial company and the public regarding the records of covered financial companies.CommentsClose CommentsPermalink





(ii) RETENTION OF RECORDS- Unless otherwise required by applicable Federal law or court order, the Corporation may not, at any time, destroy any records that are subject to clause (i).CommentsClose CommentsPermalink





(iii) RECORDS DEFINED- As used in this subparagraph, the terms ‘records’ and ‘records of a covered financial company’ mean any document, book, paper, map, photograph, microfiche, microfilm, computer or electronically-created record generated or maintained by the covered financial company in the course of and necessary to its transaction of business.CommentsClose CommentsPermalink





(b) Priority of Expenses and Unsecured Claims-CommentsClose CommentsPermalink





(1) IN GENERAL- Unsecured claims against a covered financial company, or the Corporation as receiver for such covered financial company under this section, that are proven to the satisfaction of the receiver shall have priority in the following order:CommentsClose CommentsPermalink





(A) Administrative expenses of the receiver.CommentsClose CommentsPermalink





(B) Any amounts owed to the United States, unless the United States agrees or consents otherwise.CommentsClose CommentsPermalink





(C) Wages, salaries, or commissions, including vacation, severance, and sick leave pay earned by an individual (other than an individual described in subparagraph (G)), but only to the extent of $11,725 for each individual (as indexed for inflation, by regulation of the Corporation) earned not later than 180 days before the date of appointment of the Corporation as receiver.CommentsClose CommentsPermalink





(D) Contributions owed to employee benefit plans arising from services rendered not later than 180 days before the date of appointment of the Corporation as receiver, to the extent of the number of employees covered by each such plan, multiplied by $11,725 (as indexed for inflation, by regulation of the Corporation), less the aggregate amount paid to such employees under subparagraph (C), plus the aggregate amount paid by the receivership on behalf of such employees to any other employee benefit plan.CommentsClose CommentsPermalink





(E) Any other general or senior liability of the covered financial company (which is not a liability described under subparagraph (F), (G), or (H)).CommentsClose CommentsPermalink





(F) Any obligation subordinated to general creditors (which is not an obligation described under subparagraph (G) or (H)).CommentsClose CommentsPermalink





(G) Any wages, salaries, or commissions, including vacation, severance, and sick leave pay earned, owed to senior executives and directors of the covered financial company.CommentsClose CommentsPermalink





(H) Any obligation to shareholders, members, general partners, limited partners, or other persons, with interests in the equity of the covered financial company arising as a result of their status as shareholders, members, general partners, limited partners, or other persons with interests in the equity of the covered financial company.CommentsClose CommentsPermalink





(2) POST-RECEIVERSHIP FINANCING PRIORITY- In the event that the Corporation, as receiver for a covered financial company, is unable to obtain unsecured credit for the covered financial company from commercial sources, the Corporation as receiver may obtain credit or incur debt on the part of the covered financial company, which shall have priority over any or all administrative expenses of the receiver under paragraph (1)(A).CommentsClose CommentsPermalink





(3) CLAIMS OF THE UNITED STATES- Unsecured claims of the United States shall, at a minimum, have a higher priority than liabilities of the covered financial company that count as regulatory capital.CommentsClose CommentsPermalink





(4) CREDITORS SIMILARLY SITUATED- All claimants of a covered financial company that are similarly situated under paragraph (1) shall be treated in a similar manner, except that the Corporation as receiver may take any action (including makingmay take any action (including making payments, subject to subsection (o)(1)(E)(iD)(i)) that does not comply with this subsection, if--CommentsClose CommentsPermalink





(A) the Corporation determines that such action is necessary--CommentsClose CommentsPermalink





(i) to maximize the value of the assets of the covered financial company;CommentsClose CommentsPermalink





(ii) to initiate and continue operations essential to implementation of the receivership or any bridge financial company;CommentsClose CommentsPermalink





(iii) to maximize the present value return from the sale or other disposition of the assets of the covered financial company; orCommentsClose CommentsPermalink





(iv) to minimize the amount of any loss realized upon the sale or other disposition of the assets of the covered financial company; andCommentsClose CommentsPermalink





(B) all claimants that are similarly situated under paragraph (1) receive not less than the amount provided in paragraphs (2) and (3) of subsection (d).CommentsClose CommentsPermalink





(5) SECURED CLAIMS UNAFFECTED- This section shall not affect secured claims or security entitlements in respect of assets or property held by the covered financial company, except to the extent that the security is insufficient to satisfy the claim, and then only with regard to the difference between the claim and the amount realized from the security.CommentsClose CommentsPermalink





(6) PRIORITY OF EXPENSES AND UNSECURED CLAIMS IN THE ORDERLY LIQUIDATION OF SIPC MEMBER- Where the Corporation is appointed as receiver for a covered broker or dealer, unsecured claims against such covered broker or dealer, or the Corporation as receiver for such covered broker or dealer under this section, that are proven to the satisfaction of the receiver under section 205(e), shall have the priority prescribed in paragraph (1), except that--CommentsClose CommentsPermalink





(A) SIPC shall be entitled to recover administrative expenses incurred in performing its responsibilities under section 205 on an equal basis with the Corporation, in accordance with paragraph (1)(A);CommentsClose CommentsPermalink





(B) the Corporation shall be entitled to recover any amounts paid to customers or to SIPC pursuant to section 205(f), in accordance with paragraph (1)(B);CommentsClose CommentsPermalink





(C) SIPC shall be entitled to recover any amounts paid out of the SIPC Fund to meet its obligations under section 205 and under the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.), which claim shall be subordinate to the claims payable under subparagraphs (A) and (B) of paragraph (1), but senior to all other claims; andCommentsClose CommentsPermalink





(D) the Corporation may, after paying any proven claims to customers under section 205 and the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.), and as provided above, pay dividends on other proven claims, in its discretion, and to the extent that funds are available, in accordance with the priorities set forth in paragraph (1).CommentsClose CommentsPermalink





(c) Provisions Relating to Contracts Entered Into Before Appointment of Receiver-CommentsClose CommentsPermalink





(1) AUTHORITY TO REPUDIATE CONTRACTS- In addition to any other rights that a receiver may have, the Corporation as receiver for any covered financial company may disaffirm or repudiate any contract or lease--CommentsClose CommentsPermalink





(A) to which the covered financial company is a party;CommentsClose CommentsPermalink





(B) the performance of which the Corporation as receiver, in the discretion of the Corporation, determines to be burdensome; andCommentsClose CommentsPermalink





(C) the disaffirmance or repudiation of which the Corporation as receiver determines, in the discretion of the Corporation, will promote the orderly administration of the affairs of the covered financial company.CommentsClose CommentsPermalink





(2) TIMING OF REPUDIATION- The Corporation, as receiver for any covered financial company, shall determine whether or not to exercise the rights of repudiation under this section within a reasonable period of time.CommentsClose CommentsPermalink





(3) CLAIMS FOR DAMAGES FOR REPUDIATION-CommentsClose CommentsPermalink





(A) IN GENERAL- Except as provided in paragraphs (4), (5), and (6) and in subparagraphs (C), (D), and (E) of this paragraph, the liability of the Corporation as receiver for a covered financial company for the disaffirmance or repudiation of any contract pursuant to paragraph (1) shall be--CommentsClose CommentsPermalink





(i) limited to actual direct compensatory damages; andCommentsClose CommentsPermalink





(ii) determined as of--CommentsClose CommentsPermalink





(I) the date of the appointment of the Corporation as receiver; orCommentsClose CommentsPermalink





(II) in the case of any contract or agreement referred to in paragraph (8), the date of the disaffirmance or repudiation of such contract or agreement.CommentsClose CommentsPermalink





(B) NO LIABILITY FOR OTHER DAMAGES- For purposes of subparagraph (A), the term ‘actual direct compensatory damages’ does not include--CommentsClose CommentsPermalink





(i) punitive or exemplary damages;CommentsClose CommentsPermalink





(ii) damages for lost profits or opportunity; orCommentsClose CommentsPermalink





(iii) damages for pain and suffering.CommentsClose CommentsPermalink





(C) MEASURE OF DAMAGES FOR REPUDIATION OF QUALIFIED FINANCIAL CONTRACTS- In the case of any qualified financial contract or agreement to which paragraph (8) applies, compensatory damages shall be--CommentsClose CommentsPermalink





(i) deemed to include normal and reasonable costs of cover or other reasonable measures of damages utilized in the industries for such contract and agreement claims; andCommentsClose CommentsPermalink





(ii) paid in accordance with this paragraph and subsection (d), except as otherwise specifically provided in this subsection.CommentsClose CommentsPermalink





(D) MEASURE OF DAMAGES FOR REPUDIATION OR DISAFFIRMANCE OF DEBT OBLIGATION- In the case of any debt for borrowed money or evidenced by a security, actual direct compensatory damages shall be no less than the amount lent plus accrued interest plus any accreted original issue discount as of the date the Corporation was appointed receiver of the covered financial company and, to the extent that an allowed secured claim is secured by property the value of which is greater than the amount of such claim and any accrued interest through the date of repudiation or disaffirmance, such accrued interest pursuant to paragraph (1).CommentsClose CommentsPermalink





(E) MEASURE OF DAMAGES FOR REPUDIATION OR DISAFFIRMANCE OF CONTINGENT OBLIGATION- In the case of any contingent obligation of a covered financial company consisting of any obligation under a guarantee, letter of credit, loan commitment, or similar credit obligation, the Corporation may, by rule or regulation, prescribe that actual direct compensatory damages shall be no less than the estimated value of the claim as of the date the Corporation was appointed receiver of the covered financial company, as such value is measured based on the likelihood that such contingent claim would become fixed and the probable magnitude thereof.CommentsClose CommentsPermalink





(4) LEASES UNDER WHICH THE COVERED FINANCIAL COMPANY IS THE LESSEE-CommentsClose CommentsPermalink





(A) IN GENERAL- If the Corporation as receiver disaffirms or repudiates a lease under which the covered financial company is the lessee, the receiver shall not be liable for any damages (other than damages determined pursuant to subparagraph (B)) for the disaffirmance or repudiation of such lease.CommentsClose CommentsPermalink





(B) PAYMENTS OF RENT- Notwithstanding subparagraph (A), the lessor under a lease to which subparagraph (A) would otherwise apply shall--CommentsClose CommentsPermalink





(i) be entitled to the contractual rent accruing before the later of the date on which--CommentsClose CommentsPermalink





(I) the notice of disaffirmance or repudiation is mailed; orCommentsClose CommentsPermalink





(II) the disaffirmance or repudiation becomes effective, unless the lessor is in default or breach of the terms of the lease;CommentsClose CommentsPermalink





(ii) have no claim for damages under any acceleration clause or other penalty provision in the lease; andCommentsClose CommentsPermalink





(iii) have a claim for any unpaid rent, subject to all appropriate offsets and defenses, due as of the date of the appointment which shall be paid in accordance with this paragraph and subsection (d).CommentsClose CommentsPermalink





(5) LEASES UNDER WHICH THE COVERED FINANCIAL COMPANY IS THE LESSOR-CommentsClose CommentsPermalink





(A) IN GENERAL- If the Corporation as receiver for a covered financial company repudiates an unexpired written lease of real property of the covered financial company under which the covered financial company is the lessor and the lessee is not, as of the date of such repudiation, in default, the lessee under such lease may either--CommentsClose CommentsPermalink





(i) treat the lease as terminated by such repudiation; orCommentsClose CommentsPermalink





(ii) remain in possession of the leasehold interest for the balance of the term of the lease, unless the lessee defaults under the terms of the lease after the date of such repudiation.CommentsClose CommentsPermalink





(B) PROVISIONS APPLICABLE TO LESSEE REMAINING IN POSSESSION- If any lessee under a lease described in subparagraph (A) remains in possession of a leasehold interest pursuant to clause (ii) of subparagraph (A)--CommentsClose CommentsPermalink





(i) the lessee--CommentsClose CommentsPermalink





(I) shall continue to pay the contractual rent pursuant to the terms of the lease after the date of the repudiation of such lease; andCommentsClose CommentsPermalink





(II) may offset against any rent payment which accrues after the date of the repudiation of the lease, any damages which accrue after such date due to the nonperformance of any obligation of the covered financial company under the lease after such date; andCommentsClose CommentsPermalink





(ii) the Corporation as receiver shall not be liable to the lessee for any damages arising after such date as a result of the repudiation, other than the amount of any offset allowed under clause (i)(II).CommentsClose CommentsPermalink





(6) CONTRACTS FOR THE SALE OF REAL PROPERTY-CommentsClose CommentsPermalink





(A) IN GENERAL- If the receiver repudiates any contract (which meets the requirements of subsection (a)(6)) for the sale of real property, and the purchaser of such real property under such contract is in possession and is not, as of the date of such repudiation, in default, such purchaser may either--CommentsClose CommentsPermalink





(i) treat the contract as terminated by such repudiation; orCommentsClose CommentsPermalink





(ii) remain in possession of such real property.CommentsClose CommentsPermalink





(B) PROVISIONS APPLICABLE TO PURCHASER REMAINING IN POSSESSION- If any purchaser of real property under any contract described in subparagraph (A) remains in possession of such property pursuant to clause (ii) of subparagraph (A)--CommentsClose CommentsPermalink





(i) the purchaser--CommentsClose CommentsPermalink





(I) shall continue to make all payments due under the contract after the date of the repudiation of the contract; andCommentsClose CommentsPermalink





(II) may offset against any such payments any damages which accrue after such date due to the nonperformance (after such date) of any obligation of the covered financial company under the contract; andCommentsClose CommentsPermalink





(ii) the Corporation as receiver shall--CommentsClose CommentsPermalink





(I) not be liable to the purchaser for any damages arising after such date as a result of the repudiation, other than the amount of any offset allowed under clause (i)(II);CommentsClose CommentsPermalink





(II) deliver title to the purchaser in accordance with the provisions of the contract; andCommentsClose CommentsPermalink





(III) have no obligation under the contract other than the performance required under subclause (II).CommentsClose CommentsPermalink





(C) ASSIGNMENT AND SALE ALLOWED-CommentsClose CommentsPermalink





(i) IN GENERAL- No provision of this paragraph shall be construed as limiting the right of the Corporation as receiver to assign the contract described in subparagraph (A) and sell the property, subject to the contract and the provisions of this paragraph.CommentsClose CommentsPermalink





(ii) NO LIABILITY AFTER ASSIGNMENT AND SALE- If an assignment and sale described in clause (i) is consummated, the Corporation as receiver shall have no further liability under the contract described in subparagraph (A) or with respect to the real property which was the subject of such contract.CommentsClose CommentsPermalink





(7) PROVISIONS APPLICABLE TO SERVICE CONTRACTS-CommentsClose CommentsPermalink





(A) SERVICES PERFORMED BEFORE APPOINTMENT- In the case of any contract for services between any person and any covered financial company for which the Corporation has been appointed receiver, any claim of such person for services performed before the date of appointment shall be--CommentsClose CommentsPermalink





(i) a claim to be paid in accordance with subsections (a), (b), and (d); andCommentsClose CommentsPermalink





(ii) deemed to have arisen as of the date on which the receiver was appointed.CommentsClose CommentsPermalink





(B) SERVICES PERFORMED AFTER APPOINTMENT AND PRIOR TO REPUDIATION- If, in the case of any contract for services described in subparagraph (A), the Corporation as receiver accepts performance by the other person before making any determination to exercise the right of repudiation of such contract under this section--CommentsClose CommentsPermalink





(i) the other party shall be paid under the terms of the contract for the services performed; andCommentsClose CommentsPermalink





(ii) the amount of such payment shall be treated as an administrative expense of the receivership.CommentsClose CommentsPermalink





(C) ACCEPTANCE OF PERFORMANCE NO BAR TO SUBSEQUENT REPUDIATION- The acceptance by the Corporation as receiver for services referred to in subparagraph (B) in connection with a contract described in subparagraph (B) shall not affect the right of the Corporation as receiver to repudiate such contract under this section at any time after such performance.CommentsClose CommentsPermalink





(8) CERTAIN QUALIFIED FINANCIAL CONTRACTS-CommentsClose CommentsPermalink





(A) RIGHTS OF PARTIES TO CONTRACTS- Subject to subsection (a)(8) and paragraphs (9) and (10) of this subsection, and notwithstanding any other provision of this section, any other provision of Federal law, or the law of any State, no person shall be stayed or prohibited from exercising--CommentsClose CommentsPermalink





(i) any right that such person has to cause the termination, liquidation, or acceleration of any qualified financial contract with a covered financial company which arises upon the date of appointment of the Corporation as receiver for such covered financial company or at any time after such appointment;CommentsClose CommentsPermalink





(ii) any right under any security agreement or arrangement or other credit enhancement related to one or more qualified financial contracts described in clause (i); orCommentsClose CommentsPermalink





(iii) any right to offset or net out any termination value, payment amount, or other transfer obligation arising under or in connection with 1 or more contracts or agreements described in clause (i), including any master agreement for such contracts or agreements.CommentsClose CommentsPermalink





(B) APPLICABILITY OF OTHER PROVISIONS- Subsection (a)(8) shall apply in the case of any judicial action or proceeding brought against the Corporation as receiver referred to in subparagraph (A), or the subject covered financial company, by any party to a contract or agreement described in subparagraph (A)(i) with such covered financial company.CommentsClose CommentsPermalink





(C) CERTAIN TRANSFERS NOT AVOIDABLE-CommentsClose CommentsPermalink





(i) IN GENERAL- Notwithstanding subsection (a)(11), (a)(12), or (c)(12), section 5242 of the Revised Statutes of the United States, or any other provision of Federal or State law relating to the avoidance of preferential or fraudulent transfers, the Corporation, whether acting as the Corporation or as receiver for a covered financial company, may not avoid any transfer of money or other property in connection with any qualified financial contract with a covered financial company.CommentsClose CommentsPermalink





(ii) EXCEPTION FOR CERTAIN TRANSFERS- Clause (i) shall not apply to any transfer of money or other property in connection with any qualified financial contract with a covered financial company if the transferee had actual intent to hinder, delay, or defraud such company, the creditors of such company, or the Corporation as receiver appointed for such company.CommentsClose CommentsPermalink





(D) CERTAIN CONTRACTS AND AGREEMENTS DEFINED- For purposes of this subsection, the following definitions shall apply:CommentsClose CommentsPermalink





(i) QUALIFIED FINANCIAL CONTRACT- The term ‘qualified financial contract’ means any securities contract, commodity contract, forward contract, repurchase agreement, swap agreement, and any similar agreement that the Corporation determines by regulation, resolution, or order to be a qualified financial contract for purposes of this paragraph.CommentsClose CommentsPermalink





(ii) SECURITIES CONTRACT- The term ‘securities contract’--CommentsClose CommentsPermalink





(I) means a contract for the purchase, sale, or loan of a security, a certificate of deposit, a mortgage loan, any interest in a mortgage loan, a group or index of securities, certificates of deposit, or mortgage loans or interests therein (including any interest therein or based on the value thereof), or any option on any of the foregoing, including any option to purchase or sell any such security, certificate of deposit, mortgage loan, interest, group or index, or option, and including any repurchase or reverse repurchase transaction on any such security, certificate of deposit, mortgage loan, interest, group or index, or option (whether or not such repurchase or reverse repurchase transaction is a ‘repurchase agreement’, as defined in clause (v));CommentsClose CommentsPermalink





(II) does not include any purchase, sale, or repurchase obligation under a participation in a commercial mortgage loan unless the Corporation determines by regulation, resolution, or order to include any such agreement within the meaning of such term;CommentsClose CommentsPermalink





(III) means any option entered into on a national securities exchange relating to foreign currencies;CommentsClose CommentsPermalink





(IV) means the guarantee (including by novation) by or to any securities clearing agency of any settlement of cash, securities, certificates of deposit, mortgage loans or interests therein, group or index of securities, certificates of deposit or mortgage loans or interests therein (including any interest therein or based on the value thereof) or an option on any of the foregoing, including any option to purchase or sell any such security, certificate of deposit, mortgage loan, interest, group or index, or option (whether or not such settlement is in connection with any agreement or transaction referred to in subclauses (I) through (XII) (other than subclause (II)));CommentsClose CommentsPermalink





(V) means any margin loan;CommentsClose CommentsPermalink





(VI) means any extension of credit for the clearance or settlement of securities transactions;CommentsClose CommentsPermalink





(VII) means any loan transaction coupled with a securities collar transaction, any prepaid securities forward transaction, or any total return swap transaction coupled with a securities sale transaction;CommentsClose CommentsPermalink





(VIII) means any other agreement or transaction that is similar to any agreement or transaction referred to in this clause;CommentsClose CommentsPermalink





(IX) means any combination of the agreements or transactions referred to in this clause;CommentsClose CommentsPermalink





(X) means any option to enter into any agreement or transaction referred to in this clause;CommentsClose CommentsPermalink





(XI) means a master agreement that provides for an agreement or transaction referred to in any of subclauses (I) through (X), other than subclause (II), together with all supplements to any such master agreement, without regard to whether the master agreement provides for an agreement or transaction that is not a securities contract under this clause, except that the master agreement shall be considered to be a securities contract under this clause only with respect to each agreement or transaction under the master agreement that is referred to in any of subclauses (I) through (X), other than subclause (II); andCommentsClose CommentsPermalink





(XII) means any security agreement or arrangement or other credit enhancement related to any agreement or transaction referred to in this clause, including any guarantee or reimbursement obligation in connection with any agreement or transaction referred to in this clause.CommentsClose CommentsPermalink





(iii) COMMODITY CONTRACT- The term ‘commodity contract’ means--CommentsClose CommentsPermalink





(I) with respect to a futures commission merchant, a contract for the purchase or sale of a commodity for future delivery on, or subject to the rules of, a contract market or board of trade;CommentsClose CommentsPermalink





(II) with respect to a foreign futures commission merchant, a foreign future;CommentsClose CommentsPermalink





(III) with respect to a leverage transaction merchant, a leverage transaction;CommentsClose CommentsPermalink





(IV) with respect to a clearing organization, a contract for the purchase or sale of a commodity for future delivery on, or subject to the rules of, a contract market or board of trade that is cleared by such clearing organization, or commodity option traded on, or subject to the rules of, a contract market or board of trade that is cleared by such clearing organization;CommentsClose CommentsPermalink





(V) with respect to a commodity options dealer, a commodity option;CommentsClose CommentsPermalink





(VI) any other agreement or transaction that is similar to any agreement or transaction referred to in this clause;CommentsClose CommentsPermalink





(VII) any combination of the agreements or transactions referred to in this clause;CommentsClose CommentsPermalink





(VIII) any option to enter into any agreement or transaction referred to in this clause;CommentsClose CommentsPermalink





(IX) a master agreement that provides for an agreement or transaction referred to in any of subclauses (I) through (VIII), together with all supplements to any such master agreement, without regard to whether the master agreement provides for an agreement or transaction that is not a commodity contract under this clause, except that the master agreement shall be considered to be a commodity contract under this clause only with respect to each agreement or transaction under the master agreement that is referred to in any of subclauses (I) through (VIII); orCommentsClose CommentsPermalink





(X) any security agreement or arrangement or other credit enhancement related to any agreement or transaction referred to in this clause, including any guarantee or reimbursement obligation in connection with any agreement or transaction referred to in this clause.CommentsClose CommentsPermalink





(iv) FORWARD CONTRACT- The term ‘forward contract’ means--CommentsClose CommentsPermalink





(I) a contract (other than a commodity contract) for the purchase, sale, or transfer of a commodity or any similar good, article, service, right, or interest which is presently or in the future becomes the subject of dealing in the forward contract trade, or product or byproduct thereof, with a maturity date that is more than 10 days after the date on which the contract is entered2 days after the date on which the contract is entered into, including a repurchase or reverse repurchase transaction (whether or not such repurchase or reverse repurchase transaction is a ‘repurchase agreement’, as defined in clause (v)), consignment, lease, swap, hedge transaction, deposit, loan, option, allocated transaction, unallocated transaction, or any other similar agreement;CommentsClose CommentsPermalink





(II) any combination of agreements or transactions referred to in subclauses (I) and (III);CommentsClose CommentsPermalink





(III) any option to enter into any agreement or transaction referred to in subclause (I) or (II);CommentsClose CommentsPermalink





(IV) a master agreement that provides for an agreement or transaction referred to in subclause (I), (II), or (III), together with all supplements to any such master agreement, without regard to whether the master agreement provides for an agreement or transaction that is not a forward contract under this clause, except that the master agreement shall be considered to be a forward contract under this clause only with respect to each agreement or transaction under the master agreement that is referred to in subclause (I), (II), or (III); orCommentsClose CommentsPermalink





(V) any security agreement or arrangement or other credit enhancement related to any agreement or transaction referred to in subclause (I), (II), (III), or (IV), including any guarantee or reimbursement obligation in connection with any agreement or transaction referred to in any such subclause.CommentsClose CommentsPermalink





(v) REPURCHASE AGREEMENT- The term ‘repurchase agreement’ (which definition also applies to a reverse repurchase agreement)--CommentsClose CommentsPermalink





(I) means an agreement, including related terms, which provides for the transfer of one or more certificates of deposit, mortgage related securities (as such term is defined in section 3 of the Securities Exchange Act of 1934), mortgage loans, interests in mortgage-related securities or mortgage loans, eligible bankers’ acceptances, qualified foreign government securities (which, for purposes of this clause, means a security that is a direct obligation of, or that is fully guaranteed by, the central government of a member of the Organization for Economic Cooperation and Development, as determined by regulation or order adopted by the Board of Governors), or securities that are direct obligations of, or that are fully guaranteed by, the United States or any agency of the United States against the transfer of funds by the transferee of such certificates of deposit, eligible bankers’ acceptances, securities, mortgage loans, or interests with a simultaneous agreement by such transferee to transfer to the transferor thereof certificates of deposit, eligible bankers’ acceptances, securities, mortgage loans, or interests as described above, at a date certain not later than 1 year after such transfers or on demand, against the transfer of funds, or any other similar agreement;CommentsClose CommentsPermalink





(II) does not include any repurchase obligation under a participation in a commercial mortgage loan, unless the Corporation determines, by regulation, resolution, or order to include any such participation within the meaning of such term;CommentsClose CommentsPermalink





(III) means any combination of agreements or transactions referred to in subclauses (I) and (IV);CommentsClose CommentsPermalink





(IV) means any option to enter into any agreement or transaction referred to in subclause (I) or (III);CommentsClose CommentsPermalink





(V) means a master agreement that provides for an agreement or transaction referred to in subclause (I), (III), or (IV), together with all supplements to any such master agreement, without regard to whether the master agreement provides for an agreement or transaction that is not a repurchase agreement under this clause, except that the master agreement shall be considered to be a repurchase agreement under this subclause only with respect to each agreement or transaction under the master agreement that is referred to in subclause (I), (III), or (IV); andCommentsClose CommentsPermalink





(VI) means any security agreement or arrangement or other credit enhancement related to any agreement or transaction referred to in subclause (I), (III), (IV), or (V), including any guarantee or reimbursement obligation in connection with any agreement or transaction referred to in any such subclause.CommentsClose CommentsPermalink





(vi) SWAP AGREEMENT- The term ‘swap agreement’ means--CommentsClose CommentsPermalink





(I) any agreement, including the terms and conditions incorporated by reference in any such agreement, which is an interest rate swap, option, future, or forward agreement, including a rate floor, rate cap, rate collar, cross-currency rate swap, and basis swap; a spot, same day-tomorrow, tomorrow-next, forward, or other foreign exchange, precious metals, or other commodity agreement; a currency swap, option, future, or forward agreement; an equity index or equity swap, option, future, or forward agreement; a debt index or debt swap, option, future, or forward agreement; a total return, credit spread or credit swap, option, future, or forward agreement; a commodity index or commodity swap, option, future, or forward agreement; weather swap, option, future, or forward agreement; an emissions swap, option, future, or forward agreement; or an inflation swap, option, future, or forward agreement;CommentsClose CommentsPermalink





(II) any agreement or transaction that is similar to any other agreement or transaction referred to in this clause and that is of a type that has been, is presently, or in the future becomes, the subject of recurrent dealings in the swap or other derivatives markets (including terms and conditions incorporated by reference in such agreement) and that is a forward, swap, future, option, or spot transaction on one or more rates, currencies, commodities, equity securities or other equity instruments, debt securities or other debt instruments, quantitative measures associated with an occurrence, extent of an occurrence, or contingency associated with a financial, commercial, or economic consequence, or economic or financial indices or measures of economic or financial risk or value;CommentsClose CommentsPermalink





(III) any combination of agreements or transactions referred to in this clause;CommentsClose CommentsPermalink





(IV) any option to enter into any agreement or transaction referred to in this clause;CommentsClose CommentsPermalink





(V) a master agreement that provides for an agreement or transaction referred to in subclause (I), (II), (III), or (IV), together with all supplements to any such master agreement, without regard to whether the master agreement contains an agreement or transaction that is not a swap agreement under this clause, except that the master agreement shall be considered to be a swap agreement under this clause only with respect to each agreement or transaction under the master agreement that is referred to in subclause (I), (II), (III), or (IV); andCommentsClose CommentsPermalink





(VI) any security agreement or arrangement or other credit enhancement related to any agreement or transaction referred to in any of subclauses (I) through (V), including any guarantee or reimbursement obligation in connection with any agreement or transaction referred to in any such clause.CommentsClose CommentsPermalink





(vii) DEFINITIONS RELATING TO DEFAULT- When used in this paragraph and paragraphs (9) and (10)--CommentsClose CommentsPermalink





(I) the term ‘default’ means, with respect to a covered financial company, any adjudication or other official decision by any court of competent jurisdiction, or other public authority pursuant to which the Corporation has been appointed receiver; andCommentsClose CommentsPermalink





(II) the term ‘in danger of default’ means a covered financial company with respect to which the Corporation or appropriate State authority has determined that--CommentsClose CommentsPermalink

(aa) in the opinion of the Corporation or such authority--CommentsClose CommentsPermalink

(AA) the covered financial company is not likely to be able to pay its obligations in the normal course of business; andCommentsClose CommentsPermalink

(BB) there is no reasonable prospect that the covered financial company will be able to pay such obligations without Federal assistance; orCommentsClose CommentsPermalink

(bb) in the opinion of the Corporation or such authority--CommentsClose CommentsPermalink

(AA) the covered financial company has incurred or is likely to incur losses that will deplete all or substantially all of its capital; andCommentsClose CommentsPermalink

(BB) there is no reasonable prospect that the capital will be replenished without Federal assistance.CommentsClose CommentsPermalink

(viii) TREATMENT OF MASTER AGREEMENT AS ONE AGREEMENT- Any master agreement for any contract or agreement described in any of clauses (i) through (vi) (or any master agreement for such master agreement or agreements), together with all supplements to such master agreement, shall be treated as a single agreement and a single qualified financial contact. If a master agreement contains provisions relating to agreements or transactions that are not themselves qualified financial contracts, the master agreement shall be deemed to be a qualified financial contract only with respect to those transactions that are themselves qualified financial contracts.CommentsClose CommentsPermalink





(ix) TRANSFER- The term ‘transfer’ means every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with property or with an interest in property, including retention of title as a security interest and foreclosure of the equity of redemption of the covered financial company.CommentsClose CommentsPermalink





(x) PERSON- The term ‘person’ includes any governmental entity in addition to any entity included in the definition of such term in section 1, title 1, United States Code.CommentsClose CommentsPermalink





(E) CLARIFICATION- No provision of law shall be construed as limiting the right or power of the Corporation, or authorizing any court or agency to limit or delay, in any manner, the right or power of the Corporation to transfer any qualified financial contract in accordance with paragraphs (9) and (10) of this subsection or to or to disaffirm or repudiate any such contract in accordance with subsection (c)(1).(F)this subsection.CommentsClose CommentsPermalink





(F) WALKAWAY CLAUSES NOT EFFECTIVE-CommentsClose CommentsPermalink





(i) IN GENERAL- Notwithstanding the provisions of subparagraph (A) of this paragraph and sections 403 and 404 of the Federal Deposit Insurance Corporation Improvement Act of 1991, no walkaway clause shall be enforceable in a qualified financial contract of a covered financial company in default.CommentsClose CommentsPermalink





(ii) LIMITED SUSPENSION OF CERTAIN OBLIGATIONS- In the case of a qualified financial contract referred to in clause (i), any payment or delivery obligations otherwise due from a party pursuant to the qualified financial contract shall be suspended from the time at which the Corporation is appointed as receiver until the earlier of--CommentsClose CommentsPermalink





(I) the time at which such party receives notice that such contract has been transferred pursuant to paragraph (10)(A); orCommentsClose CommentsPermalink





(II) 5:00 p.m. (eastern time) on the 3rd business day following the date of the appointment of the Corporation as receiver.(iii)business day following the date of the appointment of the Corporation as receiver.CommentsClose CommentsPermalink





(iii) WALKAWAY CLAUSE DEFINED- For purposes of this subparagraph, the term ‘walkaway clause’ means any provision in a qualified financial contract that suspends, conditions, or extinguishes a payment obligation of a party, in whole or in part, or does not create a payment obligation of a party that would otherwise exist, solely because of the status of such party as a nondefaulting party in connection with the insolvency of a covered financial company that is a party to the contract or the appointment of or the exercise of rights or powers by the Corporation as receiver for such covered financial company, and not as a result of the exercise by a party of any right to offset, setoff, or net obligations that exist under the contract, any other contract between those parties, or applicable law.CommentsClose CommentsPermalink





(ivG) CERTAIN OBLIGATIONS TO CLEARING ORGANIZATIONS- In the event that the Corporation has been appointed as receiver for a covered financial company which is a party to any qualified financial contract cleared by or subject to the rules of a clearing organization (as defined in subsection (c)paragraph (9)(D)), the receiver shall use its best efforts to meet all margin, collateral, and settlement obligations of the covered financial company that arise under qualified financial contracts (other than any margin, collateral, or settlement obligation that is not enforceable against the receiver under paragraph (8)(F)(i) or paragraph (10)(B)), as required by the rules of the clearing organization when due, and such obligations shall not be suspended pursuant to paragraph (8)(F)(ii). Notwithstanding paragraph (8)(F)(ii) or (10)(B). Notwithstanding any other provision of this title, if the receiver fails to satisfy any such margin, collateral, or settlement obligations under the rules of the clearing organization, the clearing organization shall have the immediate right to exercise, and shall not be stayed from exercising, all of its rights and remedies under its rules and applicable law with respect to any qualified financial contract of the covered financial company, including, without limitation, the right to liquidate all positions and collateral of such covered financial company under the company’s qualified financial contracts, and suspend or cease to act for such covered financial company, all in accordance with the rules of the clearing organization.CommentsClose CommentsPermalink





(GH) RECORDKEEPING-CommentsClose CommentsPermalink





(i) JOINT RULEMAKING- The Federal primary financial regulatory agencies shall jointly prescribe regulations requiring that financial companies maintain such records with respect to qualified financial contracts (including market valuations) that the Federal primary financial regulatory agencies determine to be necessary or appropriate in order to assist the Corporation as receiver for a covered financial company in being able to exercise its rights and fulfill its obligations under this paragraph or paragraph (9) or (10).CommentsClose CommentsPermalink





(ii) TIME FRAME- The Federal primary financial regulatory agencies shall prescribe joint final or interim final regulations not later than 24 months after the date of enactment of this Act.CommentsClose CommentsPermalink





(iii) BACK-UP RULEMAKING AUTHORITY- If the Federal primary financial regulatory agencies do not prescribe joint final or interim final regulations within the time frame in clause (ii), the Chairperson of the Council shall prescribe, in consultation with the Corporation, the regulations required by clause (i).CommentsClose CommentsPermalink





(iv) CATEGORIZATION AND TIERING- The joint regulations prescribed under clause (i) shall, as appropriate, differentiate among financial companies by taking into consideration their size, risk, complexity, leverage, frequency and dollar amount of qualified financial contracts, interconnectedness to the financial system, and any other factors deemed appropriate.CommentsClose CommentsPermalink





(9) TRANSFER OF QUALIFIED FINANCIAL CONTRACTS-CommentsClose CommentsPermalink





(A) IN GENERAL- In making any transfer of assets or liabilities of a covered financial company in default, which includes any qualified financial contract, the Corporation as receiver for such covered financial company shall either--CommentsClose CommentsPermalink





(i) transfer to one financial institution, other than a financial institution for which a conservator, receiver, trustee in bankruptcy, or other legal custodian has been appointed or which is otherwise the subject of a bankruptcy or insolvency proceeding--CommentsClose CommentsPermalink





(I) all qualified financial contracts between any person or any affiliate of such person and the covered financial company in default;CommentsClose CommentsPermalink





(II) all claims of such person or any affiliate of such person against such covered financial company under any such contract (other than any claim which, under the terms of any such contract, is subordinated to the claims of general unsecured creditors of such company);CommentsClose CommentsPermalink





(III) all claims of such covered financial company against such person or any affiliate of such person under any such contract; andCommentsClose CommentsPermalink





(IV) all property securing or any other credit enhancement for any contract described in subclause (I) or any claim described in subclause (II) or (III) under any such contract; orCommentsClose CommentsPermalink





(ii) transfer none of the qualified financial contracts, claims, property or other credit enhancement referred to in clause (i) (with respect to such person and any affiliate of such person).CommentsClose CommentsPermalink





(B) TRANSFER TO FOREIGN BANK, FINANCIAL INSTITUTION, OR BRANCH OR AGENCY THEREOF- In transferring any qualified financial contracts and related claims and property under subparagraph (A)(i), the Corporation as receiver for the covered financial company shall not make such transfer to a foreign bank, financial institution organized under the laws of a foreign country, or a branch or agency of a foreign bank or financial institution unless, under the law applicable to such bank, financial institution, branch or agency, to the qualified financial contracts, and to any netting contract, any security agreement or arrangement or other credit enhancement related to one or more qualified financial contracts, the contractual rights of the parties to such qualified financial contracts, netting contracts, security agreements or arrangements, or other credit enhancements are enforceable substantially to the same extent as permitted under this section.CommentsClose CommentsPermalink





(C) TRANSFER OF CONTRACTS SUBJECT TO THE RULES OF A CLEARING ORGANIZATION- In the event that the Corporation as receiver for a financial institution transfers any qualified financial contract and related claims, property, or credit enhancement pursuant to subparagraph (A)(i) and such contract is cleared by or subject to the rules of a clearing organization, the clearing organization shall not be required to accept the transferee as a member by virtue of the transfer.CommentsClose CommentsPermalink





(D) DEFINITIONS- For purposes of this paragraph--CommentsClose CommentsPermalink





(i) the term ‘financial institution’ means a broker or dealer, a depository institution, a futures commission merchant, a bridge financial company, or any other institution determined by the Corporation, by regulation, to be a financial institution; andCommentsClose CommentsPermalink





(ii) the term ‘clearing organization’ has the same meaning as in section 402 of the Federal Deposit Insurance Corporation Improvement Act of 1991.CommentsClose CommentsPermalink





(10) NOTIFICATION OF TRANSFER-CommentsClose CommentsPermalink





(A) IN GENERAL-CommentsClose CommentsPermalink





(i) NOTICE- The Corporation shall provide notice in accordance with clause (ii), if--CommentsClose CommentsPermalink





(I) the Corporation as receiver for a covered financial company in default or in danger of default transfers any assets or liabilities of the covered financial company; andCommentsClose CommentsPermalink





(II) the transfer includes any qualified financial contract.CommentsClose CommentsPermalink





(ii) TIMING- The Corporation as receiver for a covered financial company shall notify any person who is a party to any contract described in clause (i) of such transfer not later than 5:00 p.m. (eastern time) on the 3rd business day following the date of the appointment of the Corporation as receiver.CommentsClose CommentsPermalink





(B) CERTAIN RIGHTS NOT ENFORCEABLE-CommentsClose CommentsPermalink





(i) RECEIVERSHIP- A person who is a party to a qualified financial contract with a covered financial company may not exercise any right that such person has to terminate, liquidate, or net such contract under paragraph (8)(A) solely by reason of or incidental to the appointment under this section of the Corporation as receiver for the covered financial company (or the insolvency or financial condition of the covered financial company for which the Corporation has been appointed as receiver)--CommentsClose CommentsPermalink





(I) until 5:00 p.m. (eastern time) on the 3rd business day following the date of the business day following the date of the appointment; orCommentsClose CommentsPermalink





(II) after the person has received notice that the contract has been transferred pursuant to paragraph (9)(A).CommentsClose CommentsPermalink





(ii) NOTICE- For purposes of this paragraph, the Corporation as receiver for a covered financial company shall be deemed to have notified a person who is a party to a qualified financial contract with such covered financial company, if the Corporation has taken steps reasonably calculated to provide notice to such person by the time specified in subparagraph (A).CommentsClose CommentsPermalink





(C) TREATMENT OF BRIDGE FINANCIAL COMPANY- For purposes of paragraph (9), a bridge financial company shall not be considered to be a covered financial companyfinancial institution for which a conservator, receiver, trustee in bankruptcy, or other legal custodian has been appointed, or which is otherwise the subject of a bankruptcy or insolvency proceeding.CommentsClose CommentsPermalink





(D) BUSINESS DAY DEFINED- For purposes of this paragraph, the term ‘business day’ means any day other than any Saturday, Sunday, or any day on which either the New York Stock Exchange or the Federal Reserve Bank of New York is closed.CommentsClose CommentsPermalink





(11) DISAFFIRMANCE OR REPUDIATION OF QUALIFIED FINANCIAL CONTRACTS- In exercising the rights of disaffirmance or repudiation of the Corporation as receiver with respect to any qualified financial contract to which a covered financial company is a party, the Corporation shall either--CommentsClose CommentsPermalink





(A) disaffirm or repudiate all qualified financial contracts between--CommentsClose CommentsPermalink





(i) any person or any affiliate of such person; andCommentsClose CommentsPermalink





(ii) the covered financial company in default; orCommentsClose CommentsPermalink





(B) disaffirm or repudiate none of the qualified financial contracts referred to in subparagraph (A) (with respect to such person or any affiliate of such person).CommentsClose CommentsPermalink





(12) CERTAIN SECURITY AND CUSTOMER INTERESTS NOT AVOIDABLE- No provision of this subsection shall be construed as permitting the avoidance of any--CommentsClose CommentsPermalink





(A) legally enforceable or perfected security interest in any of the assets of any covered financial company, except in accordance with subsection (a)(11); orCommentsClose CommentsPermalink





(B) legally enforceable interest in customer property, security entitlements in respect of assets or property held by the covered financial company for any security entitlement holder.CommentsClose CommentsPermalink





(13) AUTHORITY TO ENFORCE CONTRACTS-CommentsClose CommentsPermalink





(A) IN GENERAL- The Corporation, as receiver for a covered financial company, may enforce any contract, other than a liability insurance contract of a director or officer, a financial institution bond entered into by the covered financial company, notwithstanding any provision of the contract providing for termination, default, acceleration, or exercise of rights upon, or solely by reason of, insolvency, the appointment of or the exercise of rights or powers by the Corporation as receiver, the filing of the petition pursuant to section 202(a)(1), or the issuance of the recommendations or determination, or any actions or events occurring in connection therewith or as a result thereof, pursuant to section 203.CommentsClose CommentsPermalink





(B) CERTAIN RIGHTS NOT AFFECTED- No provision of this paragraph may be construed as impairing or affecting any right of the Corporation as receiver to enforce or recover under a liability insurance contract of a director or officer or financial institution bond under other applicable law.CommentsClose CommentsPermalink





(C) CONSENT REQUIREMENT AND IPSO FACTO CLAUSES-CommentsClose CommentsPermalink





(i) IN GENERAL- Except as otherwise provided by this section, no person may exercise any right or power to terminate, accelerate, or declare a default under any contract to which the covered financial company is a party (and no provision in any such contract providing for such default, termination, or acceleration shall be enforceable), or to obtain possession of or exercise control over any property of the covered financial company or affect any contractual rights of the covered financial company, without the consent of the Corporation as receiver for the covered financial company during the 90 day period beginning from the appointment of the Corporation as receiver.CommentsClose CommentsPermalink





(ii) EXCEPTIONS- No provision of this subparagraph shall apply to a director or officer liability insurance contract or a financial institution bond, to the rights of parties to certain qualified financial contracts pursuant to paragraph (8), or to the rights of parties to netting contracts pursuant to subtitle A of title IV of the Federal Deposit Insurance Corporation Improvement Act of 1991 (12 U.S.C. 4401 et seq.), or shall be construed as permitting the Corporation as receiver to fail to comply with otherwise enforceable provisions of such contract.CommentsClose CommentsPermalink





(D) CONTRACTS TO EXTEND CREDIT- Notwithstanding any other provision in this title, if the Corporation as receiver enforces any contract to extend credit to the covered financial company or bridge financial company, any valid and enforceable obligation to repay such debt shall be paid by the Corporation as receiver, as an administrative expense of the receivership.CommentsClose CommentsPermalink





(14) EXCEPTION FOR FEDERAL RESERVE BANKS AND CORPORATION SECURITY INTEREST- No provision of this subsection shall apply with respect to--CommentsClose CommentsPermalink





(A) any extension of credit from any Federal reserve bank or the Corporation to any covered financial company; orCommentsClose CommentsPermalink





(B) any security interest in the assets of the covered financial company securing any such extension of credit.CommentsClose CommentsPermalink





(15) SAVINGS CLAUSE- The meanings of terms used in this subsection are applicable for purposes of this subsection only, and shall not be construed or applied so as to challenge or affect the characterization, definition, or treatment of any similar terms under any other statute, regulation, or rule, including the Gramm-Leach-Bliley Act, the Legal Certainty for Bank Products Act of 2000, the securities laws (as that term is defined in section 3(a)(47) of the Securities Exchange Act of 1934), and the Commodity Exchange Act.CommentsClose CommentsPermalink





(16) ENFORCEMENT OF CONTRACTS GUARANTEED BY THE COVERED FINANCIAL COMPANY-CommentsClose CommentsPermalink





(A) IN GENERAL- The Corporation, as receiver for a covered financial company or as receiver for a subsidiary of a covered financial company (including an insured depository institution) shall have the power to enforce contracts of subsidiaries or affiliates of the covered financial company, the obligations under which are guaranteed or otherwise supported by or linked to the covered financial company, notwithstanding any contractual right to cause the termination, liquidation, or acceleration of such contracts based solely on the insolvency, financial condition, or receivership of the covered financial company, if--CommentsClose CommentsPermalink





(i) such guaranty or other support and all related assets and liabilities are transferred to and assumed by a bridge financial company or a third party (other than a third party for which a conservator, receiver, trustee in bankruptcy, or other legal custodian has been appointed, or which is otherwise the subject of a bankruptcy or insolvency proceeding) within the same period of time as the Corporation is entitled to transfer the qualified financial contracts of such covered financial company; orCommentsClose CommentsPermalink





(ii) the Corporation, as receiver, otherwise provides adequate protection with respect to such obligations.CommentsClose CommentsPermalink





(B) RULE OF CONSTRUCTION- For purposes of this paragraph, a bridge financial company shall not be considered to be a third party for which a conservator, receiver, trustee in bankruptcy, or other legal custodian has been appointed, or which is otherwise the subject of a bankruptcy or insolvency proceeding.CommentsClose CommentsPermalink





(d) Valuation of Claims in Default-CommentsClose CommentsPermalink





(1) IN GENERAL- Notwithstanding any other provision of Federal law or the law of any State, and regardless of the method utilized by the Corporation for a covered financial company, including transactions authorized under subsection (h), this subsection shall govern the rights of the creditors of any such covered financial company.CommentsClose CommentsPermalink





(2) MAXIMUM LIABILITY- The maximum liability of the Corporation, acting as receiver for a covered financial company or in any other capacity, to any person having a claim against the Corporation as receiver or the covered financial company for which the Corporation is appointed shall equal the amount that such claimant would have received if--CommentsClose CommentsPermalink





(A) the Corporation had not been appointed receiver with respect to the covered financial company; andCommentsClose CommentsPermalink





(B) the covered financial company had been liquidated under chapter 7 of the Bankruptcy Code, or any similar provision of State insolvency law applicable to the covered financial company.CommentsClose CommentsPermalink





(3) SPECIAL PROVISION FOR ORDERLY LIQUIDATION BY SIPC- The maximum liability of the Corporation, acting as receiver or in its corporate capacity for any covered broker or dealer to any customer of such covered broker or dealer, with respect to customer property of such customer, shall be--CommentsClose CommentsPermalink





(A) equal to the amount that such customer would have received with respect to such customer property in a case initiated by SIPC under the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.); andCommentsClose CommentsPermalink





(B) determined as of the close of business on the date on which the Corporation is appointed as receiver.CommentsClose CommentsPermalink





(4) ADDITIONAL PAYMENTS AUTHORIZED-CommentsClose CommentsPermalink





(A) IN GENERAL- Subject to subsection (o)(1)(E)(ii), the Corporation, with the approval of the D)(i), the Corporation, with the approval of the Secretary, may make additional payments or credit additional amounts to or with respect to or for the account of any claimant or category of claimants of the covered financial company, if the Corporation determines that such payments or credits are necessary or appropriate to minimize losses to the Corporation as receiver from the orderly liquidation of the covered financial company under this section.CommentsClose CommentsPermalink





(B) LIMITATIONS-CommentsClose CommentsPermalink





(i) PROHIBITION- The Corporation shall not make any payments or credit amounts to any claimant or category of claimants that would result in any claimant receiving more than the face value amount of any claim that is proven to the satisfaction of the Corporation.CommentsClose CommentsPermalink





(ii) NO OBLIGATION- Notwithstanding any other provision of Federal or State law, or the Constitution of any State, the Corporation shall not be obligated, as a result of having made any payment under subparagraph (A) or credited any amount described in subparagraph (A) to or with respect to, or for the account, of any claimant or category of claimants, to make payments to any other claimant or category of claimants.CommentsClose CommentsPermalink





(C) MANNER OF PAYMENT- The Corporation may make payments or credit amounts under subparagraph (A) directly to the claimants or may make such payments or credit such amounts to a company other than a covered financial company or a bridge financial company established with respect thereto in order to induce such other company to accept liability for such claims.CommentsClose CommentsPermalink





(e) Limitation on Court Action- Except as provided in this title, no court may take any action to restrain or affect the exercise of powers or functions of the receiver hereunder, and any remedy against the Corporation or receiver shall be limited to money damages determined in accordance with this title.CommentsClose CommentsPermalink





(f) Liability of Directors and Officers-CommentsClose CommentsPermalink





(1) IN GENERAL- A director or officer of a covered financial company may be held personally liable for monetary damages in any civil action described in paragraph (2) by, on behalf of, or at the request or direction of the Corporation, which action is prosecuted wholly or partially for the benefit of the Corporation--CommentsClose CommentsPermalink





(A) acting as receiver for such covered financial company;CommentsClose CommentsPermalink





(B) acting based upon a suit, claim, or cause of action purchased from, assigned by, or otherwise conveyed by the Corporation as receiver; orCommentsClose CommentsPermalink





(C) acting based upon a suit, claim, or cause of action purchased from, assigned by, or otherwise conveyed in whole or in part by a covered financial company or its affiliate in connection with assistance provided under this title.CommentsClose CommentsPermalink





(2) ACTIONS COVERED- Paragraph (1) shall apply with respect to actions for gross negligence, including any similar conduct or conduct that demonstrates a greater disregard of a duty of care (than gross negligence) including intentional tortious conduct, as such terms are defined and determined under applicable State law.CommentsClose CommentsPermalink





(3) SAVINGS CLAUSE- Nothing in this subsection shall impair or affect any right of the Corporation under other applicable law.CommentsClose CommentsPermalink





(g) Damages- In any proceeding related to any claim against a director, officer, employee, agent, attorney, accountant, or appraiser of a covered financial company, or any other party employed by or providing services to a covered financial company, recoverable damages determined to result from the improvident or otherwise improper use or investment of any assets of the covered financial company shall include principal losses and appropriate interest.CommentsClose CommentsPermalink





(h) Bridge Financial Companies-CommentsClose CommentsPermalink





(1) ORGANIZATION-CommentsClose CommentsPermalink





(A) PURPOSE- The Corporation, as receiver for one or more covered financial companies or in anticipation of being appointed receiver for one or more covered financial companies, may organize one or more bridge financial companies in accordance with this subsection.CommentsClose CommentsPermalink





(B) AUTHORITIES- Upon the creation of a bridge financial company under subparagraph (A) with respect to a covered financial company, such bridge financial company may--CommentsClose CommentsPermalink





(i) assume such liabilities (including liabilities associated with any trust or custody business, but excluding any liabilities that count as regulatory capital) of such covered financial company as the Corporation may, in its discretion, determine to be appropriate;CommentsClose CommentsPermalink





(ii) purchase such assets (including assets associated with any trust or custody business) of such covered financial company as the Corporation may, in its discretion, determine to be appropriate; andCommentsClose CommentsPermalink





(iii) perform any other temporary function which the Corporation may, in its discretion, prescribe in accordance with this section.CommentsClose CommentsPermalink





(2) CHARTER AND ESTABLISHMENT-CommentsClose CommentsPermalink





(A) ESTABLISHMENT- Except as provided in subparagraph (H), where the covered financial company is a covered broker or dealer, the Corporation, as receiver for a covered financial company, may grant a Federal charter to and approve articles of association for one or more bridge financial company or companies, with respect to such covered financial company which shall, by operation of law and immediately upon issuance of its charter and approval of its articles of association, be established and operate in accordance with, and subject to, such charter, articles, and this section.CommentsClose CommentsPermalink





(B) MANAGEMENT- Upon its establishment, a bridge financial company shall be under the management of a board of directors appointed by the Corporation.CommentsClose CommentsPermalink





(C) ARTICLES OF ASSOCIATION- The articles of association and organization certificate of a bridge financial company shall have such terms as the Corporation may provide, and shall be executed by such representatives as the Corporation may designate.CommentsClose CommentsPermalink





(D) TERMS OF CHARTER; RIGHTS AND PRIVILEGES- Subject to and in accordance with the provisions of this subsection, the Corporation shall--CommentsClose CommentsPermalink





(i) establish the terms of the charter of a bridge financial company and the rights, powers, authorities, and privileges of a bridge financial company granted by the charter or as an incident thereto; andCommentsClose CommentsPermalink





(ii) provide for, and establish the terms and conditions governing, the management (including the bylaws and the number of directors of the board of directors) and operations of the bridge financial company.CommentsClose CommentsPermalink





(E) TRANSFER OF RIGHTS AND PRIVILEGES OF COVERED FINANCIAL COMPANY-CommentsClose CommentsPermalink





(i) IN GENERAL- Notwithstanding any other provision of Federal or State law, the Corporation may provide for a bridge financial company to succeed to and assume any rights, powers, authorities, or privileges of the covered financial company with respect to which the bridge financial company was established and, upon such determination by the Corporation, the bridge financial company shall immediately and by operation of law succeed to and assume such rights, powers, authorities, and privileges.CommentsClose CommentsPermalink





(ii) EFFECTIVE WITHOUT APPROVAL- Any succession to or assumption by a bridge financial company of rights, powers, authorities, or privileges of a covered financial company under clause (i) or otherwise shall be effective without any further approval under Federal or State law, assignment, or consent with respect thereto.CommentsClose CommentsPermalink





(F) CORPORATE GOVERNANCE AND ELECTION AND DESIGNATION OF BODY OF LAW- To the extent permitted by the Corporation and consistent with this section and any rules, regulations, or directives issued by the Corporation under this section, a bridge financial company may elect to follow the corporate governance practices and procedures that are applicable to a corporation incorporated under the general corporation law of the State of Delaware, or the State of incorporation or organization of the covered financial company with respect to which the bridge financial company was established, as such law may be amended from time to time.CommentsClose CommentsPermalink





(G) CAPITAL-CommentsClose CommentsPermalink





(i) CAPITAL NOT REQUIRED- Notwithstanding any other provision of Federal or State law, a bridge financial company may, if permitted by the Corporation, operate without any capital or surplus, or with such capital or surplus as the Corporation may in its discretion determine to be appropriate.CommentsClose CommentsPermalink





(ii) NO CONTRIBUTION BY THE CORPORATION REQUIRED- The Corporation is not required to pay capital into a bridge financial company or to issue any capital stock on behalf of a bridge financial company established under this subsection.CommentsClose CommentsPermalink





(iii) AUTHORITY- If the Corporation determines that such action is advisable, the Corporation may cause capital stock or other securities of a bridge financial company established with respect to a covered financial company to be issued and offered for sale in such amounts and on such terms and conditions as the Corporation may, in its discretion, determine.CommentsClose CommentsPermalink





(iv) OPERATING FUNDS IN LIEU OF CAPITAL AND IMPLEMENTATION PLAN- Upon the organization of a bridge financial company, and thereafter as the Corporation may, in its discretion, determine to be necessary or advisable, the Corporation may make available to the bridge financial company, subject to the plan described in subsection (n)(119), funds for the operation of the bridge financial company in lieu of capital.CommentsClose CommentsPermalink





(H) BRIDGE BROKERS OR DEALERS-CommentsClose CommentsPermalink





(i) IN GENERAL- The Corporation, as receiver for a covered broker or dealer, may approve articles of association for one or more bridge financial companies with respect to such covered broker or dealer, which bridge financial company or companies shall, by operation of law and immediately upon approval of its articles of association--CommentsClose CommentsPermalink





(I) be established and deemed registered with the Commission under the Securities Exchange Act of 1934 and a member of SIPC;CommentsClose CommentsPermalink





(II) operate in accordance with such articles and this section; andCommentsClose CommentsPermalink





(III) succeed to any and all registrations and memberships of the covered financial company with or in any self-regulatory organizations.CommentsClose CommentsPermalink





(ii) OTHER REQUIREMENTS- Except as provided in clause (i), and notwithstanding any other provision of this section, the bridge financial company shall be subject to the Federal securities laws and all requirements with respect to being a member of a self-regulatory organization, unless exempted from any such requirements by the Commission, as is necessary or appropriate in the public interest or for the protection of investors.CommentsClose CommentsPermalink





(iii) TREATMENT OF CUSTOMERS- Except as otherwise provided by this title, any customer of the covered broker or dealer whose account is transferred to a bridge financial company shall have all the rights, privileges, and protections under section 205(f) and under the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.), that such customer would have had if the account were not transferred from the covered financial company under this subparagraph.CommentsClose CommentsPermalink





(iv) OPERATION OF BRIDGE BROKERS OR DEALERS- Notwithstanding any other provision of this title, the Corporation shall not operate any bridge financial company created by the Corporation under this title with respect to a covered broker or dealer in such a manner as to adversely affect the ability of customers to promptly access their customer property in accordance with applicable law.CommentsClose CommentsPermalink





(3) INTERESTS IN AND ASSETS AND OBLIGATIONS OF COVERED FINANCIAL COMPANY- Notwithstanding paragraph (1) or (2) or any other provision of law--CommentsClose CommentsPermalink





(A) a bridge financial company shall assume, acquire, or succeed to the assets or liabilities of a covered financial company (including the assets or liabilities associated with any trust or custody business) only to the extent that such assets or liabilities are transferred by the Corporation to the bridge financial company in accordance with, and subject to the restrictions set forth in, paragraph (1)(B); andCommentsClose CommentsPermalink





(B) a bridge financial company shall not assume, acquire, or succeed to any obligation that a covered financial company for which the Corporation has been appointed receiver may have to any shareholder, member, general partner, limited partner, or other person with an interest in the equity of the covered financial company that arises as a result of the status of that person having an equity claim in the covered financial company.CommentsClose CommentsPermalink





(4) BRIDGE FINANCIAL COMPANY TREATED AS BEING IN DEFAULT FOR CERTAIN PURPOSES- A bridge financial company shall be treated as a covered financial company in default at such times and for such purposes as the Corporation may, in its discretion, determine.CommentsClose CommentsPermalink





(5) TRANSFER OF ASSETS AND LIABILITIES-CommentsClose CommentsPermalink





(A) AUTHORITY OF CORPORATION- The Corporation, as receiver for a covered financial company, may transfer any assets and liabilities of a covered financial company (including any assets or liabilities associated with any trust or custody business) to one or more bridge financial companies, in accordance with and subject to the restrictions of paragraph (1).CommentsClose CommentsPermalink





(B) SUBSEQUENT TRANSFERS- At any time after the establishment of a bridge financial company with respect to a covered financial company, the Corporation, as receiver, may transfer any assets and liabilities of such covered financial company as the Corporation may, in its discretion, determine to be appropriate in accordance with and subject to the restrictions of paragraph (1).CommentsClose CommentsPermalink





(C) TREATMENT OF TRUST OR CUSTODY BUSINESS- For purposes of this paragraph, the trust or custody business, including fiduciary appointments, held by any covered financial company is included among its assets and liabilities.CommentsClose CommentsPermalink





(D) EFFECTIVE WITHOUT APPROVAL- The transfer of any assets or liabilities, including those associated with any trust or custody business of a covered financial company, to a bridge financial company shall be effective without any further approval under Federal or State law, assignment, or consent with respect thereto.CommentsClose CommentsPermalink





(E) EQUITABLE TREATMENT OF SIMILARLY SITUATED CREDITORS- The Corporation shall treat all creditors of a covered financial company that are similarly situated under subsection (b)(1), in a similar manner in exercising the authority of the Corporation under this subsection to transfer any assets or liabilities of the covered financial company to one or more bridge financial companies established with respect to such covered financial company, except that the Corporation may take any action (including making payments, subject to subsection (o)(1)(D)(ii)) that does not comply with this subparagraph, if--CommentsClose CommentsPermalink





(i) the Corporation determines that such action is necessary--CommentsClose CommentsPermalink





(I) to maximize the value of the assets of the covered financial company;CommentsClose CommentsPermalink





(II) to maximize the present value return from the sale or other disposition of the assets of the covered financial company; orCommentsClose CommentsPermalink





(III) to minimize the amount of any loss realized upon the sale or other disposition of the assets of the covered financial company; andCommentsClose CommentsPermalink





(ii) all creditors that are similarly situated under subsection (b)(1) receive not less than the amount provided under paragraphs (2) and (3) of subsection (d).CommentsClose CommentsPermalink





(F) LIMITATION ON TRANSFER OF LIABILITIES- Notwithstanding any other provision of law, the aggregate amount of liabilities of a covered financial company that are transferred to, or assumed by, a bridge financial company from a covered financial company may not exceed the aggregate amount of the assets of the covered financial company that are transferred to, or purchased by, the bridge financial company from the covered financial company.CommentsClose CommentsPermalink





(6) STAY OF JUDICIAL ACTION- Any judicial action to which a bridge financial company becomes a party by virtue of its acquisition of any assets or assumption of any liabilities of a covered financial company shall be stayed from further proceedings for a period of not longer than 45 days (or such longer period as may be agreed to upon the consent of all parties) at the request of the bridge financial company.CommentsClose CommentsPermalink





(7) AGREEMENTS AGAINST INTEREST OF THE BRIDGE FINANCIAL COMPANY- No agreement that tends to diminish or defeat the interest of the bridge financial company in any asset of a covered financial company acquired by the bridge financial company shall be valid against the bridge financial company, unless such agreement--CommentsClose CommentsPermalink





(A) is in writing;CommentsClose CommentsPermalink





(B) was executed by an authorized officer or representative of the covered financial company or confirmed in the ordinary course of business by the covered financial company; andCommentsClose CommentsPermalink





(C) has been on the official record of the company, since the time of its execution, or with which, the party claiming under the agreement provides documentation of such agreement and its authorized execution or confirmation by the covered financial company that is acceptable to the receiver.CommentsClose CommentsPermalink





(8) NO FEDERAL STATUS-CommentsClose CommentsPermalink





(A) AGENCY STATUS- A bridge financial company is not an agency, establishment, or instrumentality of the United States.CommentsClose CommentsPermalink





(B) EMPLOYEE STATUS- Representatives for purposes of paragraph (1)(B), directors, officers, employees, or agents of a bridge financial company are not, solely by virtue of service in any such capacity, officers or employees of the United States. Any employee of the Corporation or of any Federal instrumentality who serves at the request of the Corporation as a representative for purposes of paragraph (1)(B), director, officer, employee, or agent of a bridge financial company shall not--CommentsClose CommentsPermalink





(i) solely by virtue of service in any such capacity lose any existing status as an officer or employee of the United States for purposes of title 5, United States Code, or any other provision of law; orCommentsClose CommentsPermalink





(ii) receive any salary or benefits for service in any such capacity with respect to a bridge financial company in addition to such salary or benefits as are obtained through employment with the Corporation or such Federal instrumentality.CommentsClose CommentsPermalink





(9) FUNDING AUTHORIZED- The Corporation may, subject to the plan described in subsection (n)(119), provide funding to facilitate any transaction described in subparagraph (A), (B), (C), or (D) of paragraph (13) with respect to any bridge financial company, or facilitate the acquisition by a bridge financial company of any assets, or the assumption of any liabilities, of a covered financial company for which the Corporation has been appointed receiver.CommentsClose CommentsPermalink





(10) EXEMPT TAX STATUS- Notwithstanding any other provision of Federal or State law, a bridge financial company, its franchise, property, and income shall be exempt from all taxation now or hereafter imposed by the United States, by any territory, dependency, or possession thereof, or by any State, county, municipality, or local taxing authority.CommentsClose CommentsPermalink





(11) FEDERAL AGENCY APPROVAL; ANTITRUST REVIEW- If a transaction involving the merger or sale of a bridge financial company requires approval by a Federal agency, the transaction may not be consummated before the 5th calendar day after the date of approval by the Federal agency responsible for such approval with respect thereto. If, in connection with any such approval a report on competitive factors from the Attorney General is required, the Federal agency responsible for such approval shall promptly notify the Attorney General of the proposed transaction and the Attorney General shall provide the required report within 10 days of the request. If a notification is required under section 7A of the Clayton Act with respect to such transaction, the required waiting period shall end on the 15th day after the date on which the Attorney General and the Federal Trade Commission receive such notification, unless the waiting period is terminated earlier under section 7A(b)(2) of the Clayton Act, or extended under section 7A(e)(2) of that Act.CommentsClose CommentsPermalink





(12) DURATION OF BRIDGE FINANCIAL COMPANY- Subject to paragraphs (13) and (14), the status of a bridge financial company as such shall terminate at the end of the 2-year period following the date on which it was granted a charter. The Corporation may, in its discretion, extend the status of the bridge financial company as such for no more than 3 additional 1-year periods.CommentsClose CommentsPermalink





(13) TERMINATION OF BRIDGE FINANCIAL COMPANY STATUS- The status of any bridge financial company as such shall terminate upon the earliest of--CommentsClose CommentsPermalink





(A) the date of the merger or consolidation of the bridge financial company with a company that is not a bridge financial company;CommentsClose CommentsPermalink





(B) at the election of the Corporation, the sale of a majority of the capital stock of the bridge financial company to a company other than the Corporation and other than another bridge financial company;CommentsClose CommentsPermalink





(C) the sale of 80 percent, or more, of the capital stock of the bridge financial company to a person other than the Corporation and other than another bridge financial company;CommentsClose CommentsPermalink





(D) at the election of the Corporation, either the assumption of all or substantially all of the liabilities of the bridge financial company by a company that is not a bridge financial company, or the acquisition of all or substantially all of the assets of the bridge financial company by a company that is not a bridge financial company, or other entity as permitted under applicable law; andCommentsClose CommentsPermalink





(E) the expiration of the period provided in paragraph (12), or the earlier dissolution of the bridge financial company, as provided in paragraph (15).CommentsClose CommentsPermalink





(14) EFFECT OF TERMINATION EVENTS-CommentsClose CommentsPermalink





(A) MERGER OR CONSOLIDATION- A merger or consolidation, described in paragraph (12)(A) shall be conducted in accordance with, and shall have the effect provided 3)(A) shall be conducted in accordance with, and shall have the effect provided in, the provisions of applicable law. For the purpose of effecting such a merger or consolidation, the bridge financial company shall be treated as a corporation organized under the laws of the State of Delaware (unless the law of another State has been selected by the bridge financial company in accordance with paragraph (2)(F)), and the Corporation shall be treated as the sole shareholder thereof, notwithstanding any other provision of State or Federal law.CommentsClose CommentsPermalink





(B) CHARTER CONVERSION- Following the sale of a majority of the capital stock of the bridge financial company, as provided in paragraph (13)(B), the Corporation may amend the charter of the bridge financial company to reflect the termination of the status of the bridge financial company as such, whereupon the company shall have all of the rights, powers, and privileges under its constituent documents and applicable Federal or State law. In connection therewith, the Corporation may take such steps as may be necessary or convenient to reincorporate the bridge financial company under the laws of a State and, notwithstanding any provisions of Federal or State law, such State-chartered corporation shall be deemed to succeed by operation of law to such rights, titles, powers, and interests of the bridge financial company as the Corporation may provide, with the same effect as if the bridge financial company had merged with the State-chartered corporation under provisions of the corporate laws of such State.CommentsClose CommentsPermalink





(C) SALE OF STOCK- Following the sale of 80 percent or more of the capital stock of a bridge financial company, as provided in paragraph (13)(C), the company shall have all of the rights, powers, and privileges under its constituent documents and applicable Federal or State law. In connection therewith, the Corporation may take such steps as may be necessary or convenient to reincorporate the bridge financial company under the laws of a State and, notwithstanding any provisions of Federal or State law, the State-chartered corporation shall be deemed to succeed by operation of law to such rights, titles, powers and interests of the bridge financial company as the Corporation may provide, with the same effect as if the bridge financial company had merged with the State-chartered corporation under provisions of the corporate laws of such State.CommentsClose CommentsPermalink





(D) ASSUMPTION OF LIABILITIES AND SALE OF ASSETS- Following the assumption of all or substantially all of the liabilities of the bridge financial company, or the sale of all or substantially all of the assets of the bridge financial company, as provided in paragraph (13)(D), at the election of the Corporation, the bridge financial company may retain its status as such for the period provided in paragraph (12) or may be dissolved at the election of the Corporation.CommentsClose CommentsPermalink





(E) AMENDMENTS TO CHARTER- Following the consummation of a transaction described in subparagraph (A), (B), (C), or (D) of paragraph (13), the charter of the resulting company shall be amended to reflect the termination of bridge financial company status, if appropriate.CommentsClose CommentsPermalink





(15) DISSOLUTION OF BRIDGE FINANCIAL COMPANY-CommentsClose CommentsPermalink





(A) IN GENERAL- Notwithstanding any other provision of Federal or State law, if the status of a bridge financial company as such has not previously been terminated by the occurrence of an event specified in subparagraph (A), (B), (C), or (D) of paragraph (13)--CommentsClose CommentsPermalink





(i) the Corporation may, in its discretion, dissolve the bridge financial company in accordance with this paragraph at any time; andCommentsClose CommentsPermalink





(ii) the Corporation shall promptly commence dissolution proceedings in accordance with this paragraph upon the expiration of the 2-year period following the date on which the bridge financial company was chartered, or any extension thereof, as provided in paragraph (12).CommentsClose CommentsPermalink





(B) PROCEDURES- The Corporation shall remain the receiver for a bridge financial company for the purpose of dissolving the bridge financial company. The Corporation as receiver for a bridge financial company shall wind up the affairs of the bridge financial company in conformity with the provisions of law relating to the liquidation of covered financial companies under this title. With respect to any such bridge financial company, the Corporation as receiver shall have all the rights, powers, and privileges and shall perform the duties related to the exercise of such rights, powers, or privileges granted by law to the Corporation as receiver for a covered financial company under this title and, notwithstanding any other provision of law, in the exercise of such rights, powers, and privileges, the Corporation shall not be subject to the direction or supervision of any State agency or other Federal agency.CommentsClose CommentsPermalink





(16) AUTHORITY TO OBTAIN CREDIT-CommentsClose CommentsPermalink





(A) IN GENERAL- A bridge financial company may obtain unsecured credit and issue unsecured debt.CommentsClose CommentsPermalink





(B) INABILITY TO OBTAIN CREDIT- If a bridge financial company is unable to obtain unsecured credit or issue unsecured debt, the Corporation may authorize the obtaining of credit or the issuance of debt by the bridge financial company--CommentsClose CommentsPermalink





(i) with priority over any or all of the obligations of the bridge financial company;CommentsClose CommentsPermalink





(ii) secured by a lien on property of the bridge financial company that is not otherwise subject to a lien; orCommentsClose CommentsPermalink





(iii) secured by a junior lien on property of the bridge financial company that is subject to a lien.CommentsClose CommentsPermalink





(C) LIMITATIONS-CommentsClose CommentsPermalink





(i) IN GENERAL- The Corporation, after notice and a hearing, may authorize the obtaining of credit or the issuance of debt by a bridge financial company that is secured by a senior or equal lien on property of the bridge financial company that is subject to a lien, only if--CommentsClose CommentsPermalink





(I) the bridge financial company is unable to otherwise obtain such credit or issue such debt; andCommentsClose CommentsPermalink





(II) there is adequate protection of the interest of the holder of the lien on the property with respect to which such senior or equal lien is proposed to be granted.CommentsClose CommentsPermalink





(ii) HEARING- The hearing required pursuant to this subparagraph shall be before a court of the United States, which shall have jurisdiction to conduct such hearing.(D) and to authorize a bridge financial company to obtain secured credit under clause (i).CommentsClose CommentsPermalink





(D) BURDEN OF PROOF- In any hearing under this paragraph, the Corporation has the burden of proof on the issue of adequate protection.CommentsClose CommentsPermalink





(E) QUALIFIED FINANCIAL CONTRACTS- No credit or debt obtained or issued by a bridge financial company may contain terms that impair the rights of a counterparty to a qualified financial contract upon a default by the bridge financial company, other than the priority of such counterparty’s unsecured claim (after the exercise of rights) relative to the priority of the bridge financial company’s obligations in respect of such credit or debt, unless such counterparty consents in writing to any such impairment.CommentsClose CommentsPermalink





(17) EFFECT ON DEBTS AND LIENS- The reversal or modification on appeal of an authorization under this subsection to obtain credit or issue debt, or of a grant under this section of a priority or a lien, does not affect the validity of any debt so issued, or any priority or lien so granted, to an entity that extended such credit in good faith, whether or not such entity knew of the pendency of the appeal, unless such authorization and the issuance of such debt, or the granting of such priority or lien, were stayed pending appeal.CommentsClose CommentsPermalink





(i) Sharing Records- If the Corporation has been appointed as receiver for a covered financial company, other Federal regulators shall make all records relating to the covered financial company available to the Corporation, which may be used by the Corporation in any manner that the Corporation determines to be appropriate.CommentsClose CommentsPermalink





(j) Expedited Procedures for Certain Claims-CommentsClose CommentsPermalink





(1) TIME FOR FILING NOTICE OF APPEAL- The notice of appeal of any order, whether interlocutory or final, entered in any case brought by the Corporation against a director, officer, employee, agent, attorney, accountant, or appraiser of the covered financial company, or any other person employed by or providing services to a covered financial company, shall be filed not later than 30 days after the date of entry of the order. The hearing of the appeal shall be held not later than 120 days after the date of the notice of appeal. The appeal shall be decided not later than 180 days after the date of the notice of appeal.CommentsClose CommentsPermalink





(2) SCHEDULING- The court shall expedite the consideration of any case brought by the Corporation against a director, officer, employee, agent, attorney, accountant, or appraiser of a covered financial company or any other person employed by or providing services to a covered financial company. As far as practicable, the court shall give such case priority on its docket.CommentsClose CommentsPermalink





(3) JUDICIAL DISCRETION- The court may modify the schedule and limitations stated in paragraphs (1) and (2) in a particular case, based on a specific finding that the ends of justice that would be served by making such a modification would outweigh the best interest of the public in having the case resolved expeditiously.CommentsClose CommentsPermalink





(k) Foreign Investigations- The Corporation, as receiver for any covered financial company, and for purposes of carrying out any power, authority, or duty with respect to a covered financial company--CommentsClose CommentsPermalink





(1) may request the assistance of any foreign financial authority and provide assistance to any foreign financial authority in accordance with section 8(v) of the Federal Deposit Insurance Act, as if the covered financial company were an insured depository institution, the Corporation were the appropriate Federal banking agency for the company, and any foreign financial authority were the foreign banking authority; andCommentsClose CommentsPermalink





(2) may maintain an office to coordinate foreign investigations or investigations on behalf of foreign financial authorities.CommentsClose CommentsPermalink





(l) Prohibition on Entering Secrecy Agreements and Protective Orders- The Corporation may not enter into any agreement or approve any protective order which prohibits the Corporation from disclosing the terms of any settlement of an administrative or other action for damages or restitution brought by the Corporation in its capacity as receiver for a covered financial company.CommentsClose CommentsPermalink





(m) Liquidation of Certain Covered Financial Companies or Bridge Financial Companies-CommentsClose CommentsPermalink





(1) IN GENERAL- Except as specifically provided in this section, and notwithstanding any other provision of law, the Corporation, in connection with the liquidation of any covered financial company or bridge financial company with respect to which the Corporation has been appointed as receiver, shall--CommentsClose CommentsPermalink





(A) in the case of any covered financial company or bridge financial company that is or has a subsidiary that is a stockbroker, but is not a member of the Securities Investor Protection Corporation, apply the provisions of subchapter III of chapter 7 of the Bankruptcy Code, in respect of the distribution to any customer of all customer name securities and customery and customer property and member property, as if such covered financial company or bridge financial company were a debtor for purposes of such subchapter; orCommentsClose CommentsPermalink





(B) in the case of any covered financial company or bridge financial company that is a commodity broker, apply the provisions of subchapter IV of chapter 7 the Bankruptcy Code, in respect of the distribution to any customer of all customer property and member property, as if such covered financial company or bridge financial company were a debtor for purposes of such subchapter.CommentsClose CommentsPermalink





(2) DEFINITIONS- For purposes of this subsection--CommentsClose CommentsPermalink





(A) the terms ‘customer’, ‘customer name securities’, and ‘customer y’, and ‘customer property and member property’ have the same meanings as insection 74 sections 741 and 761 of title 11, United States Code; andCommentsClose CommentsPermalink





(B) the terms ‘commodity broker’ and ‘stockbroker’ have the same meanings as in section 101 of the Bankruptcy Code.CommentsClose CommentsPermalink





(n) Orderly Liquidation Fund-CommentsClose CommentsPermalink





(1) ESTABLISHMENT- There is established in the Treasury of the United States a separate fund to be known as the ‘Orderly Liquidation Fund’, which shall be available to the Corporation to carry out the authorities contained in this title, for the cost of actions authorized by this title, including the orderly liquidation of covered financial companies, payment of administrative expenses, the payment of principal and interest by the Corporation on obligations issued under paragraph (65), and the exercise of the authorities of the Corporation under this title.CommentsClose CommentsPermalink





(2) PROCEEDS- Amounts received by the Corporation, including assessments received under subsection (o), proceeds of obligations issued under paragraph (65), interest and other earnings from investments, and repayments to the Corporation by covered financial companies, shall be deposited into the Fund.CommentsClose CommentsPermalink





(3) MANAGEMENT- The Corporation shall manage the Fund in accordance with this subsection and the policies and procedures established under section 203(d).CommentsClose CommentsPermalink





(4) INVESTMENTS- At the request of the Corporation, the Secretary may invest such portion of amounts held in the Fund that are not, in the judgment of the Corporation, required to meet the current needs of the Corporation, in obligations of the United States having suitable maturities, as determined by the Corporation. The interest on and the proceeds from the sale or redemption of such obligations shall be credited to the Fund.CommentsClose CommentsPermalink





(5) AUTHORITY TO ISSUE OBLIGATIONS-CommentsClose CommentsPermalink





(A) CORPORATION AUTHORIZED TO ISSUE OBLIGATIONS- Upon appointment by the Secretary of the Corporation as receiver for a covered financial company, the Corporation is authorized to issue obligations to the Secretary.CommentsClose CommentsPermalink





(B) SECRETARY AUTHORIZED TO PURCHASE OBLIGATIONS- The Secretary may, under such terms and conditions as the Secretary may require, purchase or agree to purchase any obligations issued under subparagraph (A), and for such purpose, the Secretary is authorized to use as a public debt transaction the proceeds of the sale of any securities issued under chapter 31 of title 31, United States Code, and the purposes for which securities may be issued under chapter 31 of title 31, United States Code, are extended to include such purchases.CommentsClose CommentsPermalink





(C) INTEREST RATE- Each purchase of obligations by the Secretary under this paragraph shall be upon such terms and conditions as to yield a return at a rate determined by the Secretary, taking into consideration the current average yield on outstanding marketable obligations of the United States of comparable maturity, plus an interest rate surcharge to be determined by the Secretary, which shall be greater than the difference between--CommentsClose CommentsPermalink





(i) the current average rate on an index of corporate obligations of comparable maturity; andCommentsClose CommentsPermalink





(ii) the current average rate on outstanding marketable obligations of the United States of comparable maturity.CommentsClose CommentsPermalink





(D) SECRETARY AUTHORIZED TO SELL OBLIGATIONS- The Secretary may sell, upon such terms and conditions as the Secretary shall determine, any of the obligations acquired under this paragraph.CommentsClose CommentsPermalink





(E) PUBLIC DEBT TRANSACTIONS- All purchases and sales by the Secretary of such obligations under this paragraph shall be treated as public debt transactions of the United States, and the proceeds from the sale of any obligations acquired by the Secretary under this paragraph shall be deposited into the Treasury of the United States as miscellaneous receipts.CommentsClose CommentsPermalink





(6) MAXIMUM OBLIGATION LIMITATION- The Corporation may not, in connection with the orderly liquidation of a covered financial company, issue or incur any obligation, if, after issuing or incurring the obligation, the aggregate amount of such obligations outstanding under this subsection for each covered financial company would exceed--CommentsClose CommentsPermalink





(A) an amount that is equal to 10 percent of the total consolidated assets of the covered financial company, based on the most recent financial statement available, during the 30-day period immediately following the date of appointment of the Corporation as receiver (or a shorter time period if the Corporation has calculated the amount described under subparagraph (B)); andCommentsClose CommentsPermalink





(B) the amount that is equal to 90 percent of the fair value of the total consolidated assets of each covered financial company that are available for repayment, after the time period described in subparagraph (A).CommentsClose CommentsPermalink





(7) RULEMAKING- The Corporation and the Secretary shall jointly, in consultation with the Council, prescribe regulations governing the calculation of the maximum obligation limitation defined in this paragraph.CommentsClose CommentsPermalink





(8) RULE OF CONSTRUCTION-CommentsClose CommentsPermalink





(A) IN GENERAL- Nothing in this section shall be construed to affect the authority of the Corporation under subsection (a) or (b) of section 14 or section 15(c)(5) of the Federal Deposit Insurance Act (12 U.S.C. 1824, 1825(c)(5)), the management of the Deposit Insurance Fund by the Corporation, or the resolution of insured depository institutions, provided that--CommentsClose CommentsPermalink





(i) the authorities of the Corporation contained in this title shall not be used to assist the Deposit Insurance Fund or to assist any financial company under applicable law other than this Act;CommentsClose CommentsPermalink





(ii) the authorities of the Corporation relating to the Deposit Insurance Fund, or any other responsibilities of the Corporation under applicable law other than this title, shall not be used to assist a covered financial company pursuant to this title; andCommentsClose CommentsPermalink





(iii) the Deposit Insurance Fund may not be used in any manner to otherwise circumvent the purposes of this title.CommentsClose CommentsPermalink





(B) VALUATION- For purposes of determining the amount of obligations under this subsection--CommentsClose CommentsPermalink





(i) the Corporation shall include as an obligation any contingent liability of the Corporation pursuant to this title; andCommentsClose CommentsPermalink





(ii) the Corporation shall value any contingent liability at its expected cost to the Corporation.CommentsClose CommentsPermalink





(9) ORDERLY LIQUIDATION AND REPAYMENT PLANS-CommentsClose CommentsPermalink





(A) ORDERLY LIQUIDATION PLAN- Amounts in the Fund shall be available to the Corporation with regard to a covered financial company for which the Corporation is appointed receiver after the Corporation has developed an orderly liquidation plan that is acceptable to the Secretary with regard to such covered financial company, including the provision and use of funds, including taking any actions specified under section 204(d) and subsection (h)(2)(G)(iv) and (h)(9) of this section, and payments to third parties. The orderly liquidation plan shall take into account actions to avoid or mitigate potential adverse effects on low income, minority, or underserved communities affected by the failure of the covered financial company, and shall provide for coordination with the primary financial regulatory agencies, as appropriate, to ensure that such actions are taken. The Corporation may, at any time, amend any orderly liquidation plan approved by the Secretary with the concurrence of the Secretary.CommentsClose CommentsPermalink





(B) MANDATORY REPAYMENT PLAN-CommentsClose CommentsPermalink





(i) IN GENERAL- No amount authorized under paragraph (6)(B) may be provided by the Secretary to the Corporation under paragraph (5), unless an agreement is in effect between the Secretary and the Corporation that--CommentsClose CommentsPermalink





(I) provides a specific plan and schedule to achieve the repayment of the outstanding amount of any borrowing under paragraph (5); andCommentsClose CommentsPermalink





(II) demonstrates that income to the Corporation from the liquidated assets of the covered financial company and assessments under subsection (o) will be sufficient to amortize the outstanding balance within the period established in the repayment schedule and pay the interest accruing on such balance within the time provided in subsection (o)(1)(B).CommentsClose CommentsPermalink





(ii) CONSULTATION WITH AND REPORT TO CONGRESS- The Secretary and the Corporation shall--CommentsClose CommentsPermalink





(I) consult with the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives on the terms of any repayment schedule agreement; andCommentsClose CommentsPermalink





(II) submit a copy of the repayment schedule agreement to the Committees described in subclause (I) before the end of the 30-day period beginning on the date on which any amount is provided by the Secretary to the Corporation under paragraph (5).CommentsClose CommentsPermalink





(10) IMPLEMENTATION EXPENSES-CommentsClose CommentsPermalink





(A) IN GENERAL- Reasonable implementation expenses of the Corporation incurred after the date of enactment of this Act shall be treated as expenses of the Council.CommentsClose CommentsPermalink





(B) REQUESTS FOR REIMBURSEMENT- The Corporation shall periodically submit a request for reimbursement for implementation expenses to the Chairperson of the Council, who shall arrange for prompt reimbursement to the Corporation of reasonable implementation expenses.CommentsClose CommentsPermalink





(C) DEFINITION- As used in this paragraph, the term ‘implementation expenses’--CommentsClose CommentsPermalink





(i) means costs incurred by the Corporation beginning on the date of enactment of this Act, as part of its efforts to implement this title that do not relate to a particular covered financial company; andCommentsClose CommentsPermalink





(ii) includes the costs incurred in connection with the development of policies, procedures, rules, and regulations and other planning activities of the Corporation consistent with carrying out this title.CommentsClose CommentsPermalink





(o) Assessments-CommentsClose CommentsPermalink





(1) RISK-BASED ASSESSMENTS-CommentsClose CommentsPermalink





(A) ELIGIBLE FINANCIAL COMPANIES DEFINED- For purposes of this subsection, the term ‘eligible financial company’ means any bank holding company with total consolidated assets equal to or greater than $50,000,000,000 and any nonbank financial company supervised by the Board of Governors.CommentsClose CommentsPermalink





(B) ASSESSMENTS- The Corporation shall charge one or more risk-based assessments in accordance with the provisions of subparagraph (D), if such assessments are necessary to pay in full the obligations issued by the Corporation to the Secretary within 60 months of the date of issuance of such obligations.(C)under this title within 60 months of the date of issuance of such obligations.CommentsClose CommentsPermalink





(C) EXTENSIONS AUTHORIZED- The Corporation may, with the approval of the Secretary, extend the time period under subparagraph (C)(iii), if the Corporation determines that an extension is necessary toB), if the Corporation determines that an extension is necessary to avoid a serious adverse effect on the financial system of the United States.CommentsClose CommentsPermalink





(D) APPLICATION OF ASSESSMENTS- To meet the requirements of subparagraph (CB), the Corporation shall--CommentsClose CommentsPermalink





(i) impose assessments, as soon as practicable, on any claimant that received additional payments or amounts from the Corporation pursuant to subsection (b)(4), (d)(4), or (h)(5)(E), except for payments or amounts necessary to initiate and continue operations essential to implementation of the receivership or any bridge financial company, to recover on a cumulative basis, the entire difference between--CommentsClose CommentsPermalink





(I) the aggregate value the claimant received from the Corporation on a claim pursuant to this title (including pursuant to subsection (b)(4), (d)(4), and (h)(5)(E)), as of the date on which such value was received; andCommentsClose CommentsPermalink





(II) the value the claimant was entitled to receive from the Corporation on such claim solely from the proceeds of the liquidation of the covered financial company under this title; andCommentsClose CommentsPermalink





(ii) if the amounts to be recovered on a cumulative basis under clause (i) are insufficient to meet the requirements of subparagraph (CB), after taking into account the considerations set forth in paragraph (4), impose assessments on--CommentsClose CommentsPermalink





(I) eligible financial companies; andCommentsClose CommentsPermalink





(II) financial companies with total consolidated assets equal to or greater than $50,000,000,000 that are not eligible financial companies.CommentsClose CommentsPermalink





(E) PROVISION OF FINANCING- Payments or amounts necessary to initiate and continue operations essential to implementation of the receivership or any bridge financial company described in subparagraph (ED)(i) shall not include the provision of financing, as defined by rule of the Corporation, to third parties.CommentsClose CommentsPermalink





(2) GRADUATED ASSESSMENT RATE- The Corporation shall impose assessments on a graduated basis, with financial companies having greater assets being and risk being assessed at a higher rate.CommentsClose CommentsPermalink





(3) NOTIFICATION AND PAYMENT- The Corporation shall notify each financial company of that company’s assessment under this subsection. Any financial company subject to assessment under this subsection shall pay such assessment in accordance with the regulations prescribed pursuant to paragraph (6).CommentsClose CommentsPermalink





(4) RISK-BASED ASSESSMENT CONSIDERATIONS- In imposing assessments under this subsection, the Corporation shall--(A) take into accountparagraph (1)(D)(ii), the Corporation shall use a risk matrix. The Council shall make a recommendation to the Corporation on the risk matrix to be used in imposing such assessments, and the Corporation shall take into account any such recommendation in the establishment of the risk matrix to be used to impose such assessments. In recommending or establishing such risk matrix, the Council and the Corporation, respectively, shall take into account--CommentsClose CommentsPermalink





(A) economic conditions generally affecting financial companies, so as to allow assessments to be lower during less favorable economic conditions;

(B) take into account any assessments imposed on--

(i) an insured depository institution subsidiary of a financial company pursuant to section 7 or sectionincrease during more favorable economic conditions and to decrease during less favorable economic conditions;CommentsClose CommentsPermalink




(B) any assessments imposed on a financial company or an affiliate of a financial company that--CommentsClose CommentsPermalink





(i) is an insured depository institution, assessed pursuant to section 7 or 13(c)(4)(G) of the Federal Deposit Insurance Act (12 U.S.C. 1817, 1823(c)(4)(G));(ii) a financial company or subsidiary of such company that is a member of SIPC pursuant to section ;CommentsClose CommentsPermalink





(ii) is a member of the Securities Investor Protection Corporation, assessed pursuant to section 4 of the Securities Investor Protection Act of 1970 (15 U.S.C. 78ddd);CommentsClose CommentsPermalink





and(iii) a financial company or subsidiary of such company that is an insurance company (iii) is an insured credit union, assessed pursuant to section 202(c)(1)(A)(i) of the Federal Credit Union Act (12 U.S.C. 1782(c)(1)(A)(i)); or CommentsClose CommentsPermalink





(iv) is an insurance company, assessed pursuant to applicable State law to cover (or reimburse payments made to cover) the costs of the rehabilitation, liquidation, or other State insolvency proceeding with respect to one1 or more insurance companies;CommentsClose CommentsPermalink





(C) take into account the financial condition of the financial company, including the extent and type of off-balance-sheet exposures of the financial company;(D) take into account the riskshe risks presented by the financial company to the financial stability of the United States economy;(E) take into account the extent to which the financial company or group of financial companiesystem and the extent to which the financial company has benefitted, or likely would benefit, from the orderly liquidation of a covered financial company and the use of the Fund under this title;(F) distinguish amongfinancial company under this title, including--CommentsClose CommentsPermalink





(i) the amount, different classes of assets or different types of financial companies (including distinguishing among different types of financial companies, based on their levels of capital and leverage) in order to establish comparable assessment bases among financial companies subject to this subsection;

(G) establish the parameters for the graduated assessment requirement in paragraph (2); and

(H) take into account such other factors as the Corporation, in consultation with the Secretary, deems appropriate.

(5) ategories, and concentrations of assets of the financial company and its affiliates, including both on-balance sheet and off-balance sheet assets;CommentsClose CommentsPermalink




(ii) the activities of the financial company and its affiliates;CommentsClose CommentsPermalink





(iii) the relevant market share of the financial company and its affiliates;CommentsClose CommentsPermalink





(iv) the extent to which the financial company is leveraged;CommentsClose CommentsPermalink





(v) the potential exposure to sudden calls on liquidity precipitated by economic distress;CommentsClose CommentsPermalink





(vi) the amount, maturity, volatility, and stability of the company’s financial obligations to, and relationship with, other financial companies;CommentsClose CommentsPermalink





(vii) the amount, maturity, volatility, and stability of the liabilities of the company, including the degree of reliance on short-term funding, taking into consideration existing systems for measuring a company’s risk-based capital;CommentsClose CommentsPermalink





(viii) the stability and variety of the company’s sources of funding;CommentsClose CommentsPermalink





(ix) the company’s importance as a source of credit for households, businesses, and State and local governments and as a source of liquidity for the financial system;CommentsClose CommentsPermalink





(x) the extent to which assets are simply managed and not owned by the financial company and the extent to which ownership of assets under management is diffuse; andCommentsClose CommentsPermalink





(xi) the amount, different categories, and concentrations of liabilities, both insured and uninsured, contingent and noncontingent, including both on-balance sheet and off-balance sheet liabilities, of the financial company and its affiliates;CommentsClose CommentsPermalink





(D) any risks presented by the financial company during the 10-year period immediately prior to the appointment of the Corporation as receiver for the covered financial company that contributed to the failure of the covered financial company; andCommentsClose CommentsPermalink





(E) such other risk-related factors as the Corporation, or the Council, as applicable, may determine to be appropriate.CommentsClose CommentsPermalink





(5) COLLECTION OF INFORMATION- The Corporation may impose on covered financial companies such collection of information requirements as the Corporation deems necessary to carry out this subsection after the appointment of the Corporation as receiver under this title.CommentsClose CommentsPermalink





(6) RULEMAKING-CommentsClose CommentsPermalink





(A) IN GENERAL- The Corporation shall prescribe regulations to carry out this subsection. The Corporation shall consult with the Secretary in the development and finalization of such regulations.CommentsClose CommentsPermalink





(B) EQUITABLE TREATMENT- The regulations prescribed under subparagraph (A) shall take into account the differences in risks posed to the financial stability of the United States by financial companies, the differences in the liability structures of financial companies, and the different bases for other assessments that such financial companies may be required to pay, to ensure that assessed financial companies are treated equitably and that assessments under this subsection reflect such differences.CommentsClose CommentsPermalink





(p) Unenforceability of Certain Agreements-CommentsClose CommentsPermalink





(1) IN GENERAL- No provision described in paragraph (2) shall be enforceable against or impose any liability on any person, as such enforcement or liability shall be contrary to public policy.CommentsClose CommentsPermalink





(2) PROHIBITED PROVISIONS- A provision described in this paragraph is any term contained in any existing or future standstill, confidentiality, or other agreement that, directly or indirectly--CommentsClose CommentsPermalink





(A) affects, restricts, or limits the ability of any person to offer to acquire or acquire;CommentsClose CommentsPermalink





(B) prohibits any person from offering to acquire or acquiring; orCommentsClose CommentsPermalink





(C) prohibits any person from using any previously disclosed information in connection with any such offer to acquire or acquisition of,CommentsClose CommentsPermalink





all or part of any covered financial company, including any liabilities, assets, or interest therein, in connection with any transaction in which the Corporation exercises its authority under this title.CommentsClose CommentsPermalink





(q) Other Exemptions-CommentsClose CommentsPermalink





(1) IN GENERAL- When acting as a receiver under this title--CommentsClose CommentsPermalink





(A) the Corporation, including its franchise, its capital, reserves and surplus, and its income, shall be exempt from all taxation imposed by any State, county, municipality, or local taxing authority, except that any real property of the Corporation shall be subject to State, territorial, county, municipal, or local taxation to the same extent according to its value as other real property is taxed, except that, notwithstanding the failure of any person to challenge an assessment under State law of the value of such property, such value, and the tax thereon, shall be determined as of the period for which such tax is imposed;CommentsClose CommentsPermalink





(B) no property of the Corporation shall be subject to levy, attachment, garnishment, foreclosure, or sale without the consent of the Corporation, nor shall any involuntary lien attach to the property of the Corporation; andCommentsClose CommentsPermalink





(C) the Corporation shall not be liable for any amounts in the nature of penalties or fines, including those arising from the failure of any person to pay any real property, personal property, probate, or recording tax or any recording or filing fees when due; andCommentsClose CommentsPermalink





(D) the Corporation shall be exempt from all prosecution by the United States or any State, county, municipality, or local authority for any criminal offense arising under Federal, State, county, municipal, or local law, which was allegedly committed by the covered financial company, or persons acting on behalf of the covered financial company, prior to the appointment of the Corporation as receiver.CommentsClose CommentsPermalink





(2) LIMITATION- Paragraph (1) shall not apply with respect to any tax imposed (or other amount arising) under the Internal Revenue Code of 1986.CommentsClose CommentsPermalink





(r) Certain Sales of Assets Prohibited-CommentsClose CommentsPermalink





(1) PERSONS WHO ENGAGED IN IMPROPER CONDUCT WITH, OR CAUSED LOSSES TO, COVERED FINANCIAL COMPANIES- The Corporation shall prescribe regulations which, at a minimum, shall prohibit the sale of assets of a covered financial company by the Corporation to--CommentsClose CommentsPermalink





(A) any person who--CommentsClose CommentsPermalink





(i) has defaulted, or was a member of a partnership or an officer or director of a corporation that has defaulted, on 1 or more obligations, the aggregate amount of which exceeds $1,000,000, to such covered financial company;CommentsClose CommentsPermalink





(ii) has been found to have engaged in fraudulent activity in connection with any obligation referred to in clause (i); andCommentsClose CommentsPermalink





(iii) proposes to purchase any such asset in whole or in part through the use of the proceeds of a loan or advance of credit from the Corporation or from any covered financial company;CommentsClose CommentsPermalink





(B) any person who participated, as an officer or director of such covered financial company or of any affiliate of such company, in a material way in any transaction that resulted in a substantial loss to such covered financial company; orCommentsClose CommentsPermalink





(C) any person who has demonstrated a pattern or practice of defalcation regarding obligations to such covered financial company.CommentsClose CommentsPermalink





(2) CONVICTED DEBTORS- Except as provided in paragraph (3), a person may not purchase any asset of such institution from the receiver, if that person--CommentsClose CommentsPermalink





(A) has been convicted of an offense under section 215, 656, 657, 1005, 1006, 1007, 1008, 1014, 1032, 1341, 1343, or 1344 of title 18, United States Code, or of conspiring to commit such an offense, affecting any covered financial company; andCommentsClose CommentsPermalink





(B) is in default on any loan or other extension of credit from such covered financial company which, if not paid, will cause substantial loss to the Fund or the Corporation.CommentsClose CommentsPermalink





(3) SETTLEMENT OF CLAIMS- Paragraphs (1) and (2) shall not apply to the sale or transfer by the Corporation of any asset of any covered financial company to any person, if the sale or transfer of the asset resolves or settles, or is part of the resolution or settlement, of 1 or more claims that have been, or could have been, asserted by the Corporation against the person.CommentsClose CommentsPermalink





(4) DEFINITION OF DEFAULT- For purposes of this subsection, the term ‘default’ means a failure to comply with the terms of a loan or other obligation to such an extent that the property securing the obligation is foreclosed upon.CommentsClose CommentsPermalink





(s) Recoupment of Compensation From Senior Executives and Directors-CommentsClose CommentsPermalink





(1) IN GENERAL- The Corporation, as receiver of a covered financial company, may recover from any current or former senior executive or director substantially responsible for the failed condition of the covered financial company any compensation received during the 2-year period preceding the date on which the Corporation was appointed as the receiver of the covered financial company, except that, in the case of fraud, no time limit shall apply.CommentsClose CommentsPermalink





(2) COST CONSIDERATIONS- In seeking to recover any such compensation, the Corporation shall weigh the financial and deterrent benefits of such recovery against the cost of executing the recovery.CommentsClose CommentsPermalink





(3) RULEMAKING- The Corporation shall promulgate regulations to implement the requirements of this subsection, including defining the term ‘compensation’ to mean any financial remuneration, including salary, bonuses, incentives, benefits, severance, deferred compensation, or golden parachute benefits, and any profits realized from the sale of the securities of the covered financial company.CommentsClose CommentsPermalink

SEC. 211. MISCELLANEOUS PROVISIONS.CommentsClose CommentsPermalink

(a) Clarification of Prohibition Regarding Concealment of Assets From Receiver or Liquidating Agent- Section 1032(1) of title 18, United States Code, is amended by inserting ‘the Federal Deposit Insurance Corporation acting as receiver for a covered financial company, in accordance with title II of the Restoring American Financial Stability Act of 2010Dodd-Frank Wall Street Reform and Consumer Protection Act,’ before ‘or the National Credit’.CommentsClose CommentsPermalink





(b) Conforming Amendment- Section 1032 of title 18, United States Code, is amended in the section heading, by striking ‘of financial institution’.CommentsClose CommentsPermalink





(c) Federal Deposit Insurance Corporation Improvement Act of 1991- Section 403(a) of the Federal Deposit Insurance Corporation Improvement Act of 1991 (12 U.S.C. 4403(a)) is amended by inserting ‘section 210(c) of the Restoring American Financial Stability Act of 2010, sectionDodd-Frank Wall Street Reform and Consumer Protection Act, section 1367 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4617(d)),’ after ‘section 11(e) of the Federal Deposit Insurance Act,’.CommentsClose CommentsPermalink





(d) FDIC Inspector General Reviews-CommentsClose CommentsPermalink





(1) SCOPE- The Inspector General of the Corporation shall conduct, supervise, and coordinate audits and investigations of the liquidation of any covered financial company by the Corporation as receiver under this title, including collecting and summarizing--CommentsClose CommentsPermalink





(A) a description of actions taken by the Corporation as receiver;CommentsClose CommentsPermalink





(B) a description of any material sales, transfers, mergers, obligations, purchases, and other material transactions entered into by the Corporation;CommentsClose CommentsPermalink





(C) an evaluation of the adequacy of the policies and procedures of the Corporation under section 203(d) and orderly liquidation plan under section 210(n)(14);CommentsClose CommentsPermalink





(D) an evaluation of the utilization by the Corporation of the private sector in carrying out its functions, including the adequacy of any conflict-of-interest reviews; andCommentsClose CommentsPermalink





(E) an evaluation of the overall performance of the Corporation in liquidating the covered financial company, including administrative costs, timeliness of liquidation process, and impact on the financial system.CommentsClose CommentsPermalink





(2) FREQUENCY- Not later than 6 months after the date of appointment of the Corporation as receiver under this title and every 6 months thereafter, the Inspector General of the Corporation shall conduct the audit and investigation described in paragraph (1).CommentsClose CommentsPermalink





(3) REPORTS AND TESTIMONY- The Inspector General of the Corporation shall include in the semiannual reports required by section 5(a) of the Inspector General Act of 1978 (5 U.S.C. App.), a summary of the findings and evaluations under paragraph (1), and shall appear before the appropriate committees of Congress, if requested, to present each such report.CommentsClose CommentsPermalink





(4) FUNDING-CommentsClose CommentsPermalink





(A) INITIAL FUNDING- The expenses of the Inspector General of the Corporation in carrying out this subsection shall be considered administrative expenses of the receivership.CommentsClose CommentsPermalink





(B) ADDITIONAL FUNDING- If the maximum amount available to the Corporation as receiver under this title is insufficient to enable the Inspector General of the Corporation to carry out the duties under this subsection, the Corporation shall pay such additional amounts from assessments imposed under section 210.CommentsClose CommentsPermalink





(5) TERMINATION OF RESPONSIBILITIES- The duties and responsibilities of the Inspector General of the Corporation under this subsection shall terminate 1 year after the date of termination of the receivership under this title.CommentsClose CommentsPermalink





(e) Treasury Inspector General Reviews-CommentsClose CommentsPermalink





(1) SCOPE- The Inspector General of the Department of the Treasury shall conduct, supervise, and coordinate audits and investigations of actions taken by the Secretary related to the liquidation of any covered financial company under this title, including collecting and summarizing--CommentsClose CommentsPermalink





(A) a description of actions taken by the Secretary under this title;CommentsClose CommentsPermalink





(B) an analysis of the approval by the Secretary of the policies and procedures of the Corporation under section 203 and acceptance of the orderly liquidation plan of the Corporation under section 210; andCommentsClose CommentsPermalink





(C) an assessment of the terms and conditions underlying the purchase by the Secretary of obligations of the Corporation under section 210.CommentsClose CommentsPermalink





(2) FREQUENCY- Not later than 6 months after the date of appointment of the Corporation as receiver under this title and every 6 months thereafter, the Inspector General of the Department of the Treasury shall conduct the audit and investigation described in paragraph (1).CommentsClose CommentsPermalink





(3) REPORTS AND TESTIMONY- The Inspector General of the Department of the Treasury shall include in the semiannual reports required by section 5(a) of the Inspector General Act of 1978 (5 U.S.C. App.), a summary of the findings and assessments under paragraph (1), and shall appear before the appropriate committees of Congress, if requested, to present each such report.CommentsClose CommentsPermalink





(4) TERMINATION OF RESPONSIBILITIES- The duties and responsibilities of the Inspector General of the Department of the Treasury under this subsection shall terminate 1 year after the date on which the obligations purchased by the Secretary from the Corporation under section 210 are fully redeemed.CommentsClose CommentsPermalink





(f) Primary Financial Regulatory Agency Inspector General Reviews-CommentsClose CommentsPermalink





(1) SCOPE- Upon the appointment of the Corporation as receiver for a covered financial company supervised by a Federal primary financial regulatory agency or the Board of Governors under section 165, the Inspector General of the agency or the Board of Governors shall make a written report reviewing the supervision by the agency or the Board of Governors of the covered financial company, which shall--CommentsClose CommentsPermalink





(A) evaluate the effectiveness of the agency or the Board of Governors in carrying out its supervisory responsibilities with respect to the covered financial company;CommentsClose CommentsPermalink





(B) identify any acts or omissions on the part of agency or Board of Governors officials that contributed to the covered financial company being in default or in danger of default;CommentsClose CommentsPermalink





(C) identify any actions that could have been taken by the agency or the Board of Governors that would have prevented the company from being in default or in danger of default; andCommentsClose CommentsPermalink





(D) recommend appropriate administrative or legislative action.CommentsClose CommentsPermalink





(2) REPORTS AND TESTIMONY- Not later than 1 year after the date of appointment of the Corporation as receiver under this title, the Inspector General of the Federal primary financial regulatory agency or the Board of Governors shall provide the report required by paragraph (1) to such agency or the Board of Governors, and along with such agency or the Board of Governors, as applicable, shall appear before the appropriate committees of Congress, if requested, to present the report required by paragraph (1). Not later than 90 days after the date of receipt of the report required by paragraph (1), such agency or the Board of Governors, as applicable, shall provide a written report to Congress describing any actions taken in response to the recommendations in the report, and if no such actions were taken, describing the reasons why no actions were taken.CommentsClose CommentsPermalink

SEC. 212. PROHIBITION OF CIRCUMVENTION AND PREVENTION OF CONFLICTS OF INTEREST.CommentsClose CommentsPermalink

(a) No Other Funding- Funds for the orderly liquidation of any covered financial company under this title shall only be provided as specified under this title.CommentsClose CommentsPermalink





(b) Limit on Governmental Actions- No governmental entity may take any action to circumvent the purposes of this title.CommentsClose CommentsPermalink





(c) Conflict of Interest- In the event that the Corporation is appointed receiver for more than 1 covered financial company or is appointed receiver for a covered financial company and receiver for any insured depository institution that is an affiliate of such covered financial company, the Corporation shall take appropriate action, as necessary to avoid any conflicts of interest that may arise in connection with multiple receiverships.CommentsClose CommentsPermalink

SEC. 213. BAN ON CERTAIN ACTIVITIES BY SENIOR EXECUTIVES AND DIRECTORS.CommentsClose CommentsPermalink

(a) Prohibition Authority- The Board of Governors or, if the covered financial company was not supervised by the Board of Governors, the Corporation, may exercise the authority provided by this section.CommentsClose CommentsPermalink





(b) Authority To Issue Order- The appropriate agency described in subsection (a) may take any action authorized by subsection (c), if the agency determines that--CommentsClose CommentsPermalink





(1) a senior executive or a director of the covered financial company, prior to the appointment of the Corporation as receiver, has, directly or indirectly--CommentsClose CommentsPermalink





(A) violated--CommentsClose CommentsPermalink





(i) any law or regulation;CommentsClose CommentsPermalink





(ii) any cease-and-desist order which has become final;CommentsClose CommentsPermalink





(iii) any condition imposed in writing by a Federal agency in connection with any action on any application, notice, or request by such company or senior executive; orCommentsClose CommentsPermalink





(iv) any written agreement between such company and such agency;CommentsClose CommentsPermalink





(B) engaged or participated in any unsafe or unsound practice in connection with any financial company; orCommentsClose CommentsPermalink





(C) committed or engaged in any act, omission, or practice which constitutes a breach of the fiduciary duty of such senior executive or director;CommentsClose CommentsPermalink





(2) by reason of the violation, practice, or breach described in any clausesubparagraph of paragraph (1), such senior executive or director has received financial gain or other benefit by reason of such violation, practice, or breach and such violation, practice, or breach contributed to the failure of the company; andCommentsClose CommentsPermalink





(3) such violation, practice, or breach--CommentsClose CommentsPermalink





(A) involves personal dishonesty on the part of such senior executive or director; orCommentsClose CommentsPermalink





(B) demonstrates willful or continuing disregard by such senior executive or director for the safety or soundness of such company.CommentsClose CommentsPermalink





(c) Authorized Actions-CommentsClose CommentsPermalink





(1) IN GENERAL- The appropriate agency for a financial company, as described in subsection (a), may serve upon a senior executive or director described in subsection (b) a written notice of the intention of the agency to prohibit any further participation by such person, in any manner, in the conduct of the affairs of any financial company for a period of time determined by the appropriate agency to be commensurate with such violation, practice, or breach, provided such period shall be not less than 2 years.CommentsClose CommentsPermalink





(2) PROCEDURES- The due process requirements and other procedures under section 8(e) of the Federal Deposit Insurance Act (12 U.S.C. 1818(e)) shall apply to actions under this section as if the covered financial company were an insured depository institution and the senior executive or director were an institution-affiliated party, as those terms are defined in that Act.CommentsClose CommentsPermalink





(d) Regulations- The Corporation and the Board of Governors, in consultation with the Council, shall jointly prescribe rules or regulations to administer and carry out this section, including rules, regulations, or guidelines to further define the term senior executive for the purposes of this section.CommentsClose CommentsPermalink

SEC. 214. PROHIBITION ON TAXPAYER FUNDING.CommentsClose CommentsPermalink

(a) Liquidation Required- All financial companies put into receivership under this title shall be liquidated. No taxpayer funds shall be used to prevent the liquidation of any financial company under this title.CommentsClose CommentsPermalink





(b) Recovery of Funds- All funds expended in the liquidation of a financial company under this title shall be recovered from the disposition of assets of such financial company, or shall be the responsibility of the financial sector, through assessments.CommentsClose CommentsPermalink





(c) No Losses to Taxpayers- Taxpayers shall bear no losses from the exercise of any authority under this title.CommentsClose CommentsPermalink

TITLE III--TRANSFER OF POWERS TO THE COMPTROLLER OF THE CURRENCY, THE CORPORATION, AND THE BOARD OF GOVERNORSCommentsClose CommentsPermalink

SEC. 300. SHORT TITLE.CommentsClose CommentsPermalink

This title may be cited as the ‘Enhancing Financial Institution Safety and Soundness Act of 2010’.CommentsClose CommentsPermalink

SEC. 301. PURPOSES.CommentsClose CommentsPermalink

The purposes of this title are--CommentsClose CommentsPermalink





(1) to provide for the safe and sound operation of the banking system of the United States;CommentsClose CommentsPermalink





(2) to preserve and protect the dual system of Federal and State-chartered depository institutions;CommentsClose CommentsPermalink





(3) to ensure the fair and appropriate supervision of each depository institution, regardless of the size or type of charter of the depository institution; andCommentsClose CommentsPermalink





(4) to streamline and rationalize the supervision of depository institutions and the holding companies of depository institutions.CommentsClose CommentsPermalink

SEC. 302. DEFINITION.CommentsClose CommentsPermalink

In this title, the term ‘transferred employee’ means, as the context requires, an employee transferred to the Office of the Comptroller of the Currency or the Corporation under section 322.CommentsClose CommentsPermalink

Subtitle A--Transfer of Powers and DutiesCommentsClose CommentsPermalink

SEC. 311. TRANSFER DATE.CommentsClose CommentsPermalink

(a) Transfer Date- Except as provided in subsection (b), the term ‘transfer date’ means the date that is 1 year after the date of enactment of this Act.CommentsClose CommentsPermalink





(b) Extension Permitted-CommentsClose CommentsPermalink





(1) NOTICE REQUIRED- The Secretary, in consultation with the Comptroller of the Currency, the Director of the Office of Thrift Supervision, the Chairman of the Board of Governors, and the Chairperson of the Corporation, may extend the period under subsection (a) and designate a transfer date that is not later than 18 months after the date of enactment of this Act, if the Secretary transmits to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives--CommentsClose CommentsPermalink





(A) a written determination that commencement of the orderly process to implement this title is not feasible by the date that is 1 year after the date of enactment of this Act;CommentsClose CommentsPermalink





(B) an explanation of why an extension is necessary to commence the process of orderly implementation of this title;CommentsClose CommentsPermalink





(C) the transfer date designated under this subsection; andCommentsClose CommentsPermalink





(D) a description of the steps that will be taken to initiate the process of an orderly and timely implementation of this title within the extended time period.CommentsClose CommentsPermalink





(2) PUBLICATION OF NOTICE- Not later than 270 days after the date of enactment of this Act, the Secretary shall publish in the Federal Register notice of any transfer date designated under paragraph (1).CommentsClose CommentsPermalink

SEC. 312. POWERS AND DUTIES TRANSFERRED.CommentsClose CommentsPermalink

(a) Effective Date- This section, and the amendments made by this section, shall take effect on the transfer date.CommentsClose CommentsPermalink





(b) Functions of the Office of Thrift Supervision-CommentsClose CommentsPermalink





(1) SAVINGS AND LOAN HOLDING COMPANY FUNCTIONS TRANSFERRED-CommentsClose CommentsPermalink





(A) TRANSFER OF FUNCTIONS- There are transferred to the Board of Governors all functions of the Office of Thrift Supervision and the Director of the Office of Thrift Supervision (including the authority to issue orders) relating to--CommentsClose CommentsPermalink





(A) the supervision of--

(i) any savings and loan holding company; and

(iii) the supervision of--CommentsClose CommentsPermalink




(I) any savings and loan holding company; andCommentsClose CommentsPermalink





(II) any subsidiary (other than a depository institution) of a savings and loan holding company; andCommentsClose CommentsPermalink





(Bii) all rulemaking authority of the Office of Thrift Supervision and the Director of the Office of Thrift Supervision relating to savings and loan holding companies.CommentsClose CommentsPermalink





(2) B) POWERS, AUTHORITIES, RIGHTS, AND DUTIES- The Board of Governors shall succeed to all powers, authorities, rights, and duties that were vested in the Office of Thrift Supervision and the Director of the Office of Thrift Supervision on the day before the transfer date relating to the functions and authority transferred under subparagraph (A).CommentsClose CommentsPermalink





(2) ALL OTHER FUNCTIONS TRANSFERRED-CommentsClose CommentsPermalink





(A) BOARD OF GOVERNORS- All rulemaking authority of the Office of Thrift Supervision and the Director of the Office of Thrift Supervision under section 11 of the Home Owners’ Loan Act (12 U.S.C. 1468) relating to transactions with affiliates and extensions of credit to executive officers, directors, and principal shareholders and under section 5(q) of such Act relating to tying arrangements is transferred to the Board of Governors.CommentsClose CommentsPermalink





(B) COMPTROLLER OF THE CURRENCY- Except as provided in paragraph (1) and subparagraph (A), --CommentsClose CommentsPermalink





(i) there are transferred tothe Comptroller of the Currency the Office of the Comptroller of the Currency and the Comptroller of the Currency--CommentsClose CommentsPermalink





(I) all functions of the Office of Thrift Supervision and the Director of the Office of Thrift Supervision relating to Federal savings associations.(C) , respectively, relating to Federal savings associations; andCommentsClose CommentsPermalink





(II) all rulemaking authority of the Office of Thrift Supervision and the Director of the Office of Thrift Supervision, respectively, relating to savings associations; andCommentsClose CommentsPermalink





(ii) the Office of the Comptroller of the Currency and the Comptroller of the Currency shall succeed to all powers, authorities, rights, and duties that were vested in the Office of Thrift Supervision and the Director of the Office of Thrift Supervision, respectively, on the day before the transfer date relating to the functions and authority transferred under clause (i).CommentsClose CommentsPermalink





(C) CORPORATION- Except as provided in paragraph (1) and subparagraph (A), all functions of the Office s (A) and (B)--CommentsClose CommentsPermalink





(i) all functions of the Office of Thrift Supervision and the Director of the Office of Thrift Supervision relating to State savings associations are transferred to the Corporation.

(D) COMPTROLLER OF THE CURRENCY AND THE CORPORATION- Except as provided in paragraph (1) and subparagraph (A), all rulemaking authority of the Office of Thrift Supervision and the Director of the Office of Thrift Supervision relating to savings associations is transferred to the Office of the Comptroller of the Currency.

(c) Conforming Amendments-

(1) FEDERAL DEPOSIT INSURANCE ACT- Section 3(q); andCommentsClose CommentsPermalink




(ii) the Corporation shall succeed to all powers, authorities, rights, and duties that were vested in the Office of Thrift Supervision and the Director of the Office of Thrift Supervision on the day before the transfer date relating to the functions transferred under clause (i).CommentsClose CommentsPermalink





(c) Conforming Amendments- Section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)) is amended) is amended--CommentsClose CommentsPermalink





(1) in subsection (q), by striking paragraphs (1) through (4) and inserting the following:CommentsClose CommentsPermalink





‘(1) the Office of the Comptroller of the Currency, in the case of--CommentsClose CommentsPermalink





‘(A) any national banking association;CommentsClose CommentsPermalink





‘(B) any Federal branch or agency of a foreign bank; andCommentsClose CommentsPermalink





‘(C) any Federal savings association;CommentsClose CommentsPermalink





‘(2) the Federal Deposit Insurance Corporation, in the case of--CommentsClose CommentsPermalink





‘(A) any insured State nonmemberState nonmember insured bank;CommentsClose CommentsPermalink





‘(B) any foreign bank having an insured branch; andCommentsClose CommentsPermalink





‘(C) any State savings association;CommentsClose CommentsPermalink





‘(3) the Board of Governors of the Federal Reserve System, in the case of--CommentsClose CommentsPermalink





‘(A) any State member bank;CommentsClose CommentsPermalink





‘(B) any branch or agency of a foreign bank with respect to any provision of the Federal Reserve Act which is made applicable under the International Banking Act of 1978;CommentsClose CommentsPermalink





‘(C) any foreign bank which does not operate an insured branch;CommentsClose CommentsPermalink





‘(D) any agency or commercial lending company other than a Federal agency;CommentsClose CommentsPermalink





‘(E) supervisory or regulatory proceedings arising from the authority given to the Board of Governors under section 7(c)(1) of the International Banking Act of 1978, including such proceedings under the Financial Institutions Supervisory Act of 1966;CommentsClose CommentsPermalink





‘(F) any bank holding company and any subsidiary (other than a depository institution) of a bank holding company; andCommentsClose CommentsPermalink





‘(G) any savings and loan holding company and any subsidiary (other than a depository institution) of a savings and loan holding company.’.

(2) FEDERAL DEPOSIT INSURANCE ACT-

(A) APPLICATION- Section 8(b)(3) of the Federal Deposit Insurance Act (12 U.S.C. 1818(b)(3)) is amended to read as follows:

‘(3) Application to Bank Holding Companies, Savings and Loan Holding Companies, and Edge and Agreement Corporations-

‘(A) APPLICATION- This subsection, subsections (c) through (s) and subsection (u) of this section, and section 50 shall apply to--

‘(i) any bank holding company, and any subsidiary (other than a bank) of a bank holding company, as those terms are defined in section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 1841), as if such company or subsidiary was an insured depository institution for which the appropriate Federal banking agency for the bank holding company was the appropriate Federal banking agency;

‘(ii) any savings and loan holding company, and any subsidiary (other than a depository institution) of a savings and loan holding company, as those terms are defined in section 10 of the Home Owners’ Loan Act (12 U.S.C. 1467a), as if such company or subsidiary was an insured depository institution for which the appropriate Federal banking agency for the savings and loan holding company was the appropriate Federal banking agency; and‘(iii) any organization organized and operated under section 25A of the Federal Reserve Act (12 U.S.C. 611 et seq.) or operating under section 25 of the Federal Reserve Act (12 U.S.C. 601 et seq.) and any noninsured State member bank, as if such organization or bank was a bank holding company.

‘(B) RULES OF CONSTRUCTION-

‘(i) EFFECT ON OTHER AUTHORITY- Nothing in this paragraph may be construed to alter or affect the authority of an appropriate Federal banking agency to initiate enforcement proceedings, issue directives, or take other remedial action under any other provision of law.

‘(ii) HOLDING COMPANIES- Nothing in this paragraph or subsection (c) may be construed as authorizing any Federal banking agency other than the appropriate Federal banking agency for a bank holding company or a savings and loan holding company to initiate enforcement proceedings, issue directives, or take other remedial action against a bank holding company, a savings and loan holding company, or any subsidiary thereof (other than a depository institution).’.

(B) CONFORMING AMENDMENT- Section 8(b)(9) of the Federal Deposit Insurance Act (12 U.S.C. 1818(b)(9)) is amended to read as follows:

‘(9) [Reserved].’; andCommentsClose CommentsPermalink




(2) in paragraphs (1) and (3) of subsection (u), by striking ‘(other than a bank holding company’ and inserting ‘(other than a bank holding company or savings and loan holding company’.CommentsClose CommentsPermalink





(d) Consumer Protection- Nothing in this section may be construed to limit or otherwise affect the transfer of powers under title X.CommentsClose CommentsPermalink

SEC. 313. ABOLISHMENT.CommentsClose CommentsPermalink

Effective 90 days after the transfer date, the Office of Thrift Supervision and the position of Director of the Office of Thrift Supervision are abolished.CommentsClose CommentsPermalink

SEC. 314. AMENDMENTS TO THE REVISED STATUTES.CommentsClose CommentsPermalink

(a) Amendment to Section 324- Section 324 of the Revised Statutes of the United States (12 U.S.C. 1) is amended to read as follows:CommentsClose CommentsPermalink

‘SEC. 324. COMPTROLLER OF THE CURRENCY.CommentsClose CommentsPermalink

‘(a) Office of the Comptroller of the Currency Established- There is established in the Department of the Treasury a bureau to be known as the ‘Office of the Comptroller of the Currency’ which is charged with assuring the safety and soundness of, and compliance with laws and regulations, fair access to financial services, and fair treatment of customers by, the institutions and other persons subject to its jurisdiction.CommentsClose CommentsPermalink





‘(b) Comptroller of the Currency-CommentsClose CommentsPermalink





‘(1) IN GENERAL- The chief officer of the Office of the Comptroller of the Currency shall be known as the Comptroller of the Currency. The Comptroller of the Currency shall perform the duties of the Comptroller of the Currency under the general direction of the Secretary of the Treasury. The Secretary of the Treasury may not delay or prevent the issuance of any rule or the promulgation of any regulation by the Comptroller of the Currency, and may not intervene in any matter or proceeding before the Comptroller of the Currency (including agency enforcement actions), unless otherwise specifically provided by law.CommentsClose CommentsPermalink





‘(2) ADDITIONAL AUTHORITY- The Comptroller of the Currency shall have the same authority with respect to functions transferred to the Comptroller of the Currency under the Enhancing Financial Institution Safety and Soundness Act of 2010 (including matters that were within the jurisdiction of the Director of the Office of Thrift Supervision or the Office of Thrift Supervision on the day before the transfer date under that Act) as was vested in the Director of the Office of Thrift Supervision on the transfer date under, as defined in section 311 of that Act.’.CommentsClose CommentsPermalink





(b) Supervision of Federal Savings Associations- Chapter 9 of title VII of the Revised Statutes of the United States (12 U.S.C. 1 et seq.) is amended by inserting after section 327A (12 U.S.C. 4a) the following:CommentsClose CommentsPermalink

‘SEC. 327B. DEPUTY COMPTROLLER FOR THE SUPERVISION AND EXAMINATION OF FEDERAL SAVINGS ASSOCIATIONS.CommentsClose CommentsPermalink

‘The Comptroller of the Currency shall designate a Deputy Comptroller, who shall be responsible for the supervision and examination of Federal savings associations.’.CommentsClose CommentsPermalink





(c) Amendment to Section 329- Section 329 of the Revised Statutes of the United States (12 U.S.C. 11) is amended by inserting before the period at the end the following: ‘or any Federal savings association’.CommentsClose CommentsPermalink





(cd) Effective Date- This section, and the amendments made by this section, shall take effect on the transfer date.CommentsClose CommentsPermalink

SEC. 315. FEDERAL INFORMATION POLICY.CommentsClose CommentsPermalink

Section 3502(5) of title 44, United States Code, is amended by inserting ‘Office of the Comptroller of the Currency,’ after ‘the Securities and Exchange Commission,’.CommentsClose CommentsPermalink

SEC. 316. SAVINGS PROVISIONS.CommentsClose CommentsPermalink

(a) Office of Thrift Supervision-CommentsClose CommentsPermalink





(1) EXISTING RIGHTS, DUTIES, AND OBLIGATIONS NOT AFFECTED- Sections 312(b) and 313 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, that existed on the day before the transfer date.CommentsClose CommentsPermalink





(2) CONTINUATION OF SUITS- This title shall not abate any action or proceeding commenced by or against the Director of the Office of Thrift Supervision or the Office of Thrift Supervision before the transfer date, except that, for any action or proceeding arising out of a function of the Director of the Office of Thrift Supervision or the Office of Thrift Supervision that is transferred to the Comptroller of the Currency, the Office of the Comptroller of the Currency, the Chairperson of the Corporation, the Corporation, the Chairman of the Board of Governors, or the Board of Governors by this subtitle, the Comptroller of the Currency, the Office of the Comptroller of the Currency, the Chairperson of the Corporation, the Corporation, the Chairman of the Board of Governors, or the Board of Governors shall be substituted for the Director of the Office of Thrift Supervision or--CommentsClose CommentsPermalink





(A) for any action or proceeding arising out of a function of the Office of Thrift Supervision or the Director of the Office of Thrift Supervision transferred to the Board of Governors by this title, the Board of Governors shall be substituted for the Office of Thrift Supervision or the Director of the Office of Thrift Supervision as a party to the action or proceeding on and after the transfer date;CommentsClose CommentsPermalink





(B) for any action or proceeding arising out of a function of the Office of Thrift Supervision or the Director of the Office of Thrift Supervision transferred to the Office of the Comptroller of the Currency or the Comptroller of the Currency by this title, the Office of the Comptroller of the Currency or the Comptroller of the Currency shall be substituted for the Office of Thrift Supervision or the Director of the Office of Thrift Supervision, as appropriate, as a party to the action or proceeding as ofthe case may be, as a party to the action or proceeding on and after the transfer date; andCommentsClose CommentsPermalink





(C) for any action or proceeding arising out of a function of the Office of Thrift Supervision or the Director of the Office of Thrift Supervision transferred to the Corporation by this title, the Corporation shall be substituted for the Office of Thrift Supervision or the Director of the Office of Thrift Supervision as a party to the action or proceeding on and after the transfer date.CommentsClose CommentsPermalink





(b) Continuation of Existing OTS Orders, Resolutions, Determinations, Agreements, Regulations, and Other Materialsetc- All orders, resolutions, determinations, agreements, and regulations, interpretative rules, other interpretations, guidelines, procedures, and other advisory materials that have been , that have been issued, made, prescribed, or allowed to become effective by the Office of Thrift Supervision or the Director of the Office of Thrift Supervision, or by a court of competent jurisdiction, in the performance of functions of the Office of Thrift Supervision that are transferred by this subtitle and that are in effect on the day before the transfer date, shallthat are transferred by this title and that are in effect on the day before the transfer date, shall continue in effect according to the terms of thosesuch orders, resolutions, determinations, agreements, and regulations, interpretative rules, other interpretations, guidelines, procedures, and other advisory materials, and shall be enforceable by or against the Office of the Comptroller of the Currency, the Corporation, or the Board of Governors, as appropriate--CommentsClose CommentsPermalink





(1) the Board of Governors, in the case of a function of the Office of Thrift Supervision or the Director of the Office of Thrift Supervision transferred to the Board of Governors, until modified, terminated, set aside, or superseded in accordance with applicable law by the Board of Governors, by any court of competent jurisdiction, or by operation of law;CommentsClose CommentsPermalink





(2) the Office of the Comptroller of the Currency or the Comptroller of the Currency, in the case of a function of the Office of Thrift Supervision or the Director of the Office of Thrift Supervision transferred to the Office of the Comptroller of the Currency or the Comptroller of the Currency, respectively, until modified, terminated, set aside, or superseded in accordance with applicable law by the Office of the Comptroller of the Currency, the Corporation, or the Board of Governors, as appropriate or the Comptroller of the Currency, by any court of competent jurisdiction, or by operation of law; andCommentsClose CommentsPermalink





(3) the Corporation, in the case of a function of the Office of Thrift Supervision or the Director of the Office of Thrift Supervision transferred to the Corporation, until modified, terminated, set aside, or superseded in accordance with applicable law by the Corporation, by any court of competent jurisdiction, or by operation of law.CommentsClose CommentsPermalink





(c) Identification of Regulations Continued-CommentsClose CommentsPermalink





(1) BY THE BOARD OF GOVERNORS- Not later than the transfer date, the Board of Governors shall--CommentsClose CommentsPermalink





(A) identify the regulations continued under subsection (b) that will be enforced by the Board of Governors; andCommentsClose CommentsPermalink





(B) publish a list of the regulations identified under subparagraph (A) in the Federal Register.CommentsClose CommentsPermalink





(2) BY OFFICE OF THE COMPTROLLER OF THE CURRENCY- Not later than the transfer date, the Office of the Comptroller of the Currency shall--CommentsClose CommentsPermalink





(A) in consultation with after consultation with the Corporation, identify the regulations continued under subsection (b) that will be enforced by the Office of the Comptroller of the Currency; andCommentsClose CommentsPermalink





(B) publish a list of such regulations the regulations identified under subparagraph (A) in the Federal Register.CommentsClose CommentsPermalink





(23) BY THE CORPORATION- Not later than the transfer date, the Corporation shall--CommentsClose CommentsPermalink





(A) in consultation with after consultation with the Office of the Comptroller of the Currency, identify the regulations continued under subsection (b) that will be enforced by the Corporation; andCommentsClose CommentsPermalink





(B) publish a list of such regulations in the Federal Register.

(3) BY THE BOARD OF GOVERNORS- Not later than the transfer date, the Board of Governors shall--

(A) in consultation with the Office of the Comptroller of the Currency and the Corporation, identify the regulations continued under subsection (b) that will be enforced by the Board of Governors; and

(B) publish a list of such regulations the regulations identified under subparagraph (A) in the Federal Register.CommentsClose CommentsPermalink




(d) Status of Regulations Proposed or Not Yet Effective-CommentsClose CommentsPermalink





(1) PROPOSED REGULATIONS- Any proposed regulation of the Office of Thrift Supervision that the Office of Thrift Supervision, in performing functions transferred by this subtitle, has proposed before the transfer date,, which the Office of Thrift Supervision in performing functions transferred by this title, has proposed before the transfer date but has not published as a final regulation before thatsuch date, shall be deemed to be a proposed regulation of the Office of the Comptroller of the Currency or the Board of Governors, as appropriate, according to its termsthe terms of the proposed regulation.CommentsClose CommentsPermalink





(2) REGULATIONS NOT YET EFFECTIVE- Any interim or final regulation of the Office of Thrift Supervision that, which the Office of Thrift Supervision, in performing functions transferred by this subtitle, has published before the transfer date, but which has not become effective before that date, shall become effective as a regulation of the Office of the Comptroller of the Currency or the Board of Governors, as appropriate, according to its termsthe terms of the interim or final regulation, unless modified, terminated, set aside, or superseded in accordance with applicable law by the Office of the Comptroller of the Currency or the Board of Governors, as appropriate, by any court of competent jurisdiction, or by operation of law.CommentsClose CommentsPermalink

SEC. 317. REFERENCES IN FEDERAL LAW TO FEDERAL BANKING AGENCIES.CommentsClose CommentsPermalink

Except as provided in section 312(d)(2), oOn and after the transfer date, any reference in Federal law to the Director of the Office of Thrift Supervision or the Office of Thrift Supervision, in connection with any function of the Director of the Office of Thrift Supervision or the Office of Thrift Supervision transferred under section 312(b) or any other provision of this subtitle, shall be deemed to be a reference to the Comptroller of the Currency, the Office of the Comptroller of the Currency, the Chairperson of the Corporation, the Corporation, the Chairman of the Board of Governors, or the Board of Governors, as appropriate and consistent with the amendments made in subtitle E.CommentsClose CommentsPermalink

SEC. 318. FUNDING.CommentsClose CommentsPermalink

(a) Compensation of Examiners- Section 5240 of the Revised Statutes of the United States (12 U.S.C. 481 et seq.) is amended--CommentsClose CommentsPermalink





(1) in the second undesignated paragraph (12 U.S.C. 481), in the fourth sentence, by striking ‘without regard to the provisions of other laws applicable to officers or employees of the United States’ and inserting the following: ‘set and adjusted subject to chapter 71 of title 5, United States Code, and without regard to the provisions of other laws applicable to officers or employees of the United States’; andCommentsClose CommentsPermalink





(2) in the third undesignated paragraph (12 U.S.C. 482), in the first sentence, by striking ‘shall fix’ and inserting ‘shall, subject to chapter 71 of title 5, United States Code, fix’.CommentsClose CommentsPermalink





(b) Funding of Office of the Comptroller of the Currency- Chapter 4 of title LXII of the Revised Statutes is amended by inserting after section 5240 (12 U.S.C. 481, 482) the following:CommentsClose CommentsPermalink





‘Sec. 5240A. The Comptroller of the Currency may collect an assessment, fee, or other charge from any entity described in section 3(q)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)(1)), as the Comptroller determines is necessary or appropriate to carry out the responsibilities of the Office of the Comptroller of the Currency. In establishing the amount of an assessment, fee, or charge collected from an entity under this section, the Comptroller of the Currency may take into account the funds transferred to the Office of the Comptroller of the Currency under this section, the nature and scope of the activities of the entity, the amount and type of assets that the entity holds, the financial and managerial condition of the entity, and any other factor, as the Comptroller of the Currency determines is appropriate. Funds derived from any assessment, fee, or charge collected or payment made pursuant to this section may be deposited by the Comptroller of the Currency in accordance with the provisions of section 5234. Such funds shall not be construed to be Government funds or appropriated monies, and shall not be subject to apportionment for purposes of chapter 15 of title 31, United States Code, or any other provision of law. The authority of the Comptroller of the Currency under this section shall be in addition to the authority under section 5240.CommentsClose CommentsPermalink





‘The Comptroller of the Currency shall have sole authority to determine the manner in which the obligations of the Office of the Comptroller of the Currency shall be incurred and its disbursements and expenses allowed and paid, in accordance with this section, except as provided in chapter 71 of title 5, United States Code (with respect to compensation).’.CommentsClose CommentsPermalink





(bc) Funding of Board of Governors- Section 11 of the Federal Reserve Act (12 U.S.C. 248) is amended by adding at the end the following:CommentsClose CommentsPermalink





‘(s) Assessments, Fees, and Other Charges for Certain Companies-CommentsClose CommentsPermalink





‘(1) IN GENERAL- The Board shall collect a total amount of assessments, fees, or other charges from the companies described in paragraph (2) that is equal to the total expenses the Board estimates are necessary or appropriate to carry out the responsibilities of the Board with respect to such companies.‘(2)supervisory and regulatory responsibilities of the Board with respect to such companies.CommentsClose CommentsPermalink





‘(2) COMPANIES- The companies described in this paragraph are--CommentsClose CommentsPermalink





‘(A) all bank holding companies having total consolidated assets of $50,000,000,000 or more;CommentsClose CommentsPermalink





‘(B) all savings and loan holding companies having total consolidated assets of $50,000,000,000 or more; andCommentsClose CommentsPermalink





‘(C) all nonbank financial companies supervised by the Board under section 113 of the Restoring American Financial Stability Act of 2010Dodd-Frank Wall Street Reform and Consumer Protection Act.’.CommentsClose CommentsPermalink





(cd) Corporation Examination Fees- Section 10(e) of the Federal Deposit Insurance Act (12 U.S.C. 1820(e)) is amended by striking paragraph (1) and inserting the following:CommentsClose CommentsPermalink





‘(1) REGULAR AND SPECIAL EXAMINATIONS OF DEPOSITORY INSTITUTIONS- The cost of conducting any regular examination or special examination of any depository institution under subsection (b)(2), (b)(3), or (d) or of any entity described in section 3(q)(2) may be assessed by the Corporation against the institution or entity to meet the expenses of the Corporation in carrying out such examinations, or as the Corporation determines is necessary or appropriate to carry out the responsibilities of the Corporation.’.(d.’.CommentsClose CommentsPermalink





(e) Effective Date- This section, and the amendments made by this section, shall take effect on the transfer date.CommentsClose CommentsPermalink

SEC. 319. CONTRACTING AND LEASING AUTHORITY.CommentsClose CommentsPermalink

Notwithstanding the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 251 et seq.) or any other provision of law (except the full and open competition requirements of the Competition in Contracting Act), the Office of the Comptroller of the Currency may--CommentsClose CommentsPermalink





(1) enter into and perform contracts, execute instruments, and acquire, in any lawful manner, such goods and services, or personal or real property (or property interest) as the Comptroller deems necessary to carry out the duties and responsibilities of the Office of the Comptroller of the Currency; andCommentsClose CommentsPermalink





(2) hold, maintain, sell, lease, or otherwise dispose of the property (or property interest) acquired under paragraph (1).CommentsClose CommentsPermalink

Subtitle B--Transitional ProvisionsCommentsClose CommentsPermalink

SEC. 321. INTERIM USE OF FUNDS, PERSONNEL, AND PROPERTY OF THE OFFICE OF THRIFT SUPERVISION.CommentsClose CommentsPermalink

(a) In General- Before the transfer date, the Office of the Comptroller of the Currency, the Corporation, and the Board of Governors shall--CommentsClose CommentsPermalink





(1) consult and cooperate with the Office of Thrift Supervision to facilitate the orderly transfer of functions to the Office of the Comptroller of the Currency, the Corporation, and the Board of Governors in accordance with this title;CommentsClose CommentsPermalink





(2) determine jointly, from time to time--CommentsClose CommentsPermalink





(A) the amount of funds necessary to pay any expenses associated with the transfer of functions (including expenses for personnel, property, and administrative services) during the period beginning on the date of enactment of this Act and ending on the transfer date;CommentsClose CommentsPermalink





(B) which personnel are appropriate to facilitate the orderly transfer of functions by this title; andCommentsClose CommentsPermalink





(C) what property and administrative services are necessary to support the Office of the Comptroller of the Currency, the Corporation, and the Board of Governors during the period beginning on the date of enactment of this Act and ending on the transfer date; andCommentsClose CommentsPermalink





(3) take such actions as may be necessary to provide for the orderly implementation of this title.CommentsClose CommentsPermalink





(b) Agency Consultation- When requested jointly by the Office of the Comptroller of the Currency, the Corporation, and the Board of Governors to do so before the transfer date, the Office of Thrift Supervision shall--CommentsClose CommentsPermalink





(1) pay to the Office of the Comptroller of the Currency, the Corporation, or the Board of Governors, as applicable, from funds obtained by the Office of Thrift Supervision through assessments, fees, or other charges that the Office of Thrift Supervision is authorized by law to impose, such amounts as the Office of the Comptroller of the Currency, the Corporation, and the Board of Governors jointly determine to be necessary under subsection (a);CommentsClose CommentsPermalink





(2) detail to the Office of the Comptroller of the Currency, the Corporation, or the Board of Governors, as applicable, such personnel as the Office of the Comptroller of the Currency, the Corporation, and the Board of Governors jointly determine to be appropriate under subsection (a); andCommentsClose CommentsPermalink





(3) make available to the Office of the Comptroller of the Currency, the Corporation, or the Board of Governors, as applicable, such property and provide to the Office of the Comptroller of the Currency, the Corporation, or the Board of Governors, as applicable, such administrative services as the Office of the Comptroller of the Currency, the Corporation, and the Board of Governors jointly determine to be necessary under subsection (a).CommentsClose CommentsPermalink





(c) Notice Required- The Office of the Comptroller of the Currency, the Corporation, and the Board of Governors shall jointly give the Office of Thrift Supervision reasonable prior notice of any request that the Office of the Comptroller of the Currency, the Corporation, and the Board of Governors jointly intend to make under subsection (b).CommentsClose CommentsPermalink

SEC. 322. TRANSFER OF EMPLOYEES.CommentsClose CommentsPermalink

(a) In General-CommentsClose CommentsPermalink





(1) OFFICE OF THRIFT SUPERVISION EMPLOYEES-CommentsClose CommentsPermalink





(A) IN GENERAL- AExcept as provided in section 1064, all employees of the Office of Thrift Supervision shall be transferred to the Office of the Comptroller of the Currency or the Corporation for employment in accordance with this section.CommentsClose CommentsPermalink





(B) ALLOCATING EMPLOYEES FOR TRANSFER TO RECEIVING AGENCIES- The Director of the Office of Thrift Supervision, the Comptroller of the Currency, and the Chairperson of the Corporation shall--CommentsClose CommentsPermalink





(i) jointly determine the number of employees of the Office of Thrift Supervision necessary to perform or support the functions that are transferred to the Office of the Comptroller of the Currency or the Corporation by this title; andCommentsClose CommentsPermalink





(ii) consistent with the determination under clause (i), jointly identify employees of the Office of Thrift Supervision for transfer to the Office of the Comptroller of the Currency or the Corporation.CommentsClose CommentsPermalink





(2) EMPLOYEES TRANSFERRED; SERVICE PERIODS CREDITED- For purposes of this section, periods of service with a Federal home loan bank, a joint office of Federal home loan banks, or a Federal reserve bank shall be credited as periods of service with a Federal agency.CommentsClose CommentsPermalink





(3) APPOINTMENT AUTHORITY FOR EXCEPTED SERVICE TRANSFERRED-CommentsClose CommentsPermalink





(A) IN GENERAL- Except as provided in subparagraph (B), any appointment authority of the Office of Thrift Supervision under Federal law that relates to the functions transferred under section 312, including the regulations of the Office of Personnel Management, for filling the positions of employees in the excepted service shall be transferred to the Comptroller of the Currency or the Chairperson of the Corporation, as appropriate.CommentsClose CommentsPermalink





(B) DECLINING TRANSFERS ALLOWED- The Office of the Comptroller of the Currency or the Chairperson of the Corporation may decline to accept a transfer of authority under subparagraph (A) (and the employees appointed under that authority) to the extent that such authority relates to positions excepted from the competitive service because of their confidential, policy-making, policy-determining, or policy-advocating character.CommentsClose CommentsPermalink





(4) ADDITIONAL APPOINTMENT AUTHORITY- Notwithstanding any other provision of law, the Office of the Comptroller of the Currency and the Corporation may appoint transferred employees to positions in the Office of the Comptroller of the Currency or the Corporation, respectively.CommentsClose CommentsPermalink





(b) Timing of Transfers and Position Assignments- Each employee to be transferred under subsection (a)(1) shall--CommentsClose CommentsPermalink





(1) be transferred not later than 90 days after the transfer date; andCommentsClose CommentsPermalink





(2) receive notice of the position assignment of the employee not later than 120 days after the effective date of the transfer of the employee.CommentsClose CommentsPermalink





(c) Transfer of Functions-CommentsClose CommentsPermalink





(1) IN GENERAL- Notwithstanding any other provision of law, the transfer of employees under this subtitle shall be deemed a transfer of functions for the purpose of section 3503 of title 5, United States Code.CommentsClose CommentsPermalink





(2) PRIORITY- If any provision of this subtitle conflicts with any protection provided to a transferred employee under section 3503 of title 5, United States Code, the provisions of this subtitle shall control.CommentsClose CommentsPermalink





(d) Employee Status and Eligibility- The transfer of functions and employees under this subtitle, and the abolishment of the Office of Thrift Supervision under section 313, shall not affect the status of the transferred employees as employees of an agency of the United States under any provision of law.CommentsClose CommentsPermalink





(e) Equal Status and Tenure Positions-CommentsClose CommentsPermalink





(1) STATUS AND TENURE- Each transferred employee from the Office of Thrift Supervision shall be placed in a position at the Office of the Comptroller of the Currency or the Corporation with the same status and tenure as the transferred employee held on the day before the date on which the employee was transferred.CommentsClose CommentsPermalink





(2) FUNCTIONS- To the extent practicable, each transferred employee shall be placed in a position at the Office of the Comptroller of the Currency or the Corporation, as applicable, responsible for the same functions and duties as the transferred employee had on the day before the date on which the employee was transferred, in accordance with the expertise and preferences of the transferred employee.CommentsClose CommentsPermalink





(f) No Additional Certification Requirements- An examiner who is a transferred employee shall not be subject to any additional certification requirements before being placed in a comparable position at the Office of the Comptroller of the Currency or the Corporation, if the examiner carries out examinations of the same type of institutions as an employee of the Office of the Comptroller of the Currency or the Corporation as the employee was responsible for carrying out before the date on which the employee was transferred.CommentsClose CommentsPermalink





(g) Personnel Actions Limited-CommentsClose CommentsPermalink





(1) 2-year PROTECTION- Except as provided in paragraph (2), during the 2-year period beginning on the transfer date, an employee holding a permanent position on the day before the date on which the employee was transferred shall notPROTECTION-CommentsClose CommentsPermalink





(A) IN GENERAL- Except as provided in paragraph (2), each affected employee shall not, during the 30-month period beginning on the transfer date, be involuntarily separated, or involuntarily reassigned outside thehis or her locality pay area (as defined by the Office of Personnel Management) of the employee.(2) EXCEPTIONS- The Comptroller of the Currency and the Chairperson of the Corporation, as applicable, may.CommentsClose CommentsPermalink





(B) AFFECTED EMPLOYEES- For purposes of this paragraph, the term ‘affected employee’ means--CommentsClose CommentsPermalink





(i) an employee transferred from the Office of Thrift Supervision holding a permanent position on the day before the transfer date; andCommentsClose CommentsPermalink





(ii) an employee of the Office of the Comptroller of the Currency or the Corporation holding a permanent position on the day before the transfer date.CommentsClose CommentsPermalink





(2) EXCEPTIONS- Paragraph (1) does not limit the right of the Office of the Comptroller of the Currency or the Corporation to--CommentsClose CommentsPermalink





(A) separate a transferred employee for cause, includingn employee for cause or for unacceptable performance;CommentsClose CommentsPermalink





or(B) terminate an appointment to a position excepted from the competitive service because of its confidential policy-making, policy-determining, or policy-advocating character; orCommentsClose CommentsPermalink





(C) reassign an employee outside such employee’s locality pay area when the Office of the Comptroller of the Currency or the Corporation determines that the reassignment is necessary for the efficient operation of the agency.CommentsClose CommentsPermalink





(h) Pay-CommentsClose CommentsPermalink





(1) 2-year30-month PROTECTION- Except as provided in paragraph (2), during the 2-year period beginning on 30-month period beginning on the date on which the employee was transferred under this subtitle, a transferred employee shall be paid at a rate that is not less than the basic rate of pay, including any geographic differential, that the transferred employee received during the pay period immediately preceding the date on which the employee was transferred.(2) Notwithstanding the preceding sentence, if the employee was receiving a higher rate of basic pay on a temporary basis (because of a temporary assignment, temporary promotion, or other temporary action) immediately before the transfer, the Agency may reduce the rate of basic pay on the date the rate would have been reduced but for the transfer, and the protected rate for the remainder of the 30-month period will be the reduced rate that would have applied but for the transfer.CommentsClose CommentsPermalink





(2) EXCEPTIONS- The Comptroller of the Currency or the Chairman of the Board of Governorsorporation may reduce the rate of basic pay of a transferred employee--CommentsClose CommentsPermalink





(A) for cause, including for unacceptable performance; orCommentsClose CommentsPermalink





(B) with the consent of the transferred employee.CommentsClose CommentsPermalink





(3) PROTECTION ONLY WHILE EMPLOYED- This subsection shall apply to a transferred employee only during the period that the transferred employee remains employed by Office of the Comptroller of the Currency or the Corporation.CommentsClose CommentsPermalink





(4) PAY INCREASES PERMITTED- Nothing in this subsection shall limit the authority of the Comptroller of the Currency or the Chairperson of the Corporation to increase the pay of a transferred employee.CommentsClose CommentsPermalink





(i) Benefits-CommentsClose CommentsPermalink





(1) RETIREMENT BENEFITS FOR TRANSFERRED EMPLOYEES-CommentsClose CommentsPermalink





(A) IN GENERAL-CommentsClose CommentsPermalink





(i) CONTINUATION OF EXISTING RETIREMENT PLAN- Each transferred employee shall remain enrolled in the retirement plan of the transferred employee, for as long as the transferred employee is employed by the Office of the Comptroller of the Currency or the Corporation.CommentsClose CommentsPermalink





(ii) Employer’s CONTRIBUTION- The Comptroller of the Currency or the Chairperson of the Corporation, as appropriate, shall pay any employer contributions to the existing retirement plan of each transferred employee, as required under each such existing retirement plan.CommentsClose CommentsPermalink





(B) DEFINITION- In this paragraph, the term ‘existing retirement plan’ means, with respect to a transferred employee, the retirement plan (including the Financial Institutions Retirement Fund), and any associated thrift savings plan, of the agency from which the employee was transferred in which the employee was enrolled on the day before the date on which the employee was transferred.CommentsClose CommentsPermalink





(2) BENEFITS OTHER THAN RETIREMENT BENEFITS-CommentsClose CommentsPermalink





(A) DURING FIRST YEAR-CommentsClose CommentsPermalink





(i) EXISTING PLANS CONTINUE- During the 1-year period following the transfer date, each transferred employee may retain membership in any employee benefit program (other than a retirement benefit program) of the agency from which the employee was transferred under this title, including any dental, vision, long term care, or life insurance program to which the employee belonged on the day before the transfer date.CommentsClose CommentsPermalink





(ii) Employer’s CONTRIBUTION- The Office of the Comptroller of the Currency or the Corporation, as appropriate, shall pay any employer cost required to extend coverage in the benefit program to the transferred employee as required under that program or negotiated agreements.CommentsClose CommentsPermalink





(B) DENTAL, VISION, OR LIFE INSURANCE AFTER FIRST YEAR- If, after the 1-year period beginning on the transfer date, the Office of the Comptroller of the Currency or the Corporation determines that the Office of the Comptroller of the Currency or the Corporation, as the case may be, will not continue to participate in any dental, vision, or life insurance program of an agency from which an employee was transferred, a transferred employee who is a member of the program may, before the decision takes effect and without regard to any regularly scheduled open season, elect to enroll in--CommentsClose CommentsPermalink





(i) the enhanced dental benefits program established under chapter 89A of title 5, United States Code;CommentsClose CommentsPermalink





(ii) the enhanced vision benefits established under chapter 89B of title 5, United States Code; andCommentsClose CommentsPermalink





(iii) the Federal Employees’ Group Life Insurance Program established under chapter 87 of title 5, United States Code, without regard to any requirement of insurability.CommentsClose CommentsPermalink





(C) LONG TERM CARE INSURANCE AFTER 1ST YEAR- If, after the 1-year period beginning on the transfer date, the Office of the Comptroller of the Currency or the Corporation determines that the Office of the Comptroller of the Currency or the Corporation, as appropriate, will not continue to participate in any long term care insurance program of an agency from which an employee transferred, a transferred employee who is a member of such a program may, before the decision takes effect, elect to apply for coverage under the Federal Long Term Care Insurance Program established under chapter 90 of title 5, United States Code, under the underwriting requirements applicable to a new active workforce member, as described in part 875 of title 5, Code of Federal Regulations (or any successor thereto).CommentsClose CommentsPermalink





(D) CONTRIBUTION OF TRANSFERRED EMPLOYEE-CommentsClose CommentsPermalink





(i) IN GENERAL- Subject to clause (ii), a transferred employee who is enrolled in a plan under the Federal Employees Health Benefits Program shall pay any employee contribution required under the plan.CommentsClose CommentsPermalink





(ii) COST DIFFERENTIAL- The Office of the Comptroller of the Currency or the Corporation, as applicable, shall pay any difference in cost between the employee contribution required under the plan provided to transferred employees by the agency from which the employee transferred on the date of enactment of this Act and the plan provided by the Office of the Comptroller of the Currency or the Corporation, as the case may be, under this section.CommentsClose CommentsPermalink





(iii) FUNDS TRANSFER- The Office of the Comptroller of the Currency or the Corporation, as the case may be, shall transfer to the Employees Health Benefits Fund established under section 8909 of title 5, United States Code, an amount determined by the Director of the Office of Personnel Management, after consultation with the Comptroller of the Currency or the Chairperson of the Corporation, as the case may be, and the Office of Management and Budget, to be necessary to reimburse the Fund for the cost to the Fund of providing any benefits under this subparagraph that are not otherwise paid for by a transferred employee under clause (i).CommentsClose CommentsPermalink





(E) SPECIAL PROVISIONS TO ENSURE CONTINUATION OF LIFE INSURANCE BENEFITS-CommentsClose CommentsPermalink





(i) IN GENERAL- An annuitant, as defined in section 8901 of title 5, United States Code, who is enrolled in a life insurance plan administered by an agency from which employees are transferred under this title on the day before the transfer date shall be eligible for coverage by a life insurance plan under sections 8706(b), 8714a, 8714b, or 8714c of title 5, United States Code, or by a life insurance plan established by the Office of the Comptroller of the Currency or the Corporation, as applicable, without regard to any regularly scheduled open season or any requirement of insurability.CommentsClose CommentsPermalink





(ii) CONTRIBUTION OF TRANSFERRED EMPLOYEE-CommentsClose CommentsPermalink





(I) IN GENERAL- Subject to subclause (II), a transferred employee enrolled in a life insurance plan under this subparagraph shall pay any employee contribution required by the plan.CommentsClose CommentsPermalink





(II) COST DIFFERENTIAL- The Office of the Comptroller of the Currency or the Corporation, as the case may be, shall pay any difference in cost between the benefits provided by the agency from which the employee transferred on the date of enactment of this Act and the benefits provided under this section.CommentsClose CommentsPermalink





(III) FUNDS TRANSFER- The Office of the Comptroller of the Currency or the Corporation, as the case may be, shall transfer to the Federal Employees’ Group Life Insurance Fund established under section 8714 of title 5, United States Code, an amount determined by the Director of the Office of Personnel Management, after consultation with the Comptroller of the Currency or the Chairperson of the Corporation, as the case may be, and the Office of Management and Budget, to be necessary to reimburse the Federal Employees’ Group Life Insurance Fund for the cost to the Federal Employees’ Group Life Insurance Fund of providing benefits under this subparagraph not otherwise paid for by a transferred employee under subclause (I).CommentsClose CommentsPermalink





(IV) CREDIT FOR TIME ENROLLED IN OTHER PLANS- For any transferred employee, enrollment in a life insurance plan administered by the agency from which the employee transferred, immediately before enrollment in a life insurance plan under chapter 87 of title 5, United States Code, shall be considered as enrollment in a life insurance plan under that chapter for purposes of section 8706(b)(1)(A) of title 5, United States Code.CommentsClose CommentsPermalink





(j) Incorporation Into Agency Pay System- Not later than 2 years after the transfer 30 months after the transfer date, the Comptroller of the Currency and the Chairperson of the Corporation shall place each transferred employee into the established pay system and structure of the appropriate employing agency.CommentsClose CommentsPermalink





(k) Equitable Treatment- In administering the provisions of this section, the Comptroller of the Currency and the Chairperson of the Corporation--CommentsClose CommentsPermalink





(1) may not take any action that would unfairly disadvantage a transferred employee relative to any other employee of the Office of the Comptroller of the Currency or the Corporation on the basis of prior employment by the Office of Thrift Supervision;CommentsClose CommentsPermalink





and(2) may take such action as is appropriate in an individual case to ensure that a transferred employee receives equitable treatment, with respect to the status, tenure, pay, benefits (other than benefits under programs administered by the Office of Personnel Management), and accrued leave or vacation time for prior periods of service with any Federal agency of the transferred employee.(l) ;CommentsClose CommentsPermalink





(3) shall, jointly with the Director of the Office of Thrift Supervision, develop and adopt procedures and safeguards designed to ensure that the requirements of this subsection are met; andCommentsClose CommentsPermalink





(4) shall conduct a study detailing the position assignments of all employees transferred pursuant to subsection (a), describing the procedures and safeguards adopted pursuant to paragraph (3), and demonstrating that the requirements of this subsection have been met; and shall, not later than 365 days after the transfer date, submit a copy of such study to Congress.CommentsClose CommentsPermalink





(l) Reorganization-CommentsClose CommentsPermalink





(1) IN GENERAL- If the Comptroller of the Currency or the Chairperson of the Corporation determines, during the 2-year period beginning 1 year after the transfer date, that a reorganization of the staff of the Office of the Comptroller of the Currency or the Corporation, respectively, is required, the reorganization shall be deemed a ‘major reorganization’ for purposes of affording affected employees retirement under section 8336(d)(2) or 8414(b)(1)(B) of title 5, United States Code.CommentsClose CommentsPermalink





(2) SERVICE CREDIT- For purposes of this subsection, periods of service with a Federal home loan bank or a joint office of Federal home loan banks shall be credited as periods of service with a Federal agency.CommentsClose CommentsPermalink

SEC. 323. PROPERTY TRANSFERRED.CommentsClose CommentsPermalink

(a) Property Defined- For purposes of this section, the term ‘property’ includes all real property (including leaseholds) and all personal property, including computers, furniture, fixtures, equipment, books, accounts, records, reports, files, memoranda, paper, reports of examination, work papers, and correspondence related to such reports, and any other information or materials.CommentsClose CommentsPermalink





(b) Property of the Office of Thrift Supervision-CommentsClose CommentsPermalink





Not later than 90 days after the transfer date, all property of the Office of Thrift Supervision(1) IN GENERAL- No later than 90 days after the transfer date, all property of the Office of Thrift Supervision (other than property described under paragraph (b)(2)) that the Comptroller of the Currency and the Chairperson of the Corporation jointly determine is used, on the day before the transfer date, to perform or support the functions of the Office of Thrift Supervision transferred to the Office of the Comptroller of the Currency or the Corporation under this title, shall be transferred to the Office of the Comptroller of the Currency or the Corporation in a manner consistent with the transfer of employees under this subtitle.CommentsClose CommentsPermalink





(c) 2) PERSONAL PROPERTY- All books, accounts, records, reports, files, memoranda, papers, documents, reports of examination, work papers, and correspondence of the Office of Thrift Supervision that the Comptroller of the Currency, the Chairperson of the Corporation, and the Chairman of the Board of Governors jointly determine is used, on the day before the transfer date, to perform or support the functions of the Office of Thrift Supervision transferred to the Board of Governors under this title shall be transferred to the Board of Governors in a manner consistent with the purposes of this title.CommentsClose CommentsPermalink





(c) Contracts Related to Property Transferred- Each contract, agreement, lease, license, permit, and similar arrangement relating to property transferred to the Office of the Comptroller of the Currency or the Corporation by this section shall be transferred to the Office of the Comptroller of the Currency or the Corporation, as appropriate, together with the property to which it relates.CommentsClose CommentsPermalink





(d) Preservation of Property- Property identified for transfer under this section shall not be altered, destroyed, or deleted before transfer under this section.CommentsClose CommentsPermalink

SEC. 324. FUNDS TRANSFERRED.CommentsClose CommentsPermalink

The funds that, on the day before the transfer date, the Director of the Office of Thrift Supervision (in consultation with the Comptroller of the Currency, the Chairperson of the Corporation, and the Chairman of the Board of Governors) determines are not necessary to dispose of the affairs of the Office of Thrift Supervision under section 325 and are available to the Office of Thrift Supervision to pay the expenses of the Office of Thrift Supervision--CommentsClose CommentsPermalink





(1) relating to the functions of the Office of Thrift Supervision transferred under section 312(b)(12)(B), shall be transferred to the Office of the Comptroller of the Currency on the transfer date;CommentsClose CommentsPermalink





(2) relating to the functions of the Office of Thrift Supervision transferred under section 312(b)(12)(C), shall be transferred to the Corporation on the transfer date; andCommentsClose CommentsPermalink





(3) relating to the functions of the Office of Thrift Supervision transferred under section 312(b)(1)(A), shall be transferred to the Board of Governors on the transfer date.CommentsClose CommentsPermalink

SEC. 325. DISPOSITION OF AFFAIRS.CommentsClose CommentsPermalink

(a) Authority of Director- During the 90-day period beginning on the transfer date, the Director of the Office of Thrift Supervision--CommentsClose CommentsPermalink





(1) shall, solely for the purpose of winding up the affairs of the Office of Thrift Supervision relating to any function transferred to the Office of the Comptroller of the Currency, the Corporation, or the Board of Governors under this title--CommentsClose CommentsPermalink





(A) manage the employees of the Office of Thrift Supervision who have not yet been transferred and provide for the payment of the compensation and benefits of the employees that accrue before the date on which the employees are transferred under this title; andCommentsClose CommentsPermalink





(B) manage any property of the Office of Thrift Supervision, until the date on which the property is transferred under section 323; andCommentsClose CommentsPermalink





(2) may take any other action necessary to wind up the affairs of the Office of Thrift Supervision.CommentsClose CommentsPermalink





(b) Status of Director-CommentsClose CommentsPermalink





(1) IN GENERAL- Notwithstanding the transfer of functions under this subtitle, during the 90-day period beginning on the transfer date, the Director of the Office of Thrift Supervision shall retain and may exercise any authority vested in the Director of the Office of Thrift Supervision on the day before the transfer date, only to the extent necessary--CommentsClose CommentsPermalink





(A) to wind up the Office of Thrift Supervision; andCommentsClose CommentsPermalink





(B) to carry out the transfer under this subtitle during such 90-day period.CommentsClose CommentsPermalink





(2) OTHER PROVISIONS- For purposes of paragraph (1), the Director of the Office of Thrift Supervision shall, during the 90-day period beginning on the transfer date, continue to be--CommentsClose CommentsPermalink





(A) treated as an officer of the United States; andCommentsClose CommentsPermalink





(B) entitled to receive compensation at the same annual rate of basic pay that the Director of the Office of Thrift Supervision received on the day before the transfer date.CommentsClose CommentsPermalink

SEC. 326. CONTINUATION OF SERVICES.CommentsClose CommentsPermalink

Any agency, department, or other instrumentality of the United States, and any successor to any such agency, department, or instrumentality, that was, before the transfer date, providing support services to the Office of Thrift Supervision in connection with functions transferred to the Office of the Comptroller of the Currency, the Corporation or the Board of Governors under this title, shall--CommentsClose CommentsPermalink





(1) continue to provide such services, subject to reimbursement by the Office of the Comptroller of the Currency, the Corporation, or the Board of Governors, until the transfer of functions under this title is complete; andCommentsClose CommentsPermalink





(2) consult with the Comptroller of the Currency, the Chairperson of the Corporation, or the Chairman of the Board of Governors, as appropriate, to coordinate and facilitate a prompt and orderly transition.CommentsClose CommentsPermalink

Subtitle C--Federal Deposit Insurance CorporationCommentsClose CommentsPermalink

SEC. 331. DEPOSIT INSURANCE REFORMS.CommentsClose CommentsPermalink

(a) Size Distinctions- Section 7(b)(2) of the Federal Deposit Insurance Act (12 U.S.C. 1817(b)(2)) is amended--CommentsClose CommentsPermalink





(1) by striking subparagraph (D); andCommentsClose CommentsPermalink





(2) by redesignating subparagraph (C) as subparagraph (D).CommentsClose CommentsPermalink





(b) Assessment Base- The Corporation shall amend the regulations issued by the Corporation under section 7(b)(2) of the Federal Deposit Insurance Act (12 U.S.C. 1817(b)(2)) to define the term ‘assessment base’ with respect to an insured depository institution for purposes of that section 7(b)(2), as an amount equal to--CommentsClose CommentsPermalink





(1) the average consolidated total assets of the insured depository institution during the assessment period; minusCommentsClose CommentsPermalink





(2) the sum of--CommentsClose CommentsPermalink





(A) the average tangible equity of the insured depository institution during the assessment period; andCommentsClose CommentsPermalink





(B) in the case of an insured depository institution that is a custodial bank (as defined by the Corporation, based on factors including the percentage of total revenues generated by custodial businesses and the level of assets under custody) or a banker’s bank (as that term is used in section 5136 of the Revised Statutes (12 U.S.C. 24)), an amount that the Corporation determines is necessary to establish assessments consistent with the definition under section 7(b)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1817(b)(1)) for a custodial bank or a banker’s bank.CommentsClose CommentsPermalink

SEC. 332. ELIMINATION OF PROCYCLICAL ASSESSMENTS.CommentsClose CommentsPermalink

SEC. 336. MANAGEMENT OF THE FEDERAL DEPOSIT INSURANCE CORPORATION.CommentsClose CommentsPermalink

(a) In General- Section 2 of the Federal Deposit Insurance Act (12 U.S.C. 1812) is amended--CommentsClose CommentsPermalink





(1) in subsection (a)(1)(B), by striking ‘Director of the Office of Thrift Supervision’ and inserting ‘Director of the Consumer Financial Protection Bureau’;CommentsClose CommentsPermalink





(2) by amending subsection (d)(2) to read as follows:CommentsClose CommentsPermalink





‘(2) ACTING OFFICIALS MAY SERVE- In the event of a vacancy in the Ooffice of the Comptroller of the Currency or the office of Director of the Consumer Financial Protection Bureau and pending the appointment of a successor, or during the absence or disability of the Comptroller of the Currency, the acting Comptroller of the Currency or the Director of the Consumer Financial Protection Bureau, the acting Comptroller of the Currency or the acting Director of the Consumer Financial Protection Bureau, as the case may be, shall be a member of the Board of Directors in the place of the Comptroller of the Currencyr Director.’; andCommentsClose CommentsPermalink





(3) in subsection (f)(2), by striking ‘or of the Office of Thrift SupervisionOffice of Thrift Supervision’ and inserting ‘Consumer Financial Protection Bureau’.CommentsClose CommentsPermalink





(b) Effective Date- This section, and the amendments made by this section, shall take effect on the transfer date.CommentsClose CommentsPermalink

Subtitle D--Termination of Federal Thrift CharterOther MattersCommentsClose CommentsPermalink

SEC. 341. TERMINATION OF FEDERAL SAVINGS ASSOCIATIONS.

(a) In General- Beginning on the date of enactment of this Act, the Director of the Office of Thrift Supervision, or the Comptroller of the Currency, may not issue a charter for a Federal savings association under section 5 of the Home Owners’ Loan Act (12 U.S.C. 1464).

(b) Conforming Amendment- Section 5(a) of the Home Owner’s Loan Act (12 U.S.C. 1464(a)) is amended to read as follows:

‘(a) In General- In order to provide thrift institutions for the deposit of funds and for the extension of credit for homes and other goods and services, the Comptroller of the Currency is authorized, under such regulations as the Comptroller of the Currency may prescribe, to provide for the examination, operation, and regulation of associations to be known as ‘Federal savings associations’ (including Federal savings banks), giving primary consideration to the best practices of thrift institutions in the United States. The lending and investment powers conferred by this section are intended to encourage such institutions to provide credit for housing safely and soundly.’.

(c) Prospective Repeal- Effective on the date on which the Comptroller of the Currency determines that no Federal savings associations exist, section 5 of the Home Owner’s Loan Act (12 U.S.C. 1464) is repealed.

SEC. 342. BRANCHING.CommentsClose CommentsPermalink

Notwithstanding the Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.), the Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.), or any other provision of Federal or State law, a savings association that becomes a bank may--CommentsClose CommentsPermalink





(1) continue to operate any branch or agency that the savings association operated immediately before the savings association became a bank; andCommentsClose CommentsPermalink





(2) establish, acquire, and operate additional branches and agencies at any location within any State in which the savings association operated a branch immediately before the savings association became a bank, if the law of the State in which the branch is located, or is to be located, would permit establishment of the branch if the bank were a State bank chartered by such State.CommentsClose CommentsPermalink

Title 31, United States Code, is amended--CommentsClose CommentsPermalink





(1) in section 321--CommentsClose CommentsPermalink





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





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





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





(iii) by striking paragraph (3); andCommentsClose CommentsPermalink





(B) by striking subsection (e); andCommentsClose CommentsPermalink





(2) in section 714(a), by striking ‘the Office of the Comptroller of the Currency, and the Office of Thrift Supervision.’ and inserting ‘and the Office of the Comptroller of the Currency.’.CommentsClose CommentsPermalink

TITLE IV--REGULATION OF ADVISERS TO HEDGE FUNDS AND OTHERSCommentsClose CommentsPermalink

SEC. 401. SHORT TITLE.CommentsClose CommentsPermalink

This title may be cited as the ‘Private Fund Investment Advisers Registration Act of 2010’.CommentsClose CommentsPermalink

SEC. 402. DEFINITIONS.CommentsClose CommentsPermalink

(a) Investment Advisers Act of 1940 Definitions- Section 202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)) is amended by adding at the end the following:CommentsClose CommentsPermalink





‘(29) The term ‘private fund’ means an issuer that would be an investment company, as defined in section 3 of the Investment Company Act of 1940 (15 U.S.C. 80a-3), but for section 3(c)(1) or 3(c)(7) of that Act.CommentsClose CommentsPermalink





‘(30) The term ‘foreign private adviser’ means any investment adviser who--CommentsClose CommentsPermalink





‘(A) has no place of business in the United States;CommentsClose CommentsPermalink





‘(B) has, in total, fewer than 15 clients who are domiciled in or residents of the United States;‘(C) has aggregate assets under managementand investors in the United States in private funds advised by the investment adviser;CommentsClose CommentsPermalink





‘(C) has aggregate assets under management attributable to clients in the United States and investors in the United States in private funds advised by the investment adviser of less than $25,000,000, or such higher amount as the Commission may, by rule, deem appropriate in accordance with the purposes of this title; andCommentsClose CommentsPermalink





‘(D) neither--CommentsClose CommentsPermalink





‘(i) holds itself out generally to the public in the United States as an investment adviser; norCommentsClose CommentsPermalink





‘(ii) acts as--CommentsClose CommentsPermalink





‘(I) an investment adviser to any investment company registered under the Investment Company Act of 1940; orCommentsClose CommentsPermalink





‘(II) a company that has elected to be a business development company pursuant to section 54 of the Investment Company Act of 1940 (15 U.S.C. 80a-53), and has not withdrawn its election.’.CommentsClose CommentsPermalink





(b) Other Definitions- As used in this title, the terms ‘investment adviser’ and ‘private fund’ have the same meanings as in section 202 of the Investment Advisers Act of 1940, as amended by this title.CommentsClose CommentsPermalink

SEC. 403. ELIMINATION OF PRIVATE ADVISER EXEMPTION; LIMITED EXEMPTION FOR FOREIGN PRIVATE ADVISERS; LIMITED INTRASTATE EXEMPTION.CommentsClose CommentsPermalink

Section 203(b) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-3(b)) is amended--CommentsClose CommentsPermalink





(1) in paragraph (1), by inserting ‘, other than an investment adviser who acts as an investment adviser to any private fund,’ before ‘all of whose’;CommentsClose CommentsPermalink





(2) by striking paragraph (3) and inserting the following:CommentsClose CommentsPermalink





‘(3) any investment adviser that is a foreign private adviser;’; andCommentsClose CommentsPermalink





(3) in paragraph (5), by striking ‘or’ at the end;CommentsClose CommentsPermalink





(4) in paragraph (6), by striking the period at the end and inserting--CommentsClose CommentsPermalink





(A) by striking ‘any investment adviser’ and inserting ‘(A) any investment adviser’;CommentsClose CommentsPermalink





(B) by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively; andCommentsClose CommentsPermalink





(C) in clause (ii) (as so redesignated), by striking the period at the end and inserting ‘; or’; andCommentsClose CommentsPermalink





(5) by adding at the endD) by adding at the end the following:CommentsClose CommentsPermalink





‘(B) any investment adviser that is registered with the Commodity Futures Trading Commission as a commodity trading advisor and advises a private fund, provided that, if after the date of enactment of the Private Fund Investment Advisers Registration Act of 2010, the business of the advisor should become predominately the provision of securities-related advice, then such adviser shall register with the Commission.’.CommentsClose CommentsPermalink





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





‘(7) any investment adviser, other than any entity that has elected to be regulated or is regulated as a business development company pursuant to section 54 of the Investment Company Act of 1940 (15 U.S.C. 80a-54), who solely advises--CommentsClose CommentsPermalink





‘(A) small business investment companies that are licensees under the Small Business Investment Act of 1958;CommentsClose CommentsPermalink





‘(B) entities that have received from the Small Business Administration notice to proceed to qualify for a license as a small business investment company under the Small Business Investment Act of 1958, which notice or license has not been revoked; orCommentsClose CommentsPermalink





‘(C) applicants that are affiliated with 1 or more licensed small business investment companies described in subparagraph (A) and that have applied for another license under the Small Business Investment Act of 1958, which application remains pending.’.CommentsClose CommentsPermalink

SEC. 404. COLLECTION OF SYSTEMIC RISK DATA; REPORTS; EXAMINATIONS; DISCLOSURES.CommentsClose CommentsPermalink

Section 204 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-4) is amended--CommentsClose CommentsPermalink





(1) by redesignating subsections (b) and (c) as subsections (c) and (d), respectively; andCommentsClose CommentsPermalink





(2) by inserting after subsection (a) the following:CommentsClose CommentsPermalink





‘(b) Records and Reports of Private Funds-CommentsClose CommentsPermalink





‘(1) IN GENERAL- The Commission may require any investment adviser registered under this title--CommentsClose CommentsPermalink





‘(A) to maintain such records of, and file with the Commission such reports regarding, private funds advised by the investment adviser, as necessary and appropriate in the public interest and for the protection of investors, or for the assessment of systemic risk by the Financial Stability Oversight Council (in this subsection referred to as the ‘Council’); andCommentsClose CommentsPermalink





‘(B) to provide or make available to the Council those reports or records or the information contained therein.CommentsClose CommentsPermalink





‘(2) TREATMENT OF RECORDS- The records and reports of any private fund to which an investment adviser registered under this title provides investment advice shall be deemed to be the records and reports of the investment adviser.CommentsClose CommentsPermalink





‘(3) REQUIRED INFORMATION- The records and reports required to be maintained by a private fundn investment adviser and subject to inspection by the Commission under this subsection shall include, for each private fund advised by the investment adviser, a description of--CommentsClose CommentsPermalink





‘(A) the amount of assets under management and use of leverage, including off-balance-sheet leverage;CommentsClose CommentsPermalink





‘(B) counterparty credit risk exposure;CommentsClose CommentsPermalink





‘(C) trading and investment positions;CommentsClose CommentsPermalink





‘(D) valuation policies and practices of the fund;CommentsClose CommentsPermalink





‘(E) types of assets held;CommentsClose CommentsPermalink





‘(F) side arrangements or side letters, whereby certain investors in a fund obtain more favorable rights or entitlements than other investors;CommentsClose CommentsPermalink





‘(G) trading practices; andCommentsClose CommentsPermalink





‘(H) such other information as the Commission, in consultation with the Council, determines is necessary and appropriate in the public interest and for the protection of investors or for the assessment of systemic risk, which may include the establishment of different reporting requirements for different classes of fund advisers, based on the type or size of private fund being advised.CommentsClose CommentsPermalink





‘(4) MAINTENANCE OF RECORDS- An investment adviser registered under this title shall maintain such records of private funds advised by the investment adviser for such period or periods as the Commission, by rule, may prescribe as necessary and appropriate in the public interest and for the protection of investors, or for the assessment of systemic risk.CommentsClose CommentsPermalink





‘(5) FILING OF RECORDS- The Commission shall issue rules requiring each investment adviser to a private fund to file reports containing such information as the Commission deems necessary and appropriate in the public interest and for the protection of investors or for the assessment of systemic risk.CommentsClose CommentsPermalink





‘(6) EXAMINATION OF RECORDS-CommentsClose CommentsPermalink





‘(A) PERIODIC AND SPECIAL EXAMINATIONS- The Commission--CommentsClose CommentsPermalink





‘(i) shall conduct periodic inspections of allthe records of private funds maintained by an investment adviser registered under this title in accordance with a schedule established by the Commission; andCommentsClose CommentsPermalink





‘(ii) may conduct at any time and from time to time such additional, special, and other examinations as the Commission may prescribe as necessary and appropriate in the public interest and for the protection of investors, or for the assessment of systemic risk.CommentsClose CommentsPermalink





‘(B) AVAILABILITY OF RECORDS- An investment adviser registered under this title shall make available to the Commission any copies or extracts from such records as may be prepared without undue effort, expense, or delay, as the Commission or its representatives may reasonably request.CommentsClose CommentsPermalink





‘(7) INFORMATION SHARING-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The Commission shall make available to the Council copies of all reports, documents, records, and information filed with or provided to the Commission by an investment adviser under this subsection as the Council may consider necessary for the purpose of assessing the systemic risk posed by a private fund.CommentsClose CommentsPermalink





‘(B) CONFIDENTIALITY- The Council shall maintain the confidentiality of information received under this paragraph in all such reports, documents, records, and information, in a manner consistent with the level of confidentiality established byfor the Commission pursuant to paragraph (8). The Council shall be exempt from section 552 of title 5, United States Code, with respect to any information in any report, document, record, or information made available, to the Council under this subsection.’.CommentsClose CommentsPermalink





‘(8) COMMISSION CONFIDENTIALITY OF REPORTS- Notwithstanding any other provision of law, the Commission may not be compelled to disclose any report or information contained therein required to be filed with the Commission under this subsection, except that nothing in this subsection authorizes the Commission--CommentsClose CommentsPermalink





‘(A) to withhold information from Congress, upon an agreement of confidentiality; orCommentsClose CommentsPermalink





‘(B) prevent the Commission from complying with--CommentsClose CommentsPermalink





‘(i) a request for information from any other Federal department or agency or any self-regulatory organization requesting the report or information for purposes within the scope of its jurisdiction; orCommentsClose CommentsPermalink





‘(ii) an order of a court of the United States in an action brought by the United States or the Commission.CommentsClose CommentsPermalink





‘(9) OTHER RECIPIENTS CONFIDENTIALITY- Any department, agency, or self-regulatory organization that receives reports or information from the Commission under this subsection shall maintain the confidentiality of such reports, documents, records, and information in a manner consistent with the level of confidentiality established for the Commission under paragraph (8).CommentsClose CommentsPermalink





‘(10) PUBLIC INFORMATION EXCEPTION-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The Commission, the Council, and any other department, agency, or self-regulatory organization that receives information, reports, documents, records, or information from the Commission under this subsection, shall be exempt from the provisions of section 552 of title 5, United States Code, with respect to any such report, document, record, or information. Any proprietary information of an investment adviser ascertained by the Commission from any report required to be filed with the Commission pursuant to this subsection shall be subject to the same limitations on public disclosure as any facts ascertained during an examination, as provided by section 210(b) of this title.CommentsClose CommentsPermalink





‘(B) PROPRIETARY INFORMATION- For purposes of this paragraph, proprietary information includes--‘(i) sensitive, non-public information regarding--CommentsClose CommentsPermalink





‘(i) the investment or trading strategies of the investment adviser;CommentsClose CommentsPermalink





‘(ii) analytical or research methodologies;CommentsClose CommentsPermalink





‘(iii) trading data;CommentsClose CommentsPermalink





‘(iv) computer hardware or software containing intellectual property; andCommentsClose CommentsPermalink





‘(v) any additional information that the Commission determines to be proprietary.CommentsClose CommentsPermalink





‘(11) ANNUAL REPORT TO CONGRESS- The Commission shall report annually to Congress on how the Commission has used the data collected pursuant to this subsection to monitor the markets for the protection of investors and the integrity of the markets.’.CommentsClose CommentsPermalink

SEC. 405. DISCLOSURE PROVISION ELIMINATEDAMENDMENT.CommentsClose CommentsPermalink

Section 210(c) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-10(c)) is amended by inserting before the period at the end the following: ‘or for purposes of assessment of potential systemic risk’.CommentsClose CommentsPermalink

SEC. 406. CLARIFICATION OF RULEMAKING AUTHORITY.CommentsClose CommentsPermalink

Section 211 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-11) is amended--CommentsClose CommentsPermalink





(1) in subsection (a), by inserting before the period at the end of the first sentence the following: ‘, including rules and regulations defining technical, trade, and other terms used in this title, except that the Commission may not define the term ‘client’ for purposes of paragraphs (1) and (2) of section 206 to include an investor in a private fund managed by an investment adviser, if such private fund has entered into an advisory contract with such adviser’; andCommentsClose CommentsPermalink





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





‘(e) Disclosure Rules on Private Funds- The Commission and the Commodity Futures Trading Commission shall, after consultation with the Council but not later than 12 months after the date of enactment of the Private Fund Investment Advisers Registration Act of 2010, jointly promulgate rules to establish the form and content of the reports required to be filed with the Commission under subsection 204(b) and with the Commodity Futures Trading Commission by investment advisers that are registered both under this title and the Commodity Exchange Act (7 U.S.C. 1a et seq.).’.CommentsClose CommentsPermalink

SEC. 407. EXEMPTION OF AND REPORTING BY VENTURE CAPITAL FUND ADVISERS.CommentsClose CommentsPermalink

Section 203 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-3) is amended by adding at the end the following:CommentsClose CommentsPermalink





‘(l) Exemption of Venture Capital Fund Advisers- No investment adviser that acts as an investment adviser solely to 1 or more venture capital funds shall be subject to the registration requirements of this title with respect to the provision of investment advice relating to a venture capital fund. Not later than 6 months1 year after the date of enactment of this subsection, the Commission shall issue final rules to define the term ‘venture capital fund’ for purposes of this subsection. The Commission shall require such advisers to maintain such records and provide to the Commission such annual or other reports as the Commission determines necessary or appropriate in the public interest or for the protection of investors.’.CommentsClose CommentsPermalink

SEC. 408. EXEMPTION OF AND RECORD KEEPING BYPORTING BY CERTAIN PRIVATE EQUITY FUND ADVISERS.CommentsClose CommentsPermalink

Section 203 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-3) is amended by adding at the end the following:CommentsClose CommentsPermalink





‘(m) Exemption of and Reporting by Private Equity Fund Advisers-

‘(1) IN GENERAL- Except as provided in this subsection, no investment adviser shall be subject to the registration or reporting requirements of this title with respect to the provision of investment advice relating to a private equity fund or funds.

‘(2) MAINTENANCE OF RECORDS AND ACCESS BY COMMISSION- Not later than 6 months after the date of enactment of this subsection, the Commission shall issue final rules--

‘(A) to require investment advisers described in paragraph (1)Certain Private Fund Advisers-CommentsClose CommentsPermalink





‘(1) IN GENERAL- The Commission shall provide an exemption from the registration requirements under this section to any investment adviser of private funds, if each of such investment adviser acts solely as an adviser to private funds and has assets under management in the United States of less than $150,000,000.CommentsClose CommentsPermalink





‘(2) REPORTING- The Commission shall require investment advisers exempted by reason of this subsection to maintain such records and provide to the Commission such annual or other reports as the Commission taking into account funddetermines necessary or appropriate in the public interest or for the protection of investors.CommentsClose CommentsPermalink





‘(n) Registration and Examination of Mid-sized Private Fund Advisers- In prescribing regulations to carry out the requirements of this section with respect to investment advisers acting as investment advisers to mid-sized private funds, the Commission shall take into account the size, governance, investment strategy, risk, and other factors, as the Commission determines necessary and appropriate in the public interest and for the protection of investors; and‘(B) to define the term ‘private equity fund’ for purposes of this subsectionand investment strategy of such funds to determine whether they pose systemic risk, and shall provide for registration and examination procedures with respect to the investment advisers of such funds which reflect the level of systemic risk posed by such funds.’.CommentsClose CommentsPermalink

SEC. 409. FAMILY OFFICES.CommentsClose CommentsPermalink

(a) In General- Section 202(a)(11) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)(11)) is amended by striking ‘or (G)’ and inserting the following: ‘; (G) any family office, as defined by rule, regulation, or order of the Commission, in accordance with the purposes of this title; or (H)’.CommentsClose CommentsPermalink





(b) Rulemaking- The rules, regulations, or orders issued by the Commission pursuant to section 202(a)(11)(G) of the Investment Advisers Act of 1940, as added by this section, regarding the definition of the term ‘family office’ shall provide for an exemption that--CommentsClose CommentsPermalink





(1) is consistent with the previous exemptive policy of the Commission, as reflected in exemptive orders for family offices in effect on the date of enactment of this Act; and(2), and the grandfathering provisions in paragraph (3);CommentsClose CommentsPermalink





(2) recognizes the range of organizational, management, and employment structures and arrangements employed by family offices; andCommentsClose CommentsPermalink





(3) does not exclude any person who was not registered or required to be registered under the Investment Advisers Act of 1940 on January 1, 2010 from the definition of the term ‘family office’, solely because such person provides investment advice to, and was engaged before January 1, 2010 in providing investment advice to--CommentsClose CommentsPermalink





(A) natural persons who, at the time of their applicable investment, are officers, directors, or employees of the family office who--CommentsClose CommentsPermalink





(i) have invested with the family office before January 1, 2010; andCommentsClose CommentsPermalink





(ii) are accredited investors, as defined in Regulation D of the Commission (or any successor thereto) under the Securities Act of 1933, or, as the Commission may prescribe by rule, the successors-in-interest thereto;CommentsClose CommentsPermalink





(B) any company owned exclusively and controlled by members of the family of the family office, or as the Commission may prescribe by rule;CommentsClose CommentsPermalink





(C) any investment adviser registered under the Investment Adviser Act of 1940 that provides investment advice to the family office and who identifies investment opportunities to the family office, and invests in such transactions on substantially the same terms as the family office invests, but does not invest in other funds advised by the family office, and whose assets as to which the family office directly or indirectly provides investment advice represent, in the aggregate, not more than 5 percent of the value of the total assets as to which the family office provides investment advice.CommentsClose CommentsPermalink





(c) Antifraud Authority- A family office that would not be a family office, but for subsection (b)(3), shall be deemed to be an investment adviser for the purposes of paragraphs (1), (2) and (4) of section 206 of the Investment Advisers Act of 1940.CommentsClose CommentsPermalink

SEC. 410. STATE AND FEDERAL RESPONSIBILITIES; ASSET THRESHOLD FOR FEDERAL REGISTRATION OF INVESTMENT ADVISERS.CommentsClose CommentsPermalink

Section 203A(a)(1) of the of the Investment Advisers Act of 1940 (15 U.S.C. 80b-3a(a)(1)) is amended--

(1) in subparagraph (A)--

(A) by striking ‘$25,000,000’ and inserting ‘$100,000,000’; and

(B) by striking ‘or’ at the end;

(2) in subparagraph (B), by striking the period at the end and inserting ‘; or’; and

(3) by adding at the end the following:

‘(C) is an adviser to a company that) is amended--CommentsClose CommentsPermalink




(1) by redesignating paragraph (2) as paragraph (3); andCommentsClose CommentsPermalink





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





‘(2) TREATMENT OF MID-SIZED INVESTMENT ADVISERS-CommentsClose CommentsPermalink





‘(A) IN GENERAL- No investment adviser described in subparagraph (B) shall register under section 203, unless the investment adviser is an adviser to an investment company registered under the Investment Company Act of 1940, or a company which has elected to be a business development company pursuant to section 54 of the Investment Company Act of 1940, and has not withdrawn its electionthe election, except that, if by effect of this paragraph an investment adviser would be required to register with 15 or more States, then the adviser may register under section 203.CommentsClose CommentsPermalink





‘(B) COVERED PERSONS- An investment adviser described in this subparagraph is an investment adviser that--CommentsClose CommentsPermalink





‘(i) is required to be registered as an investment adviser with the securities commissioner (or any agency or office performing like functions) of the State in which it maintains its principal office and place of business and, if registered, would be subject to examination as an investment adviser by any such commissioner, agency, or office; andCommentsClose CommentsPermalink





‘(ii) has assets under management between--CommentsClose CommentsPermalink





‘(I) the amount specified under subparagraph (A) of paragraph (1), as such amount may have been adjusted by the Commission pursuant to that subparagraph; andCommentsClose CommentsPermalink





‘(II) $100,000,000, or such higher amount as the Commission may, by rule, deem appropriate in accordance with the purposes of this title.’.CommentsClose CommentsPermalink

SEC. 411. CUSTODY OF CLIENT ASSETS.CommentsClose CommentsPermalink

The Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.) is amended by adding at the end the following new section:CommentsClose CommentsPermalink

‘SEC. 223. CUSTODY OF CLIENT ACCOUNTS.CommentsClose CommentsPermalink

‘An investment adviser registered under this title shall take such steps to safeguard client assets over which such adviser has custody, including, without limitation, verification of such assets by an independent public accountant, as the Commission may, by rule, prescribe.’.CommentsClose CommentsPermalink

SEC. 412. COMPTROLLER GENERAL STUDY ON CUSTODY RULE COSTS.CommentsClose CommentsPermalink

SEC. 413. ADJUSTING THE ACCREDITED INVESTOR STANDARD.CommentsClose CommentsPermalink

(a) In General- The Commission shall adjust any net worth standard for an accredited investor, as set forth in the rules of the Commission under the Securities Act of 1933, so that the individual net worth of any natural person, or joint net worth with the spouse of that person, at the time of purchase, is more than $1,000,000 (as such amount is adjusted periodically by rule of the Commission), excluding the value of the primary residence of such natural person, except that during the 4-year period that begins on the date of enactment of this Act, any net worth standard shall be $1,000,000, excluding the value of the primary residence of such natural person.CommentsClose CommentsPermalink





(b) Review and Adjustment-CommentsClose CommentsPermalink





(1) INITIAL REVIEW AND ADJUSTMENT-CommentsClose CommentsPermalink





(A) INITIAL REVIEW- The Commission may undertake a review of the definition of the term ‘accredited investor’, as such term applies to natural persons, to determine whether the requirements of the definition, excluding the requirement relating to the net worth standard described in subsection (a), should be adjusted or modified for the protection of investors, in the public interest, and in light of the economy.CommentsClose CommentsPermalink





(B) ADJUSTMENT OR MODIFICATION- Upon completion of a review under subparagraph (A), the Commission may, by notice and comment rulemaking, make such adjustments to the definition of the term ‘accredited investor’, excluding adjusting or modifying the requirement relating to the net worth standard described in subsection (a), as such term applies to natural persons, as the Commission may deem appropriate for the protection of investors, in the public interest, and in light of the economy.CommentsClose CommentsPermalink





(2) SUBSEQUENT REVIEWS AND ADJUSTMENT-CommentsClose CommentsPermalink





(A) SUBSEQUENT REVIEWS- Not earlier than 4 years after the date of enactment of this Act, and not less frequently than once every 4 years thereafter, the Commission shall undertake a review of the definition, in its entirety, of the term ‘accredited investor’, as defined in section 230.215 of title 17, Code of Federal Regulations, or any successor thereto, as such term applies to natural persons, to determine whether the requirements of the definition should be adjusted or modified for the protection of investors, in the public interest, and in light of the economy.CommentsClose CommentsPermalink





(B) ADJUSTMENT OR MODIFICATION- Upon completion of a review under subparagraph (A), the Commission may, by notice and comment rulemaking, make such adjustments to the definition of the term ‘accredited investor’, as defined in section 230.215 of title 17, Code of Federal Regulations, or any successor thereto, as such term applies to natural persons, as the Commission may deem appropriate for the protection of investors, in the public interest, and in light of the economy.CommentsClose CommentsPermalink

SEC. 4134. RULE OF CONSTRUCTION RELATING TO THE COMMODITIES EXCHANGE ACT.CommentsClose CommentsPermalink

SEC. 415. GAO STUDY AND REPORT ON ACCREDITED INVESTORS.CommentsClose CommentsPermalink

The Comptroller General of the United States shall conduct a study on the appropriate criteria for determining the financial thresholds or other criteria needed to qualify for accredited investor status and eligibility to invest in private funds, and shall submit a report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives on the results of such study not later than 3 years after the date of enactment of this Act.CommentsClose CommentsPermalink

SEC. 4146. GAO STUDY ON SELF-REGULATORY ORGANIZATION FOR PRIVATE FUNDS.CommentsClose CommentsPermalink

The Comptroller General of the United States shall--CommentsClose CommentsPermalink





(1) conduct a study of the feasibility of forming a self-regulatory organization to oversee private funds; andCommentsClose CommentsPermalink





(2) submit a report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives on the results of such study, not later than 1 year after the date of enactment of this Act.CommentsClose CommentsPermalink

SEC. 415. COMMISSION STUDY AND 7. COMMISSION STUDY AND REPORT ON SHORT SELLING.CommentsClose CommentsPermalink

(a) Studyies- The Division of Risk, Strategy, and Financial Innovation of the Commission shall conduct--CommentsClose CommentsPermalink





(1) a study, taking into account current scholarship, on the state of short selling on national securities exchanges and in the over-the-counter markets, with particular attention to the impact of recent rule changes and the incidence of--CommentsClose CommentsPermalink





(1A) the failure to deliver shares sold short; orCommentsClose CommentsPermalink





(2B) delivery of shares on the fourth day following the short sale transaction.(b) Report- The Division of Risk, Strategy, and Financial Innovation shall submit a report, together with any recommendations for market improvements, including consideration of real time reporting ofshort sale positions,transaction; andCommentsClose CommentsPermalink





(2) a study of--CommentsClose CommentsPermalink





(A) the feasibility, benefits, and costs of requiring reporting publicly, in real time short sale positions of publicly listed securities, or, in the alternative, reporting such short positions in real time only to the Commission and the Financial Industry Regulatory Authority; andCommentsClose CommentsPermalink





(B) the feasibility, benefits, and costs of conducting a voluntary pilot program in which public companies will agree to have all trades of their shares marked ‘short’, ‘market maker short’, ‘buy’, ‘buy-to-cover’, or ‘long’, and reported in real time through the Consolidated Tape.CommentsClose CommentsPermalink





(b) Reports- The Commission shall submit a report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives on the results of the study conducted under subsection (a), not later than 2 years--CommentsClose CommentsPermalink





(1) on the results of the study required under subsection (a)(1), including recommendations for market improvements, not later than 2 years after the date of enactment of this Act; andCommentsClose CommentsPermalink





(2) on the results of the study required under subsection (a)(2), not later than 1 year after the date of enactment of this Act.CommentsClose CommentsPermalink

SEC. 4168. QUALIFIED CLIENT STANDARD.CommentsClose CommentsPermalink

SEC. 419. TRANSITION PERIOD.CommentsClose CommentsPermalink

Except as otherwise provided in this title, this title and the amendments made by this title shall become effective 1 year after the date of enactment of this Act, except that any investment adviser may, at the discretion of the investment adviser, register with the Commission under the Investment Advisers Act of 1940 during that 1-year period, subject to the rules of the Commission.CommentsClose CommentsPermalink

TITLE V--INSURANCECommentsClose CommentsPermalink

Subtitle A--Office of National InsuranFederal Insurance OfficeCommentsClose CommentsPermalink

SEC. 501. SHORT TITLE.CommentsClose CommentsPermalink

This subtitle may be cited as the ‘Office of National InsuranFederal Insurance Office Act of 2010’.CommentsClose CommentsPermalink

SEC. 502. ESTABLISHMENT OF OFFICE OF NATIONAL INSURANFEDERAL INSURANCE OFFICE.CommentsClose CommentsPermalink

(a) Establishment of Office- Subchapter I of chapter 3 of subtitle I of title 31, United States Code, is amended--CommentsClose CommentsPermalink





(1) by redesignating section 312 as section 315;CommentsClose CommentsPermalink





(2) by redesignating section 313 as section 312; andCommentsClose CommentsPermalink





(3) by inserting after section 312 (as so redesignated) the following new sections:CommentsClose CommentsPermalink

‘SEC. 313. OFFICE OF NATIONAL INSURANFEDERAL INSURANCE OFFICE.CommentsClose CommentsPermalink

‘(a) Establishment- There is established within the Department of the Treasury the Office of National InsuranFederal Insurance Office.CommentsClose CommentsPermalink





‘(b) Leadership- The Office shall be headed by a Director, who shall be appointed by the Secretary of the Treasury. The position of Director shall be a career reserved position in the Senior Executive Service, as that position is defined under section 3132 of title 5, United States Code.CommentsClose CommentsPermalink





‘(c) Functions-CommentsClose CommentsPermalink





‘(1) AUTHORITY PURSUANT TO DIRECTION OF SECRETARY- The Office, pursuant to the direction of the Secretary, shall have the authority--CommentsClose CommentsPermalink





‘(A) to monitor all aspects of the insurance industry, including identifying issues or gaps in the regulation of insurers that could contribute to a systemic crisis in the insurance industry or the United States financial system;CommentsClose CommentsPermalink





‘(B) to monitor the extent to which traditionally underserved communities and consumers, minorities (as such term is defined in section 1204(c) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1811 note)), and low- and moderate-income persons have access to affordable insurance products regarding all lines of insurance, except health insurance;CommentsClose CommentsPermalink





‘(C) to recommend to the Financial Stability Oversight Council that it designate an insurer, including the affiliates of such insurer, as an entity subject to regulation as a nonbank financial company supervised by the Board of Governors pursuant to title I of the Restoring American Financial Stability Act of 2010;‘(CDodd-Frank Wall Street Reform and Consumer Protection Act;CommentsClose CommentsPermalink





‘(D) to assist the Secretary in administering the Terrorism Insurance Program established in the Department of the Treasury under the Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note);CommentsClose CommentsPermalink





‘(DE) to coordinate Federal efforts and develop Federal policy on prudential aspects of international insurance matters, including representing the United States, as appropriate, in the International Association of Insurance Supervisors (or a successor entity) and assisting the Secretary in negotiating International Insurance Agreements on Prudential Measures;‘(Ecovered agreements (as such term is defined in subsection (r));CommentsClose CommentsPermalink





‘(F) to determine, in accordance with subsection (f), whether State insurance measures are preempted by International Insurance Agreements on Prudential Measures;‘(F) to consult covered agreements;CommentsClose CommentsPermalink





‘(G) to consult with the States (including State insurance regulators) regarding insurance matters of national importance and prudential insurance matters of international importance; andCommentsClose CommentsPermalink





‘(GH) to perform such other related duties and authorities as may be assigned to the Office by the Secretary.CommentsClose CommentsPermalink





‘(2) ADVISORY FUNCTIONS- The Office shall advise the Secretary on major domestic and prudential international insurance policy issues.CommentsClose CommentsPermalink





‘(3) ADVISORY CAPACITY ON COUNCIL- The Director shall serve in an advisory capacity on the Financial Stability Oversight Council established under the Financial Stability Act of 2010.CommentsClose CommentsPermalink





‘(d) Scope- The authority of the Office shall extend to all lines of insurance except--CommentsClose CommentsPermalink





‘(1) health insurance, as such insurance is determined by the Secretarydetermined by the Secretary in coordination with the Secretary of Health and Human Services based on section 2791 of the Public Health Service Act (42 U.S.C. 300gg-91), and;CommentsClose CommentsPermalink





‘(2) long-term care insurance, except long-term care insurance that is included with life or annuity insurance components, as determined by the Secretary in coordination with the Secretary of Health and Human Services, and in the case of long-term care insurance that is included with such components, the Secretary shall coordinate with the Secretary of Health and Human Services in performing the functions of the Office; andCommentsClose CommentsPermalink





‘(3) crop insurance, as established by the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.).CommentsClose CommentsPermalink





‘(e) Gathering of Information-CommentsClose CommentsPermalink





‘(1) IN GENERAL- In carrying out the functions required under subsection (c), the Office may--CommentsClose CommentsPermalink





‘(A) receive and collect data and information on and from the insurance industry and insurers;CommentsClose CommentsPermalink





‘(B) enter into information-sharing agreements;CommentsClose CommentsPermalink





‘(C) analyze and disseminate data and information; andCommentsClose CommentsPermalink





‘(D) issue reports regarding all lines of insurance except health insurance.CommentsClose CommentsPermalink





‘(2) COLLECTION OF INFORMATION FROM INSURERS AND AFFILIATES-CommentsClose CommentsPermalink





‘(A) IN GENERAL- Except as provided in paragraph (3), the Office may require an insurer, or any affiliate of an insurer, to submit such data or information as the Office may reasonably require in carrying out the functions described under subsection (c).CommentsClose CommentsPermalink





‘(B) RULE OF CONSTRUCTION- Notwithstanding any other provision of this section, for purposes of subparagraph (A), the term ‘insurer’ means any person that is authorized to write insurance or reinsure risks and issue entity that writes insurance or reinsures risks and issues contracts or policies in 1 or more States.CommentsClose CommentsPermalink





‘(3) EXCEPTION FOR SMALL INSURERS- Paragraph (2) shall not apply with respect to any insurer or affiliate thereof that meets a minimum size threshold that the Office may establish, whether by order or rule.CommentsClose CommentsPermalink





‘(4) ADVANCE COORDINATION- Before collecting any data or information under paragraph (2) from an insurer, or any affiliate of an insurer, the Office shall coordinate with each relevant Federal agency and State insurance regulator (or other relevant Federal or State regulatory agency, if any, in the case of an affiliate of an insurer) and any publicly available sources to determine if the information to be collected is available from, or may be obtained in a timely manner by, such Stateand may be obtained in a timely manner by, such Federal agency or State insurance regulator, individually or collectively, another regulatory agency, or publicly available sources. Notwithstanding any other provision of law, each such relevant State insurance regulator or other Federal or State regulatory agency is authorized to provide to the Office such data or information.‘(5) If the Director determines that such data or information is available, and may be obtained in a timely manner, from such an agency, regulator, regulatory agency, or source, the Director shall obtain the data or information from such agency, regulator, regulatory agency, or source. If the Director determines that such data or information is not so available, the Director may collect such data or information from an insurer (or affiliate) only if the Director complies with the requirements of subchapter I of chapter 35 of title 44, United States Code (relating to Federal information policy; commonly known as the Paperwork Reduction Act), in collecting such data or information. Notwithstanding any other provision of law, each such relevant Federal agency and State insurance regulator or other Federal or State regulatory agency is authorized to provide to the Office such data or information.CommentsClose CommentsPermalink





‘(5) CONFIDENTIALITY-CommentsClose CommentsPermalink





‘(A) RETENTION OF PRIVILEGE- The submission of any nonpublicly available data and information to the Office under this subsection shall not constitute a waiver of, or otherwise affect, any privilege arising under Federal or State law (including the rules of any Federal or State court) to which the data or information is otherwise subject.CommentsClose CommentsPermalink





‘(B) CONTINUED APPLICATION OF PRIOR CONFIDENTIALITY AGREEMENTS- Any requirement under Federal or State law to the extent otherwise applicable, or any requirement pursuant to a written agreement in effect between the original source of any nonpublicly available data or information and the source of such data or information to the Office, regarding the privacy or confidentiality of any data or information in the possession of the source to the Office, shall continue to apply to such data or information after the data or information has been provided pursuant to this subsection to the Office.CommentsClose CommentsPermalink





‘(C) INFORMATION -SHARING AGREEMENT- Any data or information obtained by the Office may be made available to State insurance regulators, individually or collectively, through an information -sharing agreement that--CommentsClose CommentsPermalink





‘(i) shall comply with applicable Federal law; andCommentsClose CommentsPermalink





‘(ii) shall not constitute a waiver of, or otherwise affect, any privilege under Federal or State law (including the rules of any Federal or State Ccourt) to which the data or information is otherwise subject.CommentsClose CommentsPermalink





‘(D) AGENCY DISCLOSURE REQUIREMENTS- Section 552 of title 5, United States Code, shall apply to any data or information submitted to the Office by an insurer or an affiliate of an insurer.CommentsClose CommentsPermalink





‘(6) SUBPOENAS AND ENFORCEMENT- The Director shall have the power to require by subpoena the production of the data or information requested under paragraph (2), but only upon a written finding by the Director that such data or information is required to carry out the functions described under subsection (c) and that the Office has coordinated with such regulator or agency as required under paragraph (4). Subpoenas shall bear the signature of the Director and shall be served by any person or class of persons designated by the Director for that purpose. In the case of contumacy or failure to obey a subpoena, the subpoena shall be enforceable by order of any appropriate district court of the United States. Any failure to obey the order of the court may be punished by the court as a contempt of court.CommentsClose CommentsPermalink





‘(f) Preemption of State Insurance Measures-CommentsClose CommentsPermalink





‘(1) STANDARD- A State insurance measure shall be preempted pursuant to this section or section 314 if, and only to the extent that the Director determines, in accordance with this subsection, that the measure--CommentsClose CommentsPermalink





‘(A) results in less favorable treatment of a non-United States insurer domiciled in a foreign jurisdiction that is subject to an international insurance agreement on prudential measures than a United States covered agreement than a United States insurer domiciled, licensed, or otherwise admitted in that State; andCommentsClose CommentsPermalink





‘(B) is inconsistent with an International Insurance Agreement on Prudential Measures covered agreement.CommentsClose CommentsPermalink





‘(2) DETERMINATION-CommentsClose CommentsPermalink





‘(A) NOTICE OF POTENTIAL INCONSISTENCY- Before making any determination under paragraph (1), the Director shall--CommentsClose CommentsPermalink





‘(i) notify and consult with the appropriate State regarding any potential inconsistency or preemption;CommentsClose CommentsPermalink





‘(ii) notify and consult with the United States Trade Representative regarding any potential inconsistency or preemption;CommentsClose CommentsPermalink





‘(iii) cause to be published in the Federal Register notice of the issue regarding the potential inconsistency or preemption, including a description of each State insurance measure at issue and any applicable International Insurance Agreement on Prudential Measures;‘(iiicovered agreement;CommentsClose CommentsPermalink





‘(iv) provide interested parties a reasonable opportunity to submit written comments to the Office; andCommentsClose CommentsPermalink





‘(iv) consider any comments received.CommentsClose CommentsPermalink





‘(B) SCOPE OF REVIEW- For purposes of this subsection, theany determination of the Director regarding State insurance measures, and any preemption under paragraph (1) as a result of such determination, shall be limited to the subject matter contained within the international insurance agreement on prudential measure involvedcovered agreement involved and shall achieve a level of protection for insurance or reinsurance consumers that is substantially equivalent to the level of protection achieved under State insurance or reinsurance regulation.CommentsClose CommentsPermalink





‘(C) NOTICE OF DETERMINATION OF INCONSISTENCY- Upon making any determination under paragraph (1), the Director shall--CommentsClose CommentsPermalink





‘(i) notify the appropriate State of the determination and the extent of the inconsistency;CommentsClose CommentsPermalink





‘(ii) establish a reasonable period of time, which shall not be less than 30 days, before the determination shall become effective; andCommentsClose CommentsPermalink





‘(iii) notify the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives of the inconsistencys on Financial Services and Ways and Means of the House of Representatives and the Committees on Banking, Housing, and Urban Affairs and Finance of the Senate.CommentsClose CommentsPermalink





‘(3) NOTICE OF EFFECTIVENESS- Upon the conclusion of the period referred to in paragraph (2)(C)(ii), if the basis for such determination still exists, the determination shall become effective and the Director shall--CommentsClose CommentsPermalink





‘(A) cause to be published a notice in the Federal Register that the preemption has become effective, as well as the effective date; andCommentsClose CommentsPermalink





‘(B) notify the appropriate State.CommentsClose CommentsPermalink





‘(4) LIMITATION- No State may enforce a State insurance measure to the extent that such measure has been preempted under this subsection.CommentsClose CommentsPermalink





‘(g) Applicability of Administrative Procedures Act- Determinations of inconsistency made pursuant to subsection (f)(2) shall be subject to the applicable provisions of subchapter II of chapter 5 of title 5, United States Code (relating to administrative procedure), and chapter 7 of such title (relating to judicial review), except that in any action for judicial review of a determination of inconsistency, the court shall determine the matter de novo.CommentsClose CommentsPermalink





‘(h) Regulations, Policies, and Procedures- The Secretary may issue orders, regulations, policies, and procedures to implement this section.CommentsClose CommentsPermalink





‘(i) Consultation- The Director shall consult with State insurance regulators, individually or collectively, to the extent the Director determines appropriate, in carrying out the functions of the Office.CommentsClose CommentsPermalink





‘(j) Savings Provisions- Nothing in this section shall--CommentsClose CommentsPermalink





‘(1) preempt--CommentsClose CommentsPermalink





‘(A) any State insurance measure that governs any insurer’s rates, premiums, underwriting, or sales practices;CommentsClose CommentsPermalink





‘(B) any State coverage requirements for insurance;CommentsClose CommentsPermalink





‘(C) the application of the antitrust laws of any State to the business of insurance; orCommentsClose CommentsPermalink





‘(D) any State insurance measure governing the capital or solvency of an insurer, except to the extent that such State insurance measure results in less favorable treatment of a non-United State insurer than a United States insurer;CommentsClose CommentsPermalink





‘(2) be construed to alter, amend, or limit any provision of the Consumer Financial Protection Agency Act of 2010; orCommentsClose CommentsPermalink





‘(3) affect the preemption of any State insurance measure otherwise inconsistent with and preempted by Federal law.CommentsClose CommentsPermalink





‘(k) Retention of Existing State Regulatory Authority- Nothing in this section or section 314 shall be construed to establish or provide the Office or the Department of the Treasury with general supervisory or regulatory authority over the business of insurance.CommentsClose CommentsPermalink





‘(l) Retention of Authority of Federal Financial Regulatory Agencies- Nothing in this section or section 314 shall be construed to limit the authority of any Federal financial regulatory agency, including the authority to develop and coordinate policy, negotiate, and enter into agreements with foreign governments, authorities, regulators, and multinational regulatory committees and to preempt State measures to affect uniformity with international regulatory agreements.CommentsClose CommentsPermalink





‘(m) Retention of Authority of United States Trade Representative- Nothing in this section or section 314 shall be construed to affect the authority of the Office of the United States Trade Representative pursuant to section 141 of the Trade Act of 1974 (19 U.S.C. 2171) or any other provision of law, including authority over the development and coordination of United States international trade policy and the administration of the United States trade agreements program.CommentsClose CommentsPermalink





‘(n) Annual Report to Congresss to Congress-CommentsClose CommentsPermalink





‘(1) SECTION 313(f) REPORTS- Beginning September 30, 2011, the Director shall submit a report on or before September 30 of each calendar year to the President and to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives on the insurance industry,s on Financial Services and Ways and Means of the House of Representatives and the Committees on Banking, Housing, and Urban Affairs and Finance of the Senate on any actions taken by the Office pursuant to subsection (f) (regarding preemption of inconsistent State insurance measures), and any other information as deemed relevant by the Director or as.CommentsClose CommentsPermalink





‘(2) INSURANCE INDUSTRY- Beginning September 30, 2011, the Director shall submit a report on or before September 30 of each calendar year to the President and to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate on the insurance industry and any other information as deemed relevant by the Director or requested by such Committees.CommentsClose CommentsPermalink





‘(mo) Reports on U.S. and Global Reinsurance Market- The Director shall submit to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate--CommentsClose CommentsPermalink





‘(1) a report received not later than September 30, 2012, describing the breadth and scope of the global reinsurance market and the critical role such market plays in supporting insurance in the United States; andCommentsClose CommentsPermalink





‘(2) a report received not later than January 1, 2013, and updated not later than January 1, 2015, describing the impact of part II of the Nonadmitted and Reinsurance Reform Act of 2010 on the ability of State regulators to access reinsurance information for regulated companies in their jurisdictions.CommentsClose CommentsPermalink





‘(p) Study and Report on Regulation of Insurance-CommentsClose CommentsPermalink





‘(1) IN GENERAL- Not later than 18 months after the date of enactment of this section, the Director shall conduct a study and submit a report to Congress on how to modernize and improve the system of insurance regulation in the United States.CommentsClose CommentsPermalink





‘(2) CONSIDERATIONS- The study and report required under paragraph (1) shall be based on and guided by the following considerations:CommentsClose CommentsPermalink





‘(A) Systemic risk regulation with respect to insurance.CommentsClose CommentsPermalink





‘(B) Capital standards and the relationship between capital allocation and liabilities, including standards relating to liquidity and duration risk.CommentsClose CommentsPermalink





‘(C) Consumer protection for insurance products and practices, including gaps in sState regulation.CommentsClose CommentsPermalink





‘(D) The degree of national uniformity of sState insurance regulation.CommentsClose CommentsPermalink





‘(E) The regulation of insurance companies and affiliates on a consolidated basis.CommentsClose CommentsPermalink





‘(F) International coordination of insurance regulation.CommentsClose CommentsPermalink





‘(3) ADDITIONAL FACTORS- The study and report required under paragraph (1) shall also examine the following factors:CommentsClose CommentsPermalink





‘(A) The costs and benefits of potential Federal regulation of insurance across various lines of insurance (except health insurance).CommentsClose CommentsPermalink





‘(B) The feasibility of regulating only certain lines of insurance at the Federal level, while leaving other lines of insurance to be regulated at the State level.CommentsClose CommentsPermalink





‘(C) The ability of any potential Federal regulation or Federal regulators to eliminate or minimize regulatory arbitrage.CommentsClose CommentsPermalink





‘(D) The impact that developments in the regulation of insurance in foreign jurisdictions might have on the potential Federal regulation of insurance.CommentsClose CommentsPermalink





‘(E) The ability of any potential Federal regulation or Federal regulator to provide robust consumer protection for policyholders.CommentsClose CommentsPermalink





‘(F) The potential consequences of subjecting insurance companies to a Federal resolution authority, including the effects of any Federal resolution authority--CommentsClose CommentsPermalink





‘(i) on the operation of State insurance guaranty fund systems, including the loss of guaranty fund coverage if an insurance company is subject to a Federal resolution authority;CommentsClose CommentsPermalink





‘(ii) on policyholder protection, including the loss of the priority status of policyholder claims over other unsecured general creditor claims;CommentsClose CommentsPermalink





‘(iii) in the case of life insurance companies, on the loss of the special status of separate account assets and separate account liabilities; andCommentsClose CommentsPermalink





‘(iv) on the international competitiveness of insurance companies.CommentsClose CommentsPermalink





‘(G) Such other factors as the Director determines necessary or appropriate, consistent with the principles set forth in paragraph (2).CommentsClose CommentsPermalink





‘(4) REQUIRED RECOMMENDATIONS- The study and report required under paragraph (1) shall also contain any legislative, administrative, or regulatory recommendations, as the Director determines appropriate, to carry out or effectuate the findings set forth in such report.CommentsClose CommentsPermalink





‘(5) CONSULTATION- With respect to the study and report required under paragraph (1), the Director shall consult with the National Association of Insurance CommissioneState insurance regulators, consumer organizations, representatives of the insurance industry and policyholders, and other organizations and experts, as appropriate.CommentsClose CommentsPermalink





‘(nq) Use of Existing Resources- To carry out this section, the Office may employ personnel, facilities, and any other resource of the Department of the Treasury available to the Secretary.‘(o and the Secretary shall dedicate specific personnel to the Office.CommentsClose CommentsPermalink





‘(r) Definitions- In this section and section 314, the following definitions shall apply:CommentsClose CommentsPermalink





‘(1) AFFILIATE- The term ‘affiliate’ means, with respect to an insurer, any person who controls, is controlled by, or is under common control with the insurer.CommentsClose CommentsPermalink





‘(2) COVERED AGREEMENT- The term ‘covered agreement’ means a written bilateral or multilateral agreement regarding prudential measures with respect to the business of insurance or reinsurance that--CommentsClose CommentsPermalink





‘(A) is entered into between the United States and one or more foreign governments, authorities, or regulatory entities; andCommentsClose CommentsPermalink





‘(B) relates to the recognition of prudential measures with respect to the business of insurance or reinsurance that achieves a level of protection for insurance or reinsurance consumers that is substantially equivalent to the level of protection achieved under State insurance or reinsurance regulation.CommentsClose CommentsPermalink





‘(3) INSURER- The term ‘insurer’ means any person engaged in the business of insurance, including reinsurance.CommentsClose CommentsPermalink





‘(3) INTERNATIONAL INSURANCE AGREEMENT ON PRUDENTIAL MEASURES- The term ‘International Insurance Agreement on Prudential Measures’ means a written bilateral or multilateral agreement entered into between the United States and a foreign government, authority, or regulatory entity regarding prudential measures applicable to the business of insurance or reinsurance.‘(44) FEDERAL FINANCIAL REGULATORY AGENCY- The term ‘Federal financial regulatory agency’ means the Department of the Treasury, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, or the National Credit Union Administration.CommentsClose CommentsPermalink





‘(5) NON-UNITED STATES INSURER- The term ‘non-United States insurer’ means an insurer that is organized under the laws of a jurisdiction other than a State, but does not include any United States branch of such an insurer.CommentsClose CommentsPermalink





‘(56) OFFICE- The term ‘Office’ means the Office of National InsuranFederal Insurance Office established by this section.CommentsClose CommentsPermalink





‘(67) STATE INSURANCE MEASURE- The term ‘State insurance measure’ means any State law, regulation, administrative ruling, bulletin, guideline, or practice relating to or affecting prudential measures applicable to insurance or reinsurance.CommentsClose CommentsPermalink





‘(78) STATE INSURANCE REGULATOR- The term ‘State insurance regulator’ means any State regulatory authority responsible for the supervision of insurers.CommentsClose CommentsPermalink





‘(89) SUBSTANTIALLY EQUIVALENT TO THE LEVEL OF PROTECTION ACHIEVED- The term ‘substantially equivalent to the level of protection achieved’ means the prudential measures of a foreign government, authority, or regulatory entity achieve a similar outcome in consumer protection as the outcome achieved under State insurance or reinsurance regulation.CommentsClose CommentsPermalink





‘(10) UNITED STATES INSURER- The term ‘United States insurer’ means--CommentsClose CommentsPermalink





‘(A) an insurer that is organized under the laws of a State; orCommentsClose CommentsPermalink





‘(B) a United States branch of a non-United States insurer.CommentsClose CommentsPermalink





‘(ps) Authorization of Appropriations- There are authorized to be appropriated for the Office for each fiscal year such sums as may be necessary.CommentsClose CommentsPermalink

‘SEC. 314. INTERNATIONAL INSURANCE AGREEMENTS ON PRUDENTIAL MEASURES.‘(a) In General- The Secretary of the Treasury is authorizedCOVERED AGREEMENTS.CommentsClose CommentsPermalink

‘(a) Authority- The Secretary and the United States Trade Representative are authorized, jointly, to negotiate and enter into International Insurance Agreements on Prudential Measurecovered agreements on behalf of the United States.CommentsClose CommentsPermalink





‘(b) Savings Provision- Nothing in this section or section 313 shall be construed to affect the development and coordination of United States international trade policy or the administration of the United States trade agreements program. It is to be understood that the negotiation of International Insurance Agreements on Prudential Measures under such sections is consistent with the requirement of this subsection.‘(c) Consultation- The Secretary shall consult withRequirements for Consultation With Congress-CommentsClose CommentsPermalink





‘(1) IN GENERAL- Before initiating negotiations to enter into a covered agreement under subsection (a), during such negotiations, and before entering into any such agreement, the Secretary and the United States Trade Representative on the negotiation of International Insurance Agreements on Prudential Measures, including prior to initiating and concluding any such agreementsshall jointly consult with the Committee on Financial Services and the Committee on Ways and Means of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs and the Committee on Finance of the Senate.CommentsClose CommentsPermalink





‘(2) SCOPE- The consultation described in paragraph (1) shall include consultation with respect to--CommentsClose CommentsPermalink





‘(A) the nature of the agreement;CommentsClose CommentsPermalink





‘(B) how and to what extent the agreement will achieve the applicable purposes, policies, priorities, and objectives of section 313 and this section; andCommentsClose CommentsPermalink





‘(C) the implementation of the agreement, including the general effect of the agreement on existing State laws.CommentsClose CommentsPermalink





‘(c) Submission and Layover Provisions- A covered agreement under subsection (a) may enter into force with respect to the United States only if--CommentsClose CommentsPermalink





‘(1) the Secretary and the United States Trade Representative jointly submit to the congressional committees specified in subsection (b)(1), on a day on which both Houses of Congress are in session, a copy of the final legal text of the agreement; andCommentsClose CommentsPermalink





‘(2) a period of 90 calendar days beginning on the date on which the copy of the final legal text of the agreement is submitted to the congressional committees under paragraph (1) has expired.’.CommentsClose CommentsPermalink





(b) Duties of Secretary- Section 321(a) of title 31, United States Code, is amended--CommentsClose CommentsPermalink





(1) in paragraph (7), by striking ‘; and’ and inserting a semicolon;CommentsClose CommentsPermalink





(2) in paragraph (8)(C), by striking the period at the end and inserting ‘; and’; andCommentsClose CommentsPermalink





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





‘(9) advise the President on major domestic and international prudential policy issues in connection with all lines of insurance except health insurance.’.CommentsClose CommentsPermalink





(c) Clerical Amendment- The table of sections for subchapter I of chapter 3 of title 31, United States Code, is amended by striking the item relating to section 312 and inserting the following new items:CommentsClose CommentsPermalink





‘Sec. 312. Terrorism and financial intelligence.CommentsClose CommentsPermalink





‘Sec. 313. Office of National InsuranFederal Insurance Office.CommentsClose CommentsPermalink





‘Sec. 314. International insurance agreements on prudential measureCovered agreements.CommentsClose CommentsPermalink





‘Sec. 315. Continuing in office.’.CommentsClose CommentsPermalink

Subtitle B--State-bBased Insurance ReformCommentsClose CommentsPermalink

SEC. 511. SHORT TITLE.CommentsClose CommentsPermalink

This subtitle may be cited as the ‘Nonadmitted and Reinsurance Reform Act of 2010’.CommentsClose CommentsPermalink

SEC. 512. EFFECTIVE DATE.CommentsClose CommentsPermalink

Except as otherwise specifically provided in this subtitle, this subtitle shall take effect upon the expiration of the 12-month period beginning on the date of the enactment of this subtitle.CommentsClose CommentsPermalink

PART I--NONADMITTED INSURANCE

SEC. 521. REPORTING, PAYMENT, AND ALLOCATION OF PREMIUM TAXES.CommentsClose CommentsPermalink

(a) Home State’s Exclusive Authority- No State other than the home State of an insured may require any premium tax payment for nonadmitted insurance.CommentsClose CommentsPermalink





(b) Allocation of Nonadmitted Premium Taxes-CommentsClose CommentsPermalink





(1) IN GENERAL- The States may enter into a compact or otherwise establish procedures to allocate among the States the premium taxes paid to an insured’s home State described in subsection (a).CommentsClose CommentsPermalink





(2) EFFECTIVE DATE- Except as expressly otherwise provided in such compact or other procedures, any such compact or other procedures--CommentsClose CommentsPermalink





(A) if adopted on or before the expiration of the 330-day period that begins on the date of the enactment of this subtitle, shall apply to any premium taxes that, on or after such date of enactment, are required to be paid to any State that is subject to such compact or procedures; andCommentsClose CommentsPermalink





(B) if adopted after the expiration of such 330-day period, shall apply to any premium taxes that, on or after January 1 of the first calendar year that begins after the expiration of such 330-day period, are required to be paid to any State that is subject to such compact or procedures.CommentsClose CommentsPermalink





(3) REPORT- Upon the expiration of the 330-day period referred to in paragraph (2), the NAIC may submit a report to the Committee on Financial Services and the Committee on the Judiciary of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate identifying and describing any compact or other procedures for allocation among the States of premium taxes that have been adopted during such period by any States.CommentsClose CommentsPermalink





(4) NATIONWIDE SYSTEM- The Congress intends that each State adopt nationwide uniform requirements, forms, and procedures, such as an interstate compact, that provides for the reporting, payment, collection, and allocation of premium taxes for nonadmitted insurance consistent with this section.CommentsClose CommentsPermalink





(c) Allocation Based on Tax Allocation Report- To facilitate the payment of premium taxes among the States, an insured’s home State may require surplus lines brokers and insureds who have independently procured insurance to annually file tax allocation reports with the insured’s home State detailing the portion of the nonadmitted insurance policy premium or premiums attributable to properties, risks, or exposures located in each State. The filing of a nonadmitted insurance tax allocation report and the payment of tax may be made by a person authorized by the insured to act as its agent.CommentsClose CommentsPermalink

SEC. 522. REGULATION OF NONADMITTED INSURANCE BY INSURED’S HOME STATE.CommentsClose CommentsPermalink

(a) Home State Authority- Except as otherwise provided in this section, the placement of nonadmitted insurance shall be subject to the statutory and regulatory requirements solely of the insured’s home State.CommentsClose CommentsPermalink





(b) Broker Licensing- No State other than an insured’s home State may require a surplus lines broker to be licensed in order to sell, solicit, or negotiate nonadmitted insurance with respect to such insured.CommentsClose CommentsPermalink





(c) Enforcement Provision- With respect to section 521 and subsections (a) and (b) of this section, any law, regulation, provision, or action of any State that applies or purports to apply to nonadmitted insurance sold to, solicited by, or negotiated with an insured whose home State is another State shall be preempted with respect to such application.CommentsClose CommentsPermalink





(d) Workers’ Compensation Exception- This section may not be construed to preempt any State law, rule, or regulation that restricts the placement of workers’ compensation insurance or excess insurance for self-funded workers’ compensation plans with a nonadmitted insurer.CommentsClose CommentsPermalink

SEC. 523. PARTICIPATION IN NATIONAL PRODUCER DATABASE.CommentsClose CommentsPermalink

After the expiration of the 2-year period beginning on the date of the enactment of this subtitle, a State may not collect any fees relating to licensing of an individual or entity as a surplus lines broker in the State unless the State has in effect at such time laws or regulations that provide for participation by the State in the national insurance producer database of the NAIC, or any other equivalent uniform national database, for the licensure of surplus lines brokers and the renewal of such licenses.CommentsClose CommentsPermalink

SEC. 524. UNIFORM STANDARDS FOR SURPLUS LINES ELIGIBILITY.CommentsClose CommentsPermalink

A State may not--CommentsClose CommentsPermalink





(1) impose eligibility requirements on, or otherwise establish eligibility criteria for, nonadmitted insurers domiciled in a United States jurisdiction, except in conformance with such requirements and criteria in sections 5A(2) and 5C(2)(a) of the Non-Admitted Insurance Model Act, unless the State has adopted nationwide uniform requirements, forms, and procedures developed in accordance with section 521(b) of this subtitle that include alternative nationwide uniform eligibility requirements; orCommentsClose CommentsPermalink





(2) prohibit a surplus lines broker from placing nonadmitted insurance with, or procuring nonadmitted insurance from, a nonadmitted insurer domiciled outside the United States that is listed on the Quarterly Listing of Alien Insurers maintained by the International Insurers Department of the NAIC.CommentsClose CommentsPermalink

SEC. 525. STREAMLINED APPLICATION FOR COMMERCIAL PURCHASERS.CommentsClose CommentsPermalink

A surplus lines broker seeking to procure or place nonadmitted insurance in a State for an exempt commercial purchaser shall not be required to satisfy any State requirement to make a due diligence search to determine whether the full amount or type of insurance sought by such exempt commercial purchaser can be obtained from admitted insurers if--CommentsClose CommentsPermalink





(1) the broker procuring or placing the surplus lines insurance has disclosed to the exempt commercial purchaser that such insurance may or may not be available from the admitted market that may provide greater protection with more regulatory oversight; andCommentsClose CommentsPermalink





(2) the exempt commercial purchaser has subsequently requested in writing the broker to procure or place such insurance from a nonadmitted insurer.CommentsClose CommentsPermalink

SEC. 526. GAO STUDY OF NONADMITTED INSURANCE MARKET.CommentsClose CommentsPermalink

(a) In General- The Comptroller General of the United States shall conduct a study of the nonadmitted insurance market to determine the effect of the enactment of this part on the size and market share of the nonadmitted insurance market for providing coverage typically provided by the admitted insurance market.CommentsClose CommentsPermalink





(b) Contents- The study shall determine and analyze--CommentsClose CommentsPermalink





(1) the change in the size and market share of the nonadmitted insurance market and in the number of insurance companies and insurance holding companies providing such business in the 18-month period that begins upon the effective date of this subtitle;CommentsClose CommentsPermalink





(2) the extent to which insurance coverage typically provided by the admitted insurance market has shifted to the nonadmitted insurance market;CommentsClose CommentsPermalink





(3) the consequences of any change in the size and market share of the nonadmitted insurance market, including differences in the price and availability of coverage available in both the admitted and nonadmitted insurance markets;CommentsClose CommentsPermalink





(4) the extent to which insurance companies and insurance holding companies that provide both admitted and nonadmitted insurance have experienced shifts in the volume of business between admitted and nonadmitted insurance; andCommentsClose CommentsPermalink





(5) the extent to which there has been a change in the number of individuals who have nonadmitted insurance policies, the type of coverage provided under such policies, and whether such coverage is available in the admitted insurance market.CommentsClose CommentsPermalink





(c) Consultation With NAIC- In conducting the study under this section, the Comptroller General shall consult with the NAIC.CommentsClose CommentsPermalink





(d) Report- The Comptroller General shall complete the study under this section and submit a report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives regarding the findings of the study not later than 30 months after the effective date of this subtitle.CommentsClose CommentsPermalink

SEC. 527. DEFINITIONS.CommentsClose CommentsPermalink

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





(1) ADMITTED INSURER- The term ‘admitted insurer’ means, with respect to a State, an insurer licensed to engage in the business of insurance in such State.CommentsClose CommentsPermalink





(2) AFFILIATE- The term ‘affiliate’ means, with respect to an insured, any entity that controls, is controlled by, or is under common control with the insured.CommentsClose CommentsPermalink





(3) AFFILIATED GROUP- The term ‘affiliated group’ means any group of entities that are all affiliated.CommentsClose CommentsPermalink





(4) CONTROL- An entity has ‘control’ over another entity if--CommentsClose CommentsPermalink





(A) the entity directly or indirectly or acting through 1 or more other persons owns, controls, or has the power to vote 25 percent or more of any class of voting securities of the other entity; orCommentsClose CommentsPermalink





(B) the entity controls in any manner the election of a majority of the directors or trustees of the other entity.CommentsClose CommentsPermalink





(5) EXEMPT COMMERCIAL PURCHASER- The term ‘exempt commercial purchaser’ means any person purchasing commercial insurance that, at the time of placement, meets the following requirements:CommentsClose CommentsPermalink





(A) The person employs or retains a qualified risk manager to negotiate insurance coverage.CommentsClose CommentsPermalink





(B) The person has paid aggregate nationwide commercial property and casualty insurance premiums in excess of $100,000 in the immediately preceding 12 months.CommentsClose CommentsPermalink





(C)(i) The person meets at least 1 of the following criteria:CommentsClose CommentsPermalink





(I) The person possesses a net worth in excess of $20,000,000, as such amount is adjusted pursuant to clause (ii).CommentsClose CommentsPermalink





(II) The person generates annual revenues in excess of $50,000,000, as such amount is adjusted pursuant to clause (ii).CommentsClose CommentsPermalink





(III) The person employs more than 500 full-time or full-time equivalent employees per individual insured or is a member of an affiliated group employing more than 1,000 employees in the aggregate.CommentsClose CommentsPermalink





(IV) The person is a not-for-profit organization or public entity generating annual budgeted expenditures of at least $30,000,000, as such amount is adjusted pursuant to clause (ii).CommentsClose CommentsPermalink





(V) The person is a municipality with a population in excess of 50,000 persons.CommentsClose CommentsPermalink





(ii) Effective on the fifth January 1 occurring after the date of the enactment of this subtitle and each fifth January 1 occurring thereafter, the amounts in subclauses (I), (II), and (IV) of clause (i) shall be adjusted to reflect the percentage change for such 5-year period in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the Department of Labor.CommentsClose CommentsPermalink





(6) HOME STATE-CommentsClose CommentsPermalink





(A) IN GENERAL- Except as provided in subparagraph (B), the term ‘home State’ means, with respect to an insured--CommentsClose CommentsPermalink





(i) the State in which an insured maintains its principal place of business or, in the case of an individual, the individual’s principal residence; orCommentsClose CommentsPermalink





(ii) if 100 percent of the insured risk is located out of the State referred to in subparagraph (A), the State to which the greatest percentage of the clause (i), the State to which the greatest percentage of the insured’s taxable premium for that insurance contract is allocated.CommentsClose CommentsPermalink





(B) AFFILIATED GROUPS- If more than 1 insured from an affiliated group are named insureds on a single nonadmitted insurance contract, the term ‘home State’ means the home State, as determined pursuant to subparagraph (A), of the member of the affiliated group that has the largest percentage of premium attributed to it under such insurance contract.CommentsClose CommentsPermalink





(7) INDEPENDENTLY PROCURED INSURANCE- The term ‘independently procured insurance’ means insurance procured directly by an insured from a nonadmitted insurer.CommentsClose CommentsPermalink





(8) NAIC- The term ‘NAIC’ means the National Association of Insurance Commissioners or any successor entity.CommentsClose CommentsPermalink





(9) NONADMITTED INSURANCE- The term ‘nonadmitted insurance’ means any property and casualty insurance permitted to be placed directly or through a surplus lines broker with a nonadmitted insurer eligible to accept such insurance.CommentsClose CommentsPermalink





(10) NON-ADMITTED INSURANCE MODEL ACT- The term ‘Non-Admitted Insurance Model Act’ means the provisions of the Non-Admitted Insurance Model Act, as adopted by the NAIC on August 3, 1994, and amended on September 30, 1996, December 6, 1997, October 2, 1999, and June 8, 2002.CommentsClose CommentsPermalink





(11) NONADMITTED INSURER- The term ‘nonadmitted insurer’--CommentsClose CommentsPermalink





(A) means, with respect to a State, an insurer not licensed to engage in the business of insurance in such State; butCommentsClose CommentsPermalink





(B) does not include a risk retention group, as that term is defined in section 2(a)(4) of the Liability Risk Retention Act of 1986 (15 U.S.C. 3901(a)(4)).CommentsClose CommentsPermalink





(12) PREMIUM TAX- The term ‘premium tax’ means, with respect to surplus lines or independently procured insurance coverage, any tax, fee, assessment, or other charge imposed by a government entity directly or indirectly based on any payment made as consideration for an insurance contract for such insurance, including premium deposits, assessments, registration fees, and any other compensation given in consideration for a contract of insurance.CommentsClose CommentsPermalink





(13) QUALIFIED RISK MANAGER- The term ‘qualified risk manager’ means, with respect to a policyholder of commercial insurance, a person who meets all of the following requirements:CommentsClose CommentsPermalink





(A) The person is an employee of, or third -party consultant retained by, the commercial policyholder.CommentsClose CommentsPermalink





(B) The person provides skilled services in loss prevention, loss reduction, or risk and insurance coverage analysis, and purchase of insurance.CommentsClose CommentsPermalink





(C) The person--CommentsClose CommentsPermalink





(i)(I) has a bachelor’s degree or higher from an accredited college or university in risk management, business administration, finance, economics, or any other field determined by a State insurance commissioner or other State regulatory official or entity to demonstrate minimum competence in risk management; andCommentsClose CommentsPermalink





(II)(aa) has 3 years of experience in risk financing, claims administration, loss prevention, risk and insurance analysis, or purchasing commercial lines of insurance; orCommentsClose CommentsPermalink





(bb) has 1 of the following designations:--CommentsClose CommentsPermalink





(AA) a designation as a Chartered Property and Casualty Underwriter (in this subparagraph referred to as ‘CPCU’) issued by the American Institute for CPCU/Insurance Institute of America;CommentsClose CommentsPermalink





(BB) a designation as an Associate in Risk Management (ARM) issued by the American Institute for CPCU/Insurance Institute of America;CommentsClose CommentsPermalink





(CC) a designation as Certified Risk Manager (CRM) issued by the National Alliance for Insurance Education & Research;CommentsClose CommentsPermalink





(DD) a designation as a RIMS Fellow (RF) issued by the Global Risk Management Institute; orCommentsClose CommentsPermalink





(EE) any other designation, certification, or license determined by a State insurance commissioner or other State insurance regulatory official or entity to demonstrate minimum competency in risk management;CommentsClose CommentsPermalink





(ii)(I) has at least 7 years of experience in risk financing, claims administration, loss prevention, risk and insurance coverage analysis, or purchasing commercial lines of insurance; andCommentsClose CommentsPermalink





(II) has any 1 of the designations specified in subitems (AA) through (EE) of clause (i)(II)(bb);CommentsClose CommentsPermalink





(iii) has at least 10 years of experience in risk financing, claims administration, loss prevention, risk and insurance coverage analysis, or purchasing commercial lines of insurance; orCommentsClose CommentsPermalink





(iv) has a graduate degree from an accredited college or university in risk management, business administration, finance, economics, or any other field determined by a State insurance commissioner or other State regulatory official or entity to demonstrate minimum competence in risk management.CommentsClose CommentsPermalink





(13) PREMIUM TAX- The term ‘premium tax’ means, with respect to surplus lines or independently procured insurance coverage, any tax, fee, assessment, or other charge imposed by a government entity directly or indirectly based on any payment made as consideration for an insurance contract for such insurance, including premium deposits, assessments, registration fees, and any other compensation given in consideration for a contract of insurance.(144) REINSURANCE- The term ‘reinsurance’ means the assumption by an insurer of all or part of a risk undertaken originally by another insurer.CommentsClose CommentsPermalink





(15) SURPLUS LINES BROKER- The term ‘surplus lines broker’ means an individual, firm, or corporation which is licensed in a State to sell, solicit, or negotiate insurance on properties, risks, or exposures located or to be performed in a State with nonadmitted insurers.CommentsClose CommentsPermalink





(16) STATE- The term ‘State’ includes any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, the Northern Mariana Islands, the Virgin Islands, and American Samoa.CommentsClose CommentsPermalink

PART II--REINSURANCE

SEC. 531. REGULATION OF CREDIT FOR REINSURANCE AND REINSURANCE AGREEMENTS.CommentsClose CommentsPermalink

(a) Credit for Reinsurance- If the State of domicile of a ceding insurer is an NAIC-accredited State, or has financial solvency requirements substantially similar to the requirements necessary for NAIC accreditation, and recognizes credit for reinsurance for the insurer’s ceded risk, then no other State may deny such credit for reinsurance.CommentsClose CommentsPermalink





(b) Additional Preemption of Extraterritorial Application of State Law- In addition to the application of subsection (a), all laws, regulations, provisions, or other actions of a State that is not the domiciliary State of the ceding insurer, except those with respect to taxes and assessments on insurance companies or insurance income, are preempted to the extent that they--CommentsClose CommentsPermalink





(1) restrict or eliminate the rights of the ceding insurer or the assuming insurer to resolve disputes pursuant to contractual arbitration to the extent such contractual provision is not inconsistent with the provisions of title 9, United States Code;CommentsClose CommentsPermalink





(2) require that a certain State’s law shall govern the reinsurance contract, disputes arising from the reinsurance contract, or requirements of the reinsurance contract;CommentsClose CommentsPermalink





(3) attempt to enforce a reinsurance contract on terms different than those set forth in the reinsurance contract, to the extent that the terms are not inconsistent with this part; orCommentsClose CommentsPermalink





(4) otherwise apply the laws of the State to reinsurance agreements of ceding insurers not domiciled in that State.CommentsClose CommentsPermalink

SEC. 532. REGULATION OF REINSURER SOLVENCY.CommentsClose CommentsPermalink

(a) Domiciliary State Regulation- If the State of domicile of a reinsurer is an NAIC-accredited State or has financial solvency requirements substantially similar to the requirements necessary for NAIC accreditation, such State shall be solely responsible for regulating the financial solvency of the reinsurer.CommentsClose CommentsPermalink





(b) Nondomiciliary States-CommentsClose CommentsPermalink





(1) LIMITATION ON FINANCIAL INFORMATION REQUIREMENTS- If the State of domicile of a reinsurer is an NAIC-accredited State or has financial solvency requirements substantially similar to the requirements necessary for NAIC accreditation, no other State may require the reinsurer to provide any additional financial information other than the information the reinsurer is required to file with its domiciliary State.CommentsClose CommentsPermalink





(2) RECEIPT OF INFORMATION- No provision of this section shall be construed as preventing or prohibiting a State that is not the State of domicile of a reinsurer from receiving a copy of any financial statement filed with its domiciliary State.CommentsClose CommentsPermalink

SEC. 533. DEFINITIONS.CommentsClose CommentsPermalink

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





(1) CEDING INSURER- The term ‘ceding insurer’ means an insurer that purchases reinsurance.CommentsClose CommentsPermalink





(2) DOMICILIARY STATE- The terms ‘State of domicile’ and ‘domiciliary State’ mean, with respect to an insurer or reinsurer, the State in which the insurer or reinsurer is incorporated or entered through, and licensed.CommentsClose CommentsPermalink





(3) NAIC- The term ‘NAIC’ means the National Association of Insurance Commissioners or any successor entity.CommentsClose CommentsPermalink





(4) REINSURANCE- The term ‘reinsurance’ means the assumption by an insurer of all or part of a risk undertaken originally by another insurer.CommentsClose CommentsPermalink





(45) REINSURER-CommentsClose CommentsPermalink





(A) IN GENERAL- The term ‘reinsurer’ means an insurer to the extent that the insurer--CommentsClose CommentsPermalink





(i) is principally engaged in the business of reinsurance;CommentsClose CommentsPermalink





(ii) does not conduct significant amounts of direct insurance as a percentage of its net premiums; andCommentsClose CommentsPermalink





(iii) is not engaged in an ongoing basis in the business of soliciting direct insurance.CommentsClose CommentsPermalink





(B) DETERMINATION- A determination of whether an insurer is a reinsurer shall be made under the laws of the State of domicile in accordance with this paragraph.CommentsClose CommentsPermalink





(6) STATE- The term ‘State’ includes any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, the Northern Mariana Islands, the Virgin Islands, and American Samoa.CommentsClose CommentsPermalink

PART III--RULE OF CONSTRUCTION

SEC. 541. RULE OF CONSTRUCTION.CommentsClose CommentsPermalink

Nothing in this subtitle or the amendments made by this subtitle shall be construed to modify, impair, or supersede the application of the antitrust laws. Any implied or actual conflict between this subtitle and any amendments to this subtitle and the antitrust laws shall be resolved in favor of the operation of the antitrust laws.CommentsClose CommentsPermalink

SEC. 542. SEVERABILITY.CommentsClose CommentsPermalink

If any section or subsection of this subtitle, or any application of such provision to any person or circumstance, is held to be unconstitutional, the remainder of this subtitle, and the application of the provision to any other person or circumstance, shall not be affected.CommentsClose CommentsPermalink

TITLE VI--IMPROVEMENTS TO REGULATION OF BANK AND SAVINGS ASSOCIATION HOLDING COMPANIES AND DEPOSITORY INSTITUTIONSCommentsClose CommentsPermalink

SEC. 601. SHORT TITLE.CommentsClose CommentsPermalink

This title may be cited as the ‘Bank and Savings Association Holding Company and Depository Institution Regulatory Improvements Act of 2010’.CommentsClose CommentsPermalink

SEC. 602. DEFINITION.CommentsClose CommentsPermalink

In this title, the termFor purposes of this title, a company is a ‘commercial firm’ means any entity that derives not less than 15 percent of the consolidatedif the annual gross revenues of the entity, including all affiliates of the entity, from engaging in activities that are not financial in nature or incidental to activities that are financial in nature, as providderived by the company and all of its affiliates from activities that are financial in nature (as defined in section 4(k) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(k))) and, if applicable, from the ownership or control of one or more insured depository institutions, represent less than 15 percent of the consolidated annual gross revenues of the company.CommentsClose CommentsPermalink

SEC. 603. MORATORIUM AND STUDY ON TREATMENT OF CREDIT CARD BANKS, INDUSTRIAL LOAN COMPANIES, AND CERTAIN OTHER COMPANIES UNDER THE BANK HOLDING COMPANY ACT OF 1956.CommentsClose CommentsPermalink

(a) Moratorium-CommentsClose CommentsPermalink





(1) DEFINITIONS- In this subsection--CommentsClose CommentsPermalink





(A) the term ‘credit card bank’ means an institution described in section 2(c)(2)(F) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(c)(2)(F));CommentsClose CommentsPermalink





(B) the term ‘industrial bank’ means an institution described in section 2(c)(2)(H) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(c)(2)(H)); andCommentsClose CommentsPermalink





(C) the term ‘trust bank’ means an institution described in section 2(c)(2)(D) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(c)(2)(D)).CommentsClose CommentsPermalink





(2) MORATORIUM ON PROVISION OF DEPOSIT INSURANCE- The Corporation may not approve an application for deposit insurance under section 5 of the Federal Deposit Insurance Act (12 U.S.C. 1815) that is received after November 1023, 2009, for an industrial bank, a credit card bank, or a trust bank that is directly or indirectly owned or controlled by a commercial firm.CommentsClose CommentsPermalink





(3) CHANGE IN CONTROL-CommentsClose CommentsPermalink





(A) IN GENERAL- Except as provided in subparagraph (B), the appropriate Federal banking agency shall disapprove a change in control, as provided in section 7(j) of the Federal Deposit Insurance Act (12 U.S.C. 1817(j)), of an industrial bank, a credit card bank, or a trust bank if the change in control would result in direct or indirect control of the industrial bank, credit card bank, or trust bank by a commercial firm.CommentsClose CommentsPermalink





(B) EXCEPTIONS- Subparagraph (A) shall not apply to a change in control of an industrial bank, credit card bank, or trust bank that--(i--CommentsClose CommentsPermalink





(i) that--CommentsClose CommentsPermalink





(I) is in danger of default, as determined by the appropriate Federal banking agency;CommentsClose CommentsPermalink





or(ii(II) results from the merger or whole acquisition of a commercial firm that directly or indirectly controls the industrial bank, credit card bank, or trust bank in a bona fide merger with or acquisition by another commercial firm, as determined by the appropriate Federal banking agency; orCommentsClose CommentsPermalink





(III) results from an acquisition of voting shares of a publicly traded company that controls an industrial bank, credit card bank, or trust bank, if, after the acquisition, the acquiring shareholder (or group of shareholders acting in concert) holds less than 25 percent of any class of the voting shares of the company; andCommentsClose CommentsPermalink





(ii) that has obtained all regulatory approvals otherwise required for such change of control under any applicable Federal or State law, including section 7(j) of the Federal Deposit Insurance Act (12 U.S.C. 1817(j)).CommentsClose CommentsPermalink





(4) SUNSET- This subsection shall cease to have effect 3 years after the date of enactment of this Act.CommentsClose CommentsPermalink





(b) Government Accountability Office Study of Exceptions Under the Bank Holding Company Act of 1956-CommentsClose CommentsPermalink





(1) STUDY REQUIRED- The Comptroller General of the United States shall carry out a study to determine whether it is necessary, in order to strengthen the safety and soundness of institutions or the stability of the financial system, to eliminate the exceptions under section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 1841) for institutions described in--CommentsClose CommentsPermalink





(A) section 2(a)(5)(E) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(a)(5)(E));CommentsClose CommentsPermalink





(B) section 2(a)(5)(F) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(a)(5)(F));CommentsClose CommentsPermalink





(C) section 2(c)(2)(D) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(c)(2)(D));CommentsClose CommentsPermalink





(D) section 2(c)(2)(F) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(c)(2)(F));CommentsClose CommentsPermalink





(E) section 2(c)(2)(H) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(c)(2)(H)); andCommentsClose CommentsPermalink





(F) section 2(c)(2)(B) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(c)(2)(B)).CommentsClose CommentsPermalink





(2) CONTENT OF STUDY-CommentsClose CommentsPermalink





(A) IN GENERAL- The study required under paragraph (1), with respect to the institutions referenced in each of subparagraphs (A) through (E) of paragraph (1), shall, to the extent feasible be based on information provided to the Comptroller General by the appropriate Federal or State regulator, and shall--CommentsClose CommentsPermalink





(i) identify the types and number of institutions excepted from section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 1841) under each of the subparagraphs described in subparagraphs (A) through (E) of paragraph (1);CommentsClose CommentsPermalink





(ii) generally describe the size and geographic locations of the institutions described in clause (i);CommentsClose CommentsPermalink





(iii) determine the extent to which the institutions described in clause (i) are held by holding companies that are commercial firms;CommentsClose CommentsPermalink





(iv) determine whether the institutions described in clause (i) have any affiliates that are commercial firms;CommentsClose CommentsPermalink





(v) identify the Federal banking agency responsible for the supervision of the institutions described in clause (i) on and after the transfer date;CommentsClose CommentsPermalink





(vi) determine the adequacy of the Federal bank regulatory framework applicable to each category of institution described in clause (i), including any restrictions (including limitations on affiliate transactions or cross-marketing) that apply to transactions between an institution, the holding company of the institution, and any other affiliate of the institution; andCommentsClose CommentsPermalink





(vii) evaluate the potential consequences of subjecting the institutions described in clause (i) to the requirements of the Bank Holding Company Act of 1956, including with respect to the availability and allocation of credit, the stability of the financial system and the economy, the safe and sound operation of each category of institution, and the impact on the types of activities in which such institutions, and the holding companies of such institutions, may engage.CommentsClose CommentsPermalink





(B) SAVINGS ASSOCIATIONS- With respect to institutions described in paragraph (1)(F), the study required under paragraph (1) shall--CommentsClose CommentsPermalink





(i) determine the adequacy of the Federal bank regulatory framework applicable to such institutions, including any restrictions (including limitations on affiliate transactions or cross-marketing) that apply to transactions between an institution, the holding company of the institution, and any other affiliate of the institution; andCommentsClose CommentsPermalink





(ii) evaluate the potential consequences of subjecting the institutions described in paragraph (1)(F) to the requirements of the Bank Holding Company Act of 1956, including with respect to the availability and allocation of credit, the stability of the financial system and the economy, the safe and sound operation of such institutions, and the impact on the types of activities in which such institutions, and the holding companies of such institutions, may engage.CommentsClose CommentsPermalink





(3) REPORT- Not later than 18 months after the date of enactment of this Act, the Comptroller General shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a report on the study required under paragraph (1).CommentsClose CommentsPermalink

SEC. 604. REPORTS AND EXAMINATIONS OF HOLDING COMPANIES; REGULATION OF FUNCTIONALLY REGULATED SUBSIDIARIES.CommentsClose CommentsPermalink

(a) Reports by Bank Holding Companies- Sections 5(c)(1) of the Bank Holding Company Act of 1956 (12 U.S.C. 1844(c)(1)) is amended--CommentsClose CommentsPermalink





(1) by striking subclause (A)(ii) and inserting the following:CommentsClose CommentsPermalink





‘(ii) compliance by the bank holding company or subsidiary with--CommentsClose CommentsPermalink





‘(I) this Act;CommentsClose CommentsPermalink





‘(II) Federal laws that the Board has specific jurisdiction to enforce against the company or subsidiary; andCommentsClose CommentsPermalink





‘(III) other than in the case of an insured depository institution or functionally regulated subsidiary, any other applicable provision of Federal law.’;CommentsClose CommentsPermalink





(2) by striking subparagraph (B) and inserting the following:CommentsClose CommentsPermalink





‘(B) USE OF EXISTING REPORTS AND OTHER SUPERVISORY INFORMATION- The appropriate Federal banking agency for a bank holding companyBoard shall, to the fullest extent possible, use--CommentsClose CommentsPermalink





‘(i) reports and other supervisory information that the bank holding company or any subsidiary thereof has been required to provide to other Federal or State regulatory agencies;CommentsClose CommentsPermalink





‘(ii) externally audited financial statements of the bank holding company or subsidiary;CommentsClose CommentsPermalink





‘(iii) information otherwise available from Federal or State regulatory agencies; andCommentsClose CommentsPermalink





‘(iv) information that is otherwise required to be reported publicly.’; andCommentsClose CommentsPermalink





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





‘(C) AVAILABILITY- Upon the request of the appropriate Federal banking agency for a bank holding company, the bank holding company or a subsidiaryBoard, the bank holding company or a subsidiary of the bank holding company shall promptly provide to the appropriate Federal banking agency any information described inBoard any information described in clauses (i) through (iii) of subparagraph (B).’.CommentsClose CommentsPermalink





(b) Examinations of Bank Holding Companies- Section 5(c)(2) of the Bank Holding Company Act of 1956 (12 U.S.C. 1844(c)(2)) is amended to read as follows:CommentsClose CommentsPermalink





‘(2) EXAMINATIONS-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The appropriate Federal banking agency for a bank holding company may make examinations of the bank holding company and each subsidiary of theSubject to subtitle B of the Consumer Financial Protection Act of 2010, the Board may make examinations of a bank holding company and each subsidiary of a bank holding company in order to--CommentsClose CommentsPermalink





‘(i) inform such appropriate Federal banking agencythe Board of--CommentsClose CommentsPermalink





‘(I) the nature of the operations and financial condition of the bank holding company and the subsidiary;CommentsClose CommentsPermalink





‘(II) the financial, operational, and other risks within the bank holding company system that may pose a threat to--CommentsClose CommentsPermalink

‘(aa) the safety and soundness of the bank holding company or of any depository institution subsidiary of the bank holding company; orCommentsClose CommentsPermalink

‘(bb) the stability of the financial system of the United States; andCommentsClose CommentsPermalink

‘(III) the systems of the bank holding company for monitoring and controlling the risks described in subclause (II); andCommentsClose CommentsPermalink





‘(ii) enforcemonitor the compliance of the bank holding company and the subsidiary with this Act and any other Federal law that such appropriate Federal banking agency has specific jurisdiction to enforce against the bank holding company or subsidiary--CommentsClose CommentsPermalink





‘(I) this Act;CommentsClose CommentsPermalink





‘(II) Federal laws that the Board has specific jurisdiction to enforce against the company or subsidiary; andCommentsClose CommentsPermalink





‘(III) other than in the case of an insured depository institution or functionally regulated subsidiary, any other applicable provisions of Federal law.CommentsClose CommentsPermalink





‘(B) USE OF REPORTS TO REDUCE EXAMINATIONS- For purposes of this paragraph, the appropriate Federal banking agency for a bank holding companyBoard shall, to the fullest extent possible, rely on--CommentsClose CommentsPermalink





‘(i) examination reports made by other Federal or State regulatory agencies relating to thea bank holding company and any subsidiary of thea bank holding company; andCommentsClose CommentsPermalink





‘(ii) the reports and other information required under paragraph (1).CommentsClose CommentsPermalink





‘(C) COORDINATION WITH OTHER REGULATORS- The appropriate Federal banking agency for a bank holding companyBoard shall--CommentsClose CommentsPermalink





‘(i) provide reasonable notice to, and consult with, the appropriate Federal banking agency or State regulatory agency of a subsidiary that is a depository institution, the Securities and Exchange Commission, the Commodity Futures Trading Commission, or State regulatory agency, as appropriate, for a subsidiary that is a depository institution or a functionally regulated subsidiary of a bank holding company before commencing an examination of the subsidiary under this section; andCommentsClose CommentsPermalink





‘(ii) to the fullest extent possible, avoid duplication of examination activities, reporting requirements, and requests for information.’.CommentsClose CommentsPermalink





(c) Authority To Regulate Functionally Regulated Subsidiaries of Bank Holding Companies- The Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) is amended--CommentsClose CommentsPermalink





(1) in section 5(c)(5)(B) (12 U.S.C. 1844(c)), by striking paragraphs (3) and (4) and inserting the following:

‘(3) [Reserved]

‘(4) [Reserved](5)(B)), by striking clause (v) and inserting the following:CommentsClose CommentsPermalink




‘(v) an entity that is subject to regulation by, or registration with, the Commodity Futures Trading Commission, with respect to activities conducted as a futures commission merchant, commodity trading adviser, commodity pool, commodity pool operator, swap execution facility, swap data repository, swap dealer, major swap participant, and activities that are incidental to such commodities and swaps activities.’; andCommentsClose CommentsPermalink





(2) by striking section 10A (12 U.S.C. 1848a).CommentsClose CommentsPermalink





(d) Acquisitions of Banks- Section 3(c) of the Bank Holding Company Act of 1956 (12 U.S.C. 1842(c)) is amended by adding at the end the following:CommentsClose CommentsPermalink





‘(7) FINANCIAL STABILITY- In every case, the appropriate Federal banking agency of a bank holding companyBoard shall take into consideration the extent to which a proposed acquisition, merger, or consolidation would result in greater or more concentrated risks to the stability of the United States banking or financial system.’.CommentsClose CommentsPermalink





(e) Acquisitions of Nonbanks-CommentsClose CommentsPermalink





(1) NOTICE PROCEDURES- Section 4(j)(2)(A) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(j)(2)(A)) is amended by striking ‘or unsound banking practices’ and inserting ‘unsound banking practices, or risk to the stability of the United States banking or financial system’.CommentsClose CommentsPermalink





(2) ACTIVITIES THAT ARE FINANCIAL IN NATURE- Section 4(k)(6)(B) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(k)(6)(B)) is amended to read as follows:CommentsClose CommentsPermalink





‘(B) APPROVAL NOT REQUIRED FOR CERTAIN FINANCIAL ACTIVITIES-CommentsClose CommentsPermalink





‘(i) IN GENERAL- Except as provided in subsection (j) with regard to the acquisition of a savings association and clause (ii), a financial holding company may commence any activity, or acquire any company, pursuant to paragraph (4) or any regulation prescribed or order issued under paragraph (5), without prior approval of the appropriate Federal banking agency for the financial holding company.‘(ii)Board.CommentsClose CommentsPermalink





‘(ii) EXCEPTION- A financial holding company may not acquire a company, without the prior approval of the appropriate Federal banking agency for the financial holding companyBoard, in a transaction in which the total consolidated assets to be acquired by the financial holding company exceed $25,000,000,00010,000,000,000.CommentsClose CommentsPermalink





‘(iii) HART-SCOTT-RODINO FILING REQUIREMENT- Solely for purposes of section 7A(c)(8) of the Clayton Act (15 U.S.C. 18a(c)(8)), the transactions subject to the requirements of this paragraph shall be treated as if the approval of the Board is not required.’.CommentsClose CommentsPermalink





(f) Bank Merger Act Transactions- Section 18(c)(5) of the Federal Deposit Insurance Act (12 U.S.C. 1828(c)(5)) is amended, in the matter immediately following subparagraph (B), by striking ‘and the convenience and needs of the community to be served’ and inserting ‘the convenience and needs of the community to be served, and the risk to the stability of the United States banking or financial system’.CommentsClose CommentsPermalink





(g) Reports by Savings and Loan Holding Companies- Section 10(b)(2) of the Home Owners’ Loan Act (12 U.S.C. 1467a(b)(2) is amended--CommentsClose CommentsPermalink





(1) by striking ‘Each savings’ and inserting the following:CommentsClose CommentsPermalink





‘(A) IN GENERAL- Each savings’; andCommentsClose CommentsPermalink





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





‘(B) USE OF EXISTING REPORTS AND OTHER SUPERVISORY INFORMATION- The appropriate Federal banking agency for a savings and loan holding companyBoard shall, to the fullest extent possible, use--CommentsClose CommentsPermalink





‘(i) reports and other supervisory information that the savings and loan holding company or any subsidiary thereof has been required to provide to other Federal or State regulatory agencies;CommentsClose CommentsPermalink





‘(ii) externally audited financial statements of the savings and loan holding company or subsidiary;CommentsClose CommentsPermalink





‘(iii) information that is otherwise available from Federal or State regulatory agencies; andCommentsClose CommentsPermalink





‘(iv) information that is otherwise required to be reported publicly.CommentsClose CommentsPermalink





‘(C) AVAILABILITY- Upon the request of the appropriate Federal banking agency for a savings and loan holding company, the savings and loan holding company or a subsidiary of the savings and loan holding company shall promptly provide to the appropriate Federal banking agency any information described inBoard, a savings and loan holding company or a subsidiary of a savings and loan holding company shall promptly provide to the Board any information described in clauses (i) through (iii) of subparagraph (B).’.CommentsClose CommentsPermalink





(h) Examination of Savings and Loan Holding Companies-CommentsClose CommentsPermalink





(1) DEFINITIONS- Section 2 of the Home Owners’ Loan Act (12 U.S.C. 1462) is amended by adding at the end the following:CommentsClose CommentsPermalink





‘(10) APPROPRIATE FEDERAL BANKING AGENCY- The term ‘appropriate Federal banking agency’ has the same meaning as in section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)).CommentsClose CommentsPermalink





‘(11) FUNCTIONALLY REGULATED SUBSIDIARY- The term ‘functionally regulated subsidiary’ has the same meaning as in section 5(c)(5) of the Bank Holding Company Act of 1956 (12 U.S.C. 1844(c)(5)).’.CommentsClose CommentsPermalink





(2) EXAMINATION- Section 10(b) of the Home Owners’ Loan Act (12 U.S.C. 1467a(b)) is amended by striking paragraph (4) and inserting the following:CommentsClose CommentsPermalink





‘(4) EXAMINATIONS-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The appropriate Federal banking agency for a savings and loan holding company may make examinations of theSubject to subtitle B of the Consumer Financial Protection Act of 2010, the Board may make examinations of a savings and loan holding company and each subsidiary of thea savings and loan holding company system, in order to--CommentsClose CommentsPermalink





‘(i) inform such appropriate Federal banking agencythe Board of--CommentsClose CommentsPermalink





‘(I) the nature of the operations and financial condition of the savings and loan holding company and the subsidiary;CommentsClose CommentsPermalink





‘(II) the financial, operational, and other risks within the savings and loan holding company that maysystem that may pose a threat to--CommentsClose CommentsPermalink

‘(aa) the safety and soundness of the savings and loan holding company or of any depository institution subsidiary of the savings and loan holding company; orCommentsClose CommentsPermalink

‘(bb) the stability of the financial system of the United States; andCommentsClose CommentsPermalink

‘(III) the systems of the savings and loan holding company for monitoring and controlling the risks described in subclause (II); andCommentsClose CommentsPermalink





‘(ii) enforcemonitor the compliance of the savings and loan holding company and the subsidiary with this Act and any other Federal law that such appropriate Federal banking agency has specific jurisdiction to enforce against the savings and loan holding company or subsidiary.‘(B) --CommentsClose CommentsPermalink





‘(I) this Act;CommentsClose CommentsPermalink





‘(II) Federal laws that the Board has specific jurisdiction to enforce against the company or subsidiary; andCommentsClose CommentsPermalink





‘(III) other than in the case of an insured depository institution or functionally regulated subsidiary, any other applicable provisions of Federal law.CommentsClose CommentsPermalink





‘(B) USE OF REPORTS TO REDUCE EXAMINATIONS- For purposes of this subsection, the appropriate Federal banking agency for a savings and loan holding companyBoard shall, to the fullest extent possible, rely on--CommentsClose CommentsPermalink





‘(i) the examination reports made by other Federal or State regulatory agencies relating to thea savings and loan holding company and any subsidiary; andCommentsClose CommentsPermalink





‘(ii) the reports and other information required under paragraph (2).CommentsClose CommentsPermalink





‘(C) COORDINATION WITH OTHER REGULATORS- The appropriate Federal banking agency for a savings and loan holding company shall--‘(i) provide reasonable notice to, and consult with, the appropriate Federal banking agency or State regulatory agency of a subsidiary that is a depository institutionBoard shall--CommentsClose CommentsPermalink





‘(i) provide reasonable notice to, and consult with, the appropriate Federal banking agency, the Securities and Exchange Commission, the Commodity Futures Trading Commission, or State regulatory agency, as appropriate, for a subsidiary that is a depository institution or a functionally regulated subsidiary of a savings and loan holding company before commencing an examination of the subsidiary under this section; andCommentsClose CommentsPermalink





‘(ii) to the fullest extent possible, avoid duplication of examination activities, reporting requirements, and requests for information.’.CommentsClose CommentsPermalink





(i) Definition of the Term ‘Savings and Loan Holding Company’- Section 10(a)(1)(D)(ii) of the Home Owners’ Loan Act (12 U.S.C. 1467a(a)(1)(D)(ii)) is amended to read as follows:CommentsClose CommentsPermalink





‘(ii) EXCLUSION- The term ‘savings and loan holding company’ does not include--CommentsClose CommentsPermalink





‘(I) a bank holding company that is registered under, and subject to, the Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.), or to any company directly or indirectly controlled by such company (other than a savings association);CommentsClose CommentsPermalink





‘(II) a company that controls a savings association that functions solely in a trust or fiduciary capacity as described in section 2(c)(2)(D) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(c)(2)(D)); orCommentsClose CommentsPermalink





‘(III) a company described in subsection (c)(9)(C) solely by virtue of such company’s control of an intermediate holding company established pursuant to section 10A.’.CommentsClose CommentsPermalink





(j) Effective Date- The amendments made by this section shall take effect on the transfer date.CommentsClose CommentsPermalink

SEC. 605. ASSURING CONSISTENT OVERSIGHT OF PERMISSIBLE ACTIVITIES OF DEPOSITORY INSTITUTION SUBSIDIARIES OF HOLDING COMPANIES.CommentsClose CommentsPermalink

Section 6 of the Bank Holding Company Act of 1956(a) In General- The Federal Deposit Insurance Act (12 U.S.C. 1845) is amended to read as follows:‘SEC. 11 et seq.) is amended by inserting after section 25 the following new section:CommentsClose CommentsPermalink





‘SEC. 26. ASSURING CONSISTENT OVERSIGHT OF PERMISSIBLE ACTIVITIES OF DEPOSITORY INSTITUTION SUBSIDIARIES OF HOLDING COMPANIES.CommentsClose CommentsPermalink





‘(a) Definitions-

‘(1) DEFINITIONS- In this section--

‘(A) the term ‘depository institution holding company’ has the same meaning as in section 3(w) of the Federal Deposit Insurance Act (12 U.S.C. 1813(w));

‘(B) t For purposes of this section:CommentsClose CommentsPermalink





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





‘(2) FUNCTIONALLY REGULATED SUBSIDIARY- The term ‘functionally regulated subsidiary’ has the same meaning as in section 5(c)(5); and

‘(C) the term ‘lead Federal banking agency’ means--

‘(i) the Office of the Comptroller of the Currency, in the case of any depository institution holding company having--

‘(I) a subsidiary that is an insured depository institution, if all such insured depository institutions are Federal depository institutions; or

‘(II) a subsidiary that is a Federal depository institution and a subsidiary that is a State depository institution, if the total consolidated assets of all subsidiaries that are Federal depository institutions exceed the total consolidated assets of all subsidiaries that are State depository institutions; and

‘(ii) the Federal Deposit Insurance Corporation, in the case of any depository institution holding company having--

‘(I) a subsidiary that is an insured depository institution, if all such insured depository institutions are State depository institutions; or

‘(II) a subsidiary that is a Federal depository institution and a subsidiary that is a State depository institution, if the total consolidated assets of all subsidiaries that are State depository institutions exceed the total consolidated assets of all subsidiaries that are Federal depository institutions.

‘(2) DETERMINATION OF TOTAL CONSOLIDATED ASSETS- For purposes of paragraph (1)(A), the total consolidated assets of a depository institution shall be determined in the same manner that total consolidated assets of depository institutions are determined for purposes of section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)) of the Bank Holding Company Act.CommentsClose CommentsPermalink




‘(3) LEAD INSURED DEPOSITORY INSTITUTION- The term ‘lead insured depository institution’ has the same meaning as in section 2(o)(8) of the Bank Holding Company Act.CommentsClose CommentsPermalink





‘(b) Lead Agency Supervision-‘(1) IN GENERAL- The lead Federal banking agency for each depository institution holding company shall make examinations of the activities of eachExamination Requirements- Subject to subtitle B of the Consumer Financial Protection Act of 2010, the Board shall examine the activities of a nondepository institution subsidiary (other than a functionally regulated subsidiary) of the depository institution holding company that are permissible for or a subsidiary of a depository institution) of a depository institution holding company that are permissible for the insured depository institution subsidiaries of the depository institution holding company in the same manner, subject to the same standards, and with the same frequency as would be required if such activities were conducted in the lead insured depository institution of the depository institution holding company.CommentsClose CommentsPermalink





‘(c) State Coordination-CommentsClose CommentsPermalink





‘(1) CONSULTATION AND COORDINATION- If a nondepository institution subsidiary is supervised by a State bank supervisor or other State regulatory authority, the Board, in conducting the examinations required in subsection (b), shall consult and coordinate with such State regulator.CommentsClose CommentsPermalink





‘(2) ALTERNATING EXAMINATIONS PERMITTED- The examinations required under subsection (b) may be conducted in joint or alternating manner with a State regulator, if the Board determines that an examination of a nondepository institution subsidiary conducted by the State carries out the purposes of this section.CommentsClose CommentsPermalink





‘(d) Appropriate Federal Banking Agency Backup Examination Authority-CommentsClose CommentsPermalink





‘(1) IN GENERAL- In the event that the Board does not conduct examinations required under subsection (b) in the same manner, subject to the same standards, and with the same frequency as would be required if such activities were conducted by the lead insured depository institution subsidiary of the depository institution holding company, the appropriate Federal banking agency for the lead insured depository institution may recommend in writing (which shall include a written explanation of the concerns giving rise to the recommendation) that the Board perform the examination required under subsection (b).CommentsClose CommentsPermalink





‘(2) EXAMINATION BY AN APPROPRIATE FEDERAL BANKING AGENCY- If the Board does not, before the end of the 60-day period beginning on the date on which the Board receives a recommendation under paragraph (1), begin an examination as required under subsection (b) or provide a written explanation or plan to the appropriate Federal banking agency making such recommendation responding to the concerns raised by the appropriate Federal banking agency for the lead insured depository institution, the appropriate Federal banking agency for the lead insured depository institution may, subject to the Consumer Financial Protection Act of 2010, examine the activities that are permissible for a depository institution subsidiary conducted by such nondepository institution subsidiary (other than a functionally regulated subsidiary or a subsidiary of a depository institution) of the depository institution holding company as if the nondepository institution subsidiary were an insured depository institution for which the appropriate Federal banking agency of the lead insured depository institution was the appropriate Federal banking agency, to determine whether the activities--CommentsClose CommentsPermalink





‘(A) present safety and soundness risks to anyose a material threat to the safety and soundness of any insured depository institution subsidiary of the depository institution holding company;CommentsClose CommentsPermalink





‘(B) are conducted in accordance with applicable Federal law; andCommentsClose CommentsPermalink





‘(C) are subject to appropriate systems for monitoring and controlling the financial, operating, and other risks of the activity and protecting thematerial risks of the activities that may pose a material threat to the safety and soundness of the insured depository institution subsidiaries of the holding company.CommentsClose CommentsPermalink





‘(2) PROCESS FOR EXAMINATION- An examination under paragraph (1) shall be carried out under the authority of the lead Federal banking agency, as if the nondepository institution subsidiary were an insured depository institution for which the lead Federal banking agency is the appropriate Federal banking agency.‘(c) Coordination- For each depository institution holding company for which the Board of Governors is the appropriate Federal banking agency, the lead Federal banking agency of the depository institution holding company shall coordinate the supervis3) AGENCY COORDINATION WITH THE BOARD- An appropriate Federal banking agency that conducts an examination pursuant to paragraph (2) shall coordinate examination of the activities of nondepository institution subsidiaries described in subsection (b) with the Board of Governors, in a manner that--‘(1in a manner that--CommentsClose CommentsPermalink





‘(A) avoids duplication;CommentsClose CommentsPermalink





‘(2B) shares information relevant to the supervision of the depository institution holding company by each agency;‘(3) ;CommentsClose CommentsPermalink





‘(C) achieves the objectives of subsection (b); andCommentsClose CommentsPermalink





‘(4D) ensures that the depository institution holding company and the subsidiaries of the depository institution holding company are not subject to conflicting supervisory demands by the 2 agencies.‘(d) Referrals for Enforcementsuch agency and the Board.CommentsClose CommentsPermalink





‘(4) FEE PERMITTED FOR EXAMINATION COSTS- An appropriate Federal banking agency that conducts an examination or enforcement action pursuant to this section may collect an assessment, fee, or such other charge from the subsidiary as the appropriate Federal banking agency determines necessary or appropriate to carry out the responsibilities of the appropriate Federal banking agency in connection with such examination.CommentsClose CommentsPermalink





‘(e) Referrals for Enforcement by Appropriate Federal Banking Agency-CommentsClose CommentsPermalink





‘(1) RECOMMENDATION OF ACTION BY BOARD OF GOVERNORS- The lead Federal banking agency for a depository institution holding company, based on information obtained pursuant to the responsibilities of the agency under subsection (b), may submit to the Board of Governors, in writing, a recommendation that the Board of Governors take enforcement action againstENFORCEMENT ACTION- The appropriate Federal banking agency for the lead insured depository institution, based upon its examination of a nondepository institution subsidiary (other than a functionally regulated subsidiary) of the depository institution holding company,conducted pursuant to subsection (d), or other relevant information, may submit to the Board, in writing, a recommendation that the Board take enforcement action against such nondepository institution subsidiary, together with an explanation of the concerns giving rise to the recommendation, if the appropriate Federal banking agency determines (by a vote of its members, if applicable) that the activities of the nondepository institution subsidiary pose a material threat to the safety and soundness of any insured depository institution subsidiary of the depository institution holding company.CommentsClose CommentsPermalink





‘(2) BACK-UP AUTHORITY OF THE LEADAPPROPRIATE FEDERAL BANKING AGENCY- If, within the 60-day period beginning on the date on which the Board of Governors receives a recommendation under paragraph (1), the Board of Governors does not take enforcement action against areceives a recommendation under paragraph (1), the Board does not take enforcement action against the nondepository institution subsidiary or provide a plan for enforcement action that is acceptable to the lead Federal banking agency, the lead Federal banking agency (upon the authorization of the Comptroller, or the Federal Deposit Insurance Corporation, upon a vote of its members, as applicable) may take the supervisory or enforcement action that is acceptable to the appropriate Federal banking agency that made the recommendation pursuant to paragraph (1), such agency may take the recommended enforcement action, in the same manner as if the subsidiary were an insured depository institution for which the lead Federal banking agency is the appropriate Federal banking agency against the nondepository institution subsidiary, in the same manner as if the nondepository institution subsidiary were an insured depository institution for which the agency was the appropriate Federal banking agency.CommentsClose CommentsPermalink





‘(f) Coordination Among Appropriate Federal Banking Agencies- Each Federal banking agency, prior to or when exercising authority under subsection (d) or (e) shall--CommentsClose CommentsPermalink





‘(1) provide reasonable notice to, and consult with, the appropriate Federal banking agency or State bank supervisor (or other State regulatory agency) of the nondepository institution subsidiary of a depository institution holding company that is described in subsection (d) before commencing any examination of the subsidiary;CommentsClose CommentsPermalink





‘(2) to the fullest extent possible--CommentsClose CommentsPermalink





‘(A) rely on the examinations, inspections, and reports of the appropriate Federal banking agency or the State bank supervisor (or other State regulatory agency) of the subsidiary;CommentsClose CommentsPermalink





‘(B) avoid duplication of examination activities, reporting requirements, and requests for information; andCommentsClose CommentsPermalink





‘(C) ensure that the depository institution holding company and the subsidiaries of the depository institution holding company are not subject to conflicting supervisory demands by the appropriate Federal banking agencies.CommentsClose CommentsPermalink





‘(g) Rule of Construction- No provision of this section shall be construed as limiting any authority of the Board, the Corporation, or the Comptroller of the Currency under any other provision of law.’.CommentsClose CommentsPermalink





(b) Effective Date- The amendment made by subsection (a) shall take effect on the transfer date.CommentsClose CommentsPermalink

SEC. 606. REQUIREMENTS FOR FINANCIAL HOLDING COMPANIES TO REMAIN WELL CAPITALIZED AND WELL MANAGED.CommentsClose CommentsPermalink

(a) Amendment- Section 4(l)(1) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(l)(1)) is amended--CommentsClose CommentsPermalink





(1) in subparagraph (B), by striking ‘and’ at the end;CommentsClose CommentsPermalink





(2) by redesignating subparagraph (C) as subparagraph (D);CommentsClose CommentsPermalink





(3) by inserting after subparagraph (B) the following:CommentsClose CommentsPermalink





‘(C) the bank holding company is well capitalized and well managed; and’; andCommentsClose CommentsPermalink





(4) in subparagraph (D)(ii), as so redesignated, by striking ‘subparagraphs (A) and (B)’ and inserting ‘subparagraphs (A), (B), and (C)’.CommentsClose CommentsPermalink





(b) Home Owners’ Loan Act Amendment- Section 10(c)(2) of the Home Owners’ Loan Act (12 U.S.C. 1467a(c)(2)) is amended by adding at the end the following new subparagraph:CommentsClose CommentsPermalink





‘(H) Any activity that is permissible for a financial holding company (as such term is defined under section 2(p) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(p)) to conduct under section 4(k) of the Bank Holding Company Act of 1956 if--CommentsClose CommentsPermalink





‘(i) the savings and loan holding company meets all of the criteria to qualify as a financial holding company, and complies with all of the requirements applicable to a financial holding company, under sections 4(l) and 4(m) of the Bank Holding Company Act and section 804(c) of the Community Reinvestment Act of 1977 (12 U.S.C. 2903(c)) as if the savings and loan holding company was a bank holding company; andCommentsClose CommentsPermalink





‘(ii) the savings and loan holding company conducts the activity in accordance with the same terms, conditions, and requirements that apply to the conduct of such activity by a bank holding company under the Bank Holding Company Act of 1956 and the Board’s regulations and interpretations under such Act.’.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall take effect on the transfer date.CommentsClose CommentsPermalink

SEC. 607. STANDARDS FOR INTERSTATE ACQUISITIONS.CommentsClose CommentsPermalink

(a) Acquisition of Banks- Section 3(d)(1)(A) of the Bank Holding Company Act of 1956 (12 U.S.C. 1842(d)(1)(A)) is amended by striking ‘adequately capitalized and adequately managed’ and inserting ‘well capitalized and well managed’.CommentsClose CommentsPermalink





(b) Interstate Bank Mergers- Section 44(b)(4)(B) of the Federal Deposit Insurance Act (12 U.S.C. 1831u(b)(4)(B)) is amended by striking ‘will continue to be adequately capitalized and adequately managed’ and inserting ‘will be well capitalized and well managed’.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall take effect on the transfer date.CommentsClose CommentsPermalink

SEC. 608. ENHANCING EXISTING RESTRICTIONS ON BANK TRANSACTIONS WITH AFFILIATES.CommentsClose CommentsPermalink

(a) Affiliate Transactions- Section 23A of the Federal Reserve Act (12 U.S.C. 371c) is amended--CommentsClose CommentsPermalink





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





(A) in paragraph (1), by striking subparagraph (D) and inserting the following:CommentsClose CommentsPermalink





‘(D) any investment fund with respect to which a member bank or affiliate thereof is an investment adviser; and’; andCommentsClose CommentsPermalink





(B) in paragraph (7)--CommentsClose CommentsPermalink





(i) in subparagraph (A), by inserting before the semicolon at the end the following: ‘, including a purchase of assets subject to an agreement to repurchase’;CommentsClose CommentsPermalink





(ii) in subparagraph (C), by striking ‘, including assets subject to an agreement to repurchase’;(ii) in subparagraph (C), by striking ‘, including assets subject to an agreement to repurchase,’;CommentsClose CommentsPermalink





(iii) in subparagraph (D)--CommentsClose CommentsPermalink





(I) by inserting ‘or other debt obligations’ after ‘acceptance of securities’; andCommentsClose CommentsPermalink





(II) by striking ‘or’ at the end; andCommentsClose CommentsPermalink





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





‘(F) a transaction with an affiliate that involves the borrowing or lending of securities, to the extent that the transaction causes a member bank or a subsidiary to have credit exposure to the affiliate; orCommentsClose CommentsPermalink





‘(G) a derivative transaction, as defined in paragraph (3) of section 5200(b) of the Revised Statutes of the United States (12 U.S.C. 84(b)), with an affiliate, to the extent that the transaction causes a member bank or a subsidiary to have credit exposure to the affiliate;’;CommentsClose CommentsPermalink





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





(A) in paragraph (1)--CommentsClose CommentsPermalink





(i) in the matter preceding subparagraph (A), by striking ‘subsidiary’ and all that follows through ‘time of the transaction’ and inserting ‘subsidiary, and any credit exposure of a member bank or a subsidiary to an affiliate resulting from a securities borrowing or lending transaction, or a derivative transaction, shall be secured at all times’; andCommentsClose CommentsPermalink





(ii) in each of subparagraphs (A) through (D), by striking ‘or letter of credit’ and inserting ‘letter of credit, or credit exposure’;CommentsClose CommentsPermalink





(B) by striking paragraph (2);CommentsClose CommentsPermalink





(C) by redesignating paragraphs (3) through (5) as paragraphs (2) through (4), respectively;CommentsClose CommentsPermalink





(D) in paragraph (2), as so redesignated, by inserting before the period at the end ‘, or credit exposure to an affiliate resulting from a securities borrowing or lending transaction, or derivative transaction’; andCommentsClose CommentsPermalink





(E) in paragraph (3), as so redesignated--CommentsClose CommentsPermalink





(i) by inserting ‘or other debt obligations’ after ‘securities’; andCommentsClose CommentsPermalink





(ii) by striking ‘or guarantee’ and all that follows through ‘behalf of,’ and inserting ‘guarantee, acceptance, or letter of credit issued on behalf of, or credit exposure from a securities borrowing or lending transaction, or derivative transaction to,’;CommentsClose CommentsPermalink





(3) in subsection (d)(4), in the matter preceding subparagraph (A), by striking ‘or issuing’ and all that follows through ‘behalf of,’ and inserting ‘issuing a guarantee, acceptance, or letter of credit on behalf of, or having credit exposure resulting from a securities borrowing or lending transaction, or derivative transaction to,’; andCommentsClose CommentsPermalink





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





(A) in paragraph (2)--CommentsClose CommentsPermalink





(i) by striking ‘or order’;CommentsClose CommentsPermalink





(ii) by striking ‘if it finds’ and all that follows through the end of the paragraph and inserting the following: ‘if--CommentsClose CommentsPermalink





‘(i) the Board finds the exemption to be in the public interest and consistent with the purposes of this section, and notifies the Federal Deposit Insurance Corporation of such finding; andCommentsClose CommentsPermalink





‘(ii) before the end of the 60-day period beginning on the date on which the Federal Deposit Insurance Corporation receives notice of the finding under clause (i), the Federal Deposit Insurance Corporation does not object, in writing, to the finding, based on a determination that the exemption presents an unacceptable risk to the Deposit Insurance Fund.’;CommentsClose CommentsPermalink





(iii) by striking the Board and inserting the following:CommentsClose CommentsPermalink





‘(A) IN GENERAL- The Board’; andCommentsClose CommentsPermalink





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





‘(B) ADDITIONAL EXEMPTIONS-CommentsClose CommentsPermalink





‘(i) NATIONAL BANKS- The Comptroller of the Currency may, by order, exempt a transaction of a national bank from the requirements of this section if--CommentsClose CommentsPermalink





‘(I) the Board and the Office of the Comptroller of the Currency jointly find the exemption to be in the public interest and consistent with the purposes of this section and notify the Federal Deposit Insurance Corporation of such finding; andCommentsClose CommentsPermalink





‘(II) before the end of the 60-day period beginning on the date on which the Federal Deposit Insurance Corporation receives notice of the finding under subclause (I), the Federal Deposit Insurance Corporation does not object, in writing, to the finding, based on a determination that the exemption presents an unacceptable risk to the Deposit Insurance Fund.CommentsClose CommentsPermalink





‘(ii) STATE BANKS- The Federal Deposit Insurance Corporation may, by order, exempt a transaction of a State nonmember bank, and the Board may, by order, exempt a transaction of a State member bank, from the requirements of this section if--CommentsClose CommentsPermalink





‘(I) the Board and the Federal Deposit Insurance Corporation jointly find that the exemption is in the public interest and consistent with the purposes of this section; andCommentsClose CommentsPermalink





‘(II) the Federal Deposit Insurance Corporation finds that the exemption does not present an unacceptable risk to the Deposit Insurance Fund.’; andCommentsClose CommentsPermalink





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





‘(4) AMOUNTS OF COVERED TRANSACTIONS- The Board may issue such regulations or interpretations as the Board determines are necessary or appropriate with respect to the manner in which a netting agreement may be taken into account in determining the amount of a covered transaction between a member bank or a subsidiary and an affiliate, including the extent to which netting agreements between a member bank or a subsidiary and an affiliate may be taken into account in determining whether a covered transaction is fully secured for purposes of subsection (d)(4). An interpretation under this paragraph with respect to a specific member bank, subsidiary, or affiliate shall be issued jointly with the appropriate Federal banking agency for such member bank, subsidiary, or affiliate.’.CommentsClose CommentsPermalink





(b) Transactions With Affiliates- Section 23B(e) of the Federal Reserve Act (12 U.S.C. 371c-1(e)) is amended--CommentsClose CommentsPermalink





(1) by striking the undesignated matter following subparagraph (B);CommentsClose CommentsPermalink





(2) by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively, and adjusting the clause margins accordingly;CommentsClose CommentsPermalink





(3) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively, and adjusting the subparagraph margins accordingly;CommentsClose CommentsPermalink





(4) by striking ‘The Board’ and inserting the following:CommentsClose CommentsPermalink





‘(1) IN GENERAL- The Board’;CommentsClose CommentsPermalink





(5) in paragraph (1)(B), as so redesignated--CommentsClose CommentsPermalink





(A) in the matter preceding clause (i), by inserting before ‘regulations’ the following: ‘subject to paragraph (2), if the Board finds that an exemption or exclusion is in the public interest and is consistent with the purposes of this section, and notifies the Federal Deposit Insurance Corporation of such finding,’; andCommentsClose CommentsPermalink





(B) in clause (ii), by striking the comma at the end and inserting a period; andCommentsClose CommentsPermalink





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





‘(2) EXCEPTION- The Board may grant an exemption or exclusion under this subsection only if, during the 60-day period beginning on the date of receipt of notice of the finding from the Board under paragraph (1)(B), the Federal Deposit Insurance Corporation does not object, in writing, to such exemption or exclusion, based on a determination that the exemption presents an unacceptable risk to the Deposit Insurance Fund.’.CommentsClose CommentsPermalink





(c) Home Owners’ Loan Act- Section 11 of the Home Owners’ Loan Act (12 U.S.C. 1468) is amended by adding at the end the following:CommentsClose CommentsPermalink





‘(d) Exemptions-CommentsClose CommentsPermalink





‘(1) FEDERAL SAVINGS ASSOCIATIONS- The Comptroller of the Currency may, by order, exempt a transaction of a Federal savings association from the requirements of this section if--CommentsClose CommentsPermalink





‘(A) the Board and the Office of the Comptroller of the Currency jointly find the exemption to be in the public interest and consistent with the purposes of this section and notify the Federal Deposit Insurance Corporation of such finding; andCommentsClose CommentsPermalink





‘(B) before the end of the 60-day period beginning on the date on which the Federal Deposit Insurance Corporation receives notice of the finding under subparagraph (A), the Federal Deposit Insurance Corporation does not object, in writing, to the finding, based on a determination that the exemption presents an unacceptable risk to the Deposit Insurance Fund.CommentsClose CommentsPermalink





‘(2) STATE SAVINGS ASSOCIATION- The Federal Deposit Insurance Corporation may, by order, exempt a transaction of a State savings association from the requirements of this section if the Board and the Federal Deposit Insurance Corporation jointly find that--CommentsClose CommentsPermalink





‘(A) the exemption is in the public interest and consistent with the purposes of this section; andCommentsClose CommentsPermalink





‘(B) the exemption does not present an unacceptable risk to the Deposit Insurance Fund.’.CommentsClose CommentsPermalink





(d) Effective Date- The amendments made by this section shall take effect 1 year after the transfer date.CommentsClose CommentsPermalink

SEC. 609. ELIMINATING EXCEPTIONS FOR TRANSACTIONS WITH FINANCIAL SUBSIDIARIES.CommentsClose CommentsPermalink

(a) Amendment- Section 23A(e) of the Federal Reserve Act (12 U.S.C. 371c(e)) is amended--CommentsClose CommentsPermalink





(1) by striking paragraph (3); andCommentsClose CommentsPermalink





(2) by redesignating paragraph (4) as paragraph (3).CommentsClose CommentsPermalink





(b) Prospective Application of Amendment- The amendments made by this section shall apply with respect to any covered transaction between a bank and a subsidiary of the bank, as those terms are defined in section 23A of the Federal Reserve Act (12 U.S.C. 371c), that is entered into on or after the date of enactment of this Act.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall take effect 1 year after the transfer date.CommentsClose CommentsPermalink

SEC. 610. LENDING LIMITS APPLICABLE TO CREDIT EXPOSURE ON DERIVATIVE TRANSACTIONS, REPURCHASE AGREEMENTS, REVERSE REPURCHASE AGREEMENTS, AND SECURITIES LENDING AND BORROWING TRANSACTIONS.CommentsClose CommentsPermalink

(a) National Banks- Section 5200(b) of the Revised Statutes of the United States (12 U.S.C. 84(b)) is amended--CommentsClose CommentsPermalink





(1) in paragraph (1), by striking ‘shall include’ and all that follows through the end of the paragraph and inserting the following: ‘shall include--CommentsClose CommentsPermalink





‘(A) all direct or indirect advances of funds to a person made on the basis of any obligation of that person to repay the funds or repayable from specific property pledged by or on behalf of the person;CommentsClose CommentsPermalink





‘(B) to the extent specified by the Comptroller of the Currency, any liability of a national banking association to advance funds to or on behalf of a person pursuant to a contractual commitment; andCommentsClose CommentsPermalink





‘(C) any credit exposure to a person arising from a derivative transaction, repurchase agreement, reverse repurchase agreement, securities lending transaction, or securities borrowing transaction between the national banking association and the person;’;CommentsClose CommentsPermalink





(2) in paragraph (2), by striking the period at the end and inserting ‘; and’; andCommentsClose CommentsPermalink





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





‘(3) the term ‘derivative transaction’ includes any transaction that is a contract, agreement, swap, warrant, note, or option that is based, in whole or in part, on the value of, any interest in, or any quantitative measure or the occurrence of any event relating to, one or more commodities, securities, currencies, interest or other rates, indices, or other assets.’.CommentsClose CommentsPermalink





(b) Savings Associations- Section 5(u)(3) of the Home Owners’ Loan Act (12 U.S.C. 1464(u)(3)) is amended by striking ‘Director’ each place that term appears and inserting ‘Comptroller of the Currency’.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall take effect 1 year after the transfer date.CommentsClose CommentsPermalink

SEC. 611. APPLICATION OF NATIONAL BANKCONSISTENT TREATMENT OF DERIVATIVE TRANSACTIONS IN LENDING LIMITS TO INSURED STATE BANKS.CommentsClose CommentsPermalink

(a) Amendment- Section 18 of the Federal Deposit Insurance Act (12 U.S.C. 1828) is amended by adding at the end the following:CommentsClose CommentsPermalink





‘(y) Application of Lending Limits to Insured State Banks- Section 5200State Lending Limit Treatment of Derivatives Transactions- An insured State bank may engage in a derivative transaction, as defined in section 5200(b)(3) of the Revised Statutes of the United States (12 U.S.C. 84) shall apply to each insured State bank, in the same manner and to the same extent as if the insured State bank were a national banking association(b)(3)), only if the law with respect to lending limits of the State in which the insured State bank is chartered takes into consideration credit exposure to derivative transactions.’.CommentsClose CommentsPermalink





(b) Effective Date- The amendment made by this section shall take effect 1 year8 months after the transfer date.CommentsClose CommentsPermalink

SEC. 612. RESTRICTION ON CONVERSIONS OF TROUBLED BANKS.CommentsClose CommentsPermalink

(a) Conversion of a National Banking Association to a State Bank- The Act entitled ‘An Act to provide for the conversion of national banking associations into and their merger or consolidation with State banks, and for other purposes.’ (12 U.S.C. 214 et seq.) is amended by adding at the end the following:CommentsClose CommentsPermalink





‘SEC. 10. PROHIBITION ON CONVERSION.CommentsClose CommentsPermalink





‘A national banking association may not convert to a State bank or State savings association during any period in which the national banking association is subject to a cease and desist order (or other formal enforcement order) issued by, or a memorandum of understanding entered into with, the Comptroller of the Currency with respect to a significant supervisory matter.’.CommentsClose CommentsPermalink





(b) Conversion of a State Bank to a National Bank- Sectionor Savings Association- Section 5154 of the Revised Statutes of the United States (12 U.S.C. 35) is amended by adding at the end the following: ‘The Comptroller of the Currency may not approve the conversion of a State bank or State savings association to a national banking association or Federal savings association during any period in which the State bank or State savings association is subject to a cease and desist order (or other formal enforcement order) issued by, or a memorandum of understanding entered into with, a State bank supervisor or the appropriate Federal banking agency with respect to a significant supervisory matter or a final enforcement action by a State Attorney General.’.CommentsClose CommentsPermalink





(c) Conversion of a Federal Savings Association to a National or State Bank or State Savings Association- Section 5(i) of the Home Owners’ Loan Act (12 U.S.C. 1464(i)) is amended by adding at the end the following:CommentsClose CommentsPermalink





‘(6) LIMITATION ON CERTAIN CONVERSIONS BY FEDERAL SAVINGS ASSOCIATIONS- A Federal savings association may not convert to a national bank or State bank or State savings association during any period in which the Federal savings association is subject to a cease and desist order (or other formal enforcement order) issued by, or a memorandum of understanding entered into with, the Office of Thrift Supervision or the Comptroller of the Currency with respect to a significant supervisory matter.’.CommentsClose CommentsPermalink





(d) Exception- The prohibition on the approval of conversions under the amendments made by subsections (a), (b), and (c) shall not apply, if--CommentsClose CommentsPermalink





(1) the Federal banking agency that would be the appropriate Federal banking agency after the proposed conversion gives the appropriate Federal banking agency or State bank supervisor that issued the cease and desist order (or other formal enforcement order) or memorandum of understanding, as appropriate, written notice of the proposed conversion including a plan to address the significant supervisory matter in a manner that is consistent with the safe and sound operation of the institution;CommentsClose CommentsPermalink





(2) within 30 days of receipt of the written notice required under paragraph (1), the appropriate Federal banking agency or State bank supervisor that issued the cease and desist order (or other formal enforcement order) or memorandum of understanding, as appropriate, does not object to the conversion or the plan to address the significant supervisory matter;CommentsClose CommentsPermalink





(3) after conversion of the insured depository institution, the appropriate Federal banking agency after the conversion implements such plan; andCommentsClose CommentsPermalink





(4) in the case of a final enforcement action by a State Attorney General, approval of the conversion is conditioned on compliance by the insured depository institution with the terms of such final enforcement action.CommentsClose CommentsPermalink





(e) Notification of Pending Enforcement Actions-CommentsClose CommentsPermalink





(1) COPY OF CONVERSION APPLICATION- At the time an insured depository institution files a conversion application, the insured depository institution shall transmit a copy of the conversion application to--CommentsClose CommentsPermalink





(A) the appropriate Federal banking agency for the insured depository institution; andCommentsClose CommentsPermalink





(B) the Federal banking agency that would be the appropriate Federal banking agency of the insured depository institution after the proposed conversion.CommentsClose CommentsPermalink





(2) NOTIFICATION AND ACCESS TO INFORMATION- Upon receipt of a copy of the application described in paragraph (1), the appropriate Federal banking agency for the insured depository institution proposing the conversion shall--CommentsClose CommentsPermalink





(A) notify the Federal banking agency that would be the appropriate Federal banking agency for the institution after the proposed conversion in writing of any ongoing supervisory or investigative proceedings that the appropriate Federal banking agency for the institution proposing to convert believes is likely to result, in the near term and absent the proposed conversion, in a cease and desist order (or other formal enforcement order) or memorandum of understanding with respect to a significant supervisory matter; andCommentsClose CommentsPermalink





(B) provide the Federal banking agency that would be the appropriate Federal banking agency for the institution after the proposed conversion access to all investigative and supervisory information relating to the proceedings described in subparagraph (A).CommentsClose CommentsPermalink

SEC. 613. DE NOVO BRANCHING INTO STATES.CommentsClose CommentsPermalink

(a) National Banks- Section 5155(g)(1)(A) of the Revised Statutes of the United States (12 U.S.C. 36(g)(1)(A)) is amended to read as follows:CommentsClose CommentsPermalink





‘(A) the law of the State in which the branch is located, or is to be located, would permit establishment of the branch, if the national bank were a State bank chartered by such State; and’.CommentsClose CommentsPermalink





(b) State Insured Banks- Section 18(d)(4)(A)(i) of the Federal Deposit Insurance Act (12 U.S.C. 1828(d)(4)(A)(i)) is amended to read as follows:CommentsClose CommentsPermalink





‘(i) the law of the State in which the branch is located, or is to be located, would permit establishment of the branch, if the bank were a State bank chartered by such State; and’.CommentsClose CommentsPermalink

SEC. 614. LENDING LIMITS TO INSIDERS.CommentsClose CommentsPermalink

(a) Extensions of Credit- Section 22(h)(9)(D)(i) of the Federal Reserve Act (12 U.S.C. 375b(9)(D)(i)) is amended--CommentsClose CommentsPermalink





(1) by striking the period at the end and inserting ‘; or’;CommentsClose CommentsPermalink





(2) by striking ‘a person’ and inserting ‘the person’;CommentsClose CommentsPermalink





(3) by striking ‘extends credit by making’ and inserting the following: ‘extends credit to a person by--CommentsClose CommentsPermalink





‘(I) making’; andCommentsClose CommentsPermalink





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





‘(II) having credit exposure to the person arising from a derivative transaction (as defined in section 5200(b) of the Revised Statutes of the United States (12 U.S.C. 84(b))), repurchase agreement, reverse repurchase agreement, securities lending transaction, or securities borrowing transaction between the member bank and the person.’.CommentsClose CommentsPermalink





(b) Effective Date- The amendments made by this section shall take effect 1 year after the transfer date.CommentsClose CommentsPermalink

SEC. 615. LIMITATIONS ON PURCHASES OF ASSETS FROM INSIDERS.CommentsClose CommentsPermalink

(a) Amendment to the Federal Deposit Insurance Act- Section 18 of the Federal Deposit Insurance Act (12 U.S.C. 1828) is amended by adding at the end the following:CommentsClose CommentsPermalink





‘(z) General Prohibition on Sale of Assets-CommentsClose CommentsPermalink





‘(1) IN GENERAL- An insured depository institution may not purchase an asset from, or sell an asset to, an executive officer, director, or principal shareholder of the insured depository institution, or any related interest of such person (as such terms are defined in section 22(h) of Federal Reserve Act), unless--CommentsClose CommentsPermalink





‘(A) the transaction is on market terms; andCommentsClose CommentsPermalink





‘(B) if the transaction represents more than 10 percent of the capital stock and surplus of the insured depository institution, the transaction has been approved in advance by a majority of the members of the board of directors of the insured depository institution who do not have an interest in the transaction.CommentsClose CommentsPermalink





‘(2) RULEMAKING- The Board of Governors of the Federal Reserve System may issue such rules as may be necessary to define terms and to carry out the purposes this subsection. Before proposing or adopting a rule under this paragraph, the Board of Governors of the Federal Reserve System shall consult with the Comptroller of the Currency and the Corporation as to the terms of the rule.’.CommentsClose CommentsPermalink





(b) Amendments to the Federal Reserve Act- Section 22(d) of the Federal Reserve Act (12 U.S.C. 375) is amended to read as follows:CommentsClose CommentsPermalink





‘(d) [Reserved]’.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall take effect on the transfer date.CommentsClose CommentsPermalink

SEC. 616. REGULATIONS REGARDING CAPITAL LEVELS OF HOLDING COMPANIES.CommentsClose CommentsPermalink

(a) Capital Levels of Bank Holding Companies- Section 5(b) of the Bank Holding Company Act of 1956 (12 U.S.C. 1844(b)) is amended by inserting after ‘regulations’ the following: ‘(including regulations relating to the capital requirements of bank holding companies)--CommentsClose CommentsPermalink





(1) by inserting after ‘orders’ the following: ‘, including regulations and orders relating to the capital requirements for bank holding companies,’; andCommentsClose CommentsPermalink





(2) by adding at the end the following: ‘In establishing capital regulations pursuant to this subsection, the Board shall seek to make such requirements countercyclical, so that the amount of capital required to be maintained by a company increases in times of economic expansion and decreases in times of economic contraction, consistent with the safety and soundness of the company.’.CommentsClose CommentsPermalink





(b) Capital Levels of Savings and Loan Holding Companies- Section 10(g)(1) of the Home Owners’ Loan Act (12 U.S.C. 1467a(g)(1)) is amended by inserting after ‘orders’ the following: ‘(including regulations relating to capital requirements for savings and loan holding companies)--CommentsClose CommentsPermalink





(1) by inserting after ‘orders’ the following: ‘, including regulations and orders relating to capital requirements for savings and loan holding companies,’; andCommentsClose CommentsPermalink





(2) by inserting at the end the following: ‘In establishing capital regulations pursuant to this subsection, the appropriate Federal banking agency shall seek to make such requirements countercyclical so that the amount of capital required to be maintained by a company increases in times of economic expansion and decreases in times of economic contraction, consistent with the safety and soundness of the company.’.CommentsClose CommentsPermalink





(c) Capital Levels of Insured Depository Institutions- Section 908(a)(1) of the International Lending Supervision Act of 1983 (12 U.S.C. 3907(a)(1)) is amended by adding at the end the following: ‘Each appropriate Federal banking agency shall seek to make the capital standards required under this section or other provisions of Federal law for insured depository institutions countercyclical so that the amount of capital required to be maintained by an insured depository institution increases in times of economic expansion and decreases in times of economic contraction, consistent with the safety and soundness of the insured depository institution.’CommentsClose CommentsPermalink





(d) Source of Strength- The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) is amended by inserting after section 38 (12 U.S.C. 1831o) the following:CommentsClose CommentsPermalink

‘SEC. 38A. SOURCE OF STRENGTH.CommentsClose CommentsPermalink

‘(a) Holding Companies- The appropriate Federal banking agency for a bank holding company or savings and loan holding company shall require the bank holding company or savings and loan holding company to serve as a source of financial strength for any subsidiary of the bank holding company or savings and loan holding company that is a depository institution.CommentsClose CommentsPermalink





‘(b) Other Companies- If an insured depository institution is not the subsidiary of a bank holding company or savings and loan holding company, the appropriate Federal banking agency for the insured depository institution shall require any company that directly or indirectly controls the insured depository institution to serve as a source of financial strength for such institution.CommentsClose CommentsPermalink





‘(c) Reports- The appropriate Federal banking agency for an insured depository institution described in subsection (b) may, from time to time, require the company, or a company that directly or indirectly controls the insured depository institution, to submit a report, under oath, for the purposes of--CommentsClose CommentsPermalink





‘(1) assessing the ability of such company to comply with the requirement under subsection (b); andCommentsClose CommentsPermalink





‘(2) enforcing the compliance of such company with the requirement under subsection (b).CommentsClose CommentsPermalink





‘(d) Rules- Not later than 1 year after the transfer date, as defined in section 311 of the Enhancing Financial Institution Safety and Soundness Act of 2010, the appropriate Federal banking agencies shall jointly issue final rules to carry out this section.CommentsClose CommentsPermalink





‘(e) Definition- In this section, the term ‘source of financial strength’ means the ability of a company that directly or indirectly owns or controls an insured depository institution to provide financial assistance to such insured depository institution in the event of the financial distress of the insured depository institution.’.CommentsClose CommentsPermalink





(de) Effective Date- The amendments made by this section shall take effect on the transfer date.CommentsClose CommentsPermalink

SEC. 617. ELIMINATION OF ELECTIVE INVESTMENT BANK HOLDING COMPANY FRAMEWORK.CommentsClose CommentsPermalink

(a) Amendment- Section 17 of the Securities Exchange Act of 1934 (15 U.S.C. 78q) is amended--CommentsClose CommentsPermalink





(1) by striking subsection (i); andCommentsClose CommentsPermalink





(2) by redesignating subsections (j) and (k) as subsections (i) and (j), respectively.CommentsClose CommentsPermalink





(b) Effective Date- The amendments made by this section shall take effect on the transfer date.CommentsClose CommentsPermalink

SEC. 618. SECURITIES HOLDING COMPANIES.CommentsClose CommentsPermalink

(a) Definitions- In this section--CommentsClose CommentsPermalink





(1) the term ‘associated person of a securities holding company’ means a person directly or indirectly controlling, controlled by, or under common control with, a securities holding company;CommentsClose CommentsPermalink





(2) the term ‘foreign bank’ has the same meaning as in section 1(b)(7) of the International Banking Act of 1978 (12 U.S.C. 3101(b)(7));CommentsClose CommentsPermalink





(3) the term ‘insured bank’ has the same meaning as in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813);CommentsClose CommentsPermalink





(4) the term ‘securities holding company’--CommentsClose CommentsPermalink





(A) means--CommentsClose CommentsPermalink





(i) a person (other than a natural person) that owns or controls 1 or more brokers or dealers registered with the Commission; andCommentsClose CommentsPermalink





(ii) the associated persons of a person described in clause (i); andCommentsClose CommentsPermalink





(B) does not include a person that is--CommentsClose CommentsPermalink





(i) a nonbank financial company supervised by the Board under title I;CommentsClose CommentsPermalink





(ii) an insured bank (other than an institution described in subparagraphs (D), (F), or (H) of section 2(c)(2) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(c)(2)) or a savings association;CommentsClose CommentsPermalink





(iii) an affiliate of an insured bank (other than an institution described in subparagraphs (D), (F), or (H) of section 2(c)(2) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(c)(2)) or an affiliate of a savings association;CommentsClose CommentsPermalink





(iiiv) a foreign bank, foreign company, or company that is described in section 8(a) of the International Banking Act of 1978 (12 U.S.C. 3106(a));CommentsClose CommentsPermalink





(iv) a foreign bank that controls, directly or indirectly, a corporation chartered under section 25A of the Federal Reserve Act (12 U.S.C. 611 et seq.); orCommentsClose CommentsPermalink





(vi) subject to comprehensive consolidated supervision by a foreign regulator;CommentsClose CommentsPermalink





(5) the term ‘supervised securities holding company’ means a securities holding company that is supervised by the Board of Governors under this section; andCommentsClose CommentsPermalink





(6) the terms ‘affiliate’, ‘bank’, ‘bank holding company’, ‘company’, ‘control’, ‘savings association’, and ‘subsidiary’ have the same meanings as in section 2 of the Bank Holding Company Act of 1956.CommentsClose CommentsPermalink





(b) Supervision of a Securities Holding Company Not Having a Bank or Savings Association Affiliate-CommentsClose CommentsPermalink





(1) IN GENERAL- A securities holding company that is required by a foreign regulator or provision of foreign law to be subject to comprehensive consolidated supervision may register with the Board of Governors under paragraph (2) to become a supervised securities holding company. Any securities holding company filing such a registration shall be supervised in accordance with this section, and shall comply with the rules and orders prescribed by the Board of Governors applicable to supervised securities holding companies.CommentsClose CommentsPermalink





(2) REGISTRATION AS A SUPERVISED SECURITIES HOLDING COMPANY-CommentsClose CommentsPermalink





(A) REGISTRATION- A securities holding company that elects to be subject to comprehensive consolidated supervision shall register by filing with the Board of Governors such information and documents as the Board of Governors, by regulation, may prescribe as necessary or appropriate in furtherance of the purposes of this section.CommentsClose CommentsPermalink





(B) EFFECTIVE DATE- A securities holding company that registers under subparagraph (A) shall be deemed to be a supervised securities holding company, effective on the date that is 45 days after the date of receipt of the registration information and documents under subparagraph (A) by the Board of Governors, or within such shorter period as the Board of Governors, by rule or order, may determine.CommentsClose CommentsPermalink





(c) Supervision of Securities Holding Companies-CommentsClose CommentsPermalink





(1) RECORDKEEPING AND REPORTING-CommentsClose CommentsPermalink





(A) RECORDKEEPING AND REPORTING REQUIRED- Each supervised securities holding company and each affiliate of a supervised securities holding company and each affiliate of a supervised securities holding company shall make and keep for periods determined by the Board of Governors such records, furnish copies of such records, and make such reports, as the Board of Governors determines to be necessary or appropriate to carry out this section, to prevent evasions thereof, and to monitor compliance by the supervised securities holding company or affiliate with applicable provisions of law.CommentsClose CommentsPermalink





(B) FORM AND CONTENTS-CommentsClose CommentsPermalink





(i) IN GENERAL- Any record or report required to be made, furnished, or kept under this paragraph shall--CommentsClose CommentsPermalink





(I) be prepared in such form and according to such specifications (including certification by a registered public accounting firm), as the Board of Governors may require; andCommentsClose CommentsPermalink





(II) be provided promptly to the Board of Governors at any time, upon request by the Board of Governors.CommentsClose CommentsPermalink





(ii) CONTENTS- Records and reports required to be made, furnished, or kept under this paragraph may include--CommentsClose CommentsPermalink





(I) a balance sheet or income statement of the supervised securities holding company or an affiliate of a supervised securities holding company;CommentsClose CommentsPermalink





(II) an assessment of the consolidated capital and liquidity of the supervised securities holding company;CommentsClose CommentsPermalink





(III) a report by an independent auditor attesting to the compliance of the supervised securities holding company with the internal risk management and internal control objectives of the supervised securities holding company; andCommentsClose CommentsPermalink





(IV) a report concerning the extent to which the supervised securities holding company or affiliate has complied with the provisions of this section and any regulations prescribed and orders issued under this section.CommentsClose CommentsPermalink





(2) USE OF EXISTING REPORTS-CommentsClose CommentsPermalink





(A) IN GENERAL- The Board of Governors shall, to the fullest extent possible, accept reports in fulfillment of the requirements of this paragraph that a supervised securities holding company or an affiliate of a supervised securities holding company has been required to provide to another regulatory agency or a self-regulatory organization.CommentsClose CommentsPermalink





(B) AVAILABILITY- A supervised securities holding company or an affiliate of a supervised securities holding company shall promptly provide to the Board of Governors, at the request of the Board of Governors, any report described in subparagraph (A), as permitted by law.CommentsClose CommentsPermalink





(3) EXAMINATION AUTHORITY-CommentsClose CommentsPermalink





(A) FOCUS OF EXAMINATION AUTHORITY- The Board of Governors may make examinations of any supervised securities holding company and any affiliate of a supervised securities holding company to carry out this subsection, to prevent evasions thereof, and to monitor compliance by the supervised securities holding company or affiliate with applicable provisions of law.CommentsClose CommentsPermalink





(B) DEFERENCE TO OTHER EXAMINATIONS- For purposes of this subparagraph, the Board of Governors shall, to the fullest extent possible, use the reports of examination made by other appropriate Federal or State regulatory authorities with respect to any functionally regulated subsidiary or any institution described in subparagraph (D), (F), or (H) of section 2(c)(2) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(c)(2)).CommentsClose CommentsPermalink





(d) Capital and Risk Management-CommentsClose CommentsPermalink





(1) IN GENERAL- The Board of Governors shall, by regulation or order, prescribe capital adequacy and other risk management standards for supervised securities holding companies that are appropriate to protect the safety and soundness of the supervised securities holding companies and address the risks posed to financial stability by supervised securities holding companies.CommentsClose CommentsPermalink





(2) DIFFERENTIATION- In imposing standards under this subsection, the Board of Governors may differentiate among supervised securities holding companies on an individual basis, or by category, taking into consideration the requirements under paragraph (3).CommentsClose CommentsPermalink





(3) CONTENT- Any standards imposed on a supervised securities holding company under this subsection shall take into account--CommentsClose CommentsPermalink





(A) the differences among types of business activities carried out by the supervised securities holding company;CommentsClose CommentsPermalink





(B) the amount and nature of the financial assets of the supervised securities holding company;CommentsClose CommentsPermalink





(C) the amount and nature of the liabilities of the supervised securities holding company, including the degree of reliance on short-term funding;CommentsClose CommentsPermalink





(D) the extent and nature of the off-balance sheet exposures of the supervised securities holding company;CommentsClose CommentsPermalink





(E) the extent and nature of the transactions and relationships of the supervised securities holding company with other financial companies;CommentsClose CommentsPermalink





(F) the importance of the supervised securities holding company as a source of credit for households, businesses, and State and local governments, and as a source of liquidity for the financial system; andCommentsClose CommentsPermalink





(G) the nature, scope, and mix of the activities of the supervised securities holding company.CommentsClose CommentsPermalink





(4) NOTICE- A capital requirement imposed under this subsection may not take effect earlier than 180 days after the date on which a supervised securities holding company is provided notice of the capital requirement.CommentsClose CommentsPermalink





(e) Exception for Banks- No bank shall be subject to any of the requirements set forth in subsections (c) and (d).(f)Other Provisions of Law Applicable to Supervised Securities Holding Companies-CommentsClose CommentsPermalink





(1) FEDERAL DEPOSIT INSURANCE ACT- Subsections (b), (c) through (s), and (u) of section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818) shall apply to any supervised securities holding company, and to any subsidiary (other than a bank or an institution described in subparagraph (D), (F), or (H) of section 2(c)(2) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(c)(2))) of a supervised securities holding company, in the same manner as such subsections apply to a bank holding company for which the Board of Governors is the appropriate Federal banking agency. For purposes of applying such subsections to a supervised securities holding company or a subsidiary (other than a bank or an institution described in subparagraph (D), (F), or (H) of section 2(c)(2) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(c)(2))) of a supervised securities holding company, the Board of Governors shall be deemed the appropriate Federal banking agency for the supervised securities holding company or subsidiary.CommentsClose CommentsPermalink





(2) BANK HOLDING COMPANY ACT OF 1956- Except as the Board of Governors may otherwise provide by regulation or order, a supervised securities holding company shall be subject to the provisions of the Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) in the same manner and to the same extent a bank holding company is subject to such provisions, except that a supervised securities holding company may not, by reason of this paragraph, be deemed to be a bank holding company for purposes of section 4 of the Bank Holding Company Act of 1956 (12 U.S.C. 1843).CommentsClose CommentsPermalink

SEC. 619. RESTRICTIONS ON CAPITAL MARKET ACTIVITY BY BANKS AND BANK HOLDING COMPANIES.

(a) Definitions- In this section--

(1) the terms ‘hedge fund’ and ‘private equity fund’ mean a company or other entity that is exempt from registration as an investment company pursuant to section 3(c)(1) or 3(c)(7) of the Investment Company Act of 1940 (15PROHIBITIONS ON PROPRIETARY TRADING AND CERTAIN RELATIONSHIPS WITH HEDGE FUNDS AND PRIVATE EQUITY FUNDS.CommentsClose CommentsPermalink

The Bank Holding Company Act of 1956 ( 12 U.S.C. 80a-3(c)(1) or 80a-3(c)(7)), or a similar fund, as jointly determined by the appropriate Federal banking agencies;

(2) the term ‘proprietary trading’--

(A) means purchasing or selling, or otherwise acquiring or disposing of, stocks, bonds, options, commodities, derivatives, or other financial instruments by1841 et seq.) is amended by adding at the end the following: CommentsClose CommentsPermalink




‘SEC. 13. PROHIBITIONS ON PROPRIETARY TRADING AND CERTAIN RELATIONSHIPS WITH HEDGE FUNDS AND PRIVATE EQUITY FUNDS.CommentsClose CommentsPermalink





‘(a) In General-CommentsClose CommentsPermalink





‘(1) PROHIBITION- Unless otherwise provided in this section, a banking entity shall not--CommentsClose CommentsPermalink





‘(A) engage in proprietary trading; orCommentsClose CommentsPermalink





‘(B) acquire or retain any equity, partnership, or other ownership interest in or sponsor a hedge fund or a private equity fund.CommentsClose CommentsPermalink





‘(2) NONBANK FINANCIAL COMPANIES SUPERVISED BY THE BOARD- Any nonbank financial company supervised by the Board that engages in proprietary trading or takes or retains any equity, partnership, or other ownership interest in or sponsors a hedge fund or a private equity fund shall be subject, by rule, as provided in subsection (b)(2), to additional capital requirements for and additional quantitative limits with regards to such proprietary trading and taking or retaining any equity, partnership, or other ownership interest in or sponsorship of a hedge fund or a private equity fund, except that permitted activities as described in subsection (d) shall not be subject to the additional capital and additional quantitative limits except as provided in subsection (d)(3), as if the nonbank financial company supervised by the Board were a banking entity.CommentsClose CommentsPermalink





‘(b) Study and Rulemaking-CommentsClose CommentsPermalink





‘(1) STUDY- Not later than 6 months after the date of enactment of this section, the Financial Stability Oversight Council shall study and make recommendations on implementing the provisions of this section so as to--CommentsClose CommentsPermalink





‘(A) promote and enhance the safety and soundness of banking entities;CommentsClose CommentsPermalink





‘(B) protect taxpayers and consumers and enhance financial stability by minimizing the risk that insured depository institutions and the affiliates of insured depository institutions will engage in unsafe and unsound activities;CommentsClose CommentsPermalink





‘(C) limit the inappropriate transfer of Federal subsidies from institutions that benefit from deposit insurance and liquidity facilities of the Federal Government to unregulated entities;CommentsClose CommentsPermalink





‘(D) reduce conflicts of interest between the self-interest of banking entities and nonbank financial companies supervised by the Board, and the interests of the customers of such entities and companies;CommentsClose CommentsPermalink





‘(E) limit activities that have caused undue risk or loss in banking entities and nonbank financial companies supervised by the Board, or that might reasonably be expected to create undue risk or loss in such banking entities and nonbank financial companies supervised by the Board;CommentsClose CommentsPermalink





‘(F) appropriately accommodate the business of insurance within an insurance company, subject to regulation in accordance with the relevant insurance company investment laws, while protecting the safety and soundness of any banking entity with which such insurance company is affiliated and of the United States financial system; andCommentsClose CommentsPermalink





‘(G) appropriately time the divestiture of illiquid assets that are affected by the implementation of the prohibitions under subsection (a).CommentsClose CommentsPermalink





‘(2) RULEMAKING-CommentsClose CommentsPermalink





‘(A) IN GENERAL- Unless otherwise provided in this section, not later than 9 months after the completion of the study under paragraph (1), the appropriate Federal banking agencies, the Securities and Exchange Commission, and the Commodity Futures Trading Commission, shall consider the findings of the study under paragraph (1) and adopt rules to carry out this section, as provided in subparagraph (B).CommentsClose CommentsPermalink





‘(B) COORDINATED RULEMAKING-CommentsClose CommentsPermalink





‘(i) REGULATORY AUTHORITY- The regulations issued under this paragraph shall be issued by--CommentsClose CommentsPermalink





‘(I) the appropriate Federal banking agencies, jointly, with respect to insured depository institutions;CommentsClose CommentsPermalink





‘(II) the Board, with respect to any company that controls an insured depository institution, a company that controls, directly or indirectly, an insured depository institution or is treated as a bank holding company for purposes of the Bank Holding Company Act of 1956or that is treated as a bank holding company for purposes of section 8 of the International Banking Act, any nonbank financial company supervised by the Board, and any subsidiary of any of the foregoing (other than a subsidiary for which an agency described in subclause (I), (III), or (IV) is the primary financial regulatory agency);CommentsClose CommentsPermalink





‘(III) the Commodity Futures Trading Commission, with respect to any entity for which the Commodity Futures Trading Commission is the primary financial regulatory agency, as defined in section 2 of the Dodd-Frank Wall Street Reform and Consumer Protection Act; andCommentsClose CommentsPermalink





‘(IV) the Securities and Exchange Commission, with respect to any entity for which the Securities and Exchange Commission is the primary financial regulatory agency, as defined in section 2 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.CommentsClose CommentsPermalink





‘(ii) COORDINATION, CONSISTENCY, AND COMPARABILITY- In developing and issuing regulations pursuant to this section, the appropriate Federal banking agencies, the Securities and Exchange Commission, and the Commodity Futures Trading Commission shall consult and coordinate with each other, as appropriate, for the purposes of assuring, to the extent possible, that such regulations are comparable and provide for consistent application and implementation of the applicable provisions of this section to avoid providing advantages or imposing disadvantages to the companies affected by this subsection and to protect the safety and soundness of banking entities and nonbank financial companies supervised by the Board.CommentsClose CommentsPermalink





‘(iii) COUNCIL ROLE- The Chairperson of the Financial Stability Oversight Council shall be responsible for coordination of the regulations issued under this section.CommentsClose CommentsPermalink





‘(c) Effective Date-CommentsClose CommentsPermalink





‘(1) IN GENERAL- Except as provided in paragraphs (2) and (3), this section shall take effect on the earlier of--CommentsClose CommentsPermalink





‘(A) 12 months after the date of the issuance of final rules under subsection (b); orCommentsClose CommentsPermalink





‘(B) 2 years after the date of enactment of this section.CommentsClose CommentsPermalink





‘(2) CONFORMANCE PERIOD FOR DIVESTITURE- A banking entity or nonbank financial company supervised by the Board shall bring its activities and investments into compliance with the requirements of this section not later than 2 years after the date on which the requirements become effective pursuant to this section or 2 years after the date on which the entity or company becomes a nonbank financial company supervised by the Board. The Board may, by rule or order, extend this two-year period for not more than one year at a time, if, in the judgment of the Board, such an extension is consistent with the purposes of this section and would not be detrimental to the public interest. The extensions made by the Board under the preceding sentence may not exceed an aggregate of 3 years.CommentsClose CommentsPermalink





‘(3) EXTENDED TRANSITION FOR ILLIQUID FUNDS-CommentsClose CommentsPermalink





‘(A) APPLICATION- The Board may, upon the application of a banking entity, extend the period during which the banking entity, to the extent necessary to fulfill a contractual obligation that was in effect on May 1, 2010, may take or retain its equity, partnership, or other ownership interest in, or otherwise provide additional capital to, an illiquid fund.CommentsClose CommentsPermalink





‘(B) TIME LIMIT ON APPROVAL- The Board may grant 1 extension under subparagraph (A), which may not exceed 5 years.CommentsClose CommentsPermalink





‘(4) DIVESTITURE REQUIRED- Except as otherwise provided in subsection (d)(1)(G), a banking entity may not engage in any activity prohibited under subsection (a)(1)(B) after the earlier of--CommentsClose CommentsPermalink





‘(A) the date on which the contractual obligation to invest in the illiquid fund terminates; andCommentsClose CommentsPermalink





‘(B) the date on which any extensions granted by the Board under paragraph (3) expire.CommentsClose CommentsPermalink





‘(5) ADDITIONAL CAPITAL DURING TRANSITION PERIOD- Notwithstanding paragraph (2), on the date on which the rules are issued under subsection (b)(2), the appropriate Federal banking agencies, the Securities and Exchange Commission, and the Commodity Futures Trading Commission shall issue rules, as provided in subsection (b)(2), to impose additional capital requirements, and any other restrictions, as appropriate, on any equity, partnership, or ownership interest in or sponsorship of a hedge fund or private equity fund by a banking entity.CommentsClose CommentsPermalink





‘(6) SPECIAL RULEMAKING- Not later than 6 months after the date of enactment of this section, the Board shall issues rules to implement paragraphs (2) and (3).CommentsClose CommentsPermalink





‘(d) Permitted Activities-CommentsClose CommentsPermalink





‘(1) IN GENERAL- Notwithstanding the restrictions under subsection (a), to the extent permitted by any other provision of Federal or State law, and subject to the limitations under paragraph (2) and any restrictions or limitations that the appropriate Federal banking agencies, the Securities and Exchange Commission, and the Commodity Futures Trading Commission, may determine, the following activities (in this section referred to as ‘permitted activities’) are permitted:CommentsClose CommentsPermalink





‘(A) The purchase, sale, acquisition, or disposition of obligations of the United States or any agency thereof, obligations, participations, or other instruments of or issued by the Government National Mortgage Association, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, a Federal Home Loan Bank, the Federal Agricultural Mortgage Corporation, or a Farm Credit System institution chartered under and subject to the provisions of the Farm Credit Act of 1971 (12 U.S.C. 1841 et seq.), and any subsidiary of such institution or company, for the trading book (or such other portfolio as the Federal banking agencies may determine) of such institution, company, or subsidiary; and(B) subject to such restrictions as the Federal banking agencies may determine, does not include purchasing or selling, or otherwise acquiring or disposing of, stocks, bonds, options, commodities, derivatives, or other financial instruments on behalf of a customer, as part of market making activities, or otherwise in connection with or in facilitation of customer relationships, including r2001 et seq.), and obligations of any State or of any political subdivision thereof.CommentsClose CommentsPermalink





‘(B) The purchase, sale, acquisition, or disposition of securities and other instruments described in subsection (h)(4) in connection with underwriting or market-making-related activities, to the extent that any such activities permitted by this subparagraph are designed not to exceed the reasonably expected near term demands of clients, customers, or counterparties.CommentsClose CommentsPermalink





‘(C) Risk-mitigating hedging activities related to such ain connection with and related to individual or aggregated positions, contracts, or other holdings of a banking entity that are designed to reduce the specific risks to the banking entity in connection with and related to such positions, contracts, or other holdings.CommentsClose CommentsPermalink





‘(D) The purchase, sale, acquisition, or disposal; and

(3) the term ‘sponsoring’, when used with respect to a hedge fund or private equity fund, means--

(A)ition of securities and other instruments described in subsection (h)(4) on behalf of customers.CommentsClose CommentsPermalink




‘(E) Investments in one or more small business investment companies, as defined in section 102 of the Small Business Investment Act of 1958 (15 U.S.C. 662), investments designed primarily to promote the public welfare, of the type permitted under paragraph (11) of section 5136 of the Revised Statutes of the United States (12 U.S.C. 24), or investments that are qualified rehabilitation expenditures with respect to a qualified rehabilitated building or certified historic structure, as such terms are defined in section 47 of the Internal Revenue Code of 1986 or a similar State historic tax credit program.CommentsClose CommentsPermalink





‘(F) The purchase, sale, acquisition, or disposition of securities and other instruments described in subsection (h)(4) by a regulated insurance company directly engaged in the business of insurance for the general account of the company and by any affiliate of such regulated insurance company, provided that such activities by any affiliate are solely for the general account of the regulated insurance company, if--CommentsClose CommentsPermalink





‘(i) the purchase, sale, acquisition, or disposition is conducted in compliance with, and subject to, the insurance company investment laws, regulations, and written guidance of the State or jurisdiction in which each such insurance company is domiciled; andCommentsClose CommentsPermalink





‘(ii) the appropriate Federal banking agencies, after consultation with the Financial Stability Oversight Council and the relevant insurance commissioners of the States and territories of the United States, have not jointly determined, after notice and comment, that a particular law, regulation, or written guidance described in clause (i) is insufficient to protect the safety and soundness of the banking entity, or of the financial stability of the United States.CommentsClose CommentsPermalink





‘(G) Organizing and offering a private equity or hedge fund, including serving as a general partner, managing member, or trustee of the fund;(B) and in any manner selecting or controlling (or having employees, officers, directors, or agents who constitute) a majority of the directors, trustees, or management of the fund; or(C) sharing with the, including any necessary expenses for the foregoing, only if--CommentsClose CommentsPermalink





‘(i) the banking entity provides bona fide trust, fiduciary, or investment advisory services;CommentsClose CommentsPermalink





‘(ii) the fund is organized and offered only in connection with the provision of bona fide trust, fiduciary, or investment advisory services and only to persons that are customers of such services of the banking entity;CommentsClose CommentsPermalink





‘(iii) the banking entity does not acquire or retain an equity interest, partnership interest, or other ownership interest in the funds except for a de minimis investment subject to and in compliance with paragraph (4);CommentsClose CommentsPermalink





‘(iv) the banking entity complies with the restrictions under paragraphs (1) and (2) of subparagraph (f);CommentsClose CommentsPermalink





‘(v) the banking entity does not, directly or indirectly, guarantee, assume, or otherwise insure the obligations or performance of the hedge fund or private equity fund or of any hedge fund or private equity fund in which such hedge fund or private equity fund invests;CommentsClose CommentsPermalink





‘(vi) the banking entity does not share with the hedge fund or private equity fund, for corporate, marketing, promotional, or other purposes, the same name or a variation of the same name.

(b) Prohibition on Proprietary Trading-

(1) IN GENERAL- Subject to the recommendations and modifications of the Council under subsection (g), and except as provided in paragraph (2) or (3), the appropriate Federal banking agencies shall, through a rulemaking under subsection (g), jointly prohibit proprietary trading by an insured depository institution, a company that controls, directly or indirectly, an insured depository institution or is treated as a bank holding company for purposes of the Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.), and any subsidiary of such institution or company.

(2) EXCEPTED OBLIGATIONS-

(A) IN GENERAL- The prohibition under this subsection shall not apply with respect to an investment that is otherwise authorized by Federal law in--

(i) obligations of the United States or any agency of the United States, including obligations fully guaranteed as to principal and interest by the United States or an agency of the United States;

(ii) obligations, participations, or other instruments of, or issued by, the Government National Mortgage Association, the Federal National Mortgage Association, or the Federal Home Loan Mortgage Corporation, including obligations fully guaranteed as to principal and interest by such entities; and

(iii) obligations of any State or any political subdivision of a State.

(B) CONDITIONS- The appropriate Federal banking agencies may impose conditions on the conduct of investments described in subparagraph (A).

(C) RULE OF CONSTRUCTION- Nothing in subparagraph (A) may be construed to grant any authority to any person that is not otherwise provided in Federal law.

(3) FOREIGN ACTIVITIES- An investment or activity conducted by a compan;CommentsClose CommentsPermalink




‘(vii) no director or employee of the banking entity takes or retains an equity interest, partnership interest, or other ownership interest in the hedge fund or private equity fund, except for any director or employee of the banking entity who is directly engaged in providing investment advisory or other services to the hedge fund or private equity fund; andCommentsClose CommentsPermalink





‘(viii) the banking entity discloses to prospective and actual investors in the fund, in writing, that any losses in such hedge fund or private equity fund are borne solely by investors in the fund and not by the banking entity, and otherwise complies with any additional rules of the appropriate Federal banking agencies, the Securities and Exchange Commission, or the Commodity Futures Trading Commission, as provided in subsection (b)(2), designed to ensure that losses in such hedge fund or private equity fund are borne solely by investors in the fund and not by the banking entity.CommentsClose CommentsPermalink





‘(H) Proprietary trading conducted by a banking entity pursuant to paragraph (9) or (13) of section 4(c) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(c)), provided that the trading occurs solely outside of the United States shall not be subject to the prohibition under paragraph (1), provided that the companand that the banking entity is not directly or indirectly controlled by a companbanking entity that is organized under the laws of the United States or of a State.

(c) Prohibition on Sponsoring and Investing in Hedge Funds and Private Equity Funds-

(1) IN GENERAL- Except as provided in paragraph (2), and subject to the recommendations and modifications of the Council under subsection (g), the appropriate Federal banking agencies shall, through a rulemaking under subsection (g), jointly prohibit an insured depository institution, a company that controls, directly or indirectly, an insured depository institution or is treated as a bank holding company for purposes of the Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.), or any subsidiary of such institution or company, from sponsoring or investing in a hedge fund or a private equity fund.

(2) APPLICATION TO FOREIGN ACTIVITIES OF FOREIGN FIRMS- An investment or activity conducted by a companone or more States.CommentsClose CommentsPermalink




‘(I) The acquisition or retention of any equity, partnership, or other ownership interest in, or the sponsorship of, a hedge fund or a private equity fund by a banking entity pursuant to paragraph (9) or (13) of section 4(c) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(c)) solely outside of the United States shall not be subject to the prohibitions and restrictions under paragraph (1), provided that the compansolely outside of the United States, provided that no ownership interest in such hedge fund or private equity fund is offered for sale or sold to a resident of the United States and that the banking entity is not directly or indirectly controlled by a companbanking entity that is organized under the laws of the United States or of a State.

(d) Investments in Small Business Investment Companies and Investments Designed To Promote the Public Welfare-

(1) IN GENERAL- A prohibition imposed by the appropriate Federal banking agencies under subsection (c) shall not apply with respect an investment otherwise authorized under Federal law that is--

(A) an investment in a small business investment company, as that term is defined in section 103 of the Small Business Investment Act of 1958 (15 U.S.C. 662); or

(B) designed primarily to promote the public welfare, as provided in the 11th paragraph of section 5136 of the Revised Statutes (12 U.S.C. 24).

(2) RULE OF CONSTRUCTION- Nothing in paragraph (1) may be construed to grant any authority to any person that is not otherwise provided in Federal law.

(eone or more States.CommentsClose CommentsPermalink




‘(J) Such other activity as the appropriate Federal banking agencies, the Securities and Exchange Commission, and the Commodity Futures Trading Commission determine, by rule, as provided in subsection (b)(2), would promote and protect the safety and soundness of the banking entity and the financial stability of the United States.CommentsClose CommentsPermalink





‘(2) LIMITATION ON PERMITTED ACTIVITIES-CommentsClose CommentsPermalink





‘(A) IN GENERAL- No transaction, class of transactions, or activity may be deemed a permitted activity under paragraph (1) if the transaction, class of transactions, or activity--CommentsClose CommentsPermalink





‘(i) would involve or result in a material conflict of interest (as such term shall be defined by rule as provided in subsection (b)(2)) between the banking entity and its clients, customers, or counterparties;CommentsClose CommentsPermalink





‘(ii) would result, directly or indirectly, in a material exposure by the banking entity to high-risk assets or high-risk trading strategies (as such terms shall be defined by rule as provided in subsection (b)(2));CommentsClose CommentsPermalink





‘(iii) would pose a threat to the safety and soundness of such banking entity; orCommentsClose CommentsPermalink





‘(iv) would pose a threat to the financial stability of the United States.CommentsClose CommentsPermalink





‘(B) RULEMAKING- The appropriate Federal banking agencies, the Securities and Exchange Commission, and the Commodity Futures Trading Commission shall issue regulations to implement subparagraph (A), as part of the regulations issued under subsection (b)(2).CommentsClose CommentsPermalink





‘(3) CAPITAL AND QUANTITATIVE LIMITATIONS- The appropriate Federal banking agencies, the Securities and Exchange Commission, and the Commodity Futures Trading Commission shall, as provided in subsection (b)(2), adopt rules imposing additional capital requirements and quantitative limitations, including diversification requirements, regarding the activities permitted under this section if the appropriate Federal banking agencies, the Securities and Exchange Commission, and the Commodity Futures Trading Commission determine that additional capital and quantitative limitations are appropriate to protect the safety and soundness of banking entities engaged in such activities.CommentsClose CommentsPermalink





‘(4) DE MINIMIS INVESTMENT-CommentsClose CommentsPermalink





‘(A) IN GENERAL- A banking entity may make and retain an investment in a hedge fund or private equity fund that the banking entity organizes and offers, subject to the limitations and restrictions in subparagraph (B) for the purposes of--CommentsClose CommentsPermalink





‘(i) establishing the fund and providing the fund with sufficient initial equity for investment to permit the fund to attract unaffiliated investors; orCommentsClose CommentsPermalink





‘(ii) making a de minimis investment.CommentsClose CommentsPermalink





‘(B) LIMITATIONS AND RESTRICTIONS ON INVESTMENTS-CommentsClose CommentsPermalink





‘(i) REQUIREMENT TO SEEK OTHER INVESTORS- A banking entity shall actively seek unaffiliated investors to reduce or dilute the investment of the banking entity to the amount permitted under clause (ii).CommentsClose CommentsPermalink





‘(ii) LIMITATIONS ON SIZE OF INVESTMENTS- Notwithstanding any other provision of law, investments by a banking entity in a hedge fund or private equity fund shall--CommentsClose CommentsPermalink





‘(I) not later than 1 year after the date of establishment of the fund, be reduced through redemption, sale, or dilution to an amount that is not more than 3 percent of the total ownership interests of the fund;CommentsClose CommentsPermalink





‘(II) be immaterial to the banking entity, as defined, by rule, pursuant to subsection (b)(2), but in no case may the aggregate of all of the interests of the banking entity in all such funds exceed 3 percent of the Tier 1 capital of the banking entity.CommentsClose CommentsPermalink





‘(iii) CAPITAL- For purposes of determining compliance with applicable capital standards under paragraph (3), the aggregate amount of the outstanding investments by a banking entity under this paragraph, including retained earnings, shall be deducted from the assets and tangible equity of the banking entity, and the amount of the deduction shall increase commensurate with the leverage of the hedge fund or private equity fund.CommentsClose CommentsPermalink





‘(C) EXTENSION- Upon an application by a banking entity, the Board may extend the period of time to meet the requirements under subparagraph (B)(ii)(I) for 2 additional years, if the Board finds that an extension would be consistent with safety and soundness and in the public interest.CommentsClose CommentsPermalink





‘(e) Anti-evasion-CommentsClose CommentsPermalink





‘(1) RULEMAKING- The appropriate Federal banking agencies, the Securities and Exchange Commission, and the Commodity Futures Trading Commission shall issue regulations, as part of the rulemaking provided for in subsection (b)(2), regarding internal controls and recordkeeping, in order to insure compliance with this section.CommentsClose CommentsPermalink





‘(2) TERMINATION OF ACTIVITIES OR INVESTMENT- Notwithstanding any other provision of law, whenever an appropriate Federal banking agency, the Securities and Exchange Commission, or the Commodity Futures Trading Commission, as appropriate, has reasonable cause to believe that a banking entity or nonbank financial company supervised by the Board under the respective agency’s jurisdiction has made an investment or engaged in an activity in a manner that functions as an evasion of the requirements of this section (including through an abuse of any permitted activity) or otherwise violates the restrictions under this section, the appropriate Federal banking agency, the Securities and Exchange Commission, or the Commodity Futures Trading Commission, as appropriate, shall order, after due notice and opportunity for hearing, the banking entity or nonbank financial company supervised by the Board to terminate the activity and, as relevant, dispose of the investment. Nothing in this paragraph shall be construed to limit the inherent authority of any Federal agency or State regulatory authority to further restrict any investments or activities under otherwise applicable provisions of law.CommentsClose CommentsPermalink





‘(f) Limitations on Relationships With Hedge Funds and Private Equity Funds-CommentsClose CommentsPermalink





(1) COVERED TRANSACTIONS- An insured depository institution, a company that controls, directly or indirectly, an insured depository institution or is treated as a bank holding company for purposes of the Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.), and any subsidiary of such institution or compan‘(1) IN GENERAL- No banking entity that serves, directly or indirectly, as the investment manager or investment adviser to a hedge fund or private equity fund may not enter into, investment adviser, or sponsor to a hedge fund or private equity fund, or that organizes and offers a hedge fund or private equity fund pursuant to paragraph (d)(1)(G), and no affiliate of such entity, may enter into a transaction with the fund, or with any other hedge fund or private equity fund that is controlled by such fund, that would be a covered transaction, as defined in section 23A of the Federal Reserve Act (12 U.S.C. 371c) with such hedge fund or private equity fund.(2) AFFILIATION- An insured depository institution, a company that controls, directly or indirectly, an insured depository institution or is treated as a bank holding company for purposes of the Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.), and any subsidiary of such institution or company that , with the hedge fund or private equity fund, as if such banking entity and the affiliate thereof were a member bank and the hedge fund or private equity fund were an affiliate thereof.CommentsClose CommentsPermalink





‘(2) TREATMENT AS MEMBER BANK- A banking entity that serves, directly or indirectly, as the investment manager or investment adviser to a hedge fund or private equity fund, investment adviser, or sponsor to a hedge fund or private equity fund, or that organizes and offers a hedge fund or private equity fund pursuant to paragraph (d)(1)(G), shall be subject to section 23B of the Federal Reserve Act (12 U.S.C. 371c-1) as if such institution, company, or subsidiary were a member bank and such , as if such banking entity were a member bank and such hedge fund or private equity fund were an affiliate.

(f) Capital and Quantitative Limitations for Certain Nonbank Financial Companies-

(1) IN GENERAL- Except as provided in paragraph (2), and subject to the recommendations and modifications of the Council under subsection (g), the Board of Governors shall adopt rules thereof.CommentsClose CommentsPermalink




‘(3) PERMITTED SERVICES-CommentsClose CommentsPermalink





‘(A) IN GENERAL- Notwithstanding paragraph (1), the Board may permit a banking entity to enter into any prime brokerage transaction with any hedge fund or private equity fund in which a hedge fund or private equity fund managed, sponsored, or advised by such banking entity has taken an equity, partnership, or other ownership interest, if--CommentsClose CommentsPermalink





‘(i) the banking entity is in compliance with each of the limitations set forth in subsection (d)(1)(G) with regard to a hedge fund or private equity fund organized and offered by such banking entity;CommentsClose CommentsPermalink





‘(ii) the chief executive officer (or equivalent officer) of the banking entity certifies in writing annually (with a duty to update the certification if the information in the certification materially changes) that the conditions specified in subsection (d)(1)(g)(v) are satisfied; andCommentsClose CommentsPermalink





‘(iii) the Board has determined that such transaction is consistent with the safe and sound operation and condition of the banking entity.CommentsClose CommentsPermalink





‘(B) TREATMENT OF PRIME BROKERAGE TRANSACTIONS- For purposes of subparagraph (A), a prime brokerage transaction described in subparagraph (A) shall be subject to section 23B of the Federal Reserve Act (12 U.S.C. 371c-1) as if the counterparty were an affiliate of the banking entity.CommentsClose CommentsPermalink





‘(4) APPLICATION TO NONBANK FINANCIAL COMPANIES SUPERVISED BY THE BOARD- The appropriate Federal banking agencies, the Securities and Exchange Commission, and the Commodity Futures Trading Commission shall adopt rules, as provided in subsection (b)(2), imposing additional capital requirements and specifying additional quantitative limits for nonbank financial companies supervised by the Board of Governors undercharges or other restrictions for nonbank financial companies supervised by the Board to address the risks to and conflicts of interest of banking entities described in paragraphs (1), (2), and (3) of this subsection.CommentsClose CommentsPermalink





‘(g) Rules of Construction-CommentsClose CommentsPermalink





‘(1) LIMITATION ON CONTRARY AUTHORITY- Except as provided in this section, notwithstanding any other provision of law, the prohibitions and restrictions under this section shall apply to activities of a banking entity or nonbank financial company supervised by the Board, even if such activities are authorized for a banking entity or nonbank financial company supervised by the Board.CommentsClose CommentsPermalink





‘(2) SALE OR SECURITIZATION OF LOANS- Nothing in this section shall be construed to limit or restrict the ability of a banking entity or nonbank financial company supervised by the Board to sell or securitize loans in a manner otherwise permitted by law.CommentsClose CommentsPermalink





‘(3) AUTHORITY OF FEDERAL AGENCIES AND STATE REGULATORY AUTHORITIES- Nothing in this section shall be construed to limit the inherent authority of any Federal agency or State regulatory authority under otherwise applicable provisions of law.CommentsClose CommentsPermalink





‘(h) Definitions- In this section, the following definitions shall apply:CommentsClose CommentsPermalink





‘(1) BANKING ENTITY- The term ‘banking entity’ means any insured depository institution (as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813)), any company that controls an insured depository institution, or that is treated as a bank holding company for purposes of section 113 that engage in proprietary trading or sponsoring and investing in hedge funds and private equity funds.

(2) EXCEPTIONS- The rules under this subsection shall not apply with respect to the trading of an investment that is otherwise authorized by Federal law--

(A) in obligations of the United States or any agency of the United States, including obligations fully guaranteed as to principal and interest by the United States or an agency of the United States;

(B) in obligations, participations, or other instruments of, or issued by, the Government National Mortgage Association, the Federal National Mortgage Association, or the Federal Home Loan Mortgage Corporation, including obligations fully guaranteed as to principal and interest by such entities;

(C) in obligations of any State or any political subdivision of a State;

(D) in a small business investment company, as that term is defined in section 103 of the Small Business Investment Act of 1958 (158 of the International Banking Act of 1978, and any affiliate or subsidiary of any such entity. For purposes of this paragraph, the term ‘insured depository institution’ does not include an institution that functions solely in a trust or fiduciary capacity, if--CommentsClose CommentsPermalink




‘(A) all or substantially all of the deposits of such institution are in trust funds and are received in a bona fide fiduciary capacity;CommentsClose CommentsPermalink





‘(B) no deposits of such institution which are insured by the Federal Deposit Insurance Corporation are offered or marketed by or through an affiliate of such institution;CommentsClose CommentsPermalink





‘(C) such institution does not accept demand deposits or deposits that the depositor may withdraw by check or similar means for payment to third parties or others or make commercial loans; andCommentsClose CommentsPermalink





‘(D) such institution does not--CommentsClose CommentsPermalink





‘(i) obtain payment or payment related services from any Federal Reserve bank, including any service referred to in section 11A of the Federal Reserve Act ( 12 U.S.C. 662); or(E) that is designed primarily to promote the public welfare, as provided in the 11th paragraph of section 5136 of the Revised Statutes248a ); or CommentsClose CommentsPermalink





‘(ii) exercise discount or borrowing privileges pursuant to section 19(b)(7) of the Federal Reserve Act (12 U.S.C. 24).

(g) Council Study and Rulemaking-

(1) STUDY AND RECOMMENDATIONS- Not later than 6 months after the date of enactment of this Act, the Council--

(A) shall complete a study of the definitions under subsection (a) and the other provisions under subsections (b) through (f), to assess the extent to which the definitions under subsection (a) and the implementation of subsections (a) through (f) would--

(i) promote and enhance the safety and soundness of depository institutions and the affiliates of depository institutions;

(ii) protect taxpayers and enhance financial stability by minimizing the risk that depository institutions and461(b)(7)).CommentsClose CommentsPermalink




‘(2) HEDGE FUND; PRIVATE EQUITY FUND- The terms ‘hedge fund’ and ‘private equity fund’ mean an issuer that would be an investment company, as defined in the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.), but for section 3(c)(1) or 3(c)(7) of that Act, or such similar funds as the appropriate Federal banking agencies, the Securities and Exchange Commission, and the Commodity Futures Trading Commission may, by rule, as provided in subsection (b)(2), determine.CommentsClose CommentsPermalink





‘(3) NONBANK FINANCIAL COMPANY SUPERVISED BY THE BOARD- The term ‘nonbank financial company supervised by the Board’ means a nonbank financial company supervised by the Board of Governors, as defined in section 102 of the Financial Stability Act of 2010.CommentsClose CommentsPermalink





‘(4) PROPRIETARY TRADING- The term ‘proprietary trading’, when used with respect to a banking entity or nonbank financial company supervised by the Board, means engaging as a principal for the trading account of the banking entity or nonbank financial company supervised by the Board in any transaction to purchase or sell, or otherwise acquire or dispose of, any security, any derivative, any contract of sale of a commodity for future delivery, any option on any such security, derivative, or contract, or any other security or financial instrument that the appropriate Federal banking agencies, the Securities and Exchange Commission, and the Commodity Futures Trading Commission may, by rule as provided in subsection (b)(2), determine.CommentsClose CommentsPermalink





‘(5) SPONSOR- The term to ‘sponsor’ a fund means--CommentsClose CommentsPermalink





‘(A) to serve as a general partner, managing member, or trustee of a fund;CommentsClose CommentsPermalink





‘(B) in any manner to select or to control (or to have employees, officers, or directors, or agents who constitute) a majority of the directors, trustees, or management of a fund; orCommentsClose CommentsPermalink





‘(C) to share with a fund, for corporate, marketing, promotional, or other purposes, the same name or a variation of the same name.CommentsClose CommentsPermalink





‘(6) TRADING ACCOUNT- The term ‘trading account’ means any account used for acquiring or taking positions in the securities and instruments described in paragraph (4) principally for the purpose of selling in the near term (or otherwise with the affiliates of depository institutions will engage in unsafe and unsound activities;

(iii) limit the inappropriate transfer of Federal subsidies from institutions that benefit from deposit insurance and liquidity facilities of the Federal Government to unregulated entities;

(iv) reduce inappropriate conflicts of interest between the self-interest of depository institutions, affiliates of depository institutions, and financial companies superviseintent to resell in order to profit from short-term price movements), and any such other accounts as the appropriate Federal banking agencies, the Securities and Exchange Commission, and the Commodity Futures Trading Commission may, by rule as provided in subsection (b)(2), determine.CommentsClose CommentsPermalink




‘(7) ILLIQUID FUND-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The term ‘illiquid fund’ means a hedge fund or private equity fund that--CommentsClose CommentsPermalink





‘(i) as of May 1, 2010, was principally invested in, or was invested and contractually committed to principally invest in, illiquid assets, such as portfolio companies, real estate investments, and venture capital investments; andCommentsClose CommentsPermalink





‘(ii) makes all investments pursuant to, and consistent with, an investment strategy to principally invest in illiquid assets. In issuing rules regarding this subparagraph, the Board shall take into consideration the terms of investment for the hedge fund or private equity fund, including contractual obligations, the ability of the fund to divest of assets held by the Board, and the interests of the customers of such institutions and companies;

(v) raise the cost of credit or other financial services, reduce the availability of credit or other financial services, or impose other costs on households and businesses in the United States;

(vi) limit activities that have caused undue risk or loss in depository institutions, affiliates of depository institutions, and financial companies supervised by the Board of Governors, or that might reasonably be expected to create undue risk or loss in such institutions, affiliates, and companies; and

(vii) appropriately accommodates the business of insurance within an insurance company subject to regulation in accordance with State insurance company investment laws;

(B) shall make recommendations regarding the definitions under subsection (a) and the implementation of other provisions under subsections (b) through (f), including any modifications to the definitions, prohibitions, requirements, and limitations contained therein that the Council determines would more effectively implement the purposes of this section; and

(C) may make recommendations for prohibiting the conduct of the activities described in subsections (b) and (c) above a specific threshold amount and imposing additional capital requirements on activities conducted below such threshold amount.

(2) RULEMAKING- Not earlier than the date of completion of the study required under paragraph (1), and not later than 9 months after the date of completion of such study--

(A)fund, and any other factors that the Board determines are appropriate.CommentsClose CommentsPermalink




‘(B) HEDGE FUND- For the purposes of this paragraph, the term ‘hedge fund’ means any fund identified under subsection (h)(2), and does not include a private equity fund, as such term is used in section 203(m) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-3(m)).’.CommentsClose CommentsPermalink

(a) Study-CommentsClose CommentsPermalink





(1) IN GENERAL- Not later than 18 months after the date of enactment of this Act, the appropriate Federal banking agencies shall jointly issue final regulations implementing subsections (b) through (e), which shall reflect any recommendations or modifications made by the Council pursuant to paragraph (1)(B); and

(B) the Board of Governors shall issue final regulations implementing subsection (f), which shall reflect any recommendations or modifications made by the Council pursuant to paragraph (1)(B).

(h) Transition-

(1) IN GENERAL- The final regulations issued by the appropriate Federal banking agencies and the Board of Governors under subsection (g)(2) shall provide that, effective 2 years after the date on which such final regulations are issued, no insured depository institution, company that controls, directly or indirectly, an insured depository institution, company that is treated as a bank holding company for purposes ofreview and prepare a report on the activities that a banking entity, as such term is defined in the Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.), or subsidiary of such institution or company, may retain any investment or relationship prohibited under such regulations.

(2) EXTENSION-

(A) IN GENERAL- The appropriate Federal banking agency for an insured depository institution or a company described in paragraph (1) may, upon the application of any such company, extend the 2-year period under paragraph (1) with respect to such company, if the appropriate Federal banking agency determines that an extension would not be detrimental to the public interest.

(B) TIME PERIOD FOR EXTENSION- An extension granted under subparagraph (A) may not exceed--

(i) 1 year for each determination made by the appropriate Federal banking agency under subparagraph (A); and

(ii) a total of 3 years with respect to any 1 company. seq.), may engage in under Federal and State law, including activities authorized by statute and by order, interpretation and guidance.CommentsClose CommentsPermalink




(2) CONTENT- In carrying out the study under paragraph (1), the appropriate Federal banking agencies shall review and consider--CommentsClose CommentsPermalink





(A) the type of activities or investments;CommentsClose CommentsPermalink





(B) any financial, operational, managerial, or reputation risks associated with or presented as a result of the banking entity engaged in the activity or making the investment; andCommentsClose CommentsPermalink





(C) risk mitigation activities undertaken by the banking entity with regard to the risks.CommentsClose CommentsPermalink





(b) Report and Recommendations to the Council and to Congress- The appropriate Federal banking agencies shall submit to the Council, the Committee on Financial Services of the House of Representatives, and the Committee on Banking, Housing, and Urban Affairs of the Senate the study conducted pursuant to subsection (a) no later than 2 months after its completion. In addition to the information described in subsection (a), the report shall include recommendations regarding--CommentsClose CommentsPermalink





(1) whether each activity or investment has or could have a negative effect on the safety and soundness of the banking entity or the United States financial system;CommentsClose CommentsPermalink





(2) the appropriateness of the conduct of each activity or type of investment by banking entities; andCommentsClose CommentsPermalink





(3) additional restrictions as may be necessary to address risks to safety and soundness arising from the activities or types of investments described in subsection (a).CommentsClose CommentsPermalink

‘SEC. 27B. CONFLICTS OF INTEREST RELATING TO CERTAIN SECURITIZATIONS.CommentsClose CommentsPermalink

‘(a) In General- An underwriter, placement agent, initial purchaser, or sponsor, or any affiliate or subsidiary of any such entity, of an asset-backed security (as such term is defined in section 3 of the Securities and Exchange Act of 1934 (15 U.S.C. 78c), which for the purposes of this section shall include a synthetic asset-backed security), shall not, at any time for a period ending on the date that is one year after the date of the first closing of the sale of the asset-backed security, engage in any transaction that would involve or result in any material conflict of interest with respect to any investor in a transaction arising out of such activity.CommentsClose CommentsPermalink





‘(b) Rulemaking- Not later than 270 days after the date of enactment of this section, the Commission shall issue rules for the purpose of implementing subsection (a).CommentsClose CommentsPermalink





‘(c) Exception- The prohibitions of subsection (a) shall not apply to--CommentsClose CommentsPermalink





‘(1) risk-mitigating hedging activities in connection with positions or holdings arising out of the underwriting, placement, initial purchase, or sponsorship of an asset-backed security, provided that such activities are designed to reduce the specific risks to the underwriter, placement agent, initial purchaser, or sponsor associated with positions or holdings arising out of such underwriting, placement, initial purchase, or sponsorship; orCommentsClose CommentsPermalink





‘(2) purchases or sales of asset-backed securities made pursuant to and consistent with--CommentsClose CommentsPermalink





‘(A) commitments of the underwriter, placement agent, initial purchaser, or sponsor, or any affiliate or subsidiary of any such entity, to provide liquidity for the asset-backed security, orCommentsClose CommentsPermalink





‘(B) bona fide market-making in the asset backed security.CommentsClose CommentsPermalink





‘(d) Rule of Construction- This subsection shall not otherwise limit the application of section 15G of the Securities Exchange Act of 1934.’.CommentsClose CommentsPermalink





(b) Effective Date- Section 27B of the Securities Act of 1933, as added by this section, shall take effect on the effective date of final rules issued by the Commission under subsection (b) of such section 27B, except that subsections (b) and (d) of such section 27B shall take effect on the date of enactment of this Act.CommentsClose CommentsPermalink

SEC. 6202. CONCENTRATION LIMITS ON LARGE FINANCIAL FIRMS.CommentsClose CommentsPermalink

The Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) is amended by adding at the end the following:CommentsClose CommentsPermalink





‘SEC. 13‘SEC. 14. CONCENTRATION LIMITS ON LARGE FINANCIAL FIRMS.CommentsClose CommentsPermalink





‘(a) Definitions- In this section--CommentsClose CommentsPermalink





‘(1) the term ‘Council’ means the Financial Stability Oversight Council;CommentsClose CommentsPermalink





‘(2) the term ‘financial company’ means--CommentsClose CommentsPermalink





‘(A) an insured depository institution;CommentsClose CommentsPermalink





‘(B) a bank holding company;CommentsClose CommentsPermalink





‘(C) a savings and loan holding company;CommentsClose CommentsPermalink





‘(D) a company that controls an insured depository institution;CommentsClose CommentsPermalink





‘(E) a nonbank financial company supervised by the Board under title I of the Restoring American Financial Stability Act of 2010Dodd-Frank Wall Street Reform and Consumer Protection Act; andCommentsClose CommentsPermalink





‘(F) a foreign bank or company that is treated as a bank holding company for purposes of this Act; andCommentsClose CommentsPermalink





‘(3) the term ‘liabilities’ means--CommentsClose CommentsPermalink





‘(A) with respect to a United States financial company--CommentsClose CommentsPermalink





‘(i) the total risk-weighted assets of the financial company, as determined under the risk-based capital rules applicable to bank holding companies, as adjusted to reflect exposures that are deducted from regulatory capital; lessCommentsClose CommentsPermalink





‘(ii) the total regulatory capital of the financial company under the risk-based capital rules applicable to bank holding companies;CommentsClose CommentsPermalink





‘(B) with respect to a foreign-based financial company--CommentsClose CommentsPermalink





‘(i) the total risk-weighted assets of the United States operations of the financial company, as determined under the applicable risk-based capital rules, as adjusted to reflect exposures that are deducted from regulatory capital; lessCommentsClose CommentsPermalink





‘(ii) the total regulatory capital of the United States operations of the financial company, as determined under the applicable risk-based capital rules; andCommentsClose CommentsPermalink





‘(C) with respect to an insurance company or other nonbank financial company supervised by the Board, such assets of the company as the Board shall specify by rule, in order to provide for consistent and equitable treatment of such companies.CommentsClose CommentsPermalink





‘(b) Concentration Limit- Subject to the recommendations by the Council under subsection (e), a financial company may not merge or consolidate with, acquire all or substantially all of the assets of, or otherwise acquire control of, another company, if the total consolidated liabilities of the acquiring financial company upon consummation of the transaction would exceed 10 percent of the aggregate consolidated liabilities of all financial companies at the end of the calendar year preceding the transaction.CommentsClose CommentsPermalink





‘(c) Exception to Concentration Limit- With the prior written consent of the Board, the concentration limit under subsection (b) shall not apply to an acquisition--CommentsClose CommentsPermalink





‘(1) of a bank in default or in danger of default;CommentsClose CommentsPermalink





‘(2) with respect to which assistance is provided by the Federal Deposit Insurance Corporation under section 13(c) of the Federal Deposit Insurance Act (12 U.S.C. 1823(c)); orCommentsClose CommentsPermalink





‘(3) that would result only in a de minimis increase in the liabilities of the financial company.CommentsClose CommentsPermalink





‘(d) Rulemaking and Guidance- The Board shall issue regulations implementing this section in accordance with the recommendations of the Council under subsection (e), including the definition of terms, as necessary. The Board may issue interpretations or guidance regarding the application of this section to an individual financial company or to financial companies in general.CommentsClose CommentsPermalink





‘(e) Council Study and Rulemaking-CommentsClose CommentsPermalink





‘(1) STUDY AND RECOMMENDATIONS- Not later than 6 months after the date of enactment of this section, the Council shall--CommentsClose CommentsPermalink





‘(A) complete a study of the extent to which the concentration limit under this section would affect financial stability, moral hazard in the financial system, the efficiency and competitiveness of United States financial firms and financial markets, and the cost and availability of credit and other financial services to households and businesses in the United States; andCommentsClose CommentsPermalink





‘(B) make recommendations regarding any modifications to the concentration limit that the Council determines would more effectively implement this section.CommentsClose CommentsPermalink





‘(2) RULEMAKING- Not later than 9 months after the date of completion of the study under paragraph (1), and notwithstanding subsections (b) and (d), the Board shall issue final regulations implementing this section, which shall reflect any recommendations by the Council under paragraph (1)(B).’.CommentsClose CommentsPermalink

TITLE VII--WALL STREET TRANSPARENCY AND ACCOUNTABILITYCommentsClose CommentsPermalink

SEC. 701. SHORT TITLE.CommentsClose CommentsPermalink

This title may be cited as the ‘Wall Street Transparency and Accountability Act of 2010’.CommentsClose CommentsPermalink

Subtitle A--Regulation of Over-the-Counter Swaps MarketsCommentsClose CommentsPermalink

PART I--REGULATORY AUTHORITY

SEC. 711. DEFINITIONS.CommentsClose CommentsPermalink

In this subtitle, the terms ‘prudential regulator’, ‘swap’, ‘swap dealer’, ‘major swap participant’, ‘swap data repository’, ‘associated person of a swap dealer or major swap participant’, ‘eligible contract participant’, ‘swap execution facility’, ‘security-based swap’, ‘security-based swap dealer’, ‘major security-based swap participant’, ‘swap data repository’, and ‘associated person of a security-based swap dealer or major security-based swap participant’ have the meanings given the terms in section 1a of the Commodity Exchange Act (7 U.S.C. 1a), including any modification of the meanings under section 721(b) of this Act.CommentsClose CommentsPermalink

SEC. 712. REVIEW OF REGULATORY AUTHORITY.CommentsClose CommentsPermalink

(a) Regulatory Authority-

(1) IN GENERAL- Except as provided in paragraphs (4) and (8), the Commodity Futures Trading Commission and the Securities and Exchange Commission shall each prescribe such regulations as may be necessary to carry out the purposes of this title.

(2) COORDINATION, CONSISTENCY, AND COMPARABILITY- Both Commissions required under paragraph (1) to prescribe regulations shall consult and coordinate with each other for the purposes of assuring, to the extent possible, that the regulations prescribed by each such Commission are consistent and comparable with the regulations prescribed by the otherConsultation-CommentsClose CommentsPermalink




(1) COMMODITY FUTURES TRADING COMMISSION- Before commencing any rulemaking or issuing an order regarding swaps, swap dealers, major swap participants, swap data repositories, derivative clearing organizations with regard to swaps, persons associated with a swap dealer or major swap participant, eligible contract participants, or swap execution facilities pursuant to this subtitle, the Commodity Futures Trading Commission shall consult and coordinate to the extent possible with the Securities and Exchange Commission and the prudential regulators for the purposes of assuring regulatory consistency and comparability, to the extent possible.CommentsClose CommentsPermalink





(2) SECURITIES AND EXCHANGE COMMISSION- Before commencing any rulemaking or issuing an order regarding security-based swaps, security-based swap dealers, major security-based swap participants, security-based swap data repositories, clearing agencies with regard to security-based swaps, persons associated with a security-based swap dealer or major security-based swap participant, eligible contract participants with regard to security-based swaps, or security-based swap execution facilities pursuant to subtitle B, the Securities and Exchange Commission shall consult and coordinate to the extent possible with the Commodity Futures Trading Commission and the prudential regulators for the purposes of assuring regulatory consistency and comparability, to the extent possible.CommentsClose CommentsPermalink





(3) PROCEDURES AND DEADLINE- Such regulations shall be prescribed in accordance with applicable requirements of title 5, United States Code, and, shall be issued in final form not later than 18 shall be issued in final form not later than 360 days after the date of enactment of this Act.CommentsClose CommentsPermalink





(4) APPLICABILITY- The requirements of paragraph (1s (1) and (2) shall not apply to an order issued--CommentsClose CommentsPermalink





(A) in connection with or arising from a violation or potential violation of any provision of the Commodity Exchange Act (7 U.S.C. 1 et seq.);CommentsClose CommentsPermalink





(B) in connection with or arising from a violation or potential violation of any provision of the securities laws; orCommentsClose CommentsPermalink





(C) in any proceeding that is conducted on the record in accordance with sections 556 and 557 of title 5, United States Code.CommentsClose CommentsPermalink





(5) EFFECT- Nothing in this subsection authorizes any consultation or procedure for consultation that is not consistent with the requirements of subchapter II of chapter 5, and chapter 7, of title 5, United States Code (commonly known as the ‘Administrative Procedure Act’).CommentsClose CommentsPermalink





(6) RULES; ORDERS- In developing and promulgating rules or orders pursuant to this subsection, each Commission shall consider the views of the prudential regulators.CommentsClose CommentsPermalink





(7) TREATMENT OF SIMILAR PRODUCTS AND ENTITIES-CommentsClose CommentsPermalink





(A) IN GENERAL- In adopting rules and orders under this subsection, the Commodity Futures Trading Commission and the Securities and Exchange Commission shall treat functionally or economically similar products or entities described in paragraphs (1) and (2) in a similar manner.CommentsClose CommentsPermalink





(B) EFFECT- Nothing in this subtitle requires the Commodity Futures Trading Commission or the Securities and Exchange Commission to adopt joint rules or orders that treat functionally or economically similar products or entities described in paragraphs (1) and (2) in an identical manner.CommentsClose CommentsPermalink





(8) MIXED SWAPS- The Commodity Futures Trading Commission and the Securities and Exchange Commission, after consultation with the Board of Governors, shall jointly prescribe such regulations regarding mixed swaps, as described in section 1a(47)(D) of the Commodity Exchange Act (7 U.S.C. 1a(47)(D)) and in section 3(a)(68)(D) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(68)(D)), as may be necessary to carry out the purposes of this title.CommentsClose CommentsPermalink





(b) Limitation-CommentsClose CommentsPermalink





(1) COMMODITY FUTURES TRADING COMMISSION- Nothing in this title, unless specifically provided, confers jurisdiction on the Commodity Futures Trading Commission to issue a rule, regulation, or order providing for oversight or regulation of--CommentsClose CommentsPermalink





(A) security-based swaps; orCommentsClose CommentsPermalink





(B) with regard to its activities or functions concerning security-based swaps--CommentsClose CommentsPermalink





(i) security-based swap dealers;CommentsClose CommentsPermalink





(ii) major security-based swap participants;CommentsClose CommentsPermalink





(iii) security-based swap data repositories;CommentsClose CommentsPermalink





(iv) persons associated withassociated persons of a security-based swap dealer or major security-based swap participant;CommentsClose CommentsPermalink





(v) eligible contract participants with respect to security-based swaps; orCommentsClose CommentsPermalink





(vi) swap execution facilities with respect to security-based swaps.CommentsClose CommentsPermalink





(2) SECURITIES AND EXCHANGE COMMISSION- Nothing in this title, unless specifically provided, confers jurisdiction on the Securities and Exchange Commission or State securities regulators to issue a rule, regulation, or order providing for oversight or regulation of--CommentsClose CommentsPermalink





(A) swaps; orCommentsClose CommentsPermalink





(B) with regard to its activities or functions concerning swaps--CommentsClose CommentsPermalink





(i) swap dealers;CommentsClose CommentsPermalink





(ii) major swap participants;CommentsClose CommentsPermalink





(iii) swap data repositories;CommentsClose CommentsPermalink





(iv) persons associated with a swap dealer or major swap participant;CommentsClose CommentsPermalink





(v) eligible contract participants with respect to swaps; orCommentsClose CommentsPermalink





(vi) swap execution facilities with respect to swaps.CommentsClose CommentsPermalink





(3) PROHIBITION ON CERTAIN FUTURES ASSOCIATIONS AND NATIONAL SECURITIES ASSOCIATIONS-CommentsClose CommentsPermalink





(A) FUTURES ASSOCIATIONS- Notwithstanding any other provision of law (including regulations), unless otherwise authorized by this title, no futures association registered under section 17 of the Commodity Exchange Act (7 U.S.C. 21) may issue a rule, regulation, or order for the oversight or regulation of, or otherwise assert jurisdiction over, for any purpose, any security-based swap, except that this shall not limit the authority of a national futures association to examine for compliance with and enforce its rules on advertising and capital ubparagraph shall not limit the authority of a registered futures association to examine for compliance with, and enforce, its rules on capital adequacy.CommentsClose CommentsPermalink





(B) NATIONAL SECURITIES ASSOCIATIONS- Notwithstanding any other provision of law (including regulations), unless otherwise authorized by this title, no national securities association registered under section 15A of the Securities Exchange Act of 1934 (15 U.S.C. 78o-3) may issue a rule, regulation, or order for the oversight or regulation of, or otherwise assert jurisdiction over, for any purpose, any swap, except that this shall not limit the authority of a national securities association to examine for compliance with and enforce its rules on advertising and capital ubparagraph shall not limit the authority of a national securities association to examine for compliance with, and enforce, its rules on capital adequacy.CommentsClose CommentsPermalink





(c) Objection to Commission Regulation-CommentsClose CommentsPermalink





(1) FILING OF PETITION FOR REVIEW-CommentsClose CommentsPermalink





(A) IN GENERAL- If either Commission referred to in this section determines that a final rule, regulation, or order of the other Commission conflicts with subsection (a)(47) or (b), then the complaining Commission may obtain review of the final rule, regulation, or order in the United States Court of Appeals for the District of Columbia Circuit by filing in the court, not later than 60 days after the date of publication of the final rule, regulation, or order, a written petition requesting that the rule, regulation, or order be set aside.CommentsClose CommentsPermalink





(B) EXPEDITED PROCEEDING- A proceeding described in subparagraph (A) shall be expedited by the United States Court of Appeals for the District of Columbia Circuit.CommentsClose CommentsPermalink





(2) TRANSMITTAL OF PETITION AND RECORD-CommentsClose CommentsPermalink





(A) IN GENERAL- A copy of a petition described in paragraph (1) shall be transmitted not later than 1 business day after the date of filing by the complaining Commission to the Secretary of the responding Commission.CommentsClose CommentsPermalink





(B) DUTY OF RESPONDING COMMISSION- On receipt of the copy of a petition described in paragraph (1), the responding Commission shall file with the United States Court of Appeals for the District of Columbia Circuit--CommentsClose CommentsPermalink





(i) a copy of the rule, regulation, or order under review (including any documents referred to therein); andCommentsClose CommentsPermalink





(ii) any other materials prescribed by the United States Court of Appeals for the District of Columbia Circuit.CommentsClose CommentsPermalink





(3) STANDARD OF REVIEW- The United States Court of Appeals for the District of Columbia Circuit shall--CommentsClose CommentsPermalink





(A) give deference to the views of neither Commission; andCommentsClose CommentsPermalink





(B) determine to affirm or set aside a rule, regulation, or order of the responding Commission under this subsection, based on the determination of the court as to whether the rule, regulation, or order is in conflict with subsection (a)(4) or (b), as applicable.(4)7) or (b), as applicable.CommentsClose CommentsPermalink





(4) JUDICIAL STAY- The filing of a petition by the complaining Commission pursuant to paragraph (1) shall operate as a stay of the rule, regulation, or order until the date on which the determination of the United States Court of Appeals for the District of Columbia Circuit is final (including any appeal of the determination).CommentsClose CommentsPermalink





(d) Adoption of Rules on Uncleared Swaps- Notwithstanding subsections (b) and (c), the Commodity Futures Trading Commission and the Securities and Exchange Commission shall, after consulting with each other Commission, adopt rules--

(1) to require the maintenance of records of all activities relating to transactions in swaps and security-based swaps under the respective jurisdictions of the Commodity Futures Trading Commission and the Securities and Exchange Commission that are uncleared;

(2) to make available, consistent with section 8 of the Commodity Exchange Act (7 U.S.C. 12), to the Securities and Exchange Commission information relating to swaps transactions that are uncleared; and

(3) to make available to the Commodity Futures Trading Commission information relating to security-based swaps transactions that are uncleared.

(e) Definitions- NotwithstandingJoint Rulemaking-CommentsClose CommentsPermalink




(1) IN GENERAL- Notwithstanding any other provision of this title and subsections (b) and (c), the Commodity Futures Trading Commission and the Securities and Exchange Commission shall jointly adopt rules to define the term, in consultation with the Board of Governors, shall further define the terms ‘swap’, ‘security-based swap’, ‘swap dealer’, ‘security-based swap dealer’, ‘major swap participant’, ‘major security-based swap participant’, ‘eligible contract participant’, and ‘security-based swap agreement’ in section 1a(47)(A)(v) of the Commodity Exchange Act (7 U.S.C. 1a(47)(A)(v)) and in section 3(a)(78) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(78)).CommentsClose CommentsPermalink





(f2) AUTHORITY OF THE COMMISSIONS-CommentsClose CommentsPermalink





(A) IN GENERAL- Notwithstanding any other provision of this title, the Commodity Futures Trading Commission and the Securities and Exchange Commission, in consultation with the Board of Governors, shall jointly adopt such other rules regarding such definitions as the Commodity Futures Trading Commission and the Securities and Exchange Commission determine are necessary and appropriate, in the public interest, and for the protection of investors.CommentsClose CommentsPermalink





(B) TRADE REPOSITORY RECORDKEEPING- Notwithstanding any other provision of this title, the Commodity Futures Trading Commission and the Securities and Exchange Commission, in consultation with the Board of Governors, shall engage in joint rulemaking to jointly adopt a rule or rules governing the books and records that are required to be kept and maintained regarding security-based swap agreements by persons that are registered as swap data repositories under the Commodity Exchange Act, including uniform rules that specify the data elements that shall be collected and maintained by each repository.CommentsClose CommentsPermalink





(C) BOOKS AND RECORDS- Notwithstanding any other provision of this title, the Commodity Futures Trading Commission and the Securities and Exchange Commission, in consultation with the Board of Governors, shall engage in joint rulemaking to jointly adopt a rule or rules governing books and records regarding security-based swap agreements, including daily trading records, for swap dealers, major swap participants, security-based swap dealers, and security-based swap participants.CommentsClose CommentsPermalink





(D) COMPARABLE RULES- Rules and regulations prescribed jointly under this title by the Commodity Futures Trading Commission and the Securities and Exchange Commission shall be comparable to the maximum extent possible, taking into consideration differences in instruments and in the applicable statutory requirements.CommentsClose CommentsPermalink





(E) TRACKING UNCLEARED TRANSACTIONS- Any rules prescribed under subparagraph (A) shall require the maintenance of records of all activities relating to security-based swap agreement transactions defined under subparagraph (A) that are not cleared.CommentsClose CommentsPermalink





(F) SHARING OF INFORMATION- The Commodity Futures Trading Commission shall make available to the Securities and Exchange Commission information relating to security-based swap agreement transactions defined in subparagraph (A) that are not cleared.CommentsClose CommentsPermalink





(3) FINANCIAL STABILITY OVERSIGHT COUNCIL- In the event that the Commodity Futures Trading Commission and the Securities and Exchange Commission fail to jointly prescribe rules pursuant to paragraph (1) or (2) in a timely manner, at the request of either Commission, the Financial Stability Oversight Council shall resolve the dispute--CommentsClose CommentsPermalink





(A) within a reasonable time after receiving the request;CommentsClose CommentsPermalink





(B) after consideration of relevant information provided by each Commission; andCommentsClose CommentsPermalink





(C) by agreeing with 1 of the Commissions regarding the entirety of the matter or by determining a compromise position.CommentsClose CommentsPermalink





(4) JOINT INTERPRETATION- Any interpretation of, or guidance by either Commission regarding, a provision of this title, shall be effective only if issued jointly by the Commodity Futures Trading Commission and the Securities and Exchange Commission, after consultation with the Board of Governors, if this title requires the Commodity Futures Trading Commission and the Securities and Exchange Commission to issue joint regulations to implement the provision.CommentsClose CommentsPermalink





(e) Global Rulemaking Timeframe- Unless otherwise provided in a particular provision of this title, or an amendment made by this title, the Commodity Futures Trading Commission or the Securities and Exchange Commission, or both, shall individually, and not jointly, promulgate rules and regulations required of each Commission under this title or an amendment made by this title not later than 18360 days after the date of enactment of this Act.CommentsClose CommentsPermalink





(g) Expedited Rulemaking Process- The Commodity Futures Trading Commission or the Securities and Exchange Commission, or both, may use emergency and expedited procedures (including any administrative or other procedure as appropriate) to carry out this title and the amendments made by this title if, in either of the Commissions’ discretion, it considers it necessary to do sof) Rules and Registration Before Final Effective Dates- Beginning on the date of enactment of this Act and notwithstanding the effective date of any provision of this Act, the Commodity Futures Trading Commission and the Securities and Exchange Commission may, in order to prepare for the effective dates of the provisions of this Act--CommentsClose CommentsPermalink





(1) promulgate rules, regulations, or orders permitted or required by this Act;CommentsClose CommentsPermalink





(2) conduct studies and prepare reports and recommendations required by this Act;CommentsClose CommentsPermalink





(3) register persons under the provisions of this Act; andCommentsClose CommentsPermalink





(4) exempt persons, agreements, contracts, or transactions from provisions of this Act, under the terms contained in this Act,CommentsClose CommentsPermalink





provided, however, that no action by the Commodity Futures Trading Commission or the Securities and Exchange Commission described in paragraphs (1) through (4) shall become effective prior to the effective date applicable to such action under the provisions of this Act.CommentsClose CommentsPermalink

SEC. 713. RECOMMENDATIONS FOR CHANGES TO PORTFOLIO MARGINING LAWS.Not later than 180 days after the date of enactment of this Act, the Securities and Exchange Commission,CONFORMING CHANGES.CommentsClose CommentsPermalink

(a) Securities Exchange Act of 1934- Section 15(c)(3) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(c)(3)) is amended by adding at the end the following:CommentsClose CommentsPermalink





‘(C) Notwithstanding any provision of sections 2(a)(1)(C)(i) or 4d(a)(2) of the Commodity Exchange Act and the rules and regulations thereunder, and pursuant to an exemption granted by the Commission under section 36 of this title or pursuant to a rule or regulation, cash and securities may be held by a broker or dealer registered pursuant to subsection (b)(1) and also registered as a futures commission merchant pursuant to section 4f(a)(1) of the Commodity Exchange Act, in a portfolio margining account carried as a futures account subject to section 4d of the Commodity Exchange Act and the rules and regulations thereunder, pursuant to a portfolio margining program approved by the Commodity Futures Trading Commission, and the prudential regulators shall submit to the appropriate committees of Congress recommendations for legislative changes to the Federal laws to facilitate thesubject to subchapter IV of chapter 7 of title 11 of the United States Code and the rules and regulations thereunder. The Commission shall consult with the Commodity Futures Trading Commission to adopt rules to ensure that such transactions and accounts are subject to comparable requirements to the extent practicable for similar products.’.CommentsClose CommentsPermalink





(b) Commodity Exchange Act- Section 4d of the Commodity Exchange Act (7 U.S.C. 6d) is amended by adding at the end the following:CommentsClose CommentsPermalink





‘(h) Notwithstanding subsection (a)(2) or the rules and regulations thereunder, and pursuant to an exemption granted by the Commission under section 4(c) of this Act or pursuant to a rule or regulation, a futures commission merchant that is registered pursuant to section 4f(a)(1) of this Act and also registered as a broker or dealer pursuant to section 15(b)(1) of the Securities Exchange Act of 1934 may, pursuant to a portfolio margining of securities and commodity futures and options, commodity options, swaps, and other financial instrument positionsprogram approved by the Securities and Exchange Commission pursuant to section 19(b) of the Securities Exchange Act of 1934, hold in a portfolio margining account carried as a securities account subject to section 15(c)(3) of the Securities Exchange Act of 1934 and the rules and regulations thereunder, a contract for the purchase or sale of a commodity for future delivery or an option on such a contract, and any money, securities or other property received from a customer to margin, guarantee or secure such a contract, or accruing to a customer as the result of such a contract. The Commission shall consult with the Securities and Exchange Commission to adopt rules to ensure that such transactions and accounts are subject to comparable requirements to the extent practical for similar products.’.CommentsClose CommentsPermalink





(c) Duty of Commodity Futures Trading Commission- Section 20 of the Commodity Exchange Act (7 U.S.C. 24) is amended by adding at the end the following:CommentsClose CommentsPermalink





‘(c) The Commission shall exercise its authority to ensure that securities held in a portfolio margining account carried as a futures account are customer property and the owners of those accounts are customers for the purposes of subchapter IV of chapter 7 of title 11 of the United States Code.’.CommentsClose CommentsPermalink

SEC. 714. ABUSIVE SWAPS.CommentsClose CommentsPermalink

The Commodity Futures Trading Commission or the Securities and Exchange Commission, or both, individually may, by rule or order--CommentsClose CommentsPermalink





(1) collect information as may be necessary concerning the markets for any types of--CommentsClose CommentsPermalink





(A) swap (as defined in section 1a of the Commodity Exchange Act (7 U.S.C. 1a)); orCommentsClose CommentsPermalink





(B) security-based swap (as defined in section 1a of the Commodity Exchange Act (7 U.S.C. 1a)); andCommentsClose CommentsPermalink





(2) issue a report with respect to any types of swaps or security-based swaps that the Commodity Futures Trading Commission or the Securities and Exchange Commission determines to be detrimental to--CommentsClose CommentsPermalink





(A) the stability of a financial market; orCommentsClose CommentsPermalink





(B) participants in a financial market.CommentsClose CommentsPermalink

SEC. 715. AUTHORITY TO PROHIBIT PARTICIPATION IN SWAP ACTIVITIES.CommentsClose CommentsPermalink

Except as provided in section 4 of the Commodity Exchange Act (7 U.S.C. 6) (as amended by section 738), if the Commodity Futures Trading Commission or the Securities and Exchange Commission determines that the regulation of swaps or security-based swaps markets in a foreign country undermines the stability of the United States financial system, either Commission, in consultation with the Secretary of the Treasury, may prohibit an entity domiciled in the foreign country from participating in the United States in any swap or security-based swap activities.CommentsClose CommentsPermalink

SEC. 716. PROHIBITION AGAINST FEDERAL GOVERNMENT BAILOUTS OF SWAPS ENTITIES.CommentsClose CommentsPermalink

(a) Prohibition on Federal Assistance- Notwithstanding any other provision of law (including regulations), no Federal assistance may be provided to any swaps entity with respect to any swap, security-based swap, or other activity of the swaps entity.CommentsClose CommentsPermalink





(b) Definitions- In this section:CommentsClose CommentsPermalink





(1) FEDERAL ASSISTANCE- The term ‘Federal assistance’ means the use of any funds, including advances from any Federal Reserve credit facility, or discount window, or pursuant to the third undesignated paragraph of section 13 of the Federal Reserve Act (12 U.S.C. 343) (relating to emergency lending authority), Federal Deposit Insurance Corporation insurance, or that is not part of a program or facility with broad-based eligibility under section 13(3)(A) of the Federal Reserve Act, Federal Deposit Insurance Corporation insurance or guarantees for the purpose of--CommentsClose CommentsPermalink





(A) making any loan to, or purchasing any stock, equity interest, or debt obligation of, any swaps entity;CommentsClose CommentsPermalink





(B) purchasing the assets of any swaps entity;CommentsClose CommentsPermalink





(C) guaranteeing any loan or debt issuance of any swaps entity; orCommentsClose CommentsPermalink





(D) entering into any assistance arrangement (including tax breaks), loss sharing, or profit sharing with any swaps entity.CommentsClose CommentsPermalink





(2) SWAPS ENTITY-CommentsClose CommentsPermalink





(A) IN GENERAL- The term ‘swaps entity’ means any swap dealer, security-based swap dealer, major swap participant, major security-based swap participant, swap execution facility, designated contract market, national securities exchange, central counterparty, clearing house, clearing agency, or derivatives clearing organization that is registered under--(Athat is registered under--CommentsClose CommentsPermalink





(i) the Commodity Exchange Act (7 U.S.C. 1 et seq.);(B orCommentsClose CommentsPermalink





(ii) the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.); or(C) any other Federal or State law (including regulations).CommentsClose CommentsPermalink





(B) EXCLUSION- The term ‘swaps entity’ does not include any major swap participant or major security-based swap participant that is an insured depository institution.CommentsClose CommentsPermalink





(c) Affiliates of Insured Depository Institutions- The prohibition on Federal assistance contained in subsection (a) does not apply to and shall not prevent an insured depository institution from having or establishing an affiliate which is a swaps entity, as long as such insured depository institution is part of a bank holding company, or savings and loan holding company, that is supervised by the Federal Reserve and such swaps entity affiliate complies with sections 23A and 23B of the Federal Reserve Act and such other requirements as the Commodity Futures Trading Commission or the Securities Exchange Commission, as appropriate, and the Board of Governors of the Federal Reserve System, may determine to be necessary and appropriate.CommentsClose CommentsPermalink





(d) Only Bona Fide Hedging and Traditional Bank Activities Permitted- The prohibition in subsection (a) shall apply to any insured depository institution unless the insured depository institution limits its swap or security-based swap activities to:CommentsClose CommentsPermalink





(1) Hedging and other similar risk mitigating activities directly related to the insured depository institution’s activities.CommentsClose CommentsPermalink





(2) Acting as a swaps entity for swaps or security-based swaps involving rates or reference assets that are permissible for investment by a national bank under the paragraph designated as ‘Seventh.’ of section 5136 of the Revised Statutes of the United States ( 12 U.S.C. 24), other than as described in paragraph (3).CommentsClose CommentsPermalink





(3) LIMITATION ON CREDIT DEFAULT SWAPS- Acting as a swaps entity for credit default swaps, including swaps or security-based swaps referencing the credit risk of asset-backed securities as defined in section 3(a)(77) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(77)) (as amended by this Act) shall not be considered a bank permissible activity for purposes of subsection (d)(2) unless such swaps or security-based swaps are cleared by a derivatives clearing organization (as such term is defined in section la of the Commodity Exchange Act (7 U.S.C. la)) or a clearing agency (as such term is defined in section 3 of the Securities Exchange Act (15 U.S.C. 78c)) that is registered, or exempt from registration, as a derivatives clearing organization under the Commodity Exchange Act or as a clearing agency under the Securities Exchange Act, respectively.CommentsClose CommentsPermalink





(e) Existing Swaps and Security-based Swaps- The prohibition in subsection (a) shall only apply to swaps or security-based swaps entered into by an insured depository institution after the end of the transition period described in subsection (f).CommentsClose CommentsPermalink





(f) Transition Period- To the extent an insured depository institution qualifies as a ‘swaps entity’ and would be subject to the Federal assistance prohibition in subsection (a), the appropriate Federal banking agency, after consulting with and considering the views of the Commodity Futures Trading Commission or the Securities Exchange Commission, as appropriate, shall permit the insured depository institution up to 24 months to divest the swaps entity or cease the activities that require registration as a swaps entity. In establishing the appropriate transition period to effect such divestiture or cessation of activities, which may include making the swaps entity an affiliate of the insured depository institution, the appropriate Federal banking agency shall take into account and make written findings regarding the potential impact of such divestiture or cessation of activities on the insured depository institution’s (1) mortgage lending, (2) small business lending, (3) job creation, and (4) capital formation versus the potential negative impact on insured depositors and the Deposit Insurance Fund of the Federal Deposit Insurance Corporation. The appropriate Federal banking agency may consider such other factors as may be appropriate. The appropriate Federal banking agency may place such conditions on the insured depository institution’s divestiture or ceasing of activities of the swaps entity as it deems necessary and appropriate. The transition period under this subsection may be extended by the appropriate Federal banking agency, after consultation with the Commodity Futures Trading Commission and the Securities and Exchange Commission, for a period of up to 1 additional year.CommentsClose CommentsPermalink





(g) Excluded Entities- For purposes of this section, the term ‘swaps entity’ shall not include any insured depository institution under the Federal Deposit Insurance Act or a covered financial company under title II which is in a conservatorship, receivership, or a bridge bank operated by the Federal Deposit Insurance Corporation.CommentsClose CommentsPermalink





(h) Effective Date- The prohibition in subsection (a) shall be effective 2 years following the date on which this Act is effective.CommentsClose CommentsPermalink





(i) Liquidation Required-CommentsClose CommentsPermalink





(1) IN GENERAL-CommentsClose CommentsPermalink





(A) FDIC INSURED INSTITUTIONS- All swaps entities that are FDIC insured institutions that are put into receivership or declared insolvent as a result of swap or security-based swap activity of the swaps entities shall be subject to the termination or transfer of that swap or security-based swap activity in accordance with applicable law prescribing the treatment of those contracts. No taxpayer funds shall be used to prevent the receivership of any swap entity resulting from swap or security-based swap activity of the swaps entity.CommentsClose CommentsPermalink





(B) INSTITUTIONS THAT POSE A SYSTEMIC RISK AND ARE SUBJECT TO HEIGHTENED PRUDENTIAL SUPERVISION AS REGULATED UNDER SECTION 113- All swaps entities that are institutions that pose a systemic risk and are subject to heightened prudential supervision as regulated under section 113, that are put into receivership or declared insolvent as a result of swap or security-based swap activity of the swaps entities shall be subject to the termination or transfer of that swap or security-based swap activity in accordance with applicable law prescribing the treatment of those contracts. No taxpayer funds shall be used to prevent the receivership of any swap entity resulting from swap or security-based swap activity of the swaps entity.CommentsClose CommentsPermalink





(C) NON-FDIC INSURED, NON-SYSTEMICALLY SIGNIFICANT INSTITUTIONS NOT SUBJECT TO HEIGHTENED PRUDENTIAL SUPERVISION AS REGULATED UNDER SECTION 113- No taxpayer resources shall be used for the orderly liquidation of any swaps entities that are non-FDIC insured, non-systemically significant institutions not subject to heightened prudential supervision as regulated under section 113.CommentsClose CommentsPermalink





(2) RECOVERY OF FUNDS- All funds expended on the termination or transfer of the swap or security-based swap activity of the swaps entity shall be recovered in accordance with applicable law from the disposition of assets of such swap entity or through assessments, including on the financial sector as provided under applicable law.CommentsClose CommentsPermalink





(3) NO LOSSES TO TAXPAYERS- Taxpayers shall bear no losses from the exercise of any authority under this title.CommentsClose CommentsPermalink





(j) Prohibition on Unregulated Combination of Swaps Entities and Banking- At no time following adoption of the rules in subsection (k) may a bank or bank holding company be permitted to be or become a swap entity unless it conducts its swap or security-based swap activity in compliance with such minimum standards set by its prudential regulator as are reasonably calculated to permit the swaps entity to conduct its swap or security-based swap activities in a safe and sound manner and mitigate systemic risk.CommentsClose CommentsPermalink





(k) Rules- In prescribing rules, the prudential regulator for a swaps entity shall consider the following factors:CommentsClose CommentsPermalink





(1) The expertise and managerial strength of the swaps entity, including systems for effective oversight.CommentsClose CommentsPermalink





(2) The financial strength of the swaps entity.CommentsClose CommentsPermalink





(3) Systems for identifying, measuring and controlling risks arising from the swaps entity’s operations.CommentsClose CommentsPermalink





(4) Systems for identifying, measuring and controlling the swaps entity’s participation in existing markets.CommentsClose CommentsPermalink





(5) Systems for controlling the swaps entity’s participation or entry into in new markets and products.CommentsClose CommentsPermalink





(l) Authority of the Financial Stability Oversight Council- The Financial Stability Oversight Council may determine that, when other provisions established by this Act are insufficient to effectively mitigate systemic risk and protect taxpayers, that swaps entities may no longer access Federal assistance with respect to any swap, security-based swap, or other activity of the swaps entity. Any such determination by the Financial Stability Oversight Council of a prohibition of federal assistance shall be made on an institution-by-institution basis, and shall require the vote of not fewer than two-thirds of the members of the Financial Stability Oversight Council, which must include the vote by the Chairman of the Council, the Chairman of the Board of Governors of the Federal Reserve System, and the Chairperson of the Federal Deposit Insurance Corporation. Notice and hearing requirements for such determinations shall be consistent with the standards provided in title I.CommentsClose CommentsPermalink





(m) Ban on Proprietary Trading in Derivatives- An insured depository institution shall comply with the prohibition on proprietary trading in derivatives as required by section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.CommentsClose CommentsPermalink

SEC. 717. NEW PRODUCT APPROVAL-- CFTC--SEC PROCESS.CommentsClose CommentsPermalink

(a) Amendments to the Commodity Exchange Act- Section 2(a)(1)(C) of the Commodity Exchange Act (7 U.S.C. 2(a)(1)(C)) is amended--CommentsClose CommentsPermalink





(1) in clause (i) by striking ‘This’ and inserting ‘(I) Except as provided in subclause (II), this’; andCommentsClose CommentsPermalink





(2) by adding at the end of clause (i) the following:CommentsClose CommentsPermalink





‘(II) This Act shall apply to and the Commission shall have jurisdiction with respect to accounts, agreements, and transactions involving, and may permit the listing for trading pursuant to section 5c(c) of, a put, call, or other option on 1 or more securities (as defined in section 2(a)(1) of the Securities Act of 1933 or section 3(a)(10) of the Securities Exchange Act of 1934 on the date of enactment of the Futures Trading Act of 1982), including any group or index of such securities, or any interest therein or based on the value thereof, that is exempted by the Securities and Exchange Commission pursuant to section 36(a)(1) of the Securities Exchange Act of 1934 with the condition that the Commission exercise concurrent jurisdiction over such put, call, or other option; provided, however, that nothing in this paragraph shall be construed to affect the jurisdiction and authority of the Securities and Exchange Commission over such put, call, or other option.’.CommentsClose CommentsPermalink





(b) Amendments to the Securities Exchange Act of 1934- The Securities Exchange Act of 1934 is amended by adding the following section after section 3A (15 U.S.C. 78c-1):CommentsClose CommentsPermalink





‘SEC. 3B. SECURITIES-RELATED DERIVATIVES.CommentsClose CommentsPermalink





‘(a) Any agreement, contract, or transaction (or class thereof) that is exempted by the Commodity Futures Trading Commission pursuant to section 4(c)(1) of the Commodity Exchange Act (7 U.S.C. 6(c)(1)) with the condition that the Commission exercise concurrent jurisdiction over such agreement, contract, or transaction (or class thereof) shall be deemed a security for purposes of the securities laws.CommentsClose CommentsPermalink





‘(b) With respect to any agreement, contract, or transaction (or class thereof) that is exempted by the Commodity Futures Trading Commission pursuant to section 4(c)(1) of the Commodity Exchange Act (7 U.S.C. 6(c)(1)) with the condition that the Commission exercise concurrent jurisdiction over such agreement, contract, or transaction (or class thereof), references in the securities laws to the ‘purchase’ or ‘sale’ of a security shall be deemed to include the execution, termination (prior to its scheduled maturity date), assignment, exchange, or similar transfer or conveyance of, or extinguishing of rights or obligations under such agreement, contract, or transaction, as the context may require.’.CommentsClose CommentsPermalink





(c) Amendment to Securities Exchange Act of 1934- Section 19(b) of the Securities Exchange Act of 1934 (15 U.S.C. 78s(b)) is amended by adding at the end the following:CommentsClose CommentsPermalink





‘(10) Notwithstanding the provisions of paragraph (2), the time period within which the Commission is required by order to approve a proposed rule change or institute proceedings to determine whether the proposed rule change should be disapproved is stayed pending a determination by the Commission upon the request of the Commodity Futures Trading Commission or its Chairman that the Commission issue a determination as to whether a product that is the subject of such proposed rule change is a security pursuant to section 718 of the Wall Street Transparency and Accountability Act of 2010.’.CommentsClose CommentsPermalink





(d) Amendment to Commodity Exchange Act- Section 5c(c)(1) of the Commodity Exchange Act (7 U.S.C. 7a-2(c)(1)) is amended--CommentsClose CommentsPermalink





(1) by striking ‘Subject to paragraph (2)’ and inserting the following:CommentsClose CommentsPermalink





‘(A) ELECTION- Subject to paragraph (2)’; andCommentsClose CommentsPermalink





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





‘(B) CERTIFICATION- The certification of a product pursuant to this paragraph shall be stayed pending a determination by the Commission upon the request of the Securities and Exchange Commission or its Chairman that the Commission issue a determination as to whether the product that is the subject of such certification is a contract of sale of a commodity for future delivery, an option on such a contract, or an option on a commodity pursuant to section 718 of the Wall Street Transparency and Accountability Act of 2010.’.CommentsClose CommentsPermalink

SEC. 718. DETERMINING STATUS OF NOVEL DERIVATIVE PRODUCTS.CommentsClose CommentsPermalink

(a) Process for Determining the Status of a Novel Derivative Product-CommentsClose CommentsPermalink





(1) NOTICE-CommentsClose CommentsPermalink





(A) IN GENERAL- Any person filing a proposal to list or trade a novel derivative product that may have elements of both securities and contracts of sale of a commodity for future delivery (or options on such contracts or options on commodities) may concurrently provide notice and furnish a copy of such filing with both the Securities and Exchange Commission and the Commodity Futures Trading Commission. Any such notice shall state that notice has been made with both Commissions.CommentsClose CommentsPermalink





(B) NOTIFICATION- If no concurrent notice is made pursuant to subparagraph (A), within 5 business days after determining that a proposal that seeks to list or trade a novel derivative product may have elements of both securities and contracts of sale of a commodity for future delivery (or options on such contracts or options on commodities), the Securities and Exchange Commission or the Commodity Futures Trading Commission, as applicable, shall notify the other Commission and provide a copy of such filing to the other Commission.CommentsClose CommentsPermalink





(2) REQUEST FOR DETERMINATION-CommentsClose CommentsPermalink





(A) IN GENERAL- No later than 21 days after receipt of a notice under paragraph (1), or upon its own initiative if no such notice is received, the Commodity Futures Trading Commission may request that the Securities and Exchange Commission issue a determination as to whether a product is a security, as defined in section 3(a)(10) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(10)).CommentsClose CommentsPermalink





(B) REQUEST- No later than 21 days after receipt of a notice under paragraph (1), or upon its own initiative if no such notice is received, the Securities and Exchange Commission may request that the Commodity Futures Trading Commission issue a determination as to whether a product is a contract of sale of a commodity for future delivery, an option on such a contract, or an option on a commodity subject to the Commodity Futures Trading Commission’s exclusive jurisdiction under section 2(a)(1)(A) of the Commodity Exchange Act (7 U.S.C. 2(a)(1)(A)).CommentsClose CommentsPermalink





(C) REQUIREMENT RELATING TO REQUEST- A request under subparagraph (A) or (B) shall be made by submitting such request, in writing, to the Securities and Exchange Commission or the Commodity Futures Trading Commission, as applicable.CommentsClose CommentsPermalink





(D) EFFECT- Nothing in this paragraph shall be construed to prevent--CommentsClose CommentsPermalink





(i) the Commodity Futures Trading Commission from requesting that the Securities and Exchange Commission grant an exemption pursuant to section 36(a)(1) of the Securities Exchange Act of 1934 (15 U.S.C. 78mm(a)(1)) with respect to a product that is the subject of a filing under paragraph (1); orCommentsClose CommentsPermalink





(ii) the Securities and Exchange Commission from requesting that the Commodity Futures Trading Commission grant an exemption pursuant to section 4(c)(1) of the Commodity Exchange Act (7 U.S.C. 6(c)(1)) with respect to a product that is the subject of a filing under paragraph (1).,CommentsClose CommentsPermalink





Provided, however, that nothing in this subparagraph shall be construed to require the Commodity Futures Trading Commission or the Securities and Exchange Commission to issue an exemption requested pursuant to this subparagraph; provided further, That an order granting or denying an exemption described in this subparagraph and issued under paragraph (3)(B) shall not be subject to judicial review pursuant to subsection (b).CommentsClose CommentsPermalink





(E) WITHDRAWAL OF REQUEST- A request under subparagraph (A) or (B) may be withdrawn by the Commission making the request at any time prior to a determination being made pursuant to paragraph (3) for any reason by providing written notice to the head of the other Commission.CommentsClose CommentsPermalink





(3) DETERMINATION- Notwithstanding any other provision of law, no later than 120 days after the date of receipt of a request--CommentsClose CommentsPermalink





(A) under subparagraph (A) or (B) of paragraph (2), unless such request has been withdrawn pursuant to paragraph (2)(E), the Securities and Exchange Commission or the Commodity Futures Trading Commission, as applicable, shall, by order, issue the determination requested in subparagraph (A) or (B) of paragraph (2), as applicable, and the reasons therefore; orCommentsClose CommentsPermalink





(B) under paragraph (2)(D), unless such request has been withdrawn, the Securities and Exchange Commission or the Commodity Futures Trading Commission, as applicable, shall grant an exemption or provide reasons for not granting such exemption, provided that any decision by the Securities and Exchange Commission not to grant such exemption shall not be reviewable under section 25 of the Securities Exchange Act of 1934 (15 U.S.C. 78y).CommentsClose CommentsPermalink





(b) Judicial Resolution-CommentsClose CommentsPermalink





(1) IN GENERAL- The Commodity Futures Trading Commission or the Securities and Exchange Commission may petition the United States Court of Appeals for the District of Columbia Circuit for review of a final order of the other Commission issued pursuant to subsection (a)(3)(A), with respect to a novel derivative product that may have elements of both securities and contracts of sale of a commodity for future delivery (or options on such contracts or options on commodities) that it believes affects its statutory jurisdiction, including an order or orders issued under subsection (a)(3)(A), by filing in such court, within within 60 days after the date of entry of such order, a written petition requesting a review of the order. Any such proceeding shall be expedited by the Court of Appeals.CommentsClose CommentsPermalink





(2) TRANSMITTAL OF PETITION AND RECORD- A copy of a petition described in paragraph (1) shall be transmitted not later than 1 business day after filing by the complaining Commission to the responding Commission. On receipt of the petition, the responding Commission shall file with the court a copy of the order under review and any documents referred to therein, and any other materials prescribed by the court.CommentsClose CommentsPermalink





(3) STANDARD OF REVIEW- The court, in considering a petition filed pursuant to paragraph (1), shall give no deference to, or presumption in favor of, the views of either Commission.CommentsClose CommentsPermalink





(4) JUDICIAL STAY- The filing of a petition by the complaining Commission pursuant to paragraph (1) shall operate as a stay of the order, until the date on which the determination of the court is final (including any appeal of the determination).CommentsClose CommentsPermalink