Enhanced supervision of certain bank holding companies

(a)

Table of contents

The table of contents for the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5301 et seq.) is amended by striking the item relating to section 113 and inserting the following:

Sec. 113. Authority to require enhanced supervision and regulation of certain nonbank financial companies and certain bank holding companies.

(b)

Revisions to Council authority

(1)

Purposes and duties

Section 112 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5322) is amended in subsection (a)(2)(I) by inserting before the semicolon , which have been the subject of a final determination under section 113. (2)

Bank holding company designation

Section 113 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5323) is amended— (A)by amending the heading for such section to read as follows:

Authority to require enhanced supervision and regulation of certain nonbank financial companies and certain bank holding companies

; (B)by redesignating subsections (c), (d), (e), (f), (g), (h), and (i) as subsections (d), (e), (f), (g), (h), (i), and (j), respectively; (C)by inserting after subsection (b) the following:

(c)

Bank holding companies subject to enhanced supervision and prudential standards under section 165

(1)

In general

There is a determination that bank holding companies with total consolidated assets equal to or greater than $250,000,000,000 shall be subject to enhanced supervision and prudential standards by the Board of Governors, in accordance with section 165. (2)

Enhanced supervision for certain bank holding companies

(A)

Determination

The Council shall review each bank holding company with total consolidated assets equal to or greater than $50,000,000,000 but less than $250,000,000,000 to determine whether such company shall be subject to enhanced supervision and prudential standards by the Board of Governors, in accordance with section 165. Such determination shall be made if the Council, on a non-delegable basis and by a vote of not fewer than 2/3 of the voting members then serving, including an affirmative vote by the Chairperson, determines that material financial distress at the bank holding company, or the nature, scope, size, scale, concentration, interconnectedness, or mix of the activities of the bank holding company, could pose a threat to the financial stability of the United States. (B)

Considerations

In making a determination under subparagraph (A), the Council shall consider the following: (i)the size of the bank holding company; (ii)the interconnectedness of the bank holding company; (iii)the extent of readily available substitutes or financial institution infrastructure for the services of the bank holding company; (iv)the global cross-jurisdictional activity of the bank holding company; and (v)the complexity of the bank holding company. (C)

Review of determination

With respect to a bank holding company described under subparagraph (A) that is not subject to enhanced supervision and prudential standards, the Council shall perform an additional review under subparagraph (A) of such company if— (i)the Council finds that the nature, scope, size, scale, concentration, interconnectedness, or mix of the activities of the bank holding company have significantly changed and the company should be reviewed again to determine if it may pose a threat to the financial stability of the United States; or (ii)a period of 36 months has passed since the bank holding company was last reviewed under subparagraph (A). (D)

Notification of review

If, after a review under this paragraph, the Council determines that a bank holding company described under subparagraph (A) shall be subject to enhanced supervision and prudential standards, the Council shall provide the bank holding company with written notice of such determination and an explanation of the Council’s reasoning for such determination. (E)

Termination of enhanced supervision and prudential standards

If, with respect to a bank holding company described under subparagraph (A) that is subject to enhanced supervision and prudential standards, the Council finds, on a non-delegable basis and by a vote of not fewer than 2/3 of the voting members then serving, including an affirmative vote by the Chairperson, that material financial distress at the bank holding company, or the nature, scope, size, scale, concentration, interconnectedness, or mix of the activities of the bank holding company, do not pose a threat to the financial stability of the United States, such company shall no longer be subject to enhanced supervision and prudential standards.

;

(D)in subsection (d), as so redesignated— (i)in paragraph (1)(A), by striking subsection (a)(2) or (b)(2) and inserting subsection (a)(2), (b)(2), or (c)(2); and (ii)in paragraph (4), by striking Subsections (d) through (h) and inserting Subsections (e) through (i); (E)in subsections (f), (g), (h), (i), and (j), as so redesignated— (i)by striking subsections (a) and (b) each place such term appears and inserting subsections (a), (b), and (c); and (ii)by striking nonbank financial company each place such term appears and inserting bank holding company for which there has been a determination under subsection (c) or nonbank financial company; (F)in subsection (g), as so redesignated, by striking subsection (e) and inserting subsection (f); (G)in subsection (h), as so redesignated, by striking subsection (a), (b), or (c) and inserting subsection (a), (b), (c), or (d); and (H)in subsection (i), as so redesignated, by striking subsection (d)(2), (e)(3), or (f)(5) and inserting subsection (e)(2), (f)(3), or (g)(5). (3)

Enhanced supervision

Section 115 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5325) is amended— (A)in subsection (a)(1), by striking large, interconnected bank holding companies and inserting bank holding companies which have been the subject of a final determination under section 113; (B)in subsection (a)(2)— (i)in subparagraph (A), by striking or at the end; (ii)by striking the Council may and all that follows through differentiate and inserting the Council may differentiate; and (iii)by striking subparagraph (B); and (C)in subsection (b)(3), by striking subsections (a) and (b) of section 113 each place such term appears and inserting subsections (a), (b), and (c) of section 113. (4)

Reports

Section 116(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5326(a)) is amended by striking with total consolidated assets of $50,000,000,000 or greater and inserting which has been the subject of a final determination under section 113. (5)

Mitigation

Section 121 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5331) is amended— (A)in subsection (a), by striking with total consolidated assets of $50,000,000,000 or more and inserting which has been the subject of a final determination under section 113; and (B)in subsection (c), by striking subsection (a) or (b) of section 113 and inserting subsection (a), (b), or (c) of section 113. (6)

Office of Financial Research

Section 155 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5345) is amended in subsection (d) by striking with total consolidated assets of $50,000,000,000 or greater and inserting which have been the subject of a final determination under section 113. (c)

Revisions to Board authority

(1)

Acquisitions

Section 163 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5363) is amended by striking with total consolidated assets equal to or greater than $50,000,000,000 each place such term appears and inserting which has been the subject of a final determination under section 113. (2)

Management interlocks

Section 164 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5364) is amended by striking with total consolidated assets equal to or greater than $50,000,000,000 and inserting which has been the subject of a final determination under section 113. (3)

Enhanced supervision and prudential standards

Section 165 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5365) is amended— (A)in subsection (a), by striking with total consolidated assets equal to or greater than $50,000,000,000 and inserting which have been the subject of a final determination under section 113; (B)in subsection (a)(2)— (i)by striking (A) In general.—; and (ii)by striking subparagraph (B); (C)by striking subsections (a) and (b) of section 113 each place such term appears and inserting subsections (a), (b), and (c) of section 113; and (D)in subsection (j), by striking with total consolidated assets equal to or greater than $50,000,000,000 and inserting which has been the subject of a final determination under section 113. (d)

Effective date; expedited rulemaking authority

(1)

Effective date

The amendments made by this section shall take effect on the earlier of the following: (A)the date on which the Financial Stability Oversight Council issues final regulations to carry out the amendment made by this section; or (B)the end of the 18-month period beginning on the date of the enactment of this Act. (2)

Expedited Rulemaking Authority

The Financial Stability Oversight Counsel and the Board of Governors of the Federal Reserve System shall— (A)issue regulations to carry out the amendments made by this section— (i)in proposed form, not later than the end of the 90-day period beginning on the date of the enactment of this Act; and (ii)in final form, not later than the end of the 180-day period beginning on the date of the enactment of this Act; and (B)such final regulations shall take effect not later than the end of the 1-year period beginning on the date of the enactment of this Act.