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Donate NowH.R.4173 - Dodd-Frank Wall Street Reform and Consumer Protection 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.
| 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 | 50% |
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HR 4173 IHCommentsClose CommentsPermalink
111th CONGRESSCommentsClose CommentsPermalink
1st SessionCommentsClose CommentsPermalink
H. R. 4173CommentsClose CommentsPermalink
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.CommentsClose CommentsPermalink
IN THE HOUSE OF REPRESENTATIVESCommentsClose CommentsPermalink
December 2, 2009CommentsClose CommentsPermalink
December 2, 2009CommentsClose CommentsPermalink
Mr. FRANK of Massachusetts introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committees on Agriculture, Energy and Commerce, the Judiciary, Rules, the Budget, Oversight and Government Reform, and Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concernedCommentsClose CommentsPermalink
A BILLCommentsClose CommentsPermalink
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.CommentsClose CommentsPermalink
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘The Wall Street Reform and Consumer Protection Act of 2009’.CommentsClose CommentsPermalink
SEC. 2. TABLE OF CONTENTS.
The table of contents for this Act is as follows:CommentsClose CommentsPermalink
Sec. 1. Short title.CommentsClose CommentsPermalink
Sec. 2. Table of contents.CommentsClose CommentsPermalink
TITLE I--FINANCIAL STABILITY IMPROVEMENT ACT
Sec. 1000. Short title; definitions.CommentsClose CommentsPermalink
Sec. 1000A. Restrictions on the Federal Reserve System pending audit report.CommentsClose CommentsPermalink
Subtitle A--The Financial Services Oversight Council
Sec. 1001. Financial Services Oversight Council established.CommentsClose CommentsPermalink
Sec. 1002. Resolution of disputes among Federal financial regulatory agencies.CommentsClose CommentsPermalink
Sec. 1003. Technical and professional advisory committees.CommentsClose CommentsPermalink
Sec. 1004. Financial Services Oversight Council meetings and council governance.CommentsClose CommentsPermalink
Sec. 1005. Council staff and funding.CommentsClose CommentsPermalink
Sec. 1006. Reports to the Congress.CommentsClose CommentsPermalink
Sec. 1007. Applicability of certain Federal laws.CommentsClose CommentsPermalink
Sec. 1008. Oversight by GAO.CommentsClose CommentsPermalink
Subtitle B--Prudential Regulation of Companies and Activities for Financial Stability Purposes
Sec. 1101. Council and Board authority to obtain information.CommentsClose CommentsPermalink
Sec. 1102. Council prudential regulation recommendations to Federal financial regulatory agencies.CommentsClose CommentsPermalink
Sec. 1103. Subjecting financial companies to stricter prudential standards for financial stability purposes.CommentsClose CommentsPermalink
Sec. 1104. Stricter prudential standards for certain financial holding companies for financial stability purposes.CommentsClose CommentsPermalink
Sec. 1105. Mitigation of systemic risk.CommentsClose CommentsPermalink
Sec. 1106. Subjecting activities or practices to stricter prudential standards for financial stability purposes.CommentsClose CommentsPermalink
Sec. 1107. Stricter regulation of activities and practices for financial stability purposes.CommentsClose CommentsPermalink
Sec. 1108. Effect of rescission of identification.CommentsClose CommentsPermalink
Sec. 1109. Emergency financial stabilization.CommentsClose CommentsPermalink
Sec. 1110. Corporation must receive warrants when paying or risking taxpayer funds.CommentsClose CommentsPermalink
Sec. 1111. Examinations and enforcement actions for insurance and resolutions purposes.CommentsClose CommentsPermalink
Sec. 1112. Study of the effects of size and complexity of financial institutions on capital market efficiency and economic growth.CommentsClose CommentsPermalink
Sec. 1113. Exercise of Federal Reserve authority.CommentsClose CommentsPermalink
Sec. 1114. Stress tests.CommentsClose CommentsPermalink
Sec. 1115. Contingent Capital.CommentsClose CommentsPermalink
Sec. 1116. Restriction on proprietary trading by designated financial holding companies.CommentsClose CommentsPermalink
Sec. 1117. Rule of construction.CommentsClose CommentsPermalink
Subtitle C--Improvements to Supervision and Regulation of Federal Depository Institutions
Sec. 1201. Definitions.CommentsClose CommentsPermalink
Sec. 1202. Amendments to the Home Owners’ Loan Act relating to transfer of functions.CommentsClose CommentsPermalink
Sec. 1203. Amendments to the revised statutes.CommentsClose CommentsPermalink
Sec. 1204. Power and duties transferred.CommentsClose CommentsPermalink
Sec. 1205. Transfer date.CommentsClose CommentsPermalink
Sec. 1206. Expiration of term of comptroller.CommentsClose CommentsPermalink
Sec. 1207. Office of Thrift Supervision abolished.CommentsClose CommentsPermalink
Sec. 1208. Savings provisions.CommentsClose CommentsPermalink
Sec. 1209. Regulations and orders.CommentsClose CommentsPermalink
Sec. 1210. Coordination of transition activities.CommentsClose CommentsPermalink
Sec. 1211. Interim responsibilities of office of the comptroller of the currency and office of thrift supervision.CommentsClose CommentsPermalink
Sec. 1212. Employees transferred.CommentsClose CommentsPermalink
Sec. 1213. Property transferred.CommentsClose CommentsPermalink
Sec. 1214. Funds transferred.CommentsClose CommentsPermalink
Sec. 1215. Disposition of affairs.CommentsClose CommentsPermalink
Sec. 1216. Continuation of services.CommentsClose CommentsPermalink
Sec. 1217. Contracting and leasing authority.CommentsClose CommentsPermalink
Sec. 1218. Treatment of savings and loan holding companies.CommentsClose CommentsPermalink
Sec. 1219. Practices of certain mutual thrift holding companies preserved.CommentsClose CommentsPermalink
Sec. 1220. Implementation plan and reports.CommentsClose CommentsPermalink
Sec. 1221. Composition of board of directors of the Federal Deposit Insurance Corporation.CommentsClose CommentsPermalink
Sec. 1222. Amendments to section 3.CommentsClose CommentsPermalink
Sec. 1223. Amendments to section 7.CommentsClose CommentsPermalink
Sec. 1224. Amendments to section 8.CommentsClose CommentsPermalink
Sec. 1225. Amendments to section 11.CommentsClose CommentsPermalink
Sec. 1226. Amendments to section 13.CommentsClose CommentsPermalink
Sec. 1227. Amendments to section 18.CommentsClose CommentsPermalink
Sec. 1228. Amendments to section 28.CommentsClose CommentsPermalink
Sec. 1229. Amendments to the Alternative Mortgage Transaction Parity Act of 1982.CommentsClose CommentsPermalink
Sec. 1230. Amendments to the Bank Holding Company Act of 1956.CommentsClose CommentsPermalink
Sec. 1231. Amendments to the Bank Protection Act of 1968.CommentsClose CommentsPermalink
Sec. 1232. Amendments to the Bank Service Company Act.CommentsClose CommentsPermalink
Sec. 1233. Amendments to the Community Reinvestment Act of 1977.CommentsClose CommentsPermalink
Sec. 1234. Amendments to the Depository Institution Management Interlocks Act.CommentsClose CommentsPermalink
Sec. 1235. Amendments to the Emergency Homeowners’ Relief Act.CommentsClose CommentsPermalink
Sec. 1236. Amendments to the Equal Credit Opportunity Act.CommentsClose CommentsPermalink
Sec. 1237. Amendments to the Federal Credit Union Act.CommentsClose CommentsPermalink
Sec. 1238. Amendments to the Federal Financial Institutions Examination Council Act of 1978.CommentsClose CommentsPermalink
Sec. 1239. Amendments to the Federal Home Loan Bank Act.CommentsClose CommentsPermalink
Sec. 1240. Amendments to the Federal Reserve Act.CommentsClose CommentsPermalink
Sec. 1241. Amendments to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.CommentsClose CommentsPermalink
Sec. 1242. Amendments to the Housing Act of 1948.CommentsClose CommentsPermalink
Sec. 1243. Amendments to the Housing and Community Development Act of 1992 and the Federal Housing Enterprises Financial Safety and Soundness Act of 1992.CommentsClose CommentsPermalink
Sec. 1244. Amendment to the Housing and Urban-Rural Recovery Act of 1983.CommentsClose CommentsPermalink
Sec. 1245. Amendments to the National Housing Act.CommentsClose CommentsPermalink
Sec. 1246. Amendments to the Right to Financial Privacy Act of 1978.CommentsClose CommentsPermalink
Sec. 1247. Amendments to the Balanced Budget and Emergency Deficit Control Act of 1985.CommentsClose CommentsPermalink
Sec. 1248. Amendments to the Crime Control Act of 1990.CommentsClose CommentsPermalink
Sec. 1249. Amendment to the Flood Disaster Protection Act of 1973.CommentsClose CommentsPermalink
Sec. 1250. Amendment to the Investment Company Act of 1940.CommentsClose CommentsPermalink
Sec. 1251. Amendment to the Neighborhood Reinvestment Corporation Act.CommentsClose CommentsPermalink
Sec. 1252. Amendments to the Securities Exchange Act of 1934.CommentsClose CommentsPermalink
Sec. 1253. Amendments to title 18, United States Code.CommentsClose CommentsPermalink
Sec. 1254. Amendments to title 31, United States Code.CommentsClose CommentsPermalink
Sec. 1255. Requirement for Countercyclical Capital Requirements.CommentsClose CommentsPermalink
Sec. 1256. Transfer of authority to the Board with respect to savings and loan holding companies.CommentsClose CommentsPermalink
Subtitle D--Further Improvements to the Regulation of Bank Holding Companies and Depository Institutions
Sec. 1301. Treatment of industrial loan companies, savings associations, and certain other companies under the bank holding company act.CommentsClose CommentsPermalink
Sec. 1302. Registration of certain companies as bank holding companies.CommentsClose CommentsPermalink
Sec. 1303. Reports and examinations of bank holding companies; regulation of functionally regulated subsidiaries.CommentsClose CommentsPermalink
Sec. 1304. Requirements for financial holding companies to remain well capitalized and well managed.CommentsClose CommentsPermalink
Sec. 1305. Standards for interstate acquisitions.CommentsClose CommentsPermalink
Sec. 1306. Enhancing existing restrictions on bank transactions with affiliates.CommentsClose CommentsPermalink
Sec. 1307. Eliminating exceptions for transactions with financial subsidiaries.CommentsClose CommentsPermalink
Sec. 1308. Lending limits applicable to credit exposure on derivative transactions, repurchase agreements, reverse repurchase agreements, and securities lending and borrowing transactions.CommentsClose CommentsPermalink
Sec. 1309. Restriction on conversions of troubled banks and thrifts.CommentsClose CommentsPermalink
Sec. 1310. Lending limits to insiders.CommentsClose CommentsPermalink
Sec. 1311. Limitations on purchases of assets from insiders.CommentsClose CommentsPermalink
Sec. 1312. Rules regarding capital levels of bank holding companies.CommentsClose CommentsPermalink
Sec. 1313. Enhancements to factors to be considered in certain acquisitions.CommentsClose CommentsPermalink
Sec. 1314. Elimination of elective investment bank holding company framework.CommentsClose CommentsPermalink
Sec. 1315. Examination fees for large bank holding companies.CommentsClose CommentsPermalink
Subtitle E--Improvements to the Federal Deposit Insurance Fund
Sec. 1401. Accounting for actual risk to the Deposit Insurance Fund.CommentsClose CommentsPermalink
Sec. 1402. Creating a risk-focused assessment base.CommentsClose CommentsPermalink
Sec. 1403. Elimination of procyclical assessments.CommentsClose CommentsPermalink
Sec. 1404. Enhanced access to information for deposit insurance purposes.CommentsClose CommentsPermalink
Sec. 1405. Transition reserve ratio requirements to reflect new assessment base.CommentsClose CommentsPermalink
Subtitle F--Improvements to the Asset-backed Securitization Process
Sec. 1501. Short title.CommentsClose CommentsPermalink
Sec. 1502. Credit risk retention.CommentsClose CommentsPermalink
Sec. 1503. Periodic and other reporting under the Securities Exchange Act of 1934 for asset-backed securities.CommentsClose CommentsPermalink
Sec. 1504. Representations and warranties in asset-backed offerings.CommentsClose CommentsPermalink
Sec. 1505. Exempted transactions under the Securities Act of 1933.CommentsClose CommentsPermalink
Sec. 1506. Study on the macroeconomic effects of risk retention requirements.CommentsClose CommentsPermalink
Subtitle G--Enhanced Dissolution Authority
Sec. 1601. Short title.CommentsClose CommentsPermalink
Sec. 1602. Definitions.CommentsClose CommentsPermalink
Sec. 1603. Systemic risk determination.CommentsClose CommentsPermalink
Sec. 1604. Resolution; stabilization.CommentsClose CommentsPermalink
Sec. 1605. Judicial review.CommentsClose CommentsPermalink
Sec. 1606. Directors not liable for acquiescing in appointment of receiver.CommentsClose CommentsPermalink
Sec. 1607. Termination and exclusion of other actions.CommentsClose CommentsPermalink
Sec. 1608. Rulemaking.CommentsClose CommentsPermalink
Sec. 1609. Powers and duties of corporation.CommentsClose CommentsPermalink
Sec. 1610. Clarification of prohibition regarding concealment of assets from receiver or liquidating agent.CommentsClose CommentsPermalink
Sec. 1611. Office of Resolution.CommentsClose CommentsPermalink
Sec. 1612. Miscellaneous provisions.CommentsClose CommentsPermalink
Sec. 1613. Amendment to Federal Deposit Insurance Act.CommentsClose CommentsPermalink
Sec. 1614. Application of executive compensation limitations.CommentsClose CommentsPermalink
Subtitle H--Additional Improvements for Financial Crisis Management
Sec. 1701. Additional improvements for financial crisis management.CommentsClose CommentsPermalink
Sec. 1702. Certain restrictions related to foreign currency swap authority.CommentsClose CommentsPermalink
Sec. 1703. Additional oversight of financial regulatory system.CommentsClose CommentsPermalink
Subtitle I--Miscellaneous
Sec. 1801. Inclusion of minorities and women; Diversity in agency workforce.CommentsClose CommentsPermalink
Subtitle J--International Policy Coordination
Sec. 1901. International policy coordination.CommentsClose CommentsPermalink
Subtitle K--International Financial Provisions
Sec. 1951. Access to United States financial market by foreign institutions.CommentsClose CommentsPermalink
TITLE II--CORPORATE AND FINANCIAL INSTITUTION COMPENSATION FAIRNESS ACT
Sec. 2001. Short title.CommentsClose CommentsPermalink
Sec. 2002. Shareholder vote on executive compensation disclosures.CommentsClose CommentsPermalink
Sec. 2003. Compensation committee independence.CommentsClose CommentsPermalink
Sec. 2004. Enhanced compensation structure reporting to reduce perverse incentives.CommentsClose CommentsPermalink
TITLE III--OVER-THE-COUNTER DERIVATIVES MARKETS ACT
Sec. 3001. Short title.CommentsClose CommentsPermalink
Subtitle A--Regulation of Swap Markets
Sec. 3101. Definitions.CommentsClose CommentsPermalink
Sec. 3102. Jurisdiction.CommentsClose CommentsPermalink
Sec. 3103. Clearing.CommentsClose CommentsPermalink
Sec. 3104. Public reporting of aggregate swap data.CommentsClose CommentsPermalink
Sec. 3105. Swap repositories.CommentsClose CommentsPermalink
Sec. 3106. Reporting and recordkeeping.CommentsClose CommentsPermalink
Sec. 3107. Registration and regulation of swap dealers and major swap participants.CommentsClose CommentsPermalink
Sec. 3108. Segregation of assets held as collateral in swap transactions.CommentsClose CommentsPermalink
Sec. 3109. Conflicts of interest.CommentsClose CommentsPermalink
Sec. 3110. Swap execution facilities.CommentsClose CommentsPermalink
Sec. 3111. Derivatives transaction execution facilities and exempt boards of trade.CommentsClose CommentsPermalink
Sec. 3112. Designated contract markets.CommentsClose CommentsPermalink
Sec. 3113. Position limits.CommentsClose CommentsPermalink
Sec. 3114. Enhanced authority over registered entities.CommentsClose CommentsPermalink
Sec. 3115. Foreign boards of trade.CommentsClose CommentsPermalink
Sec. 3116. Legal certainty for swaps.CommentsClose CommentsPermalink
Sec. 3117. Multilateral clearing organizations.CommentsClose CommentsPermalink
Sec. 3118. Primary enforcement authority.CommentsClose CommentsPermalink
Sec. 3119. Enforcement.CommentsClose CommentsPermalink
Sec. 3120. Retail commodity transactions.CommentsClose CommentsPermalink
Sec. 3121. Large swap trader reporting.CommentsClose CommentsPermalink
Sec. 3122. Authority to ban abusive swaps.CommentsClose CommentsPermalink
Sec. 3123. International harmonization.CommentsClose CommentsPermalink
Sec. 3124. Authority to ban access to the United States Financial System.CommentsClose CommentsPermalink
Sec. 3125. Other authority.CommentsClose CommentsPermalink
Sec. 3126. Antitrust.CommentsClose CommentsPermalink
Sec. 3127. Effective date.CommentsClose CommentsPermalink
Subtitle B--Regulation of Security-Based Swap Markets
Sec. 3201. Definitions under the Securities Exchange Act of 1934.CommentsClose CommentsPermalink
Sec. 3202. Repeal of prohibition on regulation of security-based swaps.CommentsClose CommentsPermalink
Sec. 3203. Amendments to the Securities Exchange Act of 1934.CommentsClose CommentsPermalink
Sec. 3204. Registration and regulation of swap dealers and major swap participants.CommentsClose CommentsPermalink
Sec. 3205. National security exchange registration requirements.CommentsClose CommentsPermalink
Sec. 3206. Reporting and recordkeeping.CommentsClose CommentsPermalink
Sec. 3207. State gaming and bucket shop laws.CommentsClose CommentsPermalink
Sec. 3208. Amendments to the Securities Act of 1933; treatment of security-based swaps.CommentsClose CommentsPermalink
Sec. 3209. Other authority.CommentsClose CommentsPermalink
Sec. 3210. Jurisdiction.CommentsClose CommentsPermalink
Sec. 3211. Effective date.CommentsClose CommentsPermalink
Subtitle C--Miscellaneous
Sec. 3301. Study on feasibility of requiring use of standardized algorithmic descriptions for financial derivatives.CommentsClose CommentsPermalink
Sec. 3302. Study of desirability and feasibility of establishing single regulator for all transactions involving financial derivatives.CommentsClose CommentsPermalink
Sec. 3303. Recommendations for changes to insolvency laws.CommentsClose CommentsPermalink
Sec. 3304. Prohibition against government assistance.CommentsClose CommentsPermalink
TITLE IV--CONSUMER FINANCIAL PROTECTION AGENCY ACT
Sec. 4001. Short title.CommentsClose CommentsPermalink
Sec. 4002. Definitions.CommentsClose CommentsPermalink
Subtitle A--Establishment of the Agency
Sec. 4101. Establishment of the Consumer Financial Protection Agency.CommentsClose CommentsPermalink
Sec. 4102. Director.CommentsClose CommentsPermalink
Sec. 4103. Consumer Financial Protection Oversight Board.CommentsClose CommentsPermalink
Sec. 4104. Executive and administrative powers.CommentsClose CommentsPermalink
Sec. 4105. Administration.CommentsClose CommentsPermalink
Sec. 4106. Consumer Advisory Board.CommentsClose CommentsPermalink
Sec. 4107. Coordination.CommentsClose CommentsPermalink
Sec. 4108. Reports to the Congress.CommentsClose CommentsPermalink
Sec. 4109. Funding; fees and assessments; penalties and fines.CommentsClose CommentsPermalink
Sec. 4110. Amendments relating to other administrative provisions.CommentsClose CommentsPermalink
Sec. 4111. Effective date.CommentsClose CommentsPermalink
Subtitle B--General Powers of the Director and Agency
Sec. 4201. Mandate and objectives.CommentsClose CommentsPermalink
Sec. 4202. Authorities.CommentsClose CommentsPermalink
Sec. 4203. Examination and enforcement for small banks, thrifts, and credit unions.CommentsClose CommentsPermalink
Sec. 4204. Simultaneous and coordinated supervisory action.CommentsClose CommentsPermalink
Sec. 4205. Limitations on authority of agency and director.CommentsClose CommentsPermalink
Sec. 4206. Collection of information; confidentiality regulations.CommentsClose CommentsPermalink
Sec. 4207. Monitoring; assessments of significant regulations; reports.CommentsClose CommentsPermalink
Sec. 4208. Authority to restrict mandatory predispute arbitration.CommentsClose CommentsPermalink
Sec. 4209. Registration and supervision of nondepository covered persons.CommentsClose CommentsPermalink
Sec. 4210. Effective date.CommentsClose CommentsPermalink
Subtitle C--Specific Authorities
Sec. 4301. Prohibiting unfair, deceptive, or abusive acts or practices.CommentsClose CommentsPermalink
Sec. 4302. Disclosures.CommentsClose CommentsPermalink
Sec. 4303. Sales practices.CommentsClose CommentsPermalink
Sec. 4304. Pilot disclosures.CommentsClose CommentsPermalink
Sec. 4305. Adopting operational standards to deter unfair, deceptive, or abusive practices.CommentsClose CommentsPermalink
Sec. 4306. Duties.CommentsClose CommentsPermalink
Sec. 4307. Consumer rights to access information.CommentsClose CommentsPermalink
Sec. 4308. Prohibited acts.CommentsClose CommentsPermalink
Sec. 4309. Treatment of remittance transfers.CommentsClose CommentsPermalink
Sec. 4310. Effective date.CommentsClose CommentsPermalink
Sec. 4311. No authority to require the offering of financial products or services.CommentsClose CommentsPermalink
Sec. 4312. Appraisal independence requirements.CommentsClose CommentsPermalink
Subtitle D--Preservation of State Law
Sec. 4401. Relation to State law.CommentsClose CommentsPermalink
Sec. 4402. Preservation of enforcement powers of States.CommentsClose CommentsPermalink
Sec. 4403. Preservation of existing contracts.CommentsClose CommentsPermalink
Sec. 4404. State law preemption standards for national banks and subsidiaries clarified.CommentsClose CommentsPermalink
Sec. 4405. Visitorial standards.CommentsClose CommentsPermalink
Sec. 4406. Clarification of law applicable to nondepository institution subsidiaries.CommentsClose CommentsPermalink
Sec. 4407. State law preemption standards for Federal savings associations and subsidiaries clarified.CommentsClose CommentsPermalink
Sec. 4408. Visitorial standards.CommentsClose CommentsPermalink
Sec. 4409. Clarification of law applicable to nondepository institution subsidiaries.CommentsClose CommentsPermalink
Sec. 4410. Effective date.CommentsClose CommentsPermalink
Subtitle E--Enforcement Powers
Sec. 4501. Definitions.CommentsClose CommentsPermalink
Sec. 4502. Investigations and administrative discovery.CommentsClose CommentsPermalink
Sec. 4503. Hearings and adjudication proceedings.CommentsClose CommentsPermalink
Sec. 4504. Litigation authority.CommentsClose CommentsPermalink
Sec. 4505. Relief available.CommentsClose CommentsPermalink
Sec. 4506. Referrals for criminal proceedings.CommentsClose CommentsPermalink
Sec. 4507. Employee protection.CommentsClose CommentsPermalink
Sec. 4508. Effective date.CommentsClose CommentsPermalink
Subtitle F--Transfer of Functions and Personnel; Transitional Provisions
Sec. 4601. Transfer of certain functions.CommentsClose CommentsPermalink
Sec. 4602. Designated transfer date.CommentsClose CommentsPermalink
Sec. 4603. Savings provisions.CommentsClose CommentsPermalink
Sec. 4604. Transfer of certain personnel.CommentsClose CommentsPermalink
Sec. 4605. Incidental transfers.CommentsClose CommentsPermalink
Sec. 4606. Interim authority of the Secretary.CommentsClose CommentsPermalink
Subtitle G--Regulatory Improvements
Sec. 4701. Collection of deposit account data.CommentsClose CommentsPermalink
Sec. 4702. Small business data collection.CommentsClose CommentsPermalink
Sec. 4703. Annual financial autopsy.CommentsClose CommentsPermalink
Subtitle H--Conforming Amendments
Sec. 4801. Amendments to the Inspector General Act of 1978.CommentsClose CommentsPermalink
Sec. 4802. Amendments to the Privacy Act of 1974.CommentsClose CommentsPermalink
Sec. 4803. Amendments to the Alternative Mortgage Transaction Parity Act of 1982.CommentsClose CommentsPermalink
Sec. 4804. Amendments to the Consumer Credit Protection Act.CommentsClose CommentsPermalink
Sec. 4805. Amendments to the Expedited Funds Availability Act.CommentsClose CommentsPermalink
Sec. 4806. Amendments to the Federal Deposit Insurance Act.CommentsClose CommentsPermalink
Sec. 4807. Amendments to the Gramm-Leach-Bliley Act.CommentsClose CommentsPermalink
Sec. 4808. Amendments to the Home Mortgage Disclosure Act of 1975.CommentsClose CommentsPermalink
Sec. 4809. Amendments to division D of the Omnibus Appropriations Act, 2009.CommentsClose CommentsPermalink
Sec. 4810. Amendments to the Homeowners Protection Act of 1998.CommentsClose CommentsPermalink
Sec. 4811. Amendments to the Real Estate Settlement Procedures Act of 1974.CommentsClose CommentsPermalink
Sec. 4812. Amendments to the Right to Financial Privacy Act of 1978.CommentsClose CommentsPermalink
Sec. 4813. Amendments to the Secure and Fair Enforcement for Mortgage Licensing Act of 2008.CommentsClose CommentsPermalink
Sec. 4814. Amendments to the Truth in Savings Act.CommentsClose CommentsPermalink
Sec. 4815. Amendments to the Telemarketing and Consumer Fraud and Abuse Prevention Act.CommentsClose CommentsPermalink
Sec. 4816. Membership in Financial Literacy and Education Commission.CommentsClose CommentsPermalink
Sec. 4817. Effective date.CommentsClose CommentsPermalink
Subtitle I--Improvements to the Federal Trade Commission Act
Sec. 4901. Amendments to the Federal Trade Commission Act.CommentsClose CommentsPermalink
TITLE V--CAPITAL MARKETS
Subtitle A--Private Fund Investment Advisers Registration Act
Sec. 5001. Short title.CommentsClose CommentsPermalink
Sec. 5002. Definitions.CommentsClose CommentsPermalink
Sec. 5003. Elimination of private adviser exemption; Limited exemption for foreign private fund advisers; Limited intrastate exemption.CommentsClose CommentsPermalink
Sec. 5004. Collection of systemic risk data.CommentsClose CommentsPermalink
Sec. 5005. Elimination of disclosure provision.CommentsClose CommentsPermalink
Sec. 5006. Exemption of and reporting by venture capital fund advisers.CommentsClose CommentsPermalink
Sec. 5007. Exemption of and reporting by certain private fund advisers.CommentsClose CommentsPermalink
Sec. 5008. Clarification of rulemaking authority.CommentsClose CommentsPermalink
Sec. 5009. GAO study.CommentsClose CommentsPermalink
Sec. 5010. Effective date; Transition period.CommentsClose CommentsPermalink
Sec. 5011. Qualified client standard.CommentsClose CommentsPermalink
Subtitle B--Accountability and Transparency in Rating Agencies Act
Sec. 6001. Short title.CommentsClose CommentsPermalink
Sec. 6002. Enhanced regulation of nationally recognized statistical rating organizations.CommentsClose CommentsPermalink
Sec. 6003. Standards for private actions.CommentsClose CommentsPermalink
Sec. 6004. Issuer disclosure of preliminary ratings.CommentsClose CommentsPermalink
Sec. 6005. Change to designation.CommentsClose CommentsPermalink
Sec. 6006. Timeline for regulations.CommentsClose CommentsPermalink
Sec. 6007. Elimination of exemption from fair disclosure rule.CommentsClose CommentsPermalink
Sec. 6008. Advisory Board.CommentsClose CommentsPermalink
Sec. 6009. Removal of statutory references to credit ratings.CommentsClose CommentsPermalink
Sec. 6010. Review of reliance on ratings.CommentsClose CommentsPermalink
Sec. 6011. Publication of rating histories on the EDGAR system.CommentsClose CommentsPermalink
Sec. 6012. Effect of Rule 436(g).CommentsClose CommentsPermalink
Sec. 6013. Studies.CommentsClose CommentsPermalink
Subtitle C--Investor Protection Act
Sec. 7001. Short title.CommentsClose CommentsPermalink
Part 1--Disclosure
Sec. 7101. Investor Advisory Committee established.CommentsClose CommentsPermalink
Sec. 7102. Clarification of the Commission’s authority to engage in consumer testing.CommentsClose CommentsPermalink
Sec. 7103. Establishment of a fiduciary duty for brokers, dealers, and investment advisers, and harmonization of regulation.CommentsClose CommentsPermalink
Sec. 7104. Commission study on disclosure to retail customers before purchase of products or services.CommentsClose CommentsPermalink
Sec. 7105. Beneficial ownership and short-swing profit reporting.CommentsClose CommentsPermalink
Sec. 7106. Revision to recordkeeping rules.CommentsClose CommentsPermalink
Sec. 7107. Study on enhancing investment advisor examinations.CommentsClose CommentsPermalink
Sec. 7108. GAO study of financial planning.CommentsClose CommentsPermalink
Part 2--Enforcement and Remedies
Sec. 7201. Authority to restrict mandatory pre-dispute arbitration.CommentsClose CommentsPermalink
Sec. 7202. Comptroller General study to review securities arbitration system.CommentsClose CommentsPermalink
Sec. 7203. Whistleblower protection.CommentsClose CommentsPermalink
Sec. 7204. Conforming amendments for whistleblower protection.CommentsClose CommentsPermalink
Sec. 7205. Implementation and transition provisions for whistleblower protections.CommentsClose CommentsPermalink
Sec. 7206. Collateral bars.CommentsClose CommentsPermalink
Sec. 7207. Aiding and abetting authority under the Securities Act and the Investment Company Act.CommentsClose CommentsPermalink
Sec. 7208. Authority to impose penalties for aiding and abetting violations of the Investment Advisers Act.CommentsClose CommentsPermalink
Sec. 7209. Deadline for completing examinations, inspections and enforcement actions.CommentsClose CommentsPermalink
Sec. 7210. Nationwide service of subpoenas.CommentsClose CommentsPermalink
Sec. 7211. Authority to impose civil penalties in cease and desist proceedings.CommentsClose CommentsPermalink
Sec. 7212. Formerly associated persons.CommentsClose CommentsPermalink
Sec. 7213. Sharing privileged information with other authorities.CommentsClose CommentsPermalink
Sec. 7214. Expanded access to grand jury material.CommentsClose CommentsPermalink
Sec. 7215. Aiding and abetting standard of knowledge satisfied by recklessness.CommentsClose CommentsPermalink
Sec. 7216. Extraterritorial jurisdiction of the antifraud provisions of the Federal securities laws.CommentsClose CommentsPermalink
Sec. 7217. Fidelity bonding.CommentsClose CommentsPermalink
Sec. 7218. Enhanced SEC authority to conduct surveillance and risk assessment.CommentsClose CommentsPermalink
Sec. 7219. Investment company examinations.CommentsClose CommentsPermalink
Sec. 7220. Control person liability under the Securities Exchange Act.CommentsClose CommentsPermalink
Sec. 7221. Enhanced application of anti-fraud provisions.CommentsClose CommentsPermalink
Sec. 7222. SEC authority to issue rules on proxy access.CommentsClose CommentsPermalink
Part 3--Commission Funding and Organization
Sec. 7301. Authorization of appropriations.CommentsClose CommentsPermalink
Sec. 7302. Investment adviser regulation funding.CommentsClose CommentsPermalink
Sec. 7303. Amendments to section 31 of the Securities Exchange Act of 1934.CommentsClose CommentsPermalink
Sec. 7304. Commission organizational study and reform.CommentsClose CommentsPermalink
Sec. 7305. Capital Markets Safety Board.CommentsClose CommentsPermalink
Sec. 7306. Report on implementation of ‘post-Madoff reforms’.CommentsClose CommentsPermalink
Sec. 7307. Joint Advisory Committee.CommentsClose CommentsPermalink
Part 4--Additional Commission Reforms
Sec. 7401. Regulation of securities lending.CommentsClose CommentsPermalink
Sec. 7402. Lost and stolen securities.CommentsClose CommentsPermalink
Sec. 7403. Fingerprinting.CommentsClose CommentsPermalink
Sec. 7404. Equal treatment of self-regulatory organization rules.CommentsClose CommentsPermalink
Sec. 7405. Clarification that section 205 of the Investment Advisers Act of 1940 does not apply to State-registered advisers.CommentsClose CommentsPermalink
Sec. 7406. Conforming amendments for the repeal of the Public Utility Holding Company Act of 1935.CommentsClose CommentsPermalink
Sec. 7407. Promoting transparency in financial reporting.CommentsClose CommentsPermalink
Sec. 7408. Unlawful margin lending.CommentsClose CommentsPermalink
Sec. 7409. Protecting confidentiality of materials submitted to the Commission.CommentsClose CommentsPermalink
Sec. 7410. Technical corrections.CommentsClose CommentsPermalink
Sec. 7411. Municipal securities.CommentsClose CommentsPermalink
Sec. 7412. Interested person definition.CommentsClose CommentsPermalink
Sec. 7413. Rulemaking authority to protect redeeming investors.CommentsClose CommentsPermalink
Sec. 7414. Study on SEC revolving door.CommentsClose CommentsPermalink
Sec. 7415. Study on internal control evaluation and reporting cost burdens on smaller issuers.CommentsClose CommentsPermalink
Sec. 7416. Analysis of rule regarding smaller reporting companies.CommentsClose CommentsPermalink
Sec. 7417. Financial Reporting Forum.CommentsClose CommentsPermalink
Sec. 7418. Investment advisers subject to State authorities.CommentsClose CommentsPermalink
Sec. 7419. Custodial requirements.CommentsClose CommentsPermalink
Sec. 7420. Ombudsman.CommentsClose CommentsPermalink
Part 5--Securities Investor Protection Act Amendments
Sec. 7501. Increasing the minimum assessment paid by SIPC members.CommentsClose CommentsPermalink
Sec. 7502. Increasing the borrowing limit on treasury loans.CommentsClose CommentsPermalink
Sec. 7503. Increasing the cash limit of protection.CommentsClose CommentsPermalink
Sec. 7504. SIPC as trustee in SIPA liquidation proceedings.CommentsClose CommentsPermalink
Sec. 7505. Insiders ineligible for SIPC advances.CommentsClose CommentsPermalink
Sec. 7506. Eligibility for direct payment procedure.CommentsClose CommentsPermalink
Sec. 7507. Increasing the fine for prohibited acts under SIPA.CommentsClose CommentsPermalink
Sec. 7508. Penalty for misrepresentation of SIPC membership or protection.CommentsClose CommentsPermalink
Sec. 7509. Futures held in a portfolio margin securities account protection.CommentsClose CommentsPermalink
Sec. 7510. Study and report on the feasibility of risk-based assessments for SIPC members.CommentsClose CommentsPermalink
Sec. 7511. Budgetary treatment of Commission loans to SIPC.CommentsClose CommentsPermalink
Part 6--Sarbanes-Oxley Act Amendments
Sec. 7601. Public Company Accounting Oversight Board oversight of auditors of brokers and dealers.CommentsClose CommentsPermalink
Sec. 7602. Foreign regulatory information sharing.CommentsClose CommentsPermalink
Sec. 7603. Expansion of audit information to be produced and exchanged with foreign counterparts.CommentsClose CommentsPermalink
Sec. 7604. Conforming amendment related to registration.CommentsClose CommentsPermalink
Sec. 7605. Fair fund amendments.CommentsClose CommentsPermalink
Sec. 7606. Exemption for nonaccelerated filers.CommentsClose CommentsPermalink
Sec. 7607. Whistleblower protection against retaliation by a subsidiary of an issuer.CommentsClose CommentsPermalink
Sec. 7608. Congressional access to information.CommentsClose CommentsPermalink
Sec. 7609. Creation of ombudsman for the PCAOB.CommentsClose CommentsPermalink
Sec. 7610. Auditing Oversight Board.CommentsClose CommentsPermalink
Part 7--Senior Investment Protection
Sec. 7701. Findings.CommentsClose CommentsPermalink
Sec. 7702. Definitions.CommentsClose CommentsPermalink
Sec. 7703. Grants to States for enhanced protection of seniors from being mislead by false designations.CommentsClose CommentsPermalink
Sec. 7704. Applications.CommentsClose CommentsPermalink
Sec. 7705. Length of participation.CommentsClose CommentsPermalink
Sec. 7706. Authorization of appropriations.CommentsClose CommentsPermalink
Part 8--Registration of Municipal Financial Advisors
Sec. 7801. Municipal financial adviser registration requirement.CommentsClose CommentsPermalink
Sec. 7802. Conforming amendments.CommentsClose CommentsPermalink
Sec. 7803. Effective dates.CommentsClose CommentsPermalink
TITLE VI--FEDERAL INSURANCE OFFICE
Sec. 8001. Short title.CommentsClose CommentsPermalink
Sec. 8002. Federal Insurance Office established.CommentsClose CommentsPermalink
Sec. 8003. Report on global reinsurance market.CommentsClose CommentsPermalink
Sec. 8004. Study on modernization and improvement of insurance regulation in the United States.CommentsClose CommentsPermalink
TITLE I--FINANCIAL STABILITY IMPROVEMENT ACTCommentsClose CommentsPermalink
TITLE I--FINANCIAL STABILITY IMPROVEMENT ACTCommentsClose CommentsPermalink
SEC. 1000. SHORT TITLE; DEFINITIONS.
(a) Short Title- This title may be cited as the ‘Financial Stability Improvement Act of 2009’.CommentsClose CommentsPermalink
(b) Definitions- For purposes of this title, the following definitions shall apply:CommentsClose CommentsPermalink
(1) The term ‘Board’ means the Board of Governors of the Federal Reserve System.CommentsClose CommentsPermalink
(2) The term ‘Council’ means the Financial Services Oversight Council established under section 1001.CommentsClose CommentsPermalink
(3) The term ‘Federal financial regulatory agency’ means any agency that has a voting member of the Council as set forth in section 1001(b)(1).CommentsClose CommentsPermalink
(4) The term ‘financial company’ means a company or other entity--CommentsClose CommentsPermalink
(A) that is--CommentsClose CommentsPermalink
(i) incorporated or organized under the laws of the United States or any State, territory, or possession of the United States, the District of Columbia, Commonwealth of Puerto Rico, Commonwealth of Northern Mariana Islands, Guam, American Samoa, or the United States Virgin Islands; orCommentsClose CommentsPermalink
(ii) a company incorporated in or organized in a country other than the United States that has significant operations in the United States through--CommentsClose CommentsPermalink
(I) a Federal or State branch or agency of a foreign bank as such terms are defined in the International Banking Act of 1978 (
(II) a United States affiliate or other United States operating entity of a company that is incorporated or organized in a country other than the United States; andCommentsClose CommentsPermalink
(B) that is, in whole or in part, directly or indirectly, engaged in financial activities.CommentsClose CommentsPermalink
(5) FINANCIAL HOLDING COMPANY SUBJECT TO STRICTER STANDARDS- The term ‘financial holding company subject to stricter standards’ means--CommentsClose CommentsPermalink
(A) a financial company that has been subjected to stricter prudential standards under subtitle B; orCommentsClose CommentsPermalink
(B) in the case of a financial company described in subparagraph (A) that is required to establish an intermediate holding company under section 6 of the Bank Holding Company Act, the section 6 holding company through which the financial company is required to conduct its financial activities.CommentsClose CommentsPermalink
(6) The term ‘primary financial regulatory agency’ means the following:CommentsClose CommentsPermalink
(A) The Comptroller of the Currency, with respect to any national bank, any Federal branch or Federal agency of a foreign bank, and, after the date on which the functions of the Office of Thrift Supervision and the Director of the Office of Thrift Supervision are transferred under subtitle C, a Federal savings association.CommentsClose CommentsPermalink
(B) The Board, with respect to--CommentsClose CommentsPermalink
(i) any State member bank;CommentsClose CommentsPermalink
(ii) any bank holding company and any subsidiary of such company (as such terms are defined in the Bank Holding Company Act), other than a subsidiary that is described in any other subparagraph of this paragraph to the extent that the subsidiary is engaged in an activity described in such subparagraph;CommentsClose CommentsPermalink
(iii) any financial holding company subject to stricter standards and any subsidiary (as such term is defined in the Bank Holding Company Act) of such company, other than a subsidiary that is described in any other subparagraph of this paragraph to the extent that the subsidiary is engaged in an activity described in such subparagraph;CommentsClose CommentsPermalink
(iv) any organization organized and operated under section 25 or 25A of the Federal Reserve Act (
(v) any foreign bank or company that is treated as a bank holding company under subsection (a) of section 8 of the International Banking Act of 1978 and any subsidiary (other than a bank or other subsidiary that is described in any other subparagraph of this paragraph) of any such foreign bank or company.CommentsClose CommentsPermalink
(C) The Federal Deposit Insurance Corporation, with respect to a State nonmember bank, any insured State branch of a foreign bank (as such terms are defined in section 3 of the Federal Deposit Insurance Act), and, after the date on which the functions of the Office of Thrift Supervision are transferred under subtitle C, any State savings association.CommentsClose CommentsPermalink
(D) The National Credit Union Administration, with respect to any insured credit union under the Federal Credit Union Act (
(E) The Securities and Exchange Commission, with respect to--CommentsClose CommentsPermalink
(i) any broker or dealer registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934 (
(ii) any investment company registered with the Securities and Exchange Commission under the Investment Company Act of 1940 (
(iii) any investment adviser registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940 (
(iv) any clearing agency (as defined in section 3(a)(23) of the Securities Exchange Act of 1934;CommentsClose CommentsPermalink
(v) any exchange registered as a national securities exchange with the Securities and Exchange Commission under the Securities Exchange Act of 1934 (
(vi) any credit rating agency registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934 (
(vii) any securities information processor registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934 (
(viii) any transfer agent registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934 (
(F) The Commodity Futures Trading Commission, with respect to--CommentsClose CommentsPermalink
(i) any futures commission merchant, any commodity trading adviser, and any commodity pool operator registered with the Commodity Futures Trading Commission under the Commodity Exchange Act (
(ii) any derivatives clearing organization (as defined in the Commodity Exchange Act).CommentsClose CommentsPermalink
(G) The Federal Housing Finance Agency with respect to the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, and the Federal home loan banks.CommentsClose CommentsPermalink
(H) The State insurance authority of the State in which an insurance company is domiciled, with respect to the insurance activities and activities incidental to such insurance activities of an insurance company that is subject to supervision by the State insurance authority under State insurance law.CommentsClose CommentsPermalink
(I) The Office of Thrift Supervision, with respect to any Federal savings association, State savings association, or savings and loan holding company, until the date on which the functions of the Office of Thrift Supervision are transferred under subtitle C.CommentsClose CommentsPermalink
(7) TERMS DEFINED IN OTHER LAWS-CommentsClose CommentsPermalink
(A) AFFILIATE- The term ‘affiliate’ has the meaning given such term in section 2(k) of the Bank Holding Company Act of 1956.CommentsClose CommentsPermalink
(B) STATE MEMBER BANK, STATE NONMEMBER BANK- The terms ‘State member bank’ and ‘State nonmember bank’ have the same meanings as in subsections (d)(2) and (e)(2), respectively, of section 3 of the Federal Deposit Insurance Act.CommentsClose CommentsPermalink
SEC. 1000A. RESTRICTIONS ON THE FEDERAL RESERVE SYSTEM PENDING AUDIT REPORT.
(a) In General- Notwithstanding any other provision of law, the Comptroller General of the United States shall perform an audit of all actions taken by the Board of Governors of the Federal Reserve System and the Federal reserve banks during the current economic crisis pursuant to the authority granted under section 13(c) of the Federal Reserve Act. Such audit shall be completed as expeditiously as possible after the date of the enactment of the Financial Stability Improvement Act of 2009.CommentsClose CommentsPermalink
(b) Report-CommentsClose CommentsPermalink
(1) REQUIRED- Not later than the end of the 90-day period beginning on the date the audit referred to in subsection (a) is completed, the Comptroller General of the United States shall submit a report to the Congress, and make such report available to the public.CommentsClose CommentsPermalink
(2) CONTENTS- The report under paragraph (1) shall include a detailed description of the findings and conclusion of the Comptroller General with respect to the audit that is the subject of the report, together with such recommendations for legislative or administrative action as the Comptroller General may determine to be appropriate.CommentsClose CommentsPermalink
Subtitle A--The Financial Services Oversight CouncilCommentsClose CommentsPermalink
Subtitle A--The Financial Services Oversight CouncilCommentsClose CommentsPermalink
SEC. 1001. FINANCIAL SERVICES OVERSIGHT COUNCIL ESTABLISHED.
(a) Establishment- Immediately upon enactment of this title, there is established a Financial Services Oversight Council.CommentsClose CommentsPermalink
(b) Membership- The Council shall consist of the following:CommentsClose CommentsPermalink
(1) VOTING MEMBERS- Voting members, who shall each have one vote on the Council, as follows:CommentsClose CommentsPermalink
(A) The Secretary of the Treasury, who shall serve as the Chairman of the Council.CommentsClose CommentsPermalink
(B) The Chairman of the Board of Governors of the Federal Reserve System.CommentsClose CommentsPermalink
(C) The Comptroller of the Currency.CommentsClose CommentsPermalink
(D) The Director of the Office of Thrift Supervision, until the functions of the Director of the Office of Thrift Supervision are transferred to pursuant to subtitle C.CommentsClose CommentsPermalink
(E) The Chairman of the Securities and Exchange Commission.CommentsClose CommentsPermalink
(F) The Chairman of the Commodity Futures Trading Commission.CommentsClose CommentsPermalink
(G) The Chairperson of the Federal Deposit Insurance Corporation.CommentsClose CommentsPermalink
(H) The Director of the Federal Housing Finance Agency.CommentsClose CommentsPermalink
(I) The Chairman of the National Credit Union Administration.CommentsClose CommentsPermalink
(2) NONVOTING MEMBERS- Nonvoting members, who shall serve in an advisory capacity:CommentsClose CommentsPermalink
(A) A State insurance commissioner, to be designated by a selection process determined by the State insurance commissioners, provided that the term for which a State insurance commissioner may serve shall last no more than the 2-year period beginning on the date that the commissioner is selected.CommentsClose CommentsPermalink
(B) A State banking supervisor, to be designated by a selection process determined by the State bank supervisors, provided that the term for which a State banking supervisor may serve shall last no more than the 2-year period beginning on the date that the supervisor is selected.CommentsClose CommentsPermalink
(c) Duties- The Council shall have the following duties:CommentsClose CommentsPermalink
(1) To advise the Congress on financial domestic and international regulatory developments, including insurance and accounting developments, and make recommendations that will enhance the integrity, efficiency, orderliness, competitiveness, and stability of the United States financial markets.CommentsClose CommentsPermalink
(2) To monitor the financial services marketplace to identify potential threats to the stability of the United States financial system.CommentsClose CommentsPermalink
(3) To identify potential threats to the stability of the United States financial system that do not arise out of the financial services marketplace.CommentsClose CommentsPermalink
(4) To develop plans (and conduct exercises in furtherance of those plans) to prepare for potential threats identified under paragraphs (2) and (3).CommentsClose CommentsPermalink
(5) To subject financial companies and financial activities to stricter prudential standards in order to promote financial stability and mitigate systemic risk in accordance with subtitle B.CommentsClose CommentsPermalink
(6) To issue formal recommendations that a Council member agency adopt stricter prudential standards for firms it regulates to mitigate systemic risk in accordance with subtitle B of this title.CommentsClose CommentsPermalink
(7) To monitor international regulatory developments, including both insurance and accounting developments, and to identify those developments that may conflict with the policies of the United States or place United States financial services firms or United States financial markets at a competitive disadvantage.CommentsClose CommentsPermalink
(8) To facilitate information sharing and coordination among the members of the Council regarding financial services policy development, rulemakings, examinations, reporting requirements, and enforcement actions.CommentsClose CommentsPermalink
(9) To provide a forum for discussion and analysis of emerging market developments and financial regulatory issues among its members.CommentsClose CommentsPermalink
(10) At the request of an agency that is a Council member, to resolve a jurisdictional dispute between that agency and another agency that is a Council member in accordance with section 1002.CommentsClose CommentsPermalink
(11) To review and submit comments to the Securities and Exchange Commission and any standards setting body with respect to an existing or proposed accounting principle, standard, or procedure.CommentsClose CommentsPermalink
SEC. 1002. RESOLUTION OF DISPUTES AMONG FEDERAL FINANCIAL REGULATORY AGENCIES.
(a) Request for Dispute Resolution- The Council shall resolve a dispute among 2 or more Federal financial regulatory agencies if--CommentsClose CommentsPermalink
(1) a Federal financial regulatory agency has a dispute with another Federal financial regulatory agency about the agencies’ respective jurisdiction over a particular financial company or financial activity or product (excluding matters for which another dispute mechanism specifically has been provided under Federal law);CommentsClose CommentsPermalink
(2) the disputing agencies cannot, after a demonstrated good faith effort, resolve the dispute among themselves; andCommentsClose CommentsPermalink
(3) any of the Federal financial regulatory agencies involved in the dispute--CommentsClose CommentsPermalink
(A) provides all other disputants prior notice of its intent to request dispute resolution by the Council; andCommentsClose CommentsPermalink
(B) requests in writing, no earlier than 14 days after providing the notice described in paragraph (A), that the Council resolve the dispute.CommentsClose CommentsPermalink
(b) Council Decision- The Council shall decide the dispute--CommentsClose CommentsPermalink
(1) within a reasonable time after receiving the dispute resolution request;CommentsClose CommentsPermalink
(2) after consideration of relevant information provided by each 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 decision under this section shall be in writing and include an explanation and shall be binding on all Federal financial regulatory agencies that are parties to the dispute.CommentsClose CommentsPermalink
SEC. 1003. TECHNICAL AND PROFESSIONAL ADVISORY COMMITTEES.
The Council is authorized to appoint--CommentsClose CommentsPermalink
(1) subsidiary working groups composed of Council members and their staff, Council staff, or a combination; andCommentsClose CommentsPermalink
(2) such temporary special advisory, technical, or professional committees as may be useful in carrying out its functions, which may be composed of Council members and their staff, other persons, or a combination.CommentsClose CommentsPermalink
SEC. 1004. FINANCIAL SERVICES OVERSIGHT COUNCIL MEETINGS AND COUNCIL GOVERNANCE.
(a) Meetings- The Council shall meet as frequently as the Chairman deems necessary, but not less than quarterly.CommentsClose CommentsPermalink
(b) Voting- Unless otherwise provided, the Council shall make all decisions the Council is required or authorized to make by a majority of the total voting membership of the Council under section 1001(b)(1).CommentsClose CommentsPermalink
SEC. 1005. COUNCIL STAFF AND FUNDING.
(a) Department of the Treasury- The Secretary of the Treasury shall--CommentsClose CommentsPermalink
(1) detail permanent staff from the Department of the Treasury to provide the Council (and any temporary special advisory, technical, or professional committees appointed by the Council) with professional and expert support; andCommentsClose CommentsPermalink
(2) provide such other services and facilities necessary for the performance of the Council’s functions and fulfillment of the duties and mission of the Council.CommentsClose CommentsPermalink
(b) Other Departments and Agencies- In addition to the assistance prescribed in subsection (a), departments and agencies of the United States may, with the approval of the Secretary of the Treasury--CommentsClose CommentsPermalink
(1) detail department or agency staff on a temporary basis to provide additional support to the Council (and any special advisory, technical, or professional committees appointed by the Council); andCommentsClose CommentsPermalink
(2) provide such services, and facilities as the other departments or agencies may determine advisable.CommentsClose CommentsPermalink
(c) Staff Status; Council Funding-CommentsClose CommentsPermalink
(1) STATUS- Staff detailed to the Council by the Secretary of the Treasury and other United States departments or agencies shall--CommentsClose CommentsPermalink
(A) report to and be subject to oversight by the Council during their assignment to the Council; andCommentsClose CommentsPermalink
(B) be compensated by the department of agency from which the staff was detailed.CommentsClose CommentsPermalink
(2) FUNDING- The administrative expense of the Council shall be paid by the departments and agencies represented by voting members of the Council on an equal basis.CommentsClose CommentsPermalink
SEC. 1006. REPORTS TO THE CONGRESS.
(a) In General- Semiannually the Council shall submit a report to the Committee on Financial Services of the House of Representatives, the Committee on Banking, Housing, and Urban Affairs of the Senate, and the Comptroller General of the United States that--CommentsClose CommentsPermalink
(1) describes significant financial and regulatory developments, including insurance and accounting regulations and standards, and assesses the impact of those developments on the stability of the financial system;CommentsClose CommentsPermalink
(2) recommends actions that will improve financial stability;CommentsClose CommentsPermalink
(3) details the size, scale, scope, concentration, activities, and interconnectedness of the 50 largest financial institutions, by total assets, in the United States;CommentsClose CommentsPermalink
(4) describes plans developed by the Council to respond to potential threats to the stability of the United States financial system and the outcome of exercises conducted in furtherance of those plans;CommentsClose CommentsPermalink
(5) describes the nature and scope of any company or activities identified under subtitle B and steps taken to address them; andCommentsClose CommentsPermalink
(6) describes any dispute resolutions undertaken under section 1002 and the result of such resolutions.CommentsClose CommentsPermalink
(b) Evaluation of Annual Report by GAO- Not later than 120 days after receiving the report required by subsection (a), the Comptroller General of the United States shall submit an evaluation of such report 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
(c) Statements by Voting Members of the Council- At the time 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 prevent systemic risk that would negatively affect the economy, submit a signed statement to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate 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 the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate 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
(d) Testimony by the Chairman- The Chairman of the Council 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 a semi-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
SEC. 1007. APPLICABILITY OF CERTAIN FEDERAL LAWS.
(a) The Federal Advisory Committee Act shall not apply to the Financial Services Oversight Council, or any special advisory, technical, or professional committees 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
(b) The Council shall not be deemed an ‘agency’ for purposes of any State or Federal law.CommentsClose CommentsPermalink
SEC. 1008. OVERSIGHT BY GAO.
(a) Authority to Audit- The Comptroller General of the United States may audit the activities and financial transactions of--CommentsClose CommentsPermalink
(1) the Council; andCommentsClose CommentsPermalink
(2) any person or entity acting on behalf of or under the authority of the Council, to the extent such activities and financial transactions relate to such person’s or entity’s work for the Council.CommentsClose CommentsPermalink
(b) Access to Information-CommentsClose CommentsPermalink
(1) IN GENERAL- Notwithstanding any other provision of law, the Comptroller General of the United States shall have access, upon request and at such reasonable time and in such reasonable form as the Comptroller General may request, to--CommentsClose CommentsPermalink
(A) any records or other information under the control of the Council; andCommentsClose CommentsPermalink
(B) any records or other information under the control of a person or entity acting on behalf of or under the authority of the Council, to the extent such records or other information is relevant to an audit under subsection (a).CommentsClose CommentsPermalink
(2) CERTAIN INFORMATION SPECIFIED- Access under paragraph (1) includes access to--CommentsClose CommentsPermalink
(A) information provided to the Council by its voting and nonvoting members under section 1101; andCommentsClose CommentsPermalink
(B) the identity of each financial holding company subject to stricter standards.CommentsClose CommentsPermalink
(c) Periodic Evaluations- The Comptroller General of the United States shall periodically evaluate the processes and activities of the Council and the extent to which the Council is fulfilling its duties under this title. The Comptroller General 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 a report on the results of each such evaluation.CommentsClose CommentsPermalink
(d) Confidentiality- Any committees or Members of Congress receiving reports or other information from the Comptroller General of the United States shall maintain the confidentiality of any such information relating to--CommentsClose CommentsPermalink
(1) dispute resolutions undertaken under section 1002, including the result of such dispute resolutions; andCommentsClose CommentsPermalink
(2) financial holding companies subject to stricter standards.CommentsClose CommentsPermalink
Subtitle B--Prudential Regulation of Companies and Activities for Financial Stability PurposesCommentsClose CommentsPermalink
Subtitle B--Prudential Regulation of Companies and Activities for Financial Stability PurposesCommentsClose CommentsPermalink
SEC. 1101. COUNCIL AND BOARD AUTHORITY TO OBTAIN INFORMATION.
(a) In General- The Council and the Board are authorized to receive, and may request the production of, any data or information from members of the Council, as necessary--CommentsClose CommentsPermalink
(1) to monitor the financial services marketplace to identify potential threats to the stability of the United States financial system;CommentsClose CommentsPermalink
(2) to identify global trends and developments that could pose systemic risks to the stability of the economy of the United States or other economies; orCommentsClose CommentsPermalink
(3) to otherwise carry out any of the provisions of this title, including to ascertain a primary financial regulatory agency’s implementation of recommended prudential standards under this subtitle.CommentsClose CommentsPermalink
(b) Submission by Council Members- Notwithstanding any provision of law, any voting or nonvoting member of the Council is authorized to provide information to the Council, and the members of the Council shall maintain the confidentiality of such information.CommentsClose CommentsPermalink
(c) Financial Company Data Collection-CommentsClose CommentsPermalink
(1) IN GENERAL- The Council or the Board may require the submission of periodic and other reports from any financial company solely for the purpose of assessing the extent to which a financial activity or financial market in which the financial company participates, or the company itself, poses a threat to financial stability.CommentsClose CommentsPermalink
(2) MITIGATION OF REPORT BURDEN- Before requiring the submission of reports from financial companies that are regulated by the primary financial regulatory agencies, the Council or the Board shall coordinate with such agencies and shall, whenever possible, rely on information already being collected by such agencies.CommentsClose CommentsPermalink
(d) Consultation With Agencies and Entities- The Council or the Board, as appropriate, may consult with Federal and State agencies and other entities to carry out any of the provisions of this subtitle.CommentsClose CommentsPermalink
(e) Additional Provisions-CommentsClose CommentsPermalink
(1) DATA AND INFORMATION SHARING- The Chairman of the Council, in consultation with the other members of the Council may--CommentsClose CommentsPermalink
(A) establish procedures to share data and information collected by the Council under this section with the members of the Council;CommentsClose CommentsPermalink
(B) develop an electronic process for sharing all information collected by the Council with the Chairman of the Board on a real-time basis; andCommentsClose CommentsPermalink
(C) issue any regulations necessary to carry out this subsection; andCommentsClose CommentsPermalink
(D) designate the format in which requested data and information must be submitted to the Council, including any electronic, digital, or other format that facilitates the use of such data by the Council in its analysis.CommentsClose CommentsPermalink
(2) APPLICABLE PRIVILEGES NOT WAIVED- A Federal financial regulator, State financial regulator, United States financial company, foreign financial company operating in the United States, financial market utility, or other person shall not be deemed to have waived any privilege otherwise applicable to any data or information by transferring the data or information to, or permitting that data or information to be used by--CommentsClose CommentsPermalink
(A) the Council;CommentsClose CommentsPermalink
(B) any Federal financial regulator or State financial regulator, in any capacity; orCommentsClose CommentsPermalink
(C) any other agency of the Federal Government (as defined in
(3) DISCLOSURE EXEMPTION- Any information obtained by the Council under this section shall be exempt from the disclosure requirements under
(4) CONSULTATION WITH FOREIGN GOVERNMENTS- Under the supervision of the President, and in a manner consistent with section 207 of the Foreign Service Act of 1980 (
(5) REPORT- Not later than 6 months after the date of the enactment of this title, the Chairman of the Council shall report to the Financial Services Committee of the House of Representatives and the Banking, Housing, and Urban Affairs Committee of the Senate the opinion of the Council as to whether setting up an electronic database as described in paragraph (1)(B) would aid the Council in carrying out this section.CommentsClose CommentsPermalink
SEC. 1102. COUNCIL PRUDENTIAL REGULATION RECOMMENDATIONS TO FEDERAL FINANCIAL REGULATORY AGENCIES.
(a) In General- The Council is authorized to issue formal recommendations, publicly or privately, that a Federal financial regulatory agency adopt stricter prudential standards for firms it regulates to mitigate systemic risk.CommentsClose CommentsPermalink
(b) Agency Authority to Implement Standards- A Federal financial regulatory agency specifically is authorized to impose, require reports regarding, examine for compliance with, and enforce stricter prudential standards and safeguards for the firms it regulates to mitigate systemic risk. This authority is in addition to and does not limit any other authority of the Federal financial regulatory agencies. Compliance by an entity with actions taken by a Federal financial regulatory agency under this section shall be enforceable in accordance with the statutes governing the respective Federal financial regulatory agency’s jurisdiction over the entity as if the agency action were taken under those statutes.CommentsClose CommentsPermalink
(c) Agency Notice to Council- A Federal financial regulatory agency shall, within 60 days of receiving a Council recommendation under this section, notify the Council in writing regarding--CommentsClose CommentsPermalink
(1) the actions the Federal financial regulatory agency has taken in response to the Council’s recommendation, additional actions contemplated, and timetables therefore; orCommentsClose CommentsPermalink
(2) the reason the Federal financial regulatory agency has failed to respond to the Council’s request.CommentsClose CommentsPermalink
SEC. 1103. SUBJECTING FINANCIAL COMPANIES TO STRICTER PRUDENTIAL STANDARDS FOR FINANCIAL STABILITY PURPOSES.
(a) In General- The Council shall, in consultation with the Board and any other primary financial regulatory agency that regulates the financial company or a subsidiary of such company, subject a financial company to stricter prudential standards under this subtitle if the Council determines that--CommentsClose CommentsPermalink
(1) material financial distress at the company could pose a threat to financial stability or the economy; orCommentsClose CommentsPermalink
(2) the nature, scope, size, scale, concentration, and interconnectedness, or mix of the company’s activities could pose a threat to financial stability or the economy.CommentsClose CommentsPermalink
(b) Criteria- In making a determination under subsection (a), the Council shall consider the following criteria:CommentsClose CommentsPermalink
(1) The amount and nature of the company’s financial assets.CommentsClose CommentsPermalink
(2) The amount and nature of the company’s liabilities, including the degree of reliance on short-term funding.CommentsClose CommentsPermalink
(3) The extent of the company’s leverage.CommentsClose CommentsPermalink
(4) The extent and nature of the company’s off-balance sheet exposures.CommentsClose CommentsPermalink
(5) The extent and nature of the company’s transactions and relationships with other financial companies.CommentsClose CommentsPermalink
(6) 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
(7) The nature, scope, and mix of the company’s activities.CommentsClose CommentsPermalink
(8) The degree to which the company is already regulated by one or more Federal financial regulatory agencies.CommentsClose CommentsPermalink
(9) Any other factors that the Council deems appropriate.CommentsClose CommentsPermalink
(c) Notification of Decision- The Board, in an executive capacity on behalf of the Council, shall immediately upon the Council’s decision notify the financial company by order, which shall be public, that the financial company is subject to stricter prudential standards, as prescribed by the Board in accordance with section 1104.CommentsClose CommentsPermalink
(d) Periodic Review and Rescission of Findings-CommentsClose CommentsPermalink
(1) SUBMISSION OF ASSESSMENT- The Board shall periodically submit a report to the Council containing an assessment of whether each company subjected to stricter prudential standards should continue to be subject to such standards.CommentsClose CommentsPermalink
(2) REVIEW AND RESCISSION- The Council shall--CommentsClose CommentsPermalink
(A) review the assessment submitted pursuant to paragraph (1) and any information or recommendation submitted by members of the Council regarding whether a financial holding company subject to stricter standards continues to merit stricter prudential standards; andCommentsClose CommentsPermalink
(B) rescind the action subjecting a company to stricter prudential standards if the Council determines that the company no longer meets the conditions for being subjected to stricter prudential standards in subsections (a) and (b).CommentsClose CommentsPermalink
(e) Emergency Exception to Majority Vote of Council Requirement- If each of the Secretary of the Treasury, the Board, and the Federal Deposit Insurance Corporation determines that a financial company must be subjected to stricter prudential standards in accordance with this section immediately to prevent destabilization of the financial system or economy, the Secretary, the Board, and the Corporation may, upon approval by the President, subject such company to stricter prudential standards under this section.CommentsClose CommentsPermalink
(f) Appeal-CommentsClose CommentsPermalink
(1) ADMINISTRATIVE- The Council and the Board, in an executive capacity on behalf of the Council, shall establish a procedure through which a financial company that has been subjected to stricter prudential standards in accordance with this section may appeal being subjected to stricter prudential standards.CommentsClose CommentsPermalink
(2) JUDICIAL REVIEW- Any financial company which has been subjected to stricter prudential standards may seek judicial review by filing a petition for such review in the United States Court of Appeals for the District of Columbia.CommentsClose CommentsPermalink
(g) Effect of Council Decision-CommentsClose CommentsPermalink
(1) APPLICATION OF THE BANK HOLDING COMPANY ACT- A financial company that is not a bank holding company as defined in the Bank Holding Company Act at the time the financial company is subjected to stricter prudential standards in accordance with this section, shall--CommentsClose CommentsPermalink
(A) if such company conducts at the time such company is subjected to stricter prudential standards in accordance with this section only activities that are determined to be financial in nature or incidental thereto under section 4(k) of the Bank Holding Company Act of 1956, be treated as a bank holding company that has elected to be a financial holding company for purposes of the Bank Holding Company Act of 1956, the Federal Deposit Insurance Act, and all other Federal laws and regulations governing bank holding companies and financial holding companies and be the financial holding company subject to stricter standards for purposes of this subtitle; orCommentsClose CommentsPermalink
(B) if such company conducts at the time that such company is subjected to stricter prudential standards in accordance with this section 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, be required to establish and conduct all its activities that are determined to be financial in nature or incidental thereto under section 4(k) of the Bank Holding Company Act of 1956 in an intermediate holding company established under section 6 of the Bank Holding Company Act of 1956, which intermediate holding company shall be treated as a bank holding company that has elected to be a financial holding company for purposes of the Bank Holding Company Act of 1956, the Federal Deposit Insurance Act, and all other Federal laws and regulations governing bank holding companies and financial holding companies, and such section 6 holding company shall be a financial holding company subject to stricter standards for purposes of this title.CommentsClose CommentsPermalink
(2) EXEMPTIVE AUTHORITY- Notwithstanding any provision of the Bank Holding Company Act of 1956, the Board may, if it determines such action is necessary to ensure appropriate stricter prudential supervision, issue such exemptions from that Act as may be necessary with regard to financial holding companies subject to stricter standards that do not control an insured depository institution.CommentsClose CommentsPermalink
(3) LEVERAGE LIMITATION- The Board shall require each financial holding company subject to stricter standards to maintain a debt to equity ratio of no more than 15 to 1, and the Board shall issue regulations containing procedures and timelines for how a financial holding company subject to stricter standards with a debt to equity ratio of more than 15 to 1 at the time such company becomes a financial holding company subject to stricter standards shall reduce such ratio.CommentsClose CommentsPermalink
SEC. 1104. STRICTER PRUDENTIAL STANDARDS FOR CERTAIN FINANCIAL HOLDING COMPANIES FOR FINANCIAL STABILITY PURPOSES.
(a) Stricter Prudential Standards-CommentsClose CommentsPermalink
(1) IN GENERAL- To mitigate risks to financial stability and the economy posed by a financial holding company that has been subjected to stricter prudential standards in accordance with section 1103, the Board shall impose stricter prudential standards on such company. Such standards shall be designed to maximize financial stability taking costs to long-term financial and economic growth into account, be heightened when compared to the standards that otherwise would apply to financial holding companies that are not subjected to stricter prudential standards pursuant to this subtitle (including by addressing additional or different types of risks than otherwise applicable standards), and reflect the potential risk posed to financial stability by the financial holding company subject to stricter standards.CommentsClose CommentsPermalink
(2) STANDARDS-CommentsClose CommentsPermalink
(A) REQUIRED STANDARDS- The heightened standards imposed by the Board under this section shall include--CommentsClose CommentsPermalink
(i) risk-based capital requirements;CommentsClose CommentsPermalink
(ii) leverage limits;CommentsClose CommentsPermalink
(iii) liquidity requirements;CommentsClose CommentsPermalink
(iv) concentration requirements (as specified in subsection (c));CommentsClose CommentsPermalink
(v) prompt corrective action requirements (as specified in subsection (e));CommentsClose CommentsPermalink
(vi) resolution plan requirements (as specified in subsection (f));CommentsClose CommentsPermalink
(vii) overall risk management requirements; andCommentsClose CommentsPermalink
(viii) and may establish short-term debt limits in accordance with subsection (d).CommentsClose CommentsPermalink
(B) ADDITIONAL STANDARDS- The heightened standards imposed by the Board under this section also may include any other prudential standards that the Board deems advisable, including taking actions to mitigate systemic risk.CommentsClose CommentsPermalink
(C) CONSULTATION WITH FEDERAL FINANCIAL REGULATORY AGENCIES- The Board, in developing stricter prudential standards under this subsection, shall consult with other Federal financial regulatory agencies with respect to any standard that is likely to have a significant impact on a functionally regulated subsidiary, or a subsidiary depository institution, of a financial holding company that is subject to stricter prudential standards under this title.CommentsClose CommentsPermalink
(3) APPLICATION OF REQUIRED STANDARDS- In imposing prudential standards under this subsection, the Board may differentiate among financial holding companies subject to stricter standards on an individual basis or by category, taking into consideration their capital structure, risk, complexity, financial activities, the financial activities of their subsidiaries, and any other factors that the Board deems appropriate.CommentsClose CommentsPermalink
(4) WELL CAPITALIZED AND WELL MANAGED- A financial holding company subject to stricter standards shall at all times after it is subject to such standards be well capitalized and well managed as defined by the Board.CommentsClose CommentsPermalink
(5) APPLICATION TO FOREIGN FINANCIAL COMPANIES- The Board shall prescribe regulations regarding the application of stricter prudential standards to financial companies that are organized or incorporated in a country other than the United States, and that own or control a Federal or State branch, subsidiary, or operating entity that is a financial holding company subject to stricter standards, giving due regard to the principle of national treatment and equality of competitive opportunity and taking into account the extent to which such companies are subject to home country standards comparable to those applied to financial holding companies in the United States.CommentsClose CommentsPermalink
(6) INCLUSION OF OFF BALANCE SHEET ACTIVITIES IN COMPUTING CAPITAL REQUIREMENTS-CommentsClose CommentsPermalink
(A) IN GENERAL- In the case of any financial holding company subject to stricter standards, the computation of capital requirements shall take into account off balance sheet activities for such a company.CommentsClose CommentsPermalink
(B) EXEMPTION- If the Board determines that an exemption from the requirements under subparagraph (A) is appropriate, the Board may exempt a financial holding company subject to stricter standards from the requirements under subparagraph (A) or any transaction or transactions engaged in by such a company.CommentsClose CommentsPermalink
(C) OFF BALANCE SHEET ACTIVITIES DEFINED- For purposes of this paragraph, the term ‘off balance sheet activities’ means a liability 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 they may create a liability:CommentsClose CommentsPermalink
(i) Direct credit substitutes in which a bank substitutes its own credit for a third party, including standby letters of credit.CommentsClose CommentsPermalink
(ii) Irrevocable letters of credit that guarantee repayment of commercial paper or tax-exempt securities.CommentsClose CommentsPermalink
(iii) Risk participation in bankers’ acceptances.CommentsClose CommentsPermalink
(iv) Sale and repurchase agreements.CommentsClose CommentsPermalink
(v) Asset sales with recourse against the seller.CommentsClose CommentsPermalink
(vi) Interest rate swaps.CommentsClose CommentsPermalink
(vii) Credit swaps.CommentsClose CommentsPermalink
(viii) Commodity contracts.CommentsClose CommentsPermalink
(ix) Forward contracts.CommentsClose CommentsPermalink
(x) Securities contracts.CommentsClose CommentsPermalink
(xi) Such other activities or transactions as the Board may, by rule, define.CommentsClose CommentsPermalink
(b) Prudential Standards at Functionally Regulated Subsidiaries and Subsidiary Depository Institutions-CommentsClose CommentsPermalink
(1) BOARD AUTHORITY TO RECOMMEND STANDARDS- With respect to a functionally regulated subsidiary (as such term is defined in section 5 of the Bank Holding Company Act) or a subsidiary depository institution of a financial holding company subject to stricter standards, the Board may recommend that the relevant Federal financial regulatory agency for such functionally regulated subsidiary or subsidiary depository institution prescribe stricter prudential standards on such functionally regulated subsidiary or subsidiary depository institution. Any standards recommended by the Board under this section shall be of the same type as those described in subsection (a)(2) that the Board is required or authorized to impose directly on the financial holding company subject to stricter standards.CommentsClose CommentsPermalink
(2) AGENCY AUTHORITY TO IMPLEMENT HEIGHTENED STANDARDS AND SAFEGUARDS- Each Federal financial regulatory agency that receives a Board recommendation under paragraph (1) is authorized to impose, require reports regarding, examine for compliance with, and enforce standards under this subsection with respect to the entities such agency regulates, as such entities are described in section 1006(b)(6). This authority is in addition to and does not limit any other authority of the Federal financial regulatory agencies. Compliance by an entity with actions taken by a Federal financial regulatory agency under this section shall be enforceable in accordance with the statutes governing the respective agency’s jurisdiction over the entity as if the agency action were taken under those statutes.CommentsClose CommentsPermalink
(3) IMPOSITION OF STANDARDS- Standards imposed by a Federal financial regulatory agency under this subsection shall be the standards recommended by the Board in accordance with paragraph (1) or any other similar standards that the Board deems acceptable after consultation between the Board and the primary financial regulatory agency.CommentsClose CommentsPermalink
(4) FEDERAL FINANCIAL REGULATORY AGENCY RESPONSE; NOTICE TO COUNCIL AND BOARD- A Federal financial regulatory agency shall notify the Council and the Board in writing on whether and to what extent the agency has imposed the stricter prudential standards described in paragraph (3) within 60 days of the Board’s recommendation under paragraph (1). A Federal financial regulatory agency that fails to impose such standards shall provide specific justification for such failure to act in the written notice from the agency to the Council and Board.CommentsClose CommentsPermalink
(c) Concentration Limits for Financial Holding Companies Subject to Stricter Standards-CommentsClose CommentsPermalink
(1) STANDARDS- In order to limit the risks that the failure of any company could pose to a financial holding company subject to stricter standards and to the stability of the United States financial system, the Board, by regulation, shall prescribe standards that limit the risks posed by the exposure of a financial holding company subject to stricter standards to any other company.CommentsClose CommentsPermalink
(2) LIMITATION ON CREDIT EXPOSURE- The regulations prescribed by the Board shall prohibit each financial holding company subject to stricter standards from having credit exposure to any unaffiliated company that exceeds 25 percent of capital stock and surplus of the financial holding company subject to stricter standards, or such lower amount as the Board may determine by regulation to be necessary to mitigate risks to financial stability.CommentsClose CommentsPermalink
(3) CREDIT EXPOSURE- For purposes of this subsection and with respect to a financial holding company subject to stricter standards, the term ‘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 agreement with the company;CommentsClose CommentsPermalink
(C) all securities borrowing and lending transactions with the company to the extent that such transactions create credit exposure of the financial holding company subject to stricter standards to the company;CommentsClose CommentsPermalink
(D) all guarantees, acceptances, or letters of credit (including endorsement or standby letters of credit) issued on behalf of the company;CommentsClose CommentsPermalink
(E) all purchases of or investment in securities issued by the company;CommentsClose CommentsPermalink
(F) counterparty credit exposure to the company in connection with a derivative transaction between the financial holding company subject to stricter standards and the company; andCommentsClose CommentsPermalink
(G) any other similar transactions that the Board 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 financial holding company subject to stricter standards with any person is deemed 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 may issue such regulations and orders, including definitions consistent with this subsection, as may be necessary to administer and carry out the purpose of this subsection.CommentsClose CommentsPermalink
(6) EXEMPTIONS-CommentsClose CommentsPermalink
(A) IN GENERAL-CommentsClose CommentsPermalink
(i) FEDERAL HOME LOAN BANKS- This subsection shall not apply to any Federal home loan bank, but Federal home loan banks are not exempt from any other provision of this title.CommentsClose CommentsPermalink
(ii) APPLICABILITY TO OTHER ENTITIES- The Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation are not exempt from any provision of this title.CommentsClose CommentsPermalink
(B) REGULATIONS- The Board may, by regulation or order, exempt transactions, in whole or in part, from the definition of credit exposure if it finds that the exemption is in the public interest and consistent with the purpose of this subsection.CommentsClose CommentsPermalink
(7) TRANSITION PERIOD- This subsection and any regulations and orders of the Board under the authority of this subsection shall not take effect until the date that is 3 years from the date of the enactment of this subsection. The Board may extend the effective date for up to 2 additional years to promote financial stability.CommentsClose CommentsPermalink
(d) Short-term Debt Limits for Certain Financial Holding Companies-CommentsClose CommentsPermalink
(1) IN GENERAL- In order to limit the risks that an overaccumulation of short-term debt could pose to financial holding companies and to the stability of the United States financial system, the Board shall by regulation prescribe a limit on the amount of short-term debt, including off-balance sheet exposures, that may be accumulated by any financial holding company subject to stricter standards for purposes of this title.CommentsClose CommentsPermalink
(2) BASIS OF LIMIT- The limit prescribed under paragraph (1) shall be based on a financial holding company’s short-term debt as a percentage of its capital stock and surplus or on such other measure as the Board 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 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 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 (
(6) TRANSITION PERIOD- This subsection and any regulation or order of the Board under this subsection shall take effect 3 years after the date of the enactment of this title. The Board may postpone the date when this subsection takes effect by not more than 2 years in order to promote financial stability.CommentsClose CommentsPermalink
(e) Prompt Corrective Action for Financial Holding Companies Subject to Stricter Standards-CommentsClose CommentsPermalink
(1) PROMPT CORRECTIVE ACTION REQUIRED- The Board shall take prompt corrective action to resolve the problems of financial holding companies subject to stricter standards. Except as specifically provided otherwise, this subsection shall apply only to financial holding companies that are incorporated or organized under United States laws.CommentsClose CommentsPermalink
(2) DEFINITIONS- For purposes of this section--CommentsClose CommentsPermalink
(A) CAPITAL CATEGORIES-CommentsClose CommentsPermalink
(i) WELL CAPITALIZED- A financial holding company subject to stricter standards is ‘well capitalized’ if it exceeds the required minimum level for each relevant capital measure.CommentsClose CommentsPermalink
(ii) UNDERCAPITALIZED- A financial holding company subject to stricter standards is ‘undercapitalized’ if it fails to meet the required minimum level for any relevant capital measure.CommentsClose CommentsPermalink
(iii) SIGNIFICANTLY UNDERCAPITALIZED- A financial holding company subject to stricter standards is ‘significantly undercapitalized’ if it is significantly below the required minimum level for any relevant capital measure.CommentsClose CommentsPermalink
(iv) CRITICALLY UNDERCAPITALIZED- A financial holding company subject to stricter standards is ‘critically undercapitalized’ if it fails to meet any level specified in paragraph (4)(C)(i).CommentsClose CommentsPermalink
(3) OTHER DEFINITIONS-CommentsClose CommentsPermalink
(A) AVERAGE- The ‘average’ of an accounting item (such as total assets or tangible equity) during a given period means the sum of that item at the close of business on each business day during that period divided by the total number of business days in that period.CommentsClose CommentsPermalink
(B) CAPITAL DISTRIBUTION- The term ‘capital distribution’ means--CommentsClose CommentsPermalink
(i) a distribution of cash or other property by a financial holding company subject to stricter standards to its owners made on account of that ownership, but not including any dividend consisting only of shares of the financial holding company subject to stricter standards or rights to purchase such shares;CommentsClose CommentsPermalink
(ii) a payment by a financial holding company subject to stricter standards to repurchase, redeem, retire, or otherwise acquire any of its shares or other ownership interests, including any extension of credit to finance any person’s acquisition of those shares or interests; andCommentsClose CommentsPermalink
(iii) a transaction that the Board determines, by order or regulation, to be in substance a distribution of capital to the owners of the financial holding company subject to stricter standards.CommentsClose CommentsPermalink
(C) CAPITAL RESTORATION PLAN- The term ‘capital restoration plan’ means a plan submitted under paragraph (6)(B).CommentsClose CommentsPermalink
(D) COMPENSATION- The term ‘compensation’ includes any payment of money or provision of any other thing of value in consideration of employment.CommentsClose CommentsPermalink
(E) RELEVANT CAPITAL MEASURE- The term ‘relevant capital measure’ means the measures described in paragraph (4).CommentsClose CommentsPermalink
(F) REQUIRED MINIMUM LEVEL- The term ‘required minimum level’ means, with respect to each relevant capital measure, the minimum acceptable capital level specified by the Board by regulation.CommentsClose CommentsPermalink
(G) SENIOR EXECUTIVE OFFICER- The term ‘senior executive officer’ has the same meaning as the term ‘executive officer’ in section 22(h) of the Federal Reserve Act (
(4) CAPITAL STANDARDS-CommentsClose CommentsPermalink
(A) RELEVANT CAPITAL MEASURES-CommentsClose CommentsPermalink
(i) IN GENERAL- Except as provided in clause (ii)(II), the capital standards prescribed by the Board under section 1104(a)(2) shall include--CommentsClose CommentsPermalink
(I) a leverage limit; andCommentsClose CommentsPermalink
(II) a risk-based capital requirement.CommentsClose CommentsPermalink
(ii) OTHER CAPITAL MEASURES- The Board may by regulation--CommentsClose CommentsPermalink
(I) establish any additional relevant capital measures to carry out this section; orCommentsClose CommentsPermalink
(II) rescind any relevant capital measure required under clause (i) upon determining that the measure is no longer an appropriate means for carrying out this section.CommentsClose CommentsPermalink
(B) CAPITAL CATEGORIES GENERALLY- The Board shall, by regulation, specify for each relevant capital measure the levels at which a financial holding company subject to stricter standards is well capitalized, undercapitalized, and significantly undercapitalized.CommentsClose CommentsPermalink
(C) CRITICAL CAPITAL-CommentsClose CommentsPermalink
(i) BOARD TO SPECIFY LEVEL-CommentsClose CommentsPermalink
(I) LEVERAGE LIMIT- The Board shall, by regulation, specify the ratio of tangible equity to total assets at which a financial holding company subject to stricter standards is critically undercapitalized.CommentsClose CommentsPermalink
(II) OTHER RELEVANT CAPITAL MEASURES- The Board may, by regulation, specify for 1 or more other relevant capital measures, the level at which a financial holding company subject to stricter standards is critically undercapitalized.CommentsClose CommentsPermalink
(ii) LEVERAGE LIMIT RANGE- The level specified under clause (i)(I) shall require tangible equity in an amount--CommentsClose CommentsPermalink
(I) not less than 2 percent of total assets; andCommentsClose CommentsPermalink
(II) except as provided in subclause (I), not more than 65 percent of the required minimum level of capital under the leverage limit.CommentsClose CommentsPermalink
(5) CAPITAL DISTRIBUTIONS RESTRICTED-CommentsClose CommentsPermalink
(A) IN GENERAL- A financial holding company subject to stricter standards shall make no capital distribution if, after making the distribution, the financial holding company subject to stricter standards would be undercapitalized.CommentsClose CommentsPermalink
(B) EXCEPTION- Notwithstanding subparagraph (A), the Board may permit a financial holding company subject to stricter standards to repurchase, redeem, retire, or otherwise acquire shares or ownership interests if the repurchase, redemption, retirement, or other acquisition--CommentsClose CommentsPermalink
(i) is made in connection with the issuance of additional shares or obligations of the financial holding company subject to stricter standards in at least an equivalent amount; andCommentsClose CommentsPermalink
(ii) will reduce the financial obligations of the financial holding company subject to stricter standards or otherwise improve the financial condition of the financial holding company subject to stricter standards.CommentsClose CommentsPermalink
(6) PROVISIONS APPLICABLE TO UNDERCAPITALIZED FINANCIAL HOLDING COMPANY SUBJECT TO STRICTER STANDARDS-CommentsClose CommentsPermalink
(A) MONITORING REQUIRED- The Board shall--CommentsClose CommentsPermalink
(i) closely monitor the condition of any undercapitalized financial holding company subject to stricter standards;CommentsClose CommentsPermalink
(ii) closely monitor compliance by any undercapitalized financial holding company subject to stricter standards with capital restoration plans, restrictions, and requirements imposed under this section; andCommentsClose CommentsPermalink
(iii) periodically review the plan, restrictions, and requirements applicable to any undercapitalized financial holding company subject to stricter standards to determine whether the plan, restrictions, and requirements are effective.CommentsClose CommentsPermalink
(B) CAPITAL RESTORATION PLAN REQUIRED-CommentsClose CommentsPermalink
(i) IN GENERAL- Any undercapitalized financial holding company subject to stricter standards shall submit an acceptable capital restoration plan to the Board within the time allowed by the Board under clause (iv).CommentsClose CommentsPermalink
(ii) CONTENTS OF PLAN- The capital restoration plan shall--CommentsClose CommentsPermalink
(I) specify--CommentsClose CommentsPermalink
(aa) the steps the financial holding company subject to stricter standards will take to become well capitalized;CommentsClose CommentsPermalink
(bb) the levels of capital to be attained by the financial holding company subject to stricter standards during each year in which the plan will be in effect;CommentsClose CommentsPermalink
(cc) how the financial holding company subject to stricter standards will comply with the restrictions or requirements then in effect under this section; andCommentsClose CommentsPermalink
(dd) the types and levels of activities in which the financial holding company subject to stricter standards will engage; andCommentsClose CommentsPermalink
(II) contain such other information that the Board may require.CommentsClose CommentsPermalink
(iii) CRITERIA FOR ACCEPTING PLAN- The Board shall not accept a capital restoration plan unless it determines that the plan--CommentsClose CommentsPermalink
(I) complies with clause (ii);CommentsClose CommentsPermalink
(II) is based on realistic assumptions, and is likely to succeed in restoring the capital of the financial holding company subject to stricter standards; andCommentsClose CommentsPermalink
(III) would not appreciably increase the risk (including credit risk, interest-rate risk, and other types of risk) to which the financial holding company subject to stricter standards is exposed.CommentsClose CommentsPermalink
(iv) DEADLINES FOR SUBMISSION AND REVIEW OF PLANS- The Board shall, by regulation, establish deadlines that--CommentsClose CommentsPermalink
(I) provide financial holding companies subject to stricter standards with reasonable time to submit capital restoration plans, and generally require a financial holding company subject to stricter standards to submit a plan not later than 45 days after it becomes undercapitalized; andCommentsClose CommentsPermalink
(II) require the Board to act on capital restoration plans expeditiously, and generally not later than 60 days after the plan is submitted.CommentsClose CommentsPermalink
(C) ASSET GROWTH RESTRICTED- An undercapitalized financial holding company subject to stricter standards shall not permit its average total assets during any calendar quarter to exceed its average total assets during the preceding calendar quarter unless--CommentsClose CommentsPermalink
(i) the Board has accepted the capital restoration plan of the financial holding company subject to stricter standards;CommentsClose CommentsPermalink
(ii) any increase in total assets is consistent with the plan; andCommentsClose CommentsPermalink
(iii) the ratio of tangible equity to total assets of the financial holding company subject to stricter standards increases during the calendar quarter at a rate sufficient to enable it to become well capitalized within a reasonable time.CommentsClose CommentsPermalink
(D) PRIOR APPROVAL REQUIRED FOR ACQUISITIONS AND NEW LINES OF BUSINESS- An undercapitalized financial holding company subject to stricter standards shall not, directly or indirectly, acquire any interest in any company or insured depository institution, or engage in any new line of business, unless--CommentsClose CommentsPermalink
(i) the Board has accepted the capital restoration plan of the financial holding company subject to stricter standards, the financial holding company subject to stricter standards is implementing the plan, and the Board determines that the proposed action is consistent with and will further the achievement of the plan;CommentsClose CommentsPermalink
(ii) the Board determines that the specific proposed action is appropriate; orCommentsClose CommentsPermalink
(iii) the Board has exempted the financial holding company subject to stricter standards from the requirements of this paragraph with respect to the class of acquisitions that includes the proposed action.CommentsClose CommentsPermalink
(E) DISCRETIONARY SAFEGUARDS- The Board may, with respect to any undercapitalized financial holding company subject to stricter standards, take actions described in any clause of paragraph (7)(B) if the Board determines that those actions are necessary.CommentsClose CommentsPermalink
(7) PROVISIONS APPLICABLE TO SIGNIFICANTLY UNDERCAPITALIZED FINANCIAL HOLDING COMPANIES SUBJECT TO STRICTER STANDARDS AND UNDERCAPITALIZED FINANCIAL HOLDING COMPANIES SUBJECT TO STRICTER STANDARDS THAT FAIL TO SUBMIT AND IMPLEMENT CAPITAL RESTORATION PLANS-CommentsClose CommentsPermalink
(A) IN GENERAL- This paragraph shall apply with respect to any financial holding company subject to stricter standards that--CommentsClose CommentsPermalink
(i) is significantly undercapitalized; orCommentsClose CommentsPermalink
(ii) is undercapitalized and--CommentsClose CommentsPermalink
(I) fails to submit an acceptable capital restoration plan within the time allowed by the Board under paragraph (6)(B)(iv); orCommentsClose CommentsPermalink
(II) fails in any material respect to implement a capital restoration plan accepted by the Board.CommentsClose CommentsPermalink
(B) SPECIFIC ACTIONS AUTHORIZED- The Board shall carry out this paragraph by taking 1 or more of the following actions--CommentsClose CommentsPermalink
(i) REQUIRING RECAPITALIZATION- Doing one or more of the following:CommentsClose CommentsPermalink
(I) Requiring the financial holding company subject to stricter standards to sell enough shares or obligations of the financial holding company subject to stricter standards so that the financial holding company subject to stricter standards will be well capitalized after the sale.CommentsClose CommentsPermalink
(II) Further requiring that instruments sold under subclause (I) be voting shares.CommentsClose CommentsPermalink
(III) Requiring the financial holding company subject to stricter standards to be acquired by or combine with another company.CommentsClose CommentsPermalink
(ii) RESTRICTING TRANSACTIONS WITH AFFILIATES-CommentsClose CommentsPermalink
(I) Requiring the financial holding company subject to stricter standards to comply with section 23A of the Federal Reserve Act (
(II) Further restricting the transactions of the financial holding company subject to stricter standards with affiliates and insiders.CommentsClose CommentsPermalink
(iii) RESTRICTING ASSET GROWTH- Restricting the asset growth of the financial holding company subject to stricter standards more stringently than paragraph (6)(C), or requiring the financial holding company subject to stricter standards to reduce its total assets.CommentsClose CommentsPermalink
(iv) RESTRICTING ACTIVITIES- Requiring the financial holding company subject to stricter standards or any of its subsidiaries to alter, reduce, or terminate any activity that the Board determines poses excessive risk to the financial holding company subject to stricter standards.CommentsClose CommentsPermalink
(v) IMPROVING MANAGEMENT- Doing one or more of the following:CommentsClose CommentsPermalink
(I) NEW ELECTION OF DIRECTORS- Ordering a new election for the board of directors of the financial holding company subject to stricter standards.CommentsClose CommentsPermalink
(II) DISMISSING DIRECTORS OR SENIOR EXECUTIVE OFFICERS- Requiring the financial holding company subject to stricter standards to dismiss from office any director or senior executive officer who had held office for more than 180 days immediately before the financial holding company subject to stricter standards became undercapitalized. Dismissal under this clause shall not be construed to be a removal under section 8 of the Federal Deposit Insurance Act (
(III) EMPLOYING QUALIFIED SENIOR EXECUTIVE OFFICERS- Requiring the financial holding company subject to stricter standards to employ qualified senior executive officers (who, if the Board so specifies, shall be subject to approval by the Board).CommentsClose CommentsPermalink
(vi) REQUIRING DIVESTITURE- Requiring the financial holding company subject to stricter standards to divest itself of or liquidate any subsidiary if the Board determines that the subsidiary is in danger of becoming insolvent, poses a significant risk to the financial holding company subject to stricter standards, or is likely to cause a significant dissipation of the assets or earnings of the financial holding company subject to stricter standards.CommentsClose CommentsPermalink
(vii) REQUIRING OTHER ACTION- Requiring the financial holding company subject to stricter standards to take any other action that the Board determines will better carry out the purpose of this section than any of the actions described in this subparagraph.CommentsClose CommentsPermalink
(C) PRESUMPTION IN FAVOR OF CERTAIN ACTIONS- In complying with subparagraph (B), the Board shall take the following actions, unless the Board determines that the actions would not be appropriate--CommentsClose CommentsPermalink
(i) The action described in subclause (I) or (III) of subparagraph (B)(i) (relating to requiring the sale of shares or obligations, or requiring the financial holding company subject to stricter standards to be acquired by or combine with another company).CommentsClose CommentsPermalink
(ii) The action described in subparagraph (B)(ii) (relating to restricting transactions with affiliates).CommentsClose CommentsPermalink
(D) SENIOR EXECUTIVE OFFICERS’ COMPENSATION RESTRICTED-CommentsClose CommentsPermalink
(i) IN GENERAL- The financial holding company subject to stricter standards shall not do any of the following without the prior written approval of the Board:CommentsClose CommentsPermalink
(I) Pay any bonus to any senior executive officer.CommentsClose CommentsPermalink
(II) Provide compensation to any senior executive officer at a rate exceeding that officer’s average rate of compensation (excluding bonuses, stock options, and profit-sharing) during the 12 calendar months preceding the calendar month in which the financial holding company subject to stricter standards became undercapitalized.CommentsClose CommentsPermalink
(ii) FAILING TO SUBMIT PLAN- The Board shall not grant any approval under clause (i) with respect to a financial holding company subject to stricter standards that has failed to submit an acceptable capital restoration plan.CommentsClose CommentsPermalink
(E) CONSULTATION WITH OTHER REGULATORS- Before the Board makes a determination under subparagraph (B)(vi) with respect to a subsidiary that is a broker, dealer, government securities broker, government securities dealer, investment company, or investment adviser, the Board shall consult with the Securities and Exchange Commission and, in the case of any other subsidiary which is subject to any financial responsibility or capital requirement, any other appropriate regulator of such subsidiary with respect to the proposed determination of the Board and actions pursuant to such determination.CommentsClose CommentsPermalink
(8) MORE STRINGENT TREATMENT BASED ON OTHER SUPERVISORY CRITERIA-CommentsClose CommentsPermalink
(A) IN GENERAL- If the Board determines (after notice and an opportunity for hearing) that a financial holding company subject to stricter standards is in an unsafe or unsound condition or, pursuant to section 8(b)(8) of the Federal Deposit Insurance Act (
(i) if the financial holding company subject to stricter standards is well capitalized, require the financial holding company subject to stricter standards to comply with one or more provisions of paragraphs (6) and (7), as if the institution were undercapitalized; orCommentsClose CommentsPermalink
(ii) if the financial holding company subject to stricter standards is undercapitalized, take any one or more actions authorized under paragraph (7)(B) as if the financial holding company subject to stricter standards were significantly undercapitalized.CommentsClose CommentsPermalink
(B) CONTENTS OF PLAN- A plan that may be required pursuant to subparagraph (A)(i) shall specify the steps that the financial holding company subject to stricter standards will take to correct the unsafe or unsound condition or practice.CommentsClose CommentsPermalink
(9) IMPLEMENTATION- The Board shall prescribe such regulations, issue such orders, and take such other actions the Board determines to be necessary to carry out this subsection.CommentsClose CommentsPermalink
(10) OTHER AUTHORITY NOT AFFECTED- This section does not limit any authority of the Board, any other Federal regulatory agency, or a State to take action in addition to (but not in derogation of) that required under this section.CommentsClose CommentsPermalink
(11) CONSULTATION- The Board and the Secretary of the Treasury shall consult with their foreign counterparts and through appropriate multilateral organizations to reach agreement to extend comprehensive and robust prudential supervision and regulation to all highly leveraged and substantially interconnected financial companies.CommentsClose CommentsPermalink
(12) ADMINISTRATIVE REVIEW OF DISMISSAL ORDERS-CommentsClose CommentsPermalink
(A) TIMELY PETITION REQUIRED- A director or senior executive officer dismissed pursuant to an order under paragraph (7)(B)(v)(II) may obtain review of that order by filing a written petition for reinstatement with the Board not later than 10 days after receiving notice of the dismissal.CommentsClose CommentsPermalink
(B) PROCEDURE-CommentsClose CommentsPermalink
(i) HEARING REQUIRED- The Board shall give the petitioner an opportunity to--CommentsClose CommentsPermalink
(I) submit written materials in support of the petition; andCommentsClose CommentsPermalink
(II) appear, personally or through counsel, before 1 or more members of the Board or designated employees of the Board.CommentsClose CommentsPermalink
(ii) DEADLINE FOR HEARING- The Board shall--CommentsClose CommentsPermalink
(I) schedule the hearing referred to in clause (i)(II) promptly after the petition is filed; andCommentsClose CommentsPermalink
(II) hold the hearing not later than 30 days after the petition is filed, unless the petitioner requests that the hearing be held at a later time.CommentsClose CommentsPermalink
(iii) DEADLINE FOR DECISION- Not later than 60 days after the date of the hearing, the Board shall--CommentsClose CommentsPermalink
(I) by order, grant or deny the petition;CommentsClose CommentsPermalink
(II) if the order is adverse to the petitioner, set forth the basis for the order; andCommentsClose CommentsPermalink
(III) notify the petitioner of the order.CommentsClose CommentsPermalink
(C) STANDARD FOR REVIEW OF DISMISSAL ORDERS- The petitioner shall bear the burden of proving that the petitioner’s continued employment would materially strengthen the ability of the financial holding company subject to stricter standards--CommentsClose CommentsPermalink
(i) to become well capitalized, to the extent that the order is based on the capital level of the financial holding company subject to stricter standards or such company’s failure to submit or implement a capital restoration plan; andCommentsClose CommentsPermalink
(ii) to correct the unsafe or unsound condition or unsafe or unsound practice, to the extent that the order is based on paragraph (8)(A).CommentsClose CommentsPermalink
(13) ENFORCEMENT AUTHORITY FOR FOREIGN FINANCIAL HOLDING COMPANY SUBJECT TO STRICTER STANDARDS-CommentsClose CommentsPermalink
(A) TERMINATION AUTHORITY- If the Board believes that a condition, practice, or activity of a foreign financial holding company subject to stricter standards does not comply with this title or the rules or orders prescribed by the Board under this title or otherwise poses a threat to financial stability, the Board may, after notice and opportunity for a hearing, take such actions as necessary to mitigate such risk, including ordering a foreign financial holding company subject to stricter standards in the United States to terminate the activities of such branch, agency, or subsidiary.CommentsClose CommentsPermalink
(B) DISCRETION TO DENY HEARING- The Board may issue an order under paragraph (1) without providing for an opportunity for a hearing if the Board determines that expeditious action is necessary in order to protect the public interest.CommentsClose CommentsPermalink
(f) Reports Regarding Rapid and Orderly Resolution and Credit Exposure-CommentsClose CommentsPermalink
(1) IN GENERAL- The Board shall require each financial holding company subject to stricter standards incorporated or organized in the United States to report periodically to the Board on--CommentsClose CommentsPermalink
(A) its plan for rapid and orderly resolution in the event of severe financial distress;CommentsClose CommentsPermalink
(B) the nature and extent to which the financial holding company subject to stricter standards has credit exposure to other significant financial companies; andCommentsClose CommentsPermalink
(C) the nature and extent to which other significant financial companies have credit exposure to the financial holding company subject to stricter standards.CommentsClose CommentsPermalink
(2) NO LIMITING EFFECT- A rapid resolution plan submitted in accordance with this subsection shall not be binding on a receiver appointed under subtitle G, a bankruptcy court, or any other authority that is authorized or required to resolve the financial holding company subject to stricter standards or any of its subsidiaries or affiliates.CommentsClose CommentsPermalink
(3) REPORTING TRIGGERED BY STRESS TEST RESULTS-CommentsClose CommentsPermalink
(A) FINANCIAL HOLDING COMPANIES SUBJECT TO STRICTER STANDARDS- Each time the results of a quarterly stress test under baseline or adverse conditions conducted by a financial holding company subject to stricter standards under section 1114(a) or the results of a stress test of that financial holding company subject to stricter standards conducted by the Board under subsection (g) indicate that the financial holding company subject to stricter standards is, in the determination of the Board, significantly or critically undercapitalized, that financial holding company subject to stricter standards shall submit a rapid resolution plan in accordance with this subsection that has been revised to address the causes of those results.CommentsClose CommentsPermalink
(B) FINANCIAL COMPANIES THAT ARE NOT FINANCIAL HOLDING COMPANIES SUBJECT TO STRICTER STANDARDS- Each time the results of a semiannual stress test under baseline or adverse conditions conducted by a financial company under section 1114(b) indicate that the financial company is, in the determination of the Board, significantly or critically undercapitalized, that financial company shall be required to report under this subsection. The Board shall prescribe regulations establishing expedited procedures for such reporting.CommentsClose CommentsPermalink
(C) TRANSPARENCY- Any rapid resolution plan submitted pursuant to this paragraph shall be subject to any restrictions regarding the disclosure of any other rapid resolution plan submitted pursuant to this subsection.CommentsClose CommentsPermalink
(g) Stress Tests-CommentsClose CommentsPermalink
(1) The Board, in coordination with the appropriate primary financial regulatory agency, shall conduct annual stress tests of each financial holding company subject to stricter standards. The Board may, as the Board determines appropriate, conduct stress tests of financial companies that are not financial holding companies subject to stricter standards. The Board shall publish a summary of the results of such stress tests.CommentsClose CommentsPermalink
(2) The Board shall issue regulations to define the term ‘stress test’ for purposes of this subsection. Such a definition shall provide for not less than 3 different sets of conditions under which a stress test should be conducted: baseline, adverse, and severely adverse scenarios.CommentsClose CommentsPermalink
(h) Avoiding Duplication- The Board shall take any action the Board deems appropriate to avoid imposing duplicative requirements under this subtitle for financial holding companies subject to stricter standards that are also bank holding companies.CommentsClose CommentsPermalink
(i) Resolution Plans Required-CommentsClose CommentsPermalink
(1) IN GENERAL- The Corporation and the Board, after consultation with the Council, shall jointly issue regulations requiring financial holding companies subject to stricter standards to develop plans designed to assist in the rapid and orderly resolution of the company.CommentsClose CommentsPermalink
(2) STANDARDS FOR RESOLUTION PLANS- The regulations required by paragraph (1) shall--CommentsClose CommentsPermalink
(A) define the scope of financial holding companies subject to stricter standards covered by these requirements and may exempt financial holding companies subject to stricter standards from the requirements of this subsection if the Corporation and the Board jointly determine that exemption is consistent with the purposes of this title;CommentsClose CommentsPermalink
(B) require each plan to demonstrate that any insured depository institution affiliated with a financial holding company subject to stricter standards is adequately insulated from the activities of any non-bank subsidiary of the institution or financial holding companies subject to stricter standards;CommentsClose CommentsPermalink
(C) require that each plan include information detailing--CommentsClose CommentsPermalink
(i) the nature and extent to which the financial holding company subject to stricter standards has credit exposure to other significant financial companies;CommentsClose CommentsPermalink
(ii) the nature and extent to which other significant financial companies have credit exposure to the financial holding company subject to stricter standards;CommentsClose CommentsPermalink
(iii) full descriptions of the financial holding company subject to stricter standards’ ownership structure, assets, liabilities, and contractual obligations; andCommentsClose CommentsPermalink
(iv) the cross-guarantees tied to different securities, a list of major counterparties, and a process for determining where the financial holding company subject to stricter standards’ collateral is pledged; andCommentsClose CommentsPermalink
(D) establish such other standards as the Corporation and the Board may jointly deem necessary to carry out this subsection.CommentsClose CommentsPermalink
(3) REVIEW OF PLANS-CommentsClose CommentsPermalink
(A) SUBMISSION OF PLANS- Each financial holding company subject to stricter standards that is subject to the requirement under paragraph (1) shall submit its plan to the Corporation and the Board.CommentsClose CommentsPermalink
(B) REVIEW- Upon the submission of a plan pursuant to subparagraph (A), and not less often than annually thereafter, the Corporation and the Board, after consultation with any Federal financial regulatory agencies with jurisdiction over the financial holding company subject to stricter standards, shall jointly review such plan and may require a financial holding company subject to stricter standards to revise its plan consistent with the standards established pursuant to paragraph (2).CommentsClose CommentsPermalink
(4) ENFORCEMENT-CommentsClose CommentsPermalink
(A) IN GENERAL- The Corporation, after consultation with the Board, shall have the authority to take any enforcement action in section 8 of the Federal Deposit Insurance Act (
(B) NO LIMITATION ON BOARD AUTHORITY- Nothing under this subsection shall be construed as limiting any enforcement authority available to the Board under any other provision of law.CommentsClose CommentsPermalink
(5) NO LIMITING EFFECT ON RECEIVER- A rapid resolution plan submitted under this section shall not be binding on a receiver appointed under subtitle G, a bankruptcy court, or any other authority that is authorized or required to resolve the financial holding company subject to stricter standards or any of its subsidiaries or affiliates.CommentsClose CommentsPermalink
(6) NO PRIVATE RIGHT OF ACTION- No private right of action may be based on any resolution plan submitted under this section.CommentsClose CommentsPermalink
SEC. 1105. MITIGATION OF SYSTEMIC RISK.
(a) Council Authority to Restrict Operations and Activities- If the Council determines, after notice and an opportunity for hearing, that despite the higher prudential standards imposed pursuant to section 1104(a)(2), the size of a financial holding company subject to stricter standards or the scope, nature, scale, concentration, interconnectedness, or mix of activities directly or indirectly conducted by a financial holding company subject to stricter standards poses a grave threat to the financial stability or economy of the United States, the Council shall require the company to undertake 1 or more mitigatory actions described in subsection (d).CommentsClose CommentsPermalink
(b) Consultation With Federal Financial Regulatory Agencies- The Council, in determining whether to impose any requirement under this section that is likely to have a significant impact on a functionally regulated subsidiary, or a subsidiary depository institution, of a financial company subjected to stricter prudential standards under this title, shall consult with the Federal financial regulatory agency for any such subsidiary.CommentsClose CommentsPermalink
(c) Factors for Consideration- In reaching a determination described in subsection (a), the Council shall take into consideration the following factors, as appropriate--CommentsClose CommentsPermalink
(1) the amount and nature of the company’s financial assets;CommentsClose CommentsPermalink
(2) the amount and nature of the company’s liabilities, including the degree of reliance on short-term funding;CommentsClose CommentsPermalink
(3) the extent and nature of the company’s off-balance sheet exposures;CommentsClose CommentsPermalink
(4) the company’s reliance on leverage;CommentsClose CommentsPermalink
(5) the extent and nature of the company’s transactions, relationships, and interconnectedness with other financial and non-financial companies;CommentsClose CommentsPermalink
(6) 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
(7) the scope, nature, size, scale, concentration, interconnectedness and mix of the company’s activities;CommentsClose CommentsPermalink
(8) the extent to which prudential regulations mitigate the risk posed; andCommentsClose CommentsPermalink
(9) any other factors identified that the Council determines appropriate.CommentsClose CommentsPermalink
(d) Mitigatory Actions-CommentsClose CommentsPermalink
(1) IN GENERAL- Mitigatory action may include--CommentsClose CommentsPermalink
(A) modifying the prudential standards imposed pursuant to section 1104(a);CommentsClose CommentsPermalink
(B) terminating 1 or more activities;CommentsClose CommentsPermalink
(C) imposing conditions on the manner in which a financial holding company subject to stricter standards conducts 1 or more activities;CommentsClose CommentsPermalink
(D) limiting the ability to merge with, acquire, consolidate with, or otherwise become affiliated with another company;CommentsClose CommentsPermalink
(E) restricting the ability to offer a financial product or products; andCommentsClose CommentsPermalink
(F) in the event the Council deems subparagraphs (A) through (E) inadequate as a means to address the identified risks, selling, divesting, or otherwise transferring business units, branches, assets, or off-balance sheet items to unaffiliated companies.CommentsClose CommentsPermalink
(2) INTERNATIONAL COMPETITIVENESS CONSIDERATIONS- In making any decision pursuant to paragraph (1), the Council shall consider--CommentsClose CommentsPermalink
(A) the need to maintain the international competitiveness of the United States financial services industry; andCommentsClose CommentsPermalink
(B) the extent to which other countries with a significant financial services industry have established corresponding regimes to mitigate threats to financial stability or the economy posed by financial companies.CommentsClose CommentsPermalink
(e) Due Process-CommentsClose CommentsPermalink
(1) NOTICE AND HEARING- The Council shall give notice to a financial company subject to stricter prudential standards, and opportunity for hearing if requested, that the financial company is being considered for mitigatory action pursuant to subsection (a). The hearing shall occur no later than 30 days after the financial company receives notice of the proposed action from the Council.CommentsClose CommentsPermalink
(2) NOTICE- The Council shall notify the financial company subject to stricter prudential standards of the Council’s determination, and, if the Council determines that mitigatory action is appropriate, require the company to submit a plan to the Council to implement the required mitigatory action.CommentsClose CommentsPermalink
(3) SUBMISSION OF PLAN- The financial holding company subject to stricter standards shall submit its proposed plan to implement the required mitigatory action or actions to the Council within 60 days from the date it receives notice under paragraph (2) or such shorter timeframe as the Council may require, if the Council determines an emergency situation merits expeditious implementation.CommentsClose CommentsPermalink
(4) APPROVAL OR AMENDMENT OF THE PLAN- The Council shall review the plan submitted pursuant to paragraph (3) and determine whether the plan achieves the goal of mitigating a grave threat to the financial stability or the economy of the United States. The Council may approve or disapprove the plan with or without amendment.CommentsClose CommentsPermalink
(5) EFFECT OF PLAN APPROVAL- The Council shall--CommentsClose CommentsPermalink
(A) notify a financial holding company subject to stricter standards by order, which shall be public, that the Council has approved the plan with or without amendment; andCommentsClose CommentsPermalink
(B) direct the Board to require a financial holding company subject to stricter standards to comply with the plan to implement mitigatory action or actions within a reasonable timeframe after the Council’s approval and in accordance with such deadlines established in the plan.CommentsClose CommentsPermalink
(f) Treasury Secretary Concurrence- Mitigatory action imposed by the Council involving the sale, divestiture, or transfer of more than $10,000,000,000 in total assets by a financial holding company subject to stricter standards shall require the Secretary of the Treasury’s concurrence before the issuance of the notice in subsection (e)(5)(A). If the sale, divestiture, or transfer of total assets by a financial holding company subject to stricter standards exceeds $100,000,000,000, the Secretary of the Treasury shall consult with the President before concurrence.CommentsClose CommentsPermalink
(g) Failure to Implement the Plan- If a financial holding company subject to stricter standards fails to implement a plan for mitigatory action imposed pursuant to subsection (e)(5) within a reasonable timeframe, the Council shall direct the Board to take such actions as necessary to ensure compliance with the plan.CommentsClose CommentsPermalink
(h) Judicial Review- For any plan required under this section, a financial holding company subject to stricter standards may, not later than 30 days after receipt of the Council’s notice under subsection (e)(5), bring an action in the United States district court for the judicial district in which the home office of such company is located, or in the United States District Court for the District of Columbia, for an order requiring that the requirement for a mitigatory action be rescinded. Judicial review under this section shall be limited to the imposition of a mitigatory action. In reviewing the Council’s imposition of a mitigatory action, the court shall rescind or dismiss only those mitigatory actions it finds to be imposed in an arbitrary and capricious manner.CommentsClose CommentsPermalink
SEC. 1106. SUBJECTING ACTIVITIES OR PRACTICES TO STRICTER PRUDENTIAL STANDARDS FOR FINANCIAL STABILITY PURPOSES.
(a) In General- The Council may subject a financial activity or practice to stricter prudential standards under this subtitle 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 financial institutions or markets and local, minority, or underserved communities, and thereby threaten the stability of the financial system or economy.CommentsClose CommentsPermalink
(b) Periodic Review of Activity Identifications-CommentsClose CommentsPermalink
(1) SUBMISSION OF ASSESSMENT- The Board shall periodically submit a report to the Council containing an assessment of whether each activity or practice subjected to stricter prudential standards should continue to be subject to such standards.CommentsClose CommentsPermalink
(2) REVIEW AND RECISION- The Council shall--CommentsClose CommentsPermalink
(A) review the assessment submitted pursuant to paragraph (1) and any information or recommendation submitted by members of the Council regarding whether a financial activity subjected to stricter prudential standards continues to merit stricter prudential standards; andCommentsClose CommentsPermalink
(B) rescind the action subjecting an activity to heightened prudential supervision if the Council determines that the activity no longer meets the criteria in subsection (a).CommentsClose CommentsPermalink
(c) Procedure for Subjecting or Ceasing to Subject an Activity or Practice to Stricter Prudential Standards-CommentsClose CommentsPermalink
(1) COUNCIL AND BOARD COORDINATION- The Council shall inform the Board if the Council is considering whether to subject or cease to subject an activity to stricter prudential standards in accordance with this section.CommentsClose CommentsPermalink
(2) NOTICE AND OPPORTUNITY FOR CONSIDERATION OF WRITTEN MATERIALS-CommentsClose CommentsPermalink
(A) IN GENERAL- The Board shall, in an executive capacity on behalf of the Council, provide notice to financial companies that the Council is considering whether to subject an activity or practice to heightened prudential regulation, and shall provide a financial company engaged in such activity or practice 30 days to submit written materials to inform the Council’s decision. The Council shall decide, and the Board shall provide notice of the Council’s decision, within 60 days of the due date for such written materials.CommentsClose CommentsPermalink
(B) EMERGENCY EXCEPTION- The Council may waive or modify the requirements of subparagraph (A) if the Council determines that such waiver or modification is necessary or appropriate to prevent or mitigate threats posed by an activity to financial stability. The Board shall, in an executive capacity on behalf of the Council, provide notice of such waiver or modification to financial companies as soon as practicable, which shall be no later than 24 hours after the waiver or modification.CommentsClose CommentsPermalink
(3) FORM OF DECISION- The Board shall provide all notices required under this subsection by posting a notice on the Board’s web site and publishing a notice in the Federal Register.CommentsClose CommentsPermalink
SEC. 1107. STRICTER REGULATION OF ACTIVITIES AND PRACTICES FOR FINANCIAL STABILITY PURPOSES.
(a) Prudential Standards-CommentsClose CommentsPermalink
(1) BOARD AUTHORITY TO RECOMMEND-CommentsClose CommentsPermalink
(A) IN GENERAL- To mitigate the risks to United States financial stability and the United States economy posed by financial activities and practices that the Council identifies for stricter prudential standards under section 1106 the Board shall recommend prudential standards to the appropriate primary financial regulatory agencies to apply to such identified activities and practices.CommentsClose CommentsPermalink
(B) CONSULTATION WITH PRIMARY FINANCIAL REGULATORY AGENCIES- The Board, in developing recommendations under this subsection, shall consult with the relevant primary financial regulatory agencies with respect to any standard that is likely to have a significant effect on entities described in section 1000(b)(6).CommentsClose CommentsPermalink
(2) CRITERIA- The actions recommended under paragraph (1)--CommentsClose CommentsPermalink
(A) shall be designed to maximize financial stability, taking costs to long-term financial and 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, nature, size, scale, concentration, or interconnectedness, or applying particular capital or risk-management requirements to the conduct of the activity) or prohibiting the activity or practice altogether.CommentsClose CommentsPermalink
(b) Implementation of Recommended Standards-CommentsClose CommentsPermalink
(1) ROLE OF PRIMARY FINANCIAL REGULATORY AGENCY- Each primary financial regulatory agency is authorized to impose, require reports regarding, examine for compliance with, and enforce standards in accordance with this section with respect to those entities described in section 1000(b)(6) for which it is the primary financial regulatory agency. This authority is in addition to and does not limit any other authority of the primary financial regulatory agencies. 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 primary financial regulatory agency’s jurisdiction over the entity as if the agency action were taken under those statutes.CommentsClose CommentsPermalink
(2) IMPOSITION OF STANDARDS- Standards imposed under this subsection shall be the standards recommended by the Board in accordance with subsection (a) or any other similar standards that the Board deems acceptable after consultation between the Board and the primary financial regulatory agency.CommentsClose CommentsPermalink
(3) PRIMARY FINANCIAL REGULATORY AGENCY RESPONSE- A primary financial regulatory agency shall notify the Council and the Board in writing on whether and to what extent the agency has imposed the stricter prudential standards described in paragraph (2) within 60 days of the Board’s recommendation. A primary financial regulatory agency that fails to impose such standards shall provide specific justification for such failure to act in the written notice from the agency to the Council and Board.CommentsClose CommentsPermalink
SEC. 1108. EFFECT OF RESCISSION OF IDENTIFICATION.
(a) Notice- When the Council determines that a company or activity or practice no longer is subject to heightened prudential scrutiny, the Board shall inform the relevant primary financial regulatory agency or agencies (if different from the Board) of that finding.CommentsClose CommentsPermalink
(b) Determination of Primary Financial Regulatory Agency to Continue- A primary financial regulatory agency that has imposed stricter prudential standards for financial stability purposes under this subtitle shall determine whether standards that it has imposed under this subtitle should remain in effect.CommentsClose CommentsPermalink
SEC. 1109. EMERGENCY FINANCIAL STABILIZATION.
(a) In General- Upon the written determination of the Council that a liquidity event exists that could destabilize the financial system (which determination shall be made upon a vote of not less than two-thirds of the members of the Council then serving) and with the written consent of the Secretary of the Treasury (after certification by the President that an emergency exists), the Corporation may create a widely-available program designed to avoid or mitigate adverse effects on systemic economic conditions or financial stability by guaranteeing obligations of solvent insured depository institutions or other solvent companies that are predominantly engaged in activities that are financial in nature or are incidental thereto pursuant to section 4(k) of the Bank Holding Company Act, if necessary to prevent systemic financial instability during times of severe economic distress, except that a guarantee of obligations under this section may not include provision of equity in any form.CommentsClose CommentsPermalink
(b) Policies and Procedures- Prior to exercising any authority under this section, the Corporation shall establish policies and procedures governing the issuance of guarantees. The terms and conditions of any guarantees issued shall be established by the Corporation with the approval of the Secretary of the Treasury and the Financial Stability Oversight Council.CommentsClose CommentsPermalink
(c) Funding-CommentsClose CommentsPermalink
(1) ADMINISTRATIVE EXPENSES AND COST OF GUARANTEES- A program established pursuant to this section shall require funding only for the purposes of paying administrative expenses and for paying a guarantee in the event that a guaranteed loan defaults.CommentsClose CommentsPermalink
(2) FEES AND OTHER CHARGES- The Corporation shall charge fees or other charges to all participants in such program established pursuant to this section. To the extent that a program established pursuant to this section has expenses or losses, the program will be funded entirely through fees or other charges assessed on participants in such program.CommentsClose CommentsPermalink
(3) EXCESS FUNDS- If at the conclusion of such program there are any excess funds collected from the fees associated with such program, the funds will be deposited into the Systemic Resolution Fund established pursuant to section 1609(n).CommentsClose CommentsPermalink
(4) AUTHORITY OF CORPORATION- For purposes of conducting a program established pursuant to this section, the Corporation--CommentsClose CommentsPermalink
(A) may borrow funds from the Secretary of the Treasury, which shall be repaid in full with interest through fees and charges paid by participants in accordance with paragraph (2), and, to the extent such additional amounts are necessary, assessments on large financial companies under paragraph (5), and there shall be available to the Corporation amounts in the Treasury not otherwise appropriated, including for the payment of reasonable administrative expenses;CommentsClose CommentsPermalink
(B) may not borrow funds from the Deposit Insurance Fund established pursuant to section 11(a)(4) of the Federal Deposit Insurance Act; andCommentsClose CommentsPermalink
(C) may not borrow funds from the Systemic Resolution Fund established pursuant to section 1609(n).CommentsClose CommentsPermalink
(5) BACK-UP SPECIAL ASSESSMENT- To the extent that the funds collected pursuant to paragraph (2) are insufficient to cover any losses or expenses (including monies borrowed pursuant to paragraph (4)) arising from a program established pursuant to this section, the Corporation shall impose a special assessment on--CommentsClose CommentsPermalink
(A) large financial companies subject to assessments under section 1609(n) (whether or not such company participated in such program) in the manner provided in such section 1609(n); andCommentsClose CommentsPermalink
(B) participants in the program that are not large financial companies paying assessments pursuant to section 1609(n).CommentsClose CommentsPermalink
(d) Plan for Maintenance or Increase of Lending- In connection with any application or request to participate in such program authorized pursuant to this section, a solvent company seeking to participate in such program shall be required to submit to the Corporation a plan detailing how the use of such guaranteed funds will facilitate the increase or maintenance of such solvent company’s level of lending to consumers or small businesses.CommentsClose CommentsPermalink
(e) Definitions- For purposes of this section, the following definitions apply:CommentsClose CommentsPermalink
(1) ACTIVITIES THAT ARE FINANCIAL IN NATURE- The term ‘activities that are financial in nature’ means activities that are determined to be financial in nature, or incidental to such activities, under section 4(k) of the Bank Holding Company Act of 1956 (
(2) COMPANY- The term ‘company’ means any entity other than a natural person that is incorporated or organized under Federal law or the laws of any State.CommentsClose CommentsPermalink
(3) CORPORATION- The term ‘Corporation’ means the Federal Deposit Insurance Corporation.CommentsClose CommentsPermalink
(4) INSURED DEPOSITORY INSTITUTION- The term ‘insured depository institution’ shall have the same meaning as in section 3 of the Federal Deposit Insurance Act (
(5) SOLVENT- The term ‘solvent’ means assets are more than the obligations to creditors.CommentsClose CommentsPermalink
(f) Sunset of Corporation’s Authority- The Corporation’s authority under subsections (a) and (c) and the authority to borrow or obligate funds under section 1609(n) shall expire on December 31, 2013, unless the President transmits to the Congress a request for renewal of the authority and there is enacted a joint resolution, as defined in subsection (g).CommentsClose CommentsPermalink
(g) Joint Resolution-CommentsClose CommentsPermalink
(1) TERMS- For purposes of subsection (f), the term ‘joint resolution’ means only a joint resolution which is introduced within a 2-day period beginning on the date on which the President transmits the request to the Congress under subsection (f), and--CommentsClose CommentsPermalink
(A) which does not have a preamble;CommentsClose CommentsPermalink
(B) the matter after the resolving clause of which is as follows: ‘That Congress approves the request for renewal of authority provided under sections 1108 and 1609(n) of the Financial Stability Improvement Act of 2009 as submitted by the President on XXXXXXX’, the blank space being filled in with the appropriate date; andCommentsClose CommentsPermalink
(C) the title of which is as follows: ‘Joint resolution approving the renewal of financial stabilization authority.’.CommentsClose CommentsPermalink
(2) REFERRAL- A resolution described in paragraph (1) that is introduced in the House of Representatives shall be referred to the Committee on Financial Services of the House of Representatives. A resolution described in paragraph (1) introduced in the Senate shall be referred to the Committee on Banking, Housing, and Urban Affairs of the Senate.CommentsClose CommentsPermalink
(3) DISCHARGE- If the committee to which a resolution described in paragraph (1) is referred has not reported such resolution (or an identical resolution) by the end of the 2-day period beginning on the date on which the President transmits the request to the Congress under subsection (f), such committee shall be, at the end of such period, discharged from further consideration of such resolution, and such resolution shall be placed on the appropriate calendar of the House involved.CommentsClose CommentsPermalink
(4) CONSIDERATION-CommentsClose CommentsPermalink
(A) IN GENERAL- On or after the day after the date on which the committee to which such a resolution is referred has reported, or has been discharged (under paragraph (3)) from further consideration of, such a resolution, it is in order (even though a previous motion to the same effect has been disagreed to) for any Member of the respective House to move to proceed to the consideration of the resolution. A Member may make the motion only on the day after the calendar day on which the Member announces to the House concerned the Member’s intention to make the motion, except that, in the case of the House of Representatives, the motion may be made without such prior announcement if the motion is made by direction of the committee to which the resolution was referred. All points of order against the resolution (and against consideration of the resolution) are waived. The motion is highly privileged in the House of Representatives and is privileged in the Senate and is not debatable. The motion is not subject to amendment, or to a motion to postpone, or to a motion to proceed to the consideration of other business. A motion to reconsider the vote by which the motion is agreed to or disagreed to shall not be in order. If a motion to proceed to the consideration of the resolution is agreed to, the respective House shall immediately proceed to consideration of the joint resolution without intervening motion, order, or other business, and the resolution shall remain the unfinished business of the respective House until disposed of.CommentsClose CommentsPermalink
(B) DEBATE- Debate on the resolution, and on all debatable motions and appeals in connection therewith, shall be limited to not more than 2 hours, which shall be divided equally between those favoring and those opposing the resolution. An amendment to the resolution is not in order. A motion to limit further debate is in order and not debatable. A motion to postpone, or a motion to proceed to the consideration of other business, or a motion to recommit the resolution is not in order. A motion to reconsider the vote by which the resolution is agreed to or disagreed to is not in order.CommentsClose CommentsPermalink
(C) VOTE- Immediately following the conclusion of the debate on a resolution described in paragraph (1) and a single quorum call at the conclusion of the debate, if requested in accordance with the rules of the appropriate House, the vote on final passage of the resolution shall occur.CommentsClose CommentsPermalink
(D) RULES APPEALS- Appeals of the decisions of the Chair relating to the application of the rules of the Senate or the House of Representatives, as the case may be, to the procedure relating to a resolution described in paragraph (1) shall be decided without debate.CommentsClose CommentsPermalink
(5) CONSIDERATION BY OTHER HOUSE-CommentsClose CommentsPermalink
(A) IN GENERAL- If, before the passage by one House of a resolution of that House described in paragraph (1), that House receives from the other House a resolution described in paragraph (1), then the following procedures shall apply:CommentsClose CommentsPermalink
(i) The resolution of the other House shall not be referred to a committee and may not be considered in the House receiving it except in the case of final passage as provided in clause (ii)(II).CommentsClose CommentsPermalink
(ii) With respect to a resolution described in paragraph (1) of the House receiving the resolution--CommentsClose CommentsPermalink
(I) the procedure in that House shall be the same as if no resolution had been received from the other House; butCommentsClose CommentsPermalink
(II) the vote on final passage shall be on the resolution of the other House.CommentsClose CommentsPermalink
(B) CONSIDERATION- Upon disposition of the resolution received from the other House, it shall no longer be in order to consider the resolution that originated in the receiving House.CommentsClose CommentsPermalink
(6) RULES OF THE SENATE AND HOUSE- This subsection is enacted by the Congress--CommentsClose CommentsPermalink
(A) as an exercise of the rulemaking power of the Senate and House of Representatives, respectively, and as such it is deemed a part of the rules of each House, respectively, but applicable only with respect to the procedure to be followed in that House in the case of a resolution described in paragraph (1), and it supersedes other rules only to the extent that it is inconsistent with such rules; andCommentsClose CommentsPermalink
(B) with full recognition of the constitutional right of either House to change the rules (so far as relating to the procedure of that House) at any time, in the same manner, and to the same extent as in the case of any other rule of that House.CommentsClose CommentsPermalink
(7) EFFECTIVE PERIOD- The Presidential request referred to in paragraph (1) shall specify the period of time that such authority is extended and the adoption of the joint resolution shall extend such powers for such period of time.CommentsClose CommentsPermalink
SEC. 1110. CORPORATION MUST RECEIVE WARRANTS WHEN PAYING OR RISKING TAXPAYER FUNDS.
(a) In General- The Federal Deposit Insurance Corporation (hereinafter in this section referred to as the ‘Corporation’) may not provide any payment, credit extension, or guarantee, or make any such commitment under the authority of section 1109 or 1604, unless the Corporation receives from the financial company for which the credit extension or guarantee is intended, as fair market value consideration for such payment, credit extension or guarantee--CommentsClose CommentsPermalink
(1) in the case of a financial company, the securities of which are traded on a national securities exchange, a warrant giving the right to the Corporation to receive nonvoting common stock or preferred stock in such financial institution, or voting stock with respect to which, the Corporation agrees not to exercise voting power, as the Corporation determines appropriate; orCommentsClose CommentsPermalink
(2) in the case of any financial company other than one described in paragraph (1), a warrant for common or preferred stock, or a senior debt instrument from such financial institution, as described in subsection (b)(3).CommentsClose CommentsPermalink
(b) Terms and Conditions- The terms and conditions of any warrant or senior debt instrument required under subsection (a) shall meet the following requirements:CommentsClose CommentsPermalink
(1) PURPOSES- Such terms and conditions shall, at a minimum, be designed--CommentsClose CommentsPermalink
(A) to provide for reasonable participation by the Corporation, for the benefit of taxpayers, in equity appreciation in the case of a warrant or other equity security, or a reasonable interest rate premium, in the case of a debt instrument; andCommentsClose CommentsPermalink
(B) to provide additional protection for the taxpayer against losses from such payment, extension of credit, or guarantee by the Corporation under this title.CommentsClose CommentsPermalink
(2) AUTHORITY TO SELL, EXERCISE, OR SURRENDER- The Corporation may sell, exercise, or surrender a warrant or any senior debt instrument received under this subsection, based on the conditions established under paragraph (1).CommentsClose CommentsPermalink
(3) CONVERSION- The warrant shall provide that if, after the warrant is received by the Corporation under this subsection, the financial company that issued the warrant is no longer listed or traded on a national securities exchange or securities association, as described in subsection (a)(1), such warrants shall convert to senior debt, or contain appropriate protections for the Corporation to ensure that the Corporation is appropriately compensated for the value of the warrant, in an amount determined by the Corporation.CommentsClose CommentsPermalink
(4) PROTECTIONS- Any warrant representing securities to be received by the Corporation under this subsection shall contain anti-dilution provisions of the type employed in capital market transactions, as determined by the Corporation. Such provisions shall protect the value of the securities from market transactions such as stock splits, stock distributions, dividends, and other distributions, mergers, and other forms of reorganization or recapitalization.CommentsClose CommentsPermalink
(5) EXERCISE PRICE- The exercise price for any warrant issued pursuant to this subsection shall be set by the Corporation, in the interest of the taxpayers.CommentsClose CommentsPermalink
(6) SUFFICIENCY- The financial company shall guarantee to the Corporation that it has authorized shares of nonvoting stock available to fulfill its obligations under this subsection. Should the financial company not have sufficient authorized shares, including preferred shares that may carry dividend rights equal to a multiple number of common shares, the Corporation may, to the extent necessary, accept a senior debt note in an amount, and on such terms as will compensate the Corporation with equivalent value, in the event that a sufficient shareholder vote to authorize the necessary additional shares cannot be obtained.CommentsClose CommentsPermalink
(c) Exceptions-CommentsClose CommentsPermalink
(1) The Corporation shall establish an exception to the requirements of this section and appropriate alternative requirements for any participating financial company that is legally prohibited from issuing securities and debt instruments, so as not to allow circumvention of the requirements of this section.CommentsClose CommentsPermalink
(2) If the Corporation is providing a payment, extension of credit, or guarantee with regard to its authority under section 1604 and the Corporate determines that it is certain that at the conclusion of the Resolution Process the shareholders of all classes shall lose their entire investment and receive nothing therefor, then the requirements of this section shall not apply.CommentsClose CommentsPermalink
SEC. 1111. EXAMINATIONS AND ENFORCEMENT ACTIONS FOR INSURANCE AND RESOLUTIONS PURPOSES.
(a) Examinations for Insurance and Resolutions Purposes- Section 10(b)(3) of the Federal Deposit Insurance Act (
(b) Enforcement Authority- Section 8(t) of the Federal Deposit Insurance Act (
(1) in paragraph (2)--CommentsClose CommentsPermalink
(A) at the end of subparagraph (B), by striking ‘or’;CommentsClose CommentsPermalink
(B) at the end of subparagraph (C), by striking the period and inserting ‘; or’; andCommentsClose CommentsPermalink
(C) by inserting at the end the following new subparagraph:CommentsClose CommentsPermalink
‘(D) the conduct or threatened conduct (including any acts or omissions) of the depository institution holding company poses a risk to the Deposit Insurance Fund.’; andCommentsClose CommentsPermalink
(2) by adding at the end the following new paragraph:CommentsClose CommentsPermalink
‘(6) For purposes of this subsection:CommentsClose CommentsPermalink
‘(A) The Corporation shall have the same powers with respect to a depository institution holding company and its affiliates as the appropriate Federal banking agency has with respect to the holding company and its affiliates; andCommentsClose CommentsPermalink
‘(B) the holding company and its affiliates shall have the same duties and obligations with respect to the Corporation as the holding company and its affiliates have with respect to the appropriate Federal banking agency.’.CommentsClose CommentsPermalink
SEC. 1112. STUDY OF THE EFFECTS OF SIZE AND COMPLEXITY OF FINANCIAL INSTITUTIONS ON CAPITAL MARKET EFFICIENCY AND ECONOMIC GROWTH.
(a) Study Required- The Chairman 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 effect on the efficiency of capital markets, costs imposed on the financial sector, and on national economic growth, of--CommentsClose CommentsPermalink
(1) explicit or implicit limits on the maximum size of banks, bank holding companies, and other large financial institutions;CommentsClose CommentsPermalink
(2) limits on the organizational complexity and diversification of large financial institutions;CommentsClose CommentsPermalink
(3) requirements for operational separation between business units of large financial institutions in order to expedite resolution in case of failure;CommentsClose CommentsPermalink
(4) limits on risk transfer between business units of large financial institutions;CommentsClose CommentsPermalink
(5) requirements to carry contingent capital or similar mechanisms;CommentsClose CommentsPermalink
(6) limits on commingling of commercial and financial activities by large financial institutions;CommentsClose CommentsPermalink
(7) segregation requirements between traditional financial activities and trading or other high-risk operations in large financial institutions; andCommentsClose CommentsPermalink
(8) other limitations on the activities or structure of large financial institutions that may be useful to limit systemic risk.CommentsClose CommentsPermalink
The study shall include recommendations for the optimal structure of any limits considered in paragraphs (1) through (5) 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 the enactment of this title, the Chairman shall issue a report to the Congress containing any findings and determinations made in carrying out the study required under subsection (a).CommentsClose CommentsPermalink
SEC. 1113. EXERCISE OF FEDERAL RESERVE AUTHORITY.
(a) No Decisions by Federal Reserve Bank Presidents- No provision of this title relating to the authority of the Board shall be construed as conferring any decision-making authority on presidents of Federal reserve banks.CommentsClose CommentsPermalink
(b) Voting Decisions by Board- The Board of Governors of the Federal Reserve System shall not delegate the authority to make any voting decision that the Board is authorized or required to make under this title in contravention of section 11(k) of the Federal Reserve Act.CommentsClose CommentsPermalink
SEC. 1114. STRESS TESTS.
(a) A financial holding company subject to stricter standards shall--CommentsClose CommentsPermalink
(1) conduct quarterly stress tests; andCommentsClose CommentsPermalink
(2) submit a report on its quarterly stress test to the head of the primary financial regulatory agency and to the Board at such time, in such form, and containing such information as the head of the primary financial regulatory agency may require.CommentsClose CommentsPermalink
(b) A financial company that has more than $10,000,000,000 in total assets and is not a financial holding company subject to stricter standards shall--Comments

U.S. Congress - Text of H.R.4173 as Introduced in House Dodd-Frank Wall Street Reform and Consumer Protection Act

