[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3310 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 3310

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


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 23, 2009

Mr. Bachus (for himself, Mr. Boehner, Mr. Cantor, Mr. Pence, Mr. Smith 
of Texas, Mr. Franks of Arizona, Mr. Issa, Mr. Neugebauer, Mr. Garrett 
of New Jersey, Mr. Hensarling, Mr. Price of Georgia, Mrs. Biggert, Mrs. 
 Capito, Mr. Jones, Mr. Posey, Mr. Lance, Mr. Marchant, Mr. Royce, Mr. 
Lee of New York, Mr. Lucas, Mr. Roskam, Mrs. Bachmann, Ms. Jenkins, Mr. 
Barrett of South Carolina, Mr. Scalise, Mr. Goodlatte, Mr. Gerlach, and 
    Mr. Ryan of Wisconsin) introduced the following bill; which was 
referred to the Committee on Financial Services, and in addition to the 
 Committees on Education and Labor, Transportation and Infrastructure, 
   the Judiciary, Agriculture, Oversight and Government Reform, the 
Budget, Rules, and Energy and Commerce, for a period to be subsequently 
   determined by the Speaker, in each case for consideration of such 
 provisions as fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


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

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Consumer Protection and Regulatory 
Enhancement Act''.

SEC. 2. TABLE OF CONTENTS.

Sec. 1. Short title.
Sec. 2. Table of contents.
         TITLE I--RESOLUTION OF NON-BANK FINANCIAL INSTITUTIONS

Sec. 101. Amendments to title 28 of the United States Code.
Sec. 102. Amendments to title 11 of the United States Code.
Sec. 103. Effective date; application of amendments.
            TITLE II--MARKET STABILITY AND CAPITAL ADEQUACY

Sec. 201. Establishment of Market Stability and Capital Adequacy Board.
Sec. 202. Functions of Board.
Sec. 203. Powers of Board.
Sec. 204. Responsibilities of Federal functional regulators.
Sec. 205. Staff of Board.
Sec. 206. Compensation and travel expenses.
      TITLE III--REGULATORY CONSOLIDATION AND CONSUMER PROTECTION

Sec. 301. Establishment.
Sec. 302. Board of Directors.
Sec. 303. Powers and duties of the FIR.
Sec. 304. Allocation of responsibility among FIR divisions.
Sec. 305. Technical and conforming amendments relating to transfers of 
                            functions to the FIR.
Sec. 306. Office of Comptroller of the Currency and position of 
                            Comptroller of the Currency abolished.
Sec. 307. Office of Thrift Supervision and position of Director of the 
                            Office of Thrift Supervision abolished.
Sec. 308. Savings provisions.
Sec. 309. References in Federal law to Federal banking agencies.
Sec. 310. National Credit Union Administration moved within the FIR.
Sec. 311. Office of Consumer Protection.
                    TITLE IV--FEDERAL RESERVE REFORM

Sec. 401. GAO authority to audit the Federal Reserve System.
Sec. 402. Monetary policy and inflation targets.
Sec. 403. Reforms of section 13 emergency powers.
            TITLE V--GOVERNMENT-SPONSORED ENTERPRISES REFORM

Sec. 501. Short title.
Sec. 502. Definitions.
Sec. 503. Termination of current conservatorship.
Sec. 504. Limitation of enterprise authority upon emergence from 
                            conservatorship.
Sec. 505. Requirement to periodically renew charter until wind down and 
                            dissolution.
Sec. 506. Required wind down of operations and dissolution of 
                            enterprise.
                 TITLE VI--CREDIT RATING AGENCY REFORM

Sec. 601. Clarification of designation.
Sec. 602. Elimination of security credit rating requirements in Federal 
                            law.
Sec. 603. Elimination of security credit rating requirements in 
                            regulations.
                    TITLE VII--ANTI-FRAUD PROVISIONS

Sec. 701. Authority to impose civil penalties in cease and desist 
                            proceedings.
Sec. 702. Formerly associated persons.
Sec. 703. Collateral bars.
Sec. 704. Unlawful margin lending.
Sec. 705. Nationwide service of subpoenas.
Sec. 706. Reauthorization of the Financial Crimes Enforcement Network.
Sec. 707. Fair fund improvements.
Sec. 708. Authority to contract for collection of delinquent judgments 
                            and orders.

         TITLE I--RESOLUTION OF NON-BANK FINANCIAL INSTITUTIONS

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

    Title 28 of the United States Code is amended--
            (1) in section 1408 by striking ``section 1409'' and 
        inserting ``sections 1409 and 1409A'',
            (2) by inserting after section 1409 the following:
``Sec. 1409A. Venue of cases involving non-bank financial institutions
    ``A case under chapter 14 may be commenced in the district court of 
the United States for the district--
            ``(1) in which the debtor has its principal place of 
        business or principal assets in the United States if a Federal 
        Reserve Bank is located in that district, or
            ``(2) if venue does not exist under paragraph (1), in which 
        there is a Federal Reserve Bank and in a Federal circuit in 
        which the debtor has its principal place of business or 
        principal assets in the United States.'', and
            (3) by amending the table of sections of chapter 87 of such 
        title to insert after the item relating to section 1408 the 
        following:

``1409A. Venue of cases involving non-bank financial institutions.''.

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

    (a) Definitions.--Section 101 of title 11, United States Code, is 
amended--
            (1) by inserting after paragraph (26) the following:
            ``(26A) The term `functional regulator' means the Federal 
        regulatory agency with the primary Federal regulatory authority 
        over the debtor, such as an agency listed in section 509 of the 
        Gramm-Leach-Bliley Act.'',
            (2) by redesignating paragraphs (38A) and (38B) as 
        paragraphs (38B) and (38C), respectively,
            (3) by inserting after paragraph (38) the following:
            ``(38A) the term `Market Stability and Capital Adequacy 
        Board' means the entity established in section 201 of the 
        Consumer Protection and Regulator Enhancement Act.'', and
            (4) by inserting after paragraph (40) the following:
            ``(40A) The term `non-bank financial institution' means an 
        institution the business of which is engaging in financial 
        activities that is not an insured depository institution.''.
    (b) Applicability of Chapters.--Section 103 of title 11, United 
States Code, is amended--
            (1) in subsection (a) by striking ``13'' and inserting 
        ``13, and 14'',
            (2) by redesignating subsection (k) as subsection (l), and
            (3) by inserting after subsection (j) the following:
    ``(k) Chapter 14 applies only in a case under such chapter.''.
    (c) Who May Be a Debtor.--Section 109 of title 11, United States 
Code, is amended--
            (1) in subsection (b)--
                    (A) in paragraph (2) by striking ``or'' at the end,
                    (B) in paragraph (3) by striking the period at the 
                end and insert and inserting ``; or'', and
                    (C) by adding at the end the following:
            ``(4) a non-bank financial institution that has not been a 
        debtor under chapter 14 of this title.'',
            (2) in subsection (d) by striking ``or commodity broker'' 
        and inserting ``, commodity broker, or a non-bank financial 
        institution'', and
            (3) by adding at the end the following:
    ``(i) Only a non-bank financial institution may be a debtor under 
chapter 14 of this title.''.
    (d) Involuntary Cases.--Section 303 of title 11, the United States 
Code, is amended--
            (1) in subsection (a) by striking ``or 11'' and inserting 
        ``, 11, or 14'', and
            (2) in subsection (b) by striking ``or 11'' and inserting 
        ``, 11, or 14''.
    (e) Obtaining Credit.--Section 364 of title 11, United States Code, 
is amended by adding at the end the following:
    ``(g) Notwithstanding any other provision of this section, the 
trustee may not, and the court may not authorize the trustee to, obtain 
credit, if the source of that credit either directly or indirectly is 
the United States.''.
    (f) Chapter 14.--Title 11, United States Code, is amended--
            (1) by inserting the following after chapter 13:

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

``1401. Inapplicability of other sections.
``1402. Applicability of chapter 11 to cases under this chapter.
``1403. Prepetition consultation.
``1404. Appointment of trustee.
``1405. Right to be heard.
``1406. Right to communicate.
``1407. Exemption with respect to certain contracts or agreements.
``1408. Conversion or dismissal.
``Sec. 1401. Inapplicability of other sections
    ``Except as provided in section 1408, sections 362(b)(6), 
362(b)(7), 559, 560, and 561 do not apply in a case under this chapter.
``Sec. 1402. Applicability of chapter 11 to cases under this chapter
    ``With the exception of sections 1104(d), 1109, 1112(a), 1115, and 
1116, subchapters I, II, and III of chapter 11 apply in a case under 
this chapter.
``Sec. 1403. Prepetition consultation
    ``(a) Subject to subsection (b)--
            ``(1) a non-bank financial institution may not be a debtor 
        under this chapter unless that institution has, at least 10 
        days prior to the date of the filing of the petition by such 
        institution, taken part in the consultation described in 
        subsection (c); and
            ``(2) a creditor may not commence an involuntary case under 
        this chapter unless, at least 10 days prior to the date of the 
        filing of the petition by such creditor, the creditor notifies 
        the non-bank financial institution, the functional regulator, 
        and the Market Stability and Capital Adequacy Board of its 
        intent to file a petition and requests a consultation as 
        described in subsection (c).
    ``(b) If the non-bank financial institution, the functional 
regulator, and the Market Stability and Capital Adequacy Board, in 
consultation with any agency charged with administering a nonbankruptcy 
insolvency regime for any component of the debtor, certify that the 
immediate filing of a petition under section 301 or 303 is necessary, 
or that an immediate filing would be in the interests of justice, a 
petition may be filed notwithstanding subsection (a).
    ``(c) The non-bank financial institution, the functional regulator, 
the Market Stability and Capital Adequacy Board, and any agency charged 
with administering a nonbankruptcy insolvency regime for any component 
of the debtor shall engage in prepetition consultation in order to 
attempt to avoid the need for the non-bank financial institution's 
liquidation or reorganization in bankruptcy, to make any liquidation or 
reorganization of the non-bank financial institution under this title 
more orderly, or to aid in the nonbankruptcy resolution of any of the 
non-bank financial institution's components under its nonbankruptcy 
insolvency regime. Such consultation shall specifically include the 
attempt to negotiate forbearance of claims between the non-bank 
financial institution and its creditors if such forbearance would 
likely help to avoid the commencement of a case under this title, would 
make any liquidation or reorganization under this title more orderly, 
or would aid in the nonbankruptcy resolution of any of the non-bank 
financial institution's components under its nonbankruptcy insolvency 
regime. Additionally, the consultation shall consider whether, if a 
petition is filed under section 301 or 303, the debtor should file a 
motion for an exemption authorized by section 1407.
    ``(d) The court may allow the consultation process to continue for 
30 days after the petition, upon motion by the debtor or a creditor. 
Any post-petition consultation proceedings authorized should be 
facilitated by the court's mediation services, under seal, and exclude 
ex parte communications.
    ``(e) The Market Stability and Capital Adequacy Board and the 
functional regulator shall publish and transmit to Congress a report 
documenting the course of any consultation. Such report shall be 
published and transmitted to Congress within 30 days of the conclusion 
of the consultation.
    ``(f) Nothing in this section shall be interpreted to set aside any 
of the limitations on the use of Federal funds set forth in the 
Consumer Protection and Regulator Enhancement Act or the amendments 
made by such Act.
``Sec. 1404. Appointment of trustee
    ``In applying section 1104 to a case under this chapter, if the 
court orders the appointment of a trustee or an examiner, if the 
trustee or an examiner dies or resigns during the case or is removed 
under section 324, or if a trustee fails to qualify under section 322, 
the functional regulator, in consultation with the Market Stability and 
Capital Adequacy Board, shall submit a list of five disinterested 
persons that are qualified and willing to serve as trustees in the case 
and the United States trustee shall appoint, subject to the court's 
approval, one of such persons to serve as trustee in the case.
``Sec. 1405. Right to be heard
    ``(a) The functional regulator, the Market Stability and Capital 
Adequacy Board, the Federal Reserve, the Department of the Treasury, 
the Securities and Exchange Commission, and any domestic or foreign 
agency charged with administering a nonbankruptcy insolvency regime for 
any component of the debtor may raise and may appear and be heard on 
any issue in a case under this chapter, but may not appeal from any 
judgment, order, or decree entered in the case.
    ``(b) A party in interest, including the debtor, the trustee, a 
creditors' committee, an equity security holders' committee, a 
creditor, an equity security holder, or any indenture trustee may 
raise, and may appear and be heard on, any issue in a case under this 
chapter.
``Sec. 1406. Right to communicate
    ``The court is entitled to communicate directly with, or to request 
information or assistance directly from, the functional regulator, the 
Market Stability and Capital Adequacy Board, the Board of Governors of 
the Federal Reserve System, the Department of the Treasury, or any 
agency charged with administering a nonbankruptcy insolvency regime for 
any component of the debtor, subject to the rights of a party in 
interest to notice and participation.
``Sec. 1407. Exemption with respect to certain contracts or agreements
    ``(a) Subject to subsection (b)--
            ``(1) upon motion of the debtor, consented to by the Market 
        Stability and Capital Adequacy Board--
                    ``(A) the debtor and the estate shall be exempt 
                from the operation of sections 362(b)(6), 362(b)(7), 
                559, 560, and 561;
                    ``(B) if the Market Stability and Capital Adequacy 
                Board consents to the filing of such motion by the 
                debtor, the Board shall inform the court of its reasons 
                for consenting; and
                    ``(C) the debtor may limit its motion, or the board 
                may limit its consent, to exempt the debtor and the 
                estate from the operation of section 362(b)(6), 
                362(b)(7), 559, 560, or 561, or any combination 
                thereof; and
            ``(2) if the Market Stability and Capital Adequacy Board 
        does not consent to the filing of a motion by the debtor under 
        paragraph (1), the debtor may file a motion to exempt the 
        debtor and the estate from the operation of sections 362(b)(6), 
        362(b)(7), 559, 560, and 561.
    ``(b) The court shall commence a hearing on a motion under 
subsection (a) not later than 5 days after the filing of the motion to 
determine whether to maintain, terminate, annul, modify, or condition 
the exemption under subsection (a)(1) or, in the case of a motion under 
subsection (a)(2), grant the exemption. The court shall request that 
the functional regulator and the Market Stability and Capital Adequacy 
Board file briefs on whether the court should maintain the exemption. 
The court shall decide the motion not later than 5 days after 
commencing such hearing unless--
            ``(1) the parties in interest consent to a extension for a 
        specific period of time; or
            ``(2) except with respect to an exemption from the 
        operation of section 559, the court sua sponte extends for 5 
        additional days the period for decision if such extension would 
        be in the interests of justice or is required by compelling 
        circumstances.
    ``(c) The court shall maintain, terminate, annul, modify, or 
condition the exemption under subsection (a)(1), or, in the case of a 
motion under subsection (a)(2), grant the exemption only upon showing 
of good cause. In determining whether good cause has been shown, the 
court shall balance the interests of both debtor and creditors while 
attempting to preserve the debtor's assets for repayment and 
reorganization of the debtors obligations, or to provide for a more 
orderly liquidation.
``Sec. 1408. Conversion or dismissal
    ``In applying section 1112 to a case under this chapter, the debtor 
may convert a case under this chapter to a case under chapter 7 of this 
title if the debtor may be a debtor under such chapter unless the 
debtor is not a debtor in possession.'', and
            (2) by amending the table of chapters of such title by 
        adding at the end the following:

``14. Adjustment to the Debts of a Non-Bank Financial           1401''.
                            Institution.

SEC. 103. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.

    (a) Effective Date.--Except as provided in subsection (b), this Act 
and the amendments made by this Act shall take effect on the date of 
the enactment of this Act.
    (b) Application of Amendments.--The amendments made by this Act 
shall apply only with respect to cases commenced under title 11 of the 
United States Code on or after the date of the enactment of this Act.

            TITLE II--MARKET STABILITY AND CAPITAL ADEQUACY

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

    (a) In General.--There is hereby established the Market Stability 
and Capital Adequacy Board (hereafter in this title referred to as the 
``Board'') as an independent establishment in the Executive Branch.
    (b) Constitution of Board.--Subject to paragraph (4), the Board 
shall have 11 members as follows:
            (1) Public members.--The following shall be members of the 
        Board--
                    (A) The Secretary of the Treasury.
                    (B) The Chairman of the Board of Governors of the 
                Federal Reserve System.
                    (C) The Chairman of the Securities and Exchange 
                Commission.
                    (D) The Chairperson of the Federal Deposit 
                Insurance Corporation.
                    (E) The Chairman of the Commodity Futures Trading 
                Commission.
                    (F) The Chairperson of the Financial Institutions 
                Regulator.
            (2) Private members.--The Board shall also have 5 members 
        appointed by the President, by and with the advise and consent 
        of the Senate, who shall be appointed from among individuals 
        who--
                    (A) are specially qualified to serve on the Board 
                by virtue of their education, training, and experience; 
                and
                    (B) are not officers or employees of the Federal 
                Government, including the Board of Governors of the 
                Federal Reserve System.
            (3) Chairperson.--The Secretary of the Treasury shall serve 
        as the Chairperson of the Board.
            (4) Director of fhfa as interim member.--Until such time as 
        the charters of the Federal National Mortgage Association and 
        the Federal Home Loan Mortgage Corporation are both repealed 
        pursuant to section 506(d), the Board shall consist of 12 
        members with the Director of the Federal Housing Finance Agency 
        serving as a public member under paragraph (1).
    (c) Appointments.--
            (1) Term.--
                    (A) In general.--Each appointed member shall be 
                appointed for a term of 5 years.
                    (B) Staggered terms.--Of the members of the Board 
                first appointed under subsection (b)(2), as designated 
                by the President at the time of appointment--
                            (i) 1 shall be appointed for a term of 5 
                        years;
                            (ii) 1 shall be appointed for a term of 4 
                        years;
                            (iii) 1 shall be appointed for a term of 3 
                        years;
                            (iv) 1 shall be appointed for a term of 2 
                        years; and
                            (v) 1 shall be appointed for a term of 1 
                        year.
            (2) Interim appointments.--Any member appointed to fill a 
        vacancy occurring before the expiration of the term for which 
        such member's predecessor was appointed shall be appointed only 
        for the remainder of such term.
            (3) Continuation of service.--Each appointed member may 
        continue to serve after the expiration of the term of office to 
        which such member was appointed until a successor has been 
        appointed and qualified.
            (4) Reappointment to a 2nd term.--Each member appointed to 
        a term on the Board under subsection (b)(2), including an 
        interim appointment under paragraph (2), may be reappointed by 
        the President to serve 1 additional term.
    (d) Vacancy.--
            (1) In general.--Any vacancy on the Board shall be filled 
        in the manner in which the original appointment was made.
            (2) Acting officials may serve.--In the event of a vacancy 
        in any position listed in subsection (b)(1) and pending the 
        appointment of a successor, or during the absence or disability 
        of the individual serving in such position, any acting official 
        in such position shall be a member of the Board while such 
        vacancy, absence or disability continues and the acting 
        official continues acting in such position.
    (e) Ineligibility for Other Offices.--
            (1) Postservice restriction.--No member of the Board may 
        hold any office, position, or employment in any financial 
        institution or affiliate of a financial institution during--
                    (A) the time such member is in office; and
                    (B) the 2-year period beginning on the date such 
                member ceases to serve on the Board.
            (2) Certification.--Upon taking office, each member of the 
        Board shall certify under oath that such member has complied 
        with this subsection and such certification shall be filed with 
        the secretary of the Board.
    (f) Qualifications; Initial Meeting.--
            (1) Political party affiliation.--Not more than 3 members 
        of the Board appointed under subsection (b)(2) shall be from 
        the same political party.
            (2) Qualifications generally.--It is the sense of the 
        Congress that individuals appointed to the Commission should be 
        prominent United States citizens, with national recognition and 
        significant depth of experience commensurate with the duties of 
        the Board.
            (3) Specific appointment qualifications for certain 
        appointed members.--
                    (A) State bank.--Of the members appointed to the 
                Board under subsection (b)(2), at least 1 shall be 
                appointed from among individuals who have had 
                experience as a State bank supervisor or senior 
                management executive with a State depository 
                institution.
                    (B) Insurance commissioner.--Of the members 
                appointed to the Board under subsection (b)(2), at 
                least 1 shall be appointed from among individuals who 
                have served as a State insurance commissioner or 
                supervisor.
            (4) Initial meeting.--The Board shall meet and begin the 
        operations of the Board as soon as practicable but not later 
        than the end of the 180-day period beginning the date of the 
        enactment of this Act.
    (g) Quorum.--Four of the members of the Board designated under 
subsection (b)(1) and 3 members of the Board appointed under (b)(2) 
shall constitute a quorum.
    (h) Quarterly Meetings.--The Board shall meet upon the call of the 
chairperson or a majority of the members at least once in each calendar 
quarter

SEC. 202. FUNCTIONS OF BOARD.

    (a) Principal Functions.--The principal functions of the Board 
shall be to--
            (1) monitor the interactions of various sectors of the 
        financial system; and
            (2) identify risks that could endanger the stability and 
        soundness of the system.
    (b) Specific Review Functions Included.--In carrying out the 
functions described in subsection (a), the Board shall--
            (1) review financial industry data collected from the 
        appropriate functional regulators;
            (2) review insurance industry data, in coordination with 
        State insurance supervisors, for all lines of insurance other 
        than health insurance;
            (3) monitor government policies and initiatives;
            (4) review risk management practices within financial 
        regulatory agencies;
            (5) review capital standards set by the appropriate 
        functional regulators and make recommendations to ensure 
        capital and leverage ratios match risks regulated entities are 
        taking on;
            (6) review transparency and regulatory understanding of 
        risk exposures in the over-the-counter derivatives markets and 
        make recommendations regarding the appropriate clearing of 
        trades in those markets through central counterparties;
            (7) make recommendations regarding any government or 
        industry policies and practices that are exacerbating systemic 
        risk; and
            (8) take such other actions and make such other 
        recommendations as the Board, in the discretion of the Board, 
        determines to be appropriate.
    (c) Reports to Federal Functional Regulators and the Congress.--The 
Board shall periodically make a report to the Congress and the 
functional regulators on the findings, conclusions, and recommendations 
of the Board in a manner and within a time frame that allows the 
Congress and such regulators to act to contain risks posed by specific 
firms, industry practices, activities and interactions of entities 
under different regulatory regimes, or government policies.
    (d) Testimony to Congress.--Not later than February 20 and July 20 
of each year, the Chairperson of the Board shall testify to the 
Congress at semiannual hearings before the Committee on Banking, 
Housing, and Urban Affairs of the Senate and the Committee on Financial 
Services of the House of Representatives, about the state of systemic 
risk in the financial services industry and proposals or 
recommendations by the Board to address any undue risk.
    (e) Rule of Construction.--No provision of this title shall be 
construed as giving the Board any enforcement authority over any 
financial institution.

SEC. 203. POWERS OF BOARD.

    (a) Contracting.--The Board may, to such extent and in such amounts 
as are provided in appropriation Acts, enter into contracts to enable 
the Board to discharge its duties under this title.
    (b)  Information From Federal Agencies.--
            (1) In general.--The Board may secure directly from any 
        executive department, agency, or independent establishment, or 
        any other instrumentality of the United States information and 
        recommendations for the purposes of this title.
            (2) Delivery of requested information.--Each executive 
        department, agency, or independent establishment, or any other 
        instrumentality of the United States shall, to the extent 
        authorized by law, furnish any information and recommendations 
        requested under paragraph (1) directly to the Board, upon 
        request made by the chairperson or any member designated by a 
        majority of the Commission.
            (3) Receipt, handling, storage, and dissemination.--
        Information shall only be received, handled, stored, and 
        disseminated by members of the Board and its staff consistent 
        with all applicable statutes, regulations, and Executive 
        orders.
    (c) Assistance From Federal Agencies.--
            (1) General services administration.--The Administrator of 
        General Services shall provide to the Board on a reimbursable 
        basis administrative support and other services for the 
        performance of the Commission's functions.
            (2) Other departments and agencies.--In addition to the 
        assistance prescribed in paragraph (1), departments and 
        agencies of the United States may provide to the Commission 
        such services, funds, facilities, staff, and other support 
        services as they may determine advisable and as may be 
        authorized by law, including agencies represented on the Board 
        under section 201(b)(1).

SEC. 204. RESPONSIBILITIES OF FEDERAL FUNCTIONAL REGULATORS.

    (a) Federal Functional Regulator Defined.--For purposes of this 
title, the term ``Federal functional regulator'' has the same meaning 
as in section 509(2) of the Gramm-Leach-Bliley Act, except that such 
term includes the Commodity Futures Trading Commission.
    (b) Assessments and Reviews.--In order to address current 
regulatory gaps, each Federal functional regulator shall, before each 
quarterly meeting of the Board,--
            (1) assess the effects on macroeconomic stability of the 
        activities of financial institutions that are subject to the 
        jurisdiction of such agency;
            (2) review how such financial institutions interact with 
        entities outside the jurisdiction of such agency; and
            (3) report the results of such assessment and review to the 
        Board, together with such recommendations for administrative 
        action as the agency determines to be appropriate.

SEC. 205. STAFF OF BOARD.

    (a) Appointment and Compensation.--The chairperson, in accordance 
with rules agreed upon by the Board and title 5, United States Code, 
may appoint and fix the compensation of a staff director and such other 
personnel as may be necessary to enable the Board to carry out its 
functions.
    (b) Detailees.--Any Federal Government employee may be detailed to 
the Board and such detailee shall retain the rights, status, and 
privileges of his or her regular employment without interruption.
    (c) Consultant Services.--The Board may procure the services of 
experts and consultants in accordance with section 3109 of title 5, 
United States Code, but at rates not to exceed the daily rate paid a 
person occupying a position at level IV of the Executive Schedule under 
section 5315 of title 5, United States Code.

SEC. 206. COMPENSATION AND TRAVEL EXPENSES.

    (a) Compensation.--Each member of the Board appointed under section 
201(b)(2) may be compensated at not to exceed the daily equivalent of 
the annual rate of basic pay in effect for a position at level IV of 
the Executive Schedule under section 5315 of title 5, United States 
Code, for each day during which that member is engaged in the actual 
performance of the duties of the Board.
    (b) Travel Expenses.--While away from their homes or regular places 
of business in the performance of services for the Board, members of 
the Board shall be allowed travel expenses, including per diem in lieu 
of subsistence, in the same manner as persons employed intermittently 
in the Government service are allowed expenses under section 5703(b) of 
title 5, United States Code.

      TITLE III--REGULATORY CONSOLIDATION AND CONSUMER PROTECTION

SEC. 301. ESTABLISHMENT.

    (a) In General.--There is hereby established in the executive 
branch of the Government an independent agency to be known as the 
Financial Institutions Regulator (hereafter in this title referred to 
as the ``FIR'').
    (b) Divisions of the FIR.--There are hereby established within the 
FIR--
            (1) a division to be known as the Federal Banking Division; 
        and
            (2) a division to be known as the State Banking Division;
    (c) Insured Depository Institution Defined.--For purposes of this 
title, the term ``insured depository institution'' has the meaning 
given to such term in section 3(c) of the Federal Deposit Insurance 
Act.

SEC. 302. BOARD OF DIRECTORS.

    (a) In General.--The management of the FIR shall be vested in a 
Board of Directors consisting of 5 members--
            (1) 1 of whom shall be the Chairman of the FIR and who 
        shall be appointed by the President, by and with the advice and 
        consent of the Senate;
            (2) 1 of whom shall be the head of the Federal Banking 
        Division and who shall be appointed by the President, by and 
        with the advice and consent of the Senate;
            (3) 1 of whom shall be the head of the State Banking 
        Division and who shall be appointed by the President, by and 
        with the advice and consent of the Senate;
            (4) 1 of whom shall be the Chairman of the National Credit 
        Union Administration; and
            (5) 1 of whom shall be the Chairperson of the Board of 
        Directors of the Federal Deposit Insurance Corporation.
    (b) Terms.--
            (1) 5-Year terms.--Each member appointed under paragraphs 
        (1), (2), and (3) of subsection (a) shall be appointed for a 
        term of 5 years.
            (2) Interim appointments.--Any member appointed to fill a 
        vacancy occurring before the end of the term to which such 
        member's predecessor was appointed shall be appointed only for 
        the remainder of such term.
            (3) Continuation of service.--Any member may continue to 
        serve after the expiration of the term of office to which such 
        member was appointed until a successor has been appointed and 
        confirmed.
    (c) Vacancy.--Any vacancy on the Board of Directors shall be filled 
in the manner in which the original appointment was made.
    (d) Ineligibility for Other Offices.--
            (1) Restrictions on employment by depository 
        institutions.--No member of the Board of Directors may hold any 
        office, position, or employment in any insured depository 
        institution or any affiliate (as defined in section 2(k) of the 
        Bank Holding Company Act of 1956) of an insured depository 
        institution during--
                    (A) the time such member is in office; and
                    (B) the 2-year period beginning on the date such 
                member ceases to serve on the Board of Directors.
            (2) Other restrictions during service as member.--No member 
        of the Board of Directors may--
                    (A) be an officer or director of any Federal 
                Reserve bank or Federal home loan bank; or
                    (B) hold any stock in any insured depository 
                institution or any affiliate (as defined in section 
                2(k) of the Bank Holding Company Act of 1956) of an 
                insured depository institution.
            (3) Certification.--Upon taking office, each member of the 
        Board of Directors shall file a certification under oath with 
        the secretary of the Board of Directors that such member has 
        complied with the requirements of this subsection.

SEC. 303. POWERS AND DUTIES OF THE FIR.

    (a) Regulation of National Banks.--
            (1) Transfer to the fir.--All functions of the Comptroller 
        of the Currency are hereby transferred to the FIR.
            (2) FIR powers.--The FIR shall have all powers, duties, and 
        authority which, before the date of the enactment of this Act, 
        were vested in the Comptroller of the Currency under any 
        provision of Federal law to the extent such provision applies 
        to national banks or the office, officers, or employees of the 
        Comptroller of the Currency.
    (b) Regulation of Member Banks, Bank Holding Companies and 
Affiliates, and Various International Banking Entities.--
            (1) Transfer to the fir.--All functions of the Board of 
        Governors of the Federal Reserve System (and any Federal 
        reserve bank) relating to--
                    (A) the supervision and regulation of banks which 
                are members of the Federal Reserve System,
                    (B) the supervision and regulation of bank holding 
                companies and any subsidiary or affiliate of a bank 
                holding company which is not a depository institution,
                    (C) the supervision and regulation of companies 
                operating under section 25 or 25A of the Federal 
                Reserve Act or the International Banking Act of 1978,
                    (D) the supervision and regulation of any company 
                which is subject to supervision and regulation by the 
                Board of Governors under any title of the Consumer 
                Credit Protection Act, and
                    (E) the supervision and regulation of any foreign 
                bank, any branch or agency of a foreign bank, and any 
                commercial lending company controlled by a foreign 
                bank,
        are hereby transferred to the FIR.
            (2) FIR powers.--The FIR shall have all powers, duties, and 
        authority which, before the date of the enactment of this Act, 
        were vested in the Board of Governors of the Federal Reserve 
        System under any provision of Federal law to the extent such 
        provisions apply to banks or other companies described in any 
        subparagraph of paragraph (1).
    (c) Regulation of Savings Associations and Savings and Loan Holding 
Companies.--
            (1) Transfer to the federal banking division.--All 
        functions of the Director of the Office of Thrift Supervision 
        are hereby transferred to the FIR.
            (2) FIR powers.--The FIR shall have all powers, duties, and 
        authority which, before the date of the enactment of this Act, 
        were vested in the Director of the Office of Thrift Supervision 
        under any provision of Federal law to the extent such provision 
        applies to savings associations, savings and loan holding 
        companies, or the office, officers, or employees of the 
        Director.
    (d) Regulation of State Nonmember Banks.--
            (1) Transfer to the fir.--All functions of the Federal 
        Deposit Insurance Corporation relating to the supervision and 
        regulation of State nonmember banks, including savings banks, 
        (other than insurance, conservatorship, or receivership 
        functions) and foreign banks with insured branches (as defined 
        in section 3(s)(3) of the Federal Deposit Insurance Act) are 
        hereby transferred to the FIR.
            (2) FIR powers.--The FIR shall have all powers, duties, and 
        authority which, before the date of the enactment of this Act, 
        were vested in the Federal Deposit Insurance Corporation under 
        any provision of Federal law to the extent such provisions 
        apply to the supervision and regulation of State nonmember 
        banks, including savings banks, (other than insurance, 
        conservatorship, or receivership functions) and foreign banks 
        with insured branches (as defined in section 3(s)(3) of the 
        Federal Deposit Insurance Act).
    (e) Regulations and Orders.--In addition to any authority under any 
provision referred to in subsection (a), (b), (c), or (d), the FIR may 
prescribe such regulations and issue such orders as the FIR may 
determine to be appropriate to carry out the purposes of this title and 
the powers and duties of the FIR under this title and any provision 
referred to in any such subsection.
    (f) No Intended Impact on Existing Rights and Judicial Precedent.--
Nothing in this section shall be construed--
            (1) to impact any existing right or obligation under any 
        function or power transferred to the FIR, solely by reason of 
        such transfer; or
            (2) to impact any judicial precedent established with 
        respect to any function or power transferred to the FIR, solely 
        by reason of such transfer.
    (g) Effective Date.--The provisions of this section shall take 
effect after the end of the 90-day period beginning on the date of the 
enactment of this Act.

SEC. 304. ALLOCATION OF RESPONSIBILITY AMONG FIR DIVISIONS.

    (a) Federal Banking Division.--The Federal Banking Division shall 
have the primary responsibility for carrying out the FIR's authority 
with respect to--
            (1) national banking associations;
            (2) foreign banks and Federal branches or agencies of a 
        foreign bank;
            (3) bank holding companies and any subsidiary or affiliate 
        of a bank holding company which is not a depository 
        institution, other than a bank holding company, subsidiary, or 
        affiliate that consists solely of State banks that are insured 
        banks (as such terms is defined in section 3(h) of the Federal 
        Deposit Insurance Act (12 U.S.C. 1813(h));
            (4) companies operating under section 25 or 25A of the 
        Federal Reserve Act or the International Banking Act of 1978;
            (5) commercial lending companies, other than a Federal 
        agency;
            (6) savings associations;
            (7) savings and loan holding companies; and
            (8) such additional areas as the Board of Directors may 
        prescribe.
    (b) State Banking Division.--The State Banking Division shall have 
the primary responsibility for carrying out the FIR's authority with 
respect to--
            (1) any State bank that is an insured bank (as such terms 
        is defined in section 3(h) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1813(h)));
            (2) any bank holding company or subsidiary or affiliate of 
        a bank holding company, if such bank holding company, 
        subsidiary, or affiliate consists solely of State banks 
        described in paragraph (1); and
            (3) such additional areas as the Board of Directors may 
        prescribe.

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

    (a) Appropriate Federal Banking Agency Redefined.--Section 3(q) of 
the Federal Deposit Insurance Act (12 U.S.C. 1813(q)) is amended to 
read as follows:
    ``(q) Appropriate Federal Banking Agency.--The term `appropriate 
Federal banking agency' means the Financial Institutions Regulator.''.
    (b) Members of FDIC Board.--Section 2(a)(1) of the Federal Deposit 
Insurance Act (12 U.S.C. 1812(a)(1)) is amended--
            (1) by striking subparagraph (A) and redesignating 
        subparagraphs (B) and (C) as subparagraphs (A) and (B), 
        respectively;
            (2) in subparagraph (A) (as so redesignated by paragraph 
        (1)), by striking ``Director of the Office of Thrift 
        Supervision'' and inserting ``Chairman of the Financial 
        Institutions Regulator''; and
            (3) in subparagraph (B) (as so redesignated by paragraph 
        (1)), by striking ``3'' and inserting ``4''.
    (c) Effective Date.--The provisions of this section shall take 
effect after the end of the 90-day period beginning on the date of the 
enactment of this Act.

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

    (a) In General.--Effective at the end of the 180-day period 
beginning on the date of the enactment of this Act, the Office of the 
Comptroller of the Currency and the position of Comptroller of the 
Currency are hereby abolished.
    (b) Technical and Conforming Amendments.--Effective at the end of 
the 180-day period beginning on the date of the enactment of this Act:
            (1) Chapter nine of title VII of the Revised Statutes is 
        amended by striking sections 324, 325, and 326.
            (2) Subchapter I of chapter 3 of title 31, United States 
        Code, is amended by striking section 307.

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

    (a) In General.--Effective at the end of the 180-day period 
beginning on the date of the enactment of this Act, the Office of 
Thrift Supervision and the position of Director of the Office of Thrift 
Supervision are hereby abolished.
    (b) Technical and Conforming Amendments.--Effective at the end of 
the 180-day period beginning on the date of the enactment of this Act:
            (1) Section 3 of the Home Owners' Loan Act (12 U.S.C. 
        1462a) is amended by striking subsections (a) and (b).
            (2) Subchapter I of chapter 3 of title 31, United States 
        Code, is amended by striking section 309.

SEC. 308. SAVINGS PROVISIONS.

    (a) Savings Provisions Relating to the Comptroller of the 
Currency.--
            (1) Existing rights, duties, and obligations not 
        affected.--Sections 303(a)(1) and 306 shall not affect the 
        validity of any right, duty, or obligation of the United 
        States, the Comptroller of the Currency, the Office of the 
        Comptroller of the Currency, or any other person, which--
                    (A) arises under or pursuant to any provision of 
                law referred to in section 303(a)(2); and
                    (B) existed on the day before the date of the 
                enactment of this Act.
            (2) Continuation of suits.--No action or other proceeding 
        commenced by or against the Comptroller of the Currency or the 
        Office of the Comptroller of the Currency shall abate by reason 
        of the enactment of this Act, except that the FIR shall be 
        substituted for the Comptroller or Office as a party to any 
        such action or proceeding.
    (b) Savings Provisions Relating to the Board of Governors of the 
Federal Reserve System.--
            (1) Existing rights, duties, and obligations not 
        affected.--Section 303(b)(1) shall not affect the validity of 
        any right, duty, or obligation of the United States, the Board 
        of Governors of the Federal Reserve System, or any other 
        person, which--
                    (A) arises under or pursuant to any provision of 
                law referred to in section 303(b)(2); and
                    (B) existed on the day before the date of the 
                enactment of this Act.
            (2) Continuation of suits.--No action or other proceeding 
        commenced by or against the Board of Governors of the Federal 
        Reserve System with respect to any function transferred to the 
        FIR shall abate by reason of the enactment of this Act, except 
        that the FIR shall be substituted for the Board of Governors as 
        a party to any such action or proceeding.
    (c) Savings Provisions Relating to the Director of the Office of 
Thrift Supervision.--
            (1) Existing rights, duties, and obligations not 
        affected.--Sections 303(c)(1) and 307 shall not affect the 
        validity of any right, duty, or obligation of the United 
        States, the Director of the Office of Thrift Supervision, the 
        Office of Thrift Supervision, or any other person, which--
                    (A) arises under or pursuant to any provision of 
                law referred to in section 303(c)(2); and
                    (B) existed on the day before the date of the 
                enactment of this Act.
            (2) Continuation of suits.--No action or other proceeding 
        commenced by or against the Director of the Office of Thrift 
        Supervision or the Office of Thrift Supervision shall abate by 
        reason of the enactment of this Act, except that the FIR shall 
        be substituted for the Director or Office as a party to any 
        such action or proceeding.
    (d) Savings Provisions Relating to the Federal Deposit Insurance 
Corporation.--
            (1) Existing rights, duties, and obligations not 
        affected.--Section 303(d)(1) shall not affect the validity of 
        any right, duty, or obligation of the United States, the 
        Federal Deposit Insurance Corporation, the Board of Directors 
        of such Corporation, or any other person, which--
                    (A) arises under or pursuant to any provision of 
                law referred to in section 303(d)(2); and
                    (B) existed on the day before the date of the 
                enactment of this Act.
            (2) Continuation of suits.--No action or other proceeding 
        commenced by or against the Federal Deposit Insurance 
        Corporation or the Board of Directors of such Corporation with 
        respect to any function transferred to the FIR shall abate by 
        reason of the enactment of this Act, except that the FIR may be 
        substituted for the Corporation or Board of Directors, as the 
        case may be, as a party to any such action or proceeding.
    (e) Continuation of Orders, Resolutions, Determinations, and 
Regulations.--All orders, resolutions, determinations, and regulations, 
which--
            (1) have been issued, made, prescribed, or allowed to 
        become effective by the Director of the Office of Thrift 
        Supervision, the Comptroller of the Currency, the Federal 
        Deposit Insurance Corporation, or the Board of Governors of the 
        Federal Reserve System (including orders, resolutions, 
        determinations, and regulations which relate to the conduct of 
        conservatorships and receiverships), or by a court of competent 
        jurisdiction, in the performance of functions which are 
        transferred by this Act, and
            (2) are in effect on the date this Act takes effect (or 
        become effective after such date pursuant to the terms of the 
        order, resolution, determination or regulation, as in effect on 
        such date),
shall continue in effect according to the terms of such orders, 
resolutions, determinations, and regulations and shall be enforceable 
by or against the FIR until modified, terminated, set aside, or 
superseded in accordance with applicable law by the FIR, by any court 
of competent jurisdiction, or by operation of law.
    (f) Effective Date.--The provisions of this section shall take 
effect after the end of the 90-day period beginning on the date of the 
enactment of this Act.

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

    (a) Comptroller of the Currency and Director of the Office of 
Thrift Supervision.--Any reference in any Federal law to the 
Comptroller of the Currency, the Office of the Comptroller of the 
Currency, the Director of the Office of Thrift Supervision, or the 
Office of Thrift Supervision shall be deemed to be a reference to the 
FIR.
    (b) Board of Governors of the Federal Reserve System.--Any 
reference in any Federal law to the Board of Governors of the Federal 
Reserve System in connection with any function of the Board under any 
provision of law referred to in section 304(b)(2) shall be deemed to be 
a reference to the FIR.
    (c) Federal Deposit Insurance Corporation.--Any reference in any 
Federal law to the Federal Deposit Insurance Corporation or the Board 
of Directors of such Corporation in connection with any function of the 
Corporation or Board of Directors under any provision of law referred 
to in section 303(d)(2) shall be deemed to be a reference to the FIR.
    (d) Effective Date.--The provisions of this section shall take 
effect after the end of the 90-day period beginning on the date of the 
enactment of this Act.

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

    (a) In General.--The Nation Credit Union Administration is hereby 
moved within the FIR and shall be maintained as a distinct entity 
within the FIR.
    (b) Effective Date.--The provisions of this section shall take 
effect after the end of the 90-day period beginning on the date of the 
enactment of this Act.

SEC. 311. OFFICE OF CONSUMER PROTECTION.

    (a) Office of Consumer Protection.--There is hereby established 
within the FIR an Office of Consumer Protection (hereinafter in this 
section referred to as the ``Office'').
    (b) Delegation of Authority to the Office.--The Office shall have 
the primary responsibility for carrying out the FIR's authority with 
respect to laws and regulations relating to consumer protection, 
including the authority of the FIR under the Consumer Credit Protection 
Act.
    (c) Rulemaking Approval.--No rule or regulation issued by the 
Office shall take effect unless the Board of Directors of the FIR 
approves such rule or regulation.
    (d) Consumer Complaint Hotline and Website.--The Office shall 
establish a toll-free hotline and a website for consumers to contact 
regarding inquiries or complaints related to insured depository 
institutions. Such hotline and website shall then refer such inquiries 
or complaints to the appropriate FIR division, which will then respond 
to the inquiry or complaint.
    (e) Disclosure Review.--Not less than once every 7 years, the 
Office shall undertake a comprehensive review of all public disclosures 
(including policies, procedures, guidelines, standards, and regulatory 
filings) made by the FIR and each division of the FIR. In making such 
review the Office shall perform a cost and benefit analysis of each 
such disclosure and determine if the policy of the FIR towards such 
disclosure should remain the same or be revised.
    (f) Consumer Testing Requirement.--Before prescribing any 
regulation pursuant to the authority of the FIR under the Consumer 
Credit Protection Act, the Office shall carry out consumer testing with 
respect to such regulation.
    (g) Periodic Review of Regulations.--
            (1) Review.--Not less than once every 7 years, the Office 
        shall undertake a comprehensive review of all regulations 
        issued by the Office, the FIR, or any entity preceding the FIR, 
        with respect to the authority of the FIR under the Consumer 
        Credit Protection Act. In making such review, the Office shall 
        perform a cost and benefit analysis of each regulation and 
        determine if such regulation should remain the same or if such 
        regulation should be revised.
            (2) Report.--After performing a review required by 
        paragraph (1), the Office shall issue a report to the Congress 
        describing the review process, any determinations made by the 
        Office, and any revisions to regulations that the Office 
        determined were needed.

                    TITLE IV--FEDERAL RESERVE REFORM

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

    (a) In General.--Subsection (b) of section 714 of title 31, United 
States Code, is amended by striking all after ``shall audit an agency'' 
and inserting a period.
    (b) Audit.--Section 714 of title 31, United States Code, is amended 
by adding at the end the following new subsection:
    ``(e) Audit and Report of the Federal Reserve System.--
            ``(1) In general.--The audit of the Board of Governors of 
        the Federal Reserve System and the Federal reserve banks under 
        subsection (b) shall be completed before the end of 2010.
            ``(2) Report.--
                    ``(A) Required.--A report on the audit referred to 
                in paragraph (1) shall be submitted by the Comptroller 
                General to the Congress before the end of the 90-day 
                period beginning on the date on which such audit is 
                completed and made available to the Speaker of the 
                House, the majority and minority leaders of the House 
                of Representatives, the majority and minority leaders 
                of the Senate, the Chairman and Ranking Member of the 
                committee and each subcommittee of jurisdiction in the 
                House of Representatives and the Senate, and any other 
                Member of Congress who requests it.
                    ``(B) Contents.--The report under subparagraph (A) 
                shall include a detailed description of the findings 
                and conclusion of the Comptroller General with respect 
                to the audit that is the subject of the report, 
                together with such recommendations for legislative or 
                administrative action as the Comptroller General may 
                determine to be appropriate.''.

SEC. 402. MONETARY POLICY AND INFLATION TARGETS.

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

``SEC. 2A. MONETARY POLICY.

    ``(a) Price Stability.--The Board and the Federal Open Market 
Committee shall--
            ``(1) establish an explicit numerical definition of the 
        term `price stability';
            ``(2) implement such definition through inflation targets; 
        and
            ``(3) maintain a monetary policy that effectively promotes 
        long-term price stability.
    ``(b) Market Stability and Liquidity.--Subsection (a) shall not be 
construed as a limitation on the authority or responsibility of the 
Board--
            ``(1) to provide liquidity to markets in the event of a 
        disruption that threatens the smooth functioning and stability 
        of the financial sector; or
            ``(2) to serve as a lender of last resort under this Act 
        when the Board determines such action is necessary.''.

SEC. 403. REFORMS OF SECTION 13 EMERGENCY POWERS.

    (a) Restrictions on Emergency Powers.--The third undesignated 
paragraph of section 13 of the Federal Reserve Act is amended--
            (1) by striking ``In unusual and exigent'' and inserting 
        the following:
            ``(3) Emergency authority.--
                    ``(A) In general.--In unusual and exigent''; and
            (2) by adding at the end the following new subparagraph:
                    ``(B) Requirement for broad availability of 
                discounts.--Subject to the limitations provided under 
                subparagraph (A), any authorization made pursuant to 
                the authority provided under subparagraph (A) shall 
                require discounts to be made broadly available to 
                individuals, partnerships, and corporations within the 
                market sector for which such authorization is being 
                made.
                    ``(C) Transparency and oversight.--
                            ``(i) Secretary of the treasury approval 
                        required; notice to the congress.--No 
                        authorization may be made pursuant to the 
                        authority provided under subparagraph (A) 
                        unless--
                                    ``(I) such authorization is first 
                                approved by the Secretary of the 
                                Treasury; and
                                    ``(II) the Secretary of the 
                                Treasury issues a notice to the 
                                Congress detailing what authorization 
                                the Secretary has approved.
                            ``(ii) Programs moved on-budget after 90 
                        days.--On and after the date that is 90 days 
                        after the date on which any authorization is 
                        made pursuant to the authority provided under 
                        subparagraph (A), all receipts and 
                        disbursements resulting from such authorization 
                        shall be counted as new budget authority, 
                        outlays, receipts, or deficit or surplus for 
                        purposes of--
                                    ``(I) the budget of the United 
                                States Government as submitted by the 
                                President;
                                    ``(II) the congressional budget; 
                                and
                                    ``(III) the Balanced Budget and 
                                Emergency Deficit Control Act of 1985.
                    ``(D) Joint resolution of disapproval.--
                            ``(i) In general.--With respect to an 
                        authorization made pursuant to the authority 
                        provided under subparagraph (A), if, during the 
                        90-day period beginning on the date the 
                        Congress receives a notice described under 
                        subparagraph (C)(i)(II) with respect to such 
                        authorization, there is enacted into law a 
                        joint resolution disapproving such 
                        authorization, any action taken under such 
                        authorization must be discontinued and unwound 
                        not later than the end of the 180-day period 
                        beginning on the date that such authorization 
                        was made.
                            ``(ii) Contents of joint resolution.--For 
                        the purpose of this paragraph, the term `joint 
                        resolution' means only a joint resolution--
                                    ``(I) that is introduced not later 
                                than 3 calendar days after the date on 
                                which the notice referred to in clause 
                                (i) is received by the Congress;
                                    ``(II) which does not have a 
                                preamble;
                                    ``(III) the title of which is as 
                                follows: `Joint resolution relating to 
                                the disapproval of authorization under 
                                the emergency powers of the Federal 
                                Reserve Act'; and
                                    ``(IV) the matter after the 
                                resolving clause of which is as 
                                follows: `That Congress disapproves the 
                                authorization contained in the notice 
                                submitted to the Congress by the 
                                Secretary of the Treasury on the date 
                                of _______ relating to _______.' (The 
                                blank spaces being appropriately filled 
                                in.).
                    ``(E) Fast track consideration in house of 
                representatives.--
                            ``(i) Reconvening.--Upon receipt of a 
                        notice referred to in subparagraph (D)(i), the 
                        Speaker, if the House would otherwise be 
                        adjourned, shall notify the Members of the 
                        House that, pursuant to this section, the House 
                        shall convene not later than the second 
                        calendar day after receipt of such report.
                            ``(ii) Reporting and discharge.--Any 
                        committee of the House of Representatives to 
                        which a joint resolution is referred shall 
                        report it to the House not later than 5 
                        calendar days after the date of receipt of the 
                        notice referred to in subparagraph (D)(i). If a 
                        committee fails to report the joint resolution 
                        within that period, the committee shall be 
                        discharged from further consideration of the 
                        joint resolution and the joint resolution shall 
                        be referred to the appropriate calendar.
                            ``(iii) Proceeding to consideration.--After 
                        each committee authorized to consider a joint 
                        resolution reports it to the House or has been 
                        discharged from its consideration, it shall be 
                        in order, not later than the sixth day after 
                        Congress receives the notice referred to in 
                        subparagraph (D)(i), to move to proceed to 
                        consider the joint resolution in the House. All 
                        points of order against the motion are waived. 
                        Such a motion shall not be in order after the 
                        House has disposed of a motion to proceed on 
                        the joint resolution. The previous question 
                        shall be considered as ordered on the motion to 
                        its adoption without intervening motion. The 
                        motion shall not be debatable. A motion to 
                        reconsider the vote by which the motion is 
                        disposed of shall not be in order.
                            ``(iv) Consideration.--The joint resolution 
                        shall be considered as read. All points of 
                        order against the joint resolution and against 
                        its consideration are waived. The previous 
                        question shall be considered as ordered on the 
                        joint resolution to its passage without 
                        intervening motion except two hours of debate 
                        equally divided and controlled by the proponent 
                        and an opponent. A motion to reconsider the 
                        vote on passage of the joint resolution shall 
                        not be in order.
                    ``(F) Fast track consideration in senate.--
                            ``(i) Reconvening.--Upon receipt of a 
                        notice referred to in subparagraph (D)(i), if 
                        the Senate has adjourned or recessed for more 
                        than 2 days, the majority leader of the Senate, 
                        after consultation with the minority leader of 
                        the Senate, shall notify the Members of the 
                        Senate that, pursuant to this section, the 
                        Senate shall convene not later than the second 
                        calendar day after receipt of such message.
                            ``(ii) Placement on calendar.--Upon 
                        introduction in the Senate, the joint 
                        resolution shall be placed immediately on the 
                        calendar.
                            ``(iii) Floor consideration.--
                                    ``(I) In general.--Notwithstanding 
                                Rule XXII of the Standing Rules of the 
                                Senate, it is in order at any time 
                                during the period beginning on the 4th 
                                day after the date on which Congress 
                                receives a notice referred to in 
                                subparagraph (D)(i) and ending on the 
                                6th day after the date on which 
                                Congress receives a notice referred to 
                                in subparagraph (D)(i) (even though a 
                                previous motion to the same effect has 
                                been disagreed to) to move to proceed 
                                to the consideration of the joint 
                                resolution, and all points of order 
                                against the joint resolution (and 
                                against consideration of the joint 
                                resolution) are waived. The motion to 
                                proceed is not debatable. The motion is 
                                not subject to a motion to postpone. A 
                                motion to reconsider the vote by which 
                                the motion is agreed to or disagreed to 
                                shall not be in order. If a motion to 
                                proceed to the consideration of the 
                                resolution is agreed to, the joint 
                                resolution shall remain the unfinished 
                                business until disposed of.
                                    ``(II) Debate.--Debate on the joint 
                                resolution, and on all debatable 
                                motions and appeals in connection 
                                therewith, shall be limited to not more 
                                than 10 hours, which shall be divided 
                                equally between the majority and 
                                minority leaders or their designees. A 
                                motion further to limit debate is in 
                                order and not debatable. An amendment 
                                to, or a motion to postpone, or a 
                                motion to proceed to the consideration 
                                of other business, or a motion to 
                                recommit the joint resolution is not in 
                                order.
                                    ``(III) Vote on passage.--The vote 
                                on passage shall occur immediately 
                                following the conclusion of the debate 
                                on a joint resolution, and a single 
                                quorum call at the conclusion of the 
                                debate if requested in accordance with 
                                the rules of the Senate.
                                    ``(IV) Rulings of the chair on 
                                procedure.--Appeals from the decisions 
                                of the Chair relating to the 
                                application of the rules of the Senate, 
                                as the case may be, to the procedure 
                                relating to a joint resolution shall be 
                                decided without debate.
                    ``(G) Rules relating to senate and house of 
                representatives.--
                            ``(i) Coordination with action by other 
                        house.--If, before the passage by one House of 
                        a joint resolution of that House, that House 
                        receives from the other House a joint 
                        resolution, then the following procedures shall 
                        apply:
                                    ``(I) The joint resolution of the 
                                other House shall not be referred to a 
                                committee.
                                    ``(II) With respect to a joint 
                                resolution of the House receiving the 
                                resolution--
                                            ``(aa) the procedure in 
                                        that House shall be the same as 
                                        if no joint resolution had been 
                                        received from the other House; 
                                        but
                                            ``(bb) the vote on passage 
                                        shall be on the joint 
                                        resolution of the other House.
                            ``(ii) Treatment of joint resolution of 
                        other house.--If one House fails to introduce 
                        or consider a joint resolution under this 
                        section, the joint resolution of the other 
                        House shall be entitled to expedited floor 
                        procedures under this section.
                            ``(iii) Treatment of companion measures.--
                        If, following passage of the joint resolution 
                        in the Senate, the Senate then receives the 
                        companion measure from the House of 
                        Representatives, the companion measure shall 
                        not be debatable.
                            ``(iv) Vetoes.--If the President vetoes the 
                        joint resolution, debate on a veto message in 
                        the Senate under this section shall be 1 hour 
                        equally divided between the majority and 
                        minority leaders or their designees.
                            ``(v) Rules of house of representatives and 
                        senate.--This subparagraph and subparagraphs 
                        (D), (E), and (F) are enacted by Congress--
                                    ``(I) as an exercise of the 
                                rulemaking power of the Senate and 
                                House of Representatives, respectively, 
                                and as such it is deemed a part of the 
                                rules of each House, respectively, but 
                                applicable only with respect to the 
                                procedure to be followed in that House 
                                in the case of a joint resolution, and 
                                it supersedes other rules only to the 
                                extent that it is inconsistent with 
                                such rules; and
                                    ``(II) with full recognition of the 
                                constitutional right of either House to 
                                change the rules (so far as relating to 
                                the procedure of that House) at any 
                                time, in the same manner, and to the 
                                same extent as in the case of any other 
                                rule of that House.''.
    (b) Current Programs Moved On-Budget.--Not later than 90 days after 
the date of the enactment of this Act, all receipts and disbursements 
resulting from any authorization made before the date of the enactment 
of this Act pursuant to the authority granted by the third undesignated 
paragraph of section 13 of the Federal Reserve Act shall be counted as 
new budget authority, outlays, receipts, or deficit or surplus for 
purposes of--
            (1) the budget of the United States Government as submitted 
        by the President;
            (2) the congressional budget; and
            (3) the Balanced Budget and Emergency Deficit Control Act 
        of 1985.

            TITLE V--GOVERNMENT-SPONSORED ENTERPRISES REFORM

SEC. 501. SHORT TITLE.

    This title may be cited as the ``Government-Sponsored Enterprises 
Free Market Reform Act of 2009''.

SEC. 502. DEFINITIONS.

    For purposes of this title, the following definitions shall apply:
            (1) Charter.--The term ``charter'' means--
                    (A) with respect to the Federal National Mortgage 
                Association, the Federal National Mortgage Association 
                Charter Act (12 U.S.C. 1716 et seq.); and
                    (B) with respect to the Federal Home Loan Mortgage 
                Corporation, the Federal Home Loan Mortgage Corporation 
                Act (12 U.S.C. 1451 et seq.).
            (2) Director.--The term ``Director'' means the Director of 
        the Federal Housing Finance Agency.
            (3) Enterprise.--The term ``enterprise'' means--
                    (A) the Federal National Mortgage Association; and
                    (B) the Federal Home Loan Mortgage Corporation.
            (4) Guarantee.--The term ``guarantee'' means, with respect 
        to an enterprise, the credit support of the enterprise that is 
        provided by the Federal Government through its charter as a 
        Government-sponsored enterprise.

SEC. 503. TERMINATION OF CURRENT CONSERVATORSHIP.

    (a) In General.--Upon the expiration of the period referred to in 
subsection (b), the Director of the Federal Housing Finance Agency 
shall determine, with respect to each enterprise, if the enterprise is 
financially viable at that time and--
            (1) if the Director determines that the enterprise is 
        financially viable, immediately take all actions necessary to 
        terminate the conservatorship for each of the enterprises; or
            (2) if the Director determines that the enterprise is not 
        financially viable, immediately appoint the Federal Housing 
        Finance Agency as receiver under section 1367 of the Federal 
        Housing Enterprises Financial Safety and Soundness Act of 1992 
        and carry out such receivership under the authority of such 
        section.
    (b) Timing.--The period referred to in this subsection is, with 
respect to an enterprise--
            (1) except as provided in paragraph (2), the 24-month 
        period beginning upon the date of the enactment of this Act; or
            (2) if the Director determines before the expiration of the 
        period referred to in paragraph (1) that the financial markets 
        would be adversely affected without the extension of such 
        period under this paragraph with respect to that enterprise, 
        the 30-month period beginning upon the date of the enactment of 
        this Act.
    (c) Financial Viability.--The Director may not determine that an 
enterprise is financially viable for purposes of subsection (a) if the 
Director determines that any of the conditions for receivership set 
forth in paragraph (3) or (4) of section 1367(a) of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 
4617(a)) exists at the time with respect to the enterprise.

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

    (a) Revised Authority.--Upon the expiration of the period referred 
to in section 503(b), if the Director makes the determination under 
section 503(a)(1), the following provisions shall take effect:
            (1) Portfolio limitations.--Subtitle B of title XIII of the 
        Housing and Community Development Act of 1992 (12 U.S.C. 4611 
        et seq.) is amended by adding at the end the following new 
        section:

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

    ``(a) Restriction.--No enterprise shall own, as of any applicable 
date in this subsection or thereafter, mortgage assets in excess of--
            ``(1) upon the expiration of the period referred to in 
        section 503(b) of the Government-Sponsored Enterprises Free 
        Market Reform Act of 2009, $850,000,000,000; or
            ``(2) on December 31 of each year thereafter, 80.0 percent 
        of the aggregate amount of mortgage assets of the enterprise as 
        of December 31 of the immediately preceding calendar year;
except that in no event shall an enterprise be required under this 
section to own less than $250,000,000,000 in mortgage assets.
    ``(b) Definition of Mortgage Assets.--For purposes of this section, 
the term `mortgage assets' means, with respect to an enterprise, assets 
of such enterprise consisting of mortgages, mortgage loans, mortgage-
related securities, participation certificates, mortgage-backed 
commercial paper, obligations of real estate mortgage investment 
conduits and similar assets, in each case to the extent such assets 
would appear on the balance sheet of such enterprise in accordance with 
generally accepted accounting principles in effect in the United States 
as of September 7, 2008 (as set forth in the opinions and 
pronouncements of the Accounting Principles Board and the American 
Institute of Certified Public Accountants and statements and 
pronouncements of the Financial Accounting Standards Board from time to 
time; and without giving any effect to any change that may be made 
after September 7, 2008, in respect of Statement of Financial 
Accounting Standards No. 140 or any similar accounting standard).''.
            (2) Increase in minimum capital requirement.--Section 1362 
        of the Federal Housing Enterprises Financial Safety and 
        Soundness Act of 1992 (12 U.S.C. 4612), as amended by section 
        1111 of the Housing and Economic Recovery Act of 2008 (Public 
        Law 110-289), is amended--
                    (A) in subsection (a), by striking ``For purposes 
                of this subtitle, the minimum capital level for each 
                enterprise shall be'' and inserting ``The minimum 
                capital level established under subsection (g) for each 
                enterprise may not be lower than'';
                    (B) in subsection (c)--
                            (i) by striking ``subsections (a) and'' and 
                        inserting ``subsection'';
                            (ii) by striking ``regulated entities'' the 
                        first place such term appears and inserting 
                        ``Federal Home Loan Banks'';
                            (iii) by striking ``for the enterprises,'';
                            (iv) by striking ``, or for both the 
                        enterprises and the banks,'';
                            (v) by striking ``the level specified in 
                        subsection (a) for the enterprises or''; and
                            (vi) by striking ``the regulated entities 
                        operate'' and inserting ``such banks operate'';
                    (C) in subsection (d)(1)--
                            (i) by striking ``subsections (a) and'' and 
                        inserting ``subsection''; and
                            (ii) by striking ``regulated entity'' each 
                        place such term appears and inserting ``Federal 
                        home loan bank'';
                    (D) in subsection (e), by striking ``regulated 
                entity'' each place such term appears and inserting 
                ``Federal home loan bank'';
                    (E) in subsection (f)--
                            (i) by striking ``the amount of core 
                        capital maintained by the enterprises,''; and
                            (ii) by striking ``regulated entities'' and 
                        inserting ``banks''; and
                    (F) by adding at the end the following new 
                subsection:
    ``(g) Establishment of Revised Minimum Capital Levels.--
            ``(1) In general.--The Director shall cause the enterprises 
        to achieve and maintain adequate capital by establishing 
        minimum levels of capital for the enterprises and by using such 
        other methods as the Director deems appropriate.
            ``(2) Authority.--The Director shall have the authority to 
        establish such minimum level of capital for an enterprise in 
        excess of the level specified under subsection (a) as the 
        Director, in the Director's discretion, deems to be necessary 
        or appropriate in light of the particular circumstances of the 
        enterprise.
    ``(h) Failure To Maintain Revised Minimum Capital Levels.--
            ``(1) Unsafe and unsound practice or condition.--Failure of 
        an enterprise to maintain capital at or above its minimum level 
        as established pursuant to subsection (c) of this section may 
        be deemed by the Director, in his discretion, to constitute an 
        unsafe and unsound practice or condition within the meaning of 
        this title.
            ``(2) Directive to achieve capital level.--
                    ``(A) Authority.--In addition to, or in lieu of, 
                any other action authorized by law, including paragraph 
                (1), the Director may issue a directive to an 
                enterprise that fails to maintain capital at or above 
                its required level as established pursuant to 
                subsection (c) of this section.
                    ``(B) Plan.--Such directive may require the 
                enterprise to submit and adhere to a plan acceptable to 
                the Director describing the means and timing by which 
                the enterprise shall achieve its required capital 
                level.
                    ``(C) Enforcement.--Any such directive issued 
                pursuant to this paragraph, including plans submitted 
                pursuant thereto, shall be enforceable under the 
                provisions of subtitle C of this title to the same 
                extent as an effective and outstanding order issued 
                pursuant to subtitle C of this title which has become 
                final.
            ``(3) Adherence to plan.--
                    ``(A) Consideration.--The Director may consider 
                such enterprise's progress in adhering to any plan 
                required under this subsection whenever such enterprise 
                seeks the requisite approval of the Director for any 
                proposal which would divert earnings, diminish capital, 
                or otherwise impede such enterprise's progress in 
                achieving its minimum capital level.
                    ``(B) Denial.--The Director may deny such approval 
                where it determines that such proposal would adversely 
                affect the ability of the enterprise to comply with 
                such plan.''.
            (3) Repeal of increases to conforming loan limits.--
                    (A) Repeal of temporary increases.--
                            (i) Economic stimulus act of 2008.--Section 
                        201 of the Economic Stimulus Act of 2008 
                        (Public Law 110-185) is hereby repealed.
                            (ii) American recovery and reinvestment act 
                        of 2009.--Section 1203 of division A of the 
                        American Recovery and Reinvestment Act of 2009 
                        (Public Law 111-5; 123 Stat. 225) is hereby 
                        repealed.
                    (B) Repeal of general limit and permanent high-cost 
                area increase.--Paragraph (2) of section 302(b) of the 
                Federal National Mortgage Association Charter Act (12 
                U.S.C. 1717(b)(2)) and paragraph (2) of section 305(a) 
                of the Federal Home Loan Mortgage Corporation Act (12 
                U.S.C. 1454(a)(2)) are each amended to read as such 
                sections were in effect immediately before the 
                enactment of the Housing and Economic Recovery Act of 
                2008 (Public Law 110-289).
                    (C) Repeal of new housing price index.--Section 
                1322 of the Federal Housing Enterprises Financial 
                Safety and Soundness Act of 1992, as added by section 
                1124(d) of the Housing and Economic Recovery Act of 
                2008 (Public Law 110-289), is hereby repealed.
                    (D) Repeal.--Section 1124 of the Housing and 
                Economic Recovery Act of 2008 (Public Law 110-289) is 
                hereby repealed.
                    (E) Establishment of conforming loan limit.--For 
                the year in which the expiration of the period referred 
                to in section 503(b) of this section occurs, the 
                limitations governing the maximum original principal 
                obligation of conventional mortgages that may be 
                purchased by the Federal National Mortgage Association 
                and the Federal Home Loan Mortgage Corporation, 
                referred to in section 302(b)(2) of the Federal 
                National Mortgage Association Charter Act (12 U.S.C. 
                1717(b)(2)) and section 305(a)(2) of the Federal Home 
                Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)), 
                respectively, shall be considered to be--
                            (i) $417,000 for a mortgage secured by a 
                        single-family residence,
                            (ii) $533,850 for a mortgage secured by a 
                        2-family residence,
                            (iii) $645,300 for a mortgage secured by a 
                        3-family residence, and
                            (iv) $801,950 for a mortgage secured by a 
                        4-family residence,
                and such limits shall be adjusted effective each 
                January 1 thereafter in accordance with such sections 
                302(b)(2) and 305(a)(2).
                    (F) Prohibition of purchase of mortgages exceeding 
                median area home price.--
                            (i) Fannie mae.--Section 302(b)(2) of the 
                        Federal National Mortgage Association Charter 
                        Act (12 U.S.C. 1717(b)(2)) is amended by adding 
                        at the end the following new sentence: 
                        ``Notwithstanding any other provision of this 
                        title, the corporation may not purchase any 
                        mortgage for a property having a principal 
                        obligation that exceeds the median home price, 
                        for properties of the same size, for the area 
                        in which such property subject to the mortgage 
                        is located.''.
                            (ii) Freddie mac.--Section 305(a)(2) of the 
                        Federal Home Loan Mortgage Corporation Act (12 
                        U.S.C. 1454(a)(2)) is amended by adding at the 
                        end the following new sentence: 
                        ``Notwithstanding any other provision of this 
                        title, the Corporation may not purchase any 
                        mortgage for a property having a principal 
                        obligation that exceeds the median home price, 
                        for properties of the same size, for the area 
                        in which such property subject to the mortgage 
                        is located.''.
            (4) Requirement to pay state and local taxes.--
                    (A) Fannie mae.--Paragraph (2) of section 309(c) of 
                the Federal National Mortgage Association Charter Act 
                (12 U.S.C. 1723a(c)(2)) is amended--
                            (i) by striking ``shall be exempt from'' 
                        and inserting ``shall be subject to''; and
                            (ii) by striking ``except that any'' and 
                        inserting ``and any''.
                    (B) Freddie mac.--Section 303(e) of the Federal 
                Home Loan Mortgage Corporation Act (12 U.S.C. 1452(e)) 
                is amended--
                            (i) by striking ``shall be exempt from'' 
                        and inserting ``shall be subject to''; and
                            (ii) by striking ``except that any'' and 
                        inserting ``and any''.
            (5) Repeals relating to registration of securities.--
                    (A) Fannie mae.--
                            (i) Mortgage-backed securities.--Section 
                        304(d) of the Federal National Mortgage 
                        Association Charter Act (12 U.S.C. 1719(d)) is 
                        amended by striking the fourth sentence.
                            (ii) Subordinate obligations.--Section 
                        304(e) of the Federal National Mortgage 
                        Association Charter Act (12 U.S.C. 1719(e)) is 
                        amended by striking the fourth sentence.
                    (B) Freddie mac.--Section 306 of the Federal Home 
                Loan Mortgage Corporation Act (12 U.S.C. 1455) is 
                amended by striking subsection (g).
            (6) Recoupment of costs for federal guarantee.--
                    (A) Assessments.--The Director of the Federal 
                Housing Finance Agency shall establish and collect from 
                each enterprise assessments in the amount determined 
                under subparagraph (B). In determining the method and 
                timing for making such assessments, the Director shall 
                take into consideration the determinations and 
                conclusions of the study under subsection (b) of this 
                section.
                    (B) Determination of costs of guarantee.--
                Assessments under subparagraph (A) with respect to an 
                enterprise shall be in such amount as the Director 
                determines necessary to recoup to the Federal 
                Government the full value of the benefit the enterprise 
                receives from the guarantee provided by the Federal 
                Government for the obligations and financial viability 
                of the enterprise, based upon the dollar value of such 
                benefit in the market to such enterprise when not 
                operating under conservatorship or receivership. To 
                determine such amount, the Director shall establish a 
                risk-based pricing mechanism as the Director considers 
                appropriate, taking into consideration the 
                determinations and conclusions of the study under 
                subsection (b) of this section.
                    (C) Treatment of recouped amounts.--The Director 
                shall cover into the general fund of the Treasury any 
                amounts received from assessments made under this 
                paragraph.
    (b) GAO Study Regarding Recoupment of Costs for Federal Government 
Guarantee.--The Comptroller General of the United States shall conduct 
a study to determine a risk-based pricing mechanism to accurately 
determine the value of the benefit the enterprises receive from the 
guarantee provided by the Federal Government for the obligations and 
financial viability of the enterprises. Such study shall establish a 
dollar value of such benefit in the market to each enterprise when not 
operating under conservatorship or receivership, shall analyze various 
methods of the Federal Government assessing a charge for such value 
received (including methods involving an annual fee or a fee for each 
mortgage purchased or securitized), and shall make a recommendation of 
the best such method for assessing such charge. Not later than 12 
months after the date of the enactment of this Act, the Comptroller 
General shall submit to the Congress a report setting forth the 
determinations and conclusions of such study.

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

    (a) Required Renewal; Wind Down and Dissolution Upon Non-Renewal.--
Upon the expiration of the 3-year period that begins upon the 
expiration of the period referred to in section 503(b), unless the 
charter of an enterprise is renewed pursuant to subsection (b) of this 
section, section 506 (relating to wind down of operations and 
dissolution of enterprise) shall apply to the enterprise.
    (b) Renewal Procedure.--
            (1) Application; timing.--The Director shall provide for 
        each enterprise to apply to the Director, before the expiration 
        of the 3-year period under subsection (a), for renewal of the 
        charter of the enterprise.
            (2) Standard.--The Director shall approve the application 
        of an enterprise for the renewal of the charter of the 
        enterprise if--
                    (A) the application includes a certification by the 
                enterprise that the enterprise is financially sound and 
                is complying with all provisions of, and amendments 
                made by, section 504 of this title applicable to such 
                enterprise; and
                    (B) the Director verifies that the certification 
                made pursuant to subparagraph (A) is accurate.
    (c) Option To Reapply.--Nothing in this section may be construed to 
require an enterprise to apply under this section for renewal of the 
charter of the enterprise.

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

    (a) Applicability.--This section shall apply to an enterprise--
            (1) upon the expiration of the 3-year period referred to in 
        such section 505(a), to the extent provided in such section; 
        and
            (2) if this section has not previously applied to the 
        enterprise, upon the expiration of the 6-year period that 
        begins upon the expiration of the period referred to in section 
        503(b).
    (b) Wind Down.--Upon the applicability of this section to an 
enterprise, the Director and the Secretary of the Treasury shall 
jointly take such action, and may prescribe such regulations and 
procedures, as may be necessary to wind down the operations of an 
enterprise as an entity chartered by the United States Government over 
the duration of the 10-year period beginning upon the applicability of 
this section to the enterprise (pursuant to subsection (a)) in an 
orderly manner consistent with this title and the ongoing obligations 
of the enterprise.
    (c) Division of Assets and Liabilities; Authority To Establish 
Holding Corporation and Dissolution Trust Fund.--The action and 
procedures required under subsection (b)--
            (1) shall include the establishment and execution of plans 
        to provide for an equitable division and distribution of assets 
        and liabilities of the enterprise, including any liability of 
        the enterprise to the United States Government or a Federal 
        reserve bank that may continue after the end of the period 
        described in subsection (b); and
            (2) may provide for establishment of--
                    (A) a holding corporation organized under the laws 
                of any State of the United States or the District of 
                Columbia for the purposes of the reorganization and 
                restructuring of the enterprise; and
                    (B) one or more trusts to which to transfer--
                            (i) remaining debt obligations of the 
                        enterprise, for the benefit of holders of such 
                        remaining obligations; or
                            (ii) remaining mortgages held for the 
                        purpose of backing mortgage-backed securities, 
                        for the benefit of holders of such remaining 
                        securities.
    (d) Repeal of Charter.--Effective upon the expiration of the 10-
year period referred to in subsection (b) for an enterprise, the 
charter for the enterprise is repealed, except that the provisions of 
such charter in effect immediately before such repeal shall continue to 
apply with respect to the rights and obligations of any holders of 
outstanding debt obligations and mortgage-backed securities of the 
enterprise.

                 TITLE VI--CREDIT RATING AGENCY REFORM

SEC. 601. CLARIFICATION OF DESIGNATION.

    (a) In General.--
            (1) Singular.--Each applicable law is amended by striking 
        ``nationally recognized statistical rating organization'' each 
        place it appears and inserting ``nationally registered 
        statistical rating organization''.
            (2) Plural.--Each applicable law is amended by striking 
        ``nationally recognized statistical rating organizations'' each 
        place it appears and inserting ``nationally registered 
        statistical rating organizations''.
    (b) Applicable Laws.--For purposes of this section, the term 
``applicable laws'' means--
            (1) the Securities Exchange Act of 1934; and
            (2) the Investment Advisers Act of 1940.

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

    (a) Securities Exchange Act of 1934.--The Securities Exchange Act 
of 1934 (15 U.S.C. 78a et seq.) is amended--
            (1) in section 3(a)(41), by striking ``is rated in one of 
        the two highest rating categories by at least one nationally 
        recognized statistical rating organization, and''; and
            (2) in section 3(a)(53)(A), by striking ``is rated in 1 of 
        the 4 highest rating categories by at least 1 nationally 
        recognized statistical rating organization, and''.
    (b) Investment Company Act of 1940.--Section 6(a)(5)(A) of the 
Investment Company Act of 1940 (15 U.S.C. 80a-6(a)(5)(A)) is amended--
            (1) in clause (ii), by adding ``and'' at the end;
            (2) in clause (iii), by striking ``; and'' and inserting a 
        period; and
            (3) by striking clause (iv).
    (c) Higher Education Act of 1965.--Section 439 of the Higher 
Education Act of 1965 (20 U.S.C. 1087-2) is amended--
            (1) by striking subsection (d)(5); and
            (2) in subsection (r), by striking paragraph (11) and 
        inserting the following:
            ``(11) [Repealed]''.
    (d) Launching Our Communities' Access to Local Television Act of 
2000.--Section 1004(d)(2)(D) of the Launching Our Communities' Access 
to Local Television Act of 2000 (47 U.S.C. 1103(d)(2)(D)) is amended--
            (1) in clause (i)(II), by striking ``, if the Board 
        determines that such nonprofit corporation has one or more 
        issues of outstanding long-term debt that is rated within the 
        highest three rating categories of a nationally recognized 
        statistical rating organization''; and
            (2) by striking clause (ii) (and redesignating succeeding 
        clauses accordingly).
    (e) Employee Retirement Income Security Act of 1974.--Section 
4041(b)(5)(B) of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1341(b)(5)(B)) is amended to read as follows:
                    ``(B) Limitation.--Subparagraph (A) shall not apply 
                to any transaction or series of transactions unless the 
                employer maintaining the plan after the transaction or 
                series of transactions employs at least 20 percent of 
                the employees located in the United States who were 
                employed by such employer immediately before the 
                transaction or series of transactions.''.
    (f) Chapter 6 of Title 23.--Chapter 6 of title 23, United States 
Code, is amended--
            (1) in section 601(a), by striking paragraph (3) and 
        paragraph (10) and redesignating succeeding paragraphs 
        accordingly;
            (2) in section 602(b)(2), by amending subparagraph (B) to 
        read as follows:
                    ``(B) [Repealed]'';
            (3) in section 603(a)(3)--
                    (A) by striking ``and each rating agency providing 
                a preliminary rating opinion letter under section 602 
                (b)(2)(B)''; and
                    (B) by striking ``, taking into account such 
                letter'';
            (4) in section 603(a), by striking paragraph (4);
            (5) in section 603(b)(2), by striking `` or, if the secured 
        loan does not receive an investment grade rating, the amount of 
        the senior project obligations'';
            (6) in section 604(a)(3)--
                    (A) by striking ``and each rating agency providing 
                a preliminary rating opinion letter under section 602 
                (b)(2)(B)''; and
                    (B) by striking ``, taking into account such 
                letter'';
            (7) in section 604(a), by striking paragraph (4); and
            (8) by striking section 604(a)(4).
    (g) Federal Housing Enterprises Financial Safety and Soundness Act 
of 1992.--Section 1319 of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (12 U.S.C. 4519) is amended by 
striking ``that is a nationally recognized statistical rating 
organization, as such term is defined in section 3(a) of the Securities 
Exchange Act of 1934,''.
    (h) Revised Statutes.--Section 5136A of title LXII of the Revised 
Statutes of the United States is amended--
            (1) in subsection (a)(2)(E), by striking ``applicable 
        rating or other'';
            (2) in the heading for subsection (a)(3) by striking 
        ``Rating or comparable requirement'' and inserting 
        ``Requirement'';
            (3) by amending subsection (a)(3)(A) to read as follows:
                    ``(A) In general.--A national bank meets the 
                requirements of this paragraph if the bank is 1 of the 
                second 50 largest insured banks and meets such criteria 
                as the Secretary of the Treasury and the Board of 
                Governors of the Federal Reserve System may jointly 
                establish by regulation.'';
            (4) in the heading for subsection (f), by striking 
        ``maintain public rating or''; and
            (5) in subsection (f)(1), by striking ``applicable rating 
        or other''.
    (i) Federal Deposit Insurance Act.--Section 28 of the Federal 
Deposit Insurance Act (12 U.S.C. 1831e) is amended by striking 
subsections (d) and (e) (and redesignating succeeding subsections 
accordingly).

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

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

                    TITLE VII--ANTI-FRAUD PROVISIONS

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

    (a) Under the Securities Act of 1933.--Section 8A of the Securities 
Act of 1933 (15 U.S.C. 77h-1) is amended by adding at the end the 
following new subsection:
    ``(g) Authority To Impose Money Penalties.--
            ``(1) Grounds for imposing.--In any cease-and-desist 
        proceeding under subsection (a), the Commission may impose a 
        civil penalty on a person if it finds, on the record after 
        notice and opportunity for hearing, that--
                    ``(A) such person--
                            ``(i) is violating or has violated any 
                        provision of this title, or any rule or 
                        regulation thereunder; or
                            ``(ii) is or was a cause of the violation 
                        of any provision of this title, or any rule or 
                        regulation thereunder; and
                    ``(B) such penalty is in the public interest.
            ``(2) Maximum amount of penalty.--
                    ``(A) First tier.--The maximum amount of penalty 
                for each act or omission described in paragraph (1) 
                shall be $6,500 for a natural person or $65,000 for any 
                other person.
                    ``(B) Second tier.--Notwithstanding paragraph (A), 
                the maximum amount of penalty for each such act or 
                omission shall be $65,000 for a natural person or 
                $325,000 for any other person if the act or omission 
                described in paragraph (1) involved fraud, deceit, 
                manipulation, or deliberate or reckless disregard of a 
                regulatory requirement.
                    ``(C) Third tier.--Notwithstanding paragraphs (A) 
                and (B), the maximum amount of penalty for each such 
                act or omission shall be $130,000 for a natural person 
                or $650,000 for any other person if--
                            ``(i) the act or omission described in 
                        paragraph (1) involved fraud, deceit, 
                        manipulation, or deliberate or reckless 
                        disregard of a regulatory requirement; and
                            ``(ii) such act or omission directly or 
                        indirectly resulted in substantial losses or 
                        created a significant risk of substantial 
                        losses to other persons or resulted in 
                        substantial pecuniary gain to the person who 
                        committed the act or omission.
            ``(3) Evidence concerning ability to pay.--In any 
        proceeding in which the Commission may impose a penalty under 
        this section, a respondent may present evidence of the 
        respondent's ability to pay such penalty. The Commission may, 
        in its discretion, consider such evidence in determining 
        whether such penalty is in the public interest. Such evidence 
        may relate to the extent of such person's ability to continue 
        in business and the collectability of a penalty, taking into 
        account any other claims of the United States or third parties 
        upon such person's assets and the amount of such person's 
        assets.''.
    (b) Under the Securities Exchange Act of 1934.--Subsection (a) of 
section 21B of the Securities Exchange Act of 1934 (15 U.S.C. 78u-2(a)) 
is amended--
            (1) by striking ``(a) Commission Authority To Assess Money 
        Penalties.--In any proceeding'' and inserting the following:
    ``(a) Commission Authority To Assess Money Penalties.--
            ``(1) In general.--In any proceeding'';
            (2) by redesignating paragraphs (1) through (4) of such 
        subsection as subparagraphs (A) through (D), respectively and 
        moving such redesignated subparagraphs and the matter following 
        such subparagraphs 2 ems to the right; and
            (3) by adding at the end of such subsection the following 
        new paragraph:
            ``(2) Cease-and-desist proceedings.--In any proceeding 
        instituted pursuant to section 21C of this title against any 
        person, the Commission may impose a civil penalty if it finds, 
        on the record after notice and opportunity for hearing, that 
        such person--
                    ``(A) is violating or has violated any provision of 
                this title, or any rule or regulation thereunder; or
                    ``(B) is or was a cause of the violation of any 
                provision of this title, or any rule or regulation 
                thereunder.''.
    (c) Under the Investment Company Act of 1940.--Paragraph (1) of 
section 9(d) of the Investment Company Act of 1940 (15 U.S.C. 80a-
9(d)(1)) is amended--
            (1) by striking ``(1) Authority of commission.--In any 
        proceeding'' and inserting the following:
            ``(1) Authority of commission.--
                    ``(A) In general.--In any proceeding'';
            (2) by redesignating subparagraphs (A) through (C) of such 
        paragraph as clauses (i) through (iii), respectively and by 
        moving such redesignated clauses and the matter following such 
        subparagraphs 2 ems to the right; and
            (3) by adding at the end of such paragraph the following 
        new subparagraph:
                    ``(B) Cease-and-desist proceedings.--In any 
                proceeding instituted pursuant to subsection (f) 
                against any person, the Commission may impose a civil 
                penalty if it finds, on the record after notice and 
                opportunity for hearing, that such person--
                            ``(i) is violating or has violated any 
                        provision of this title, or any rule or 
                        regulation thereunder; or
                            ``(ii) is or was a cause of the violation 
                        of any provision of this title, or any rule or 
                        regulation thereunder.''.
    (d) Under the Investment Advisers Act of 1940.--Paragraph (1) of 
section 203(i) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
3(i)(1)) is amended--
            (1) by striking ``(1) Authority of commission.--In any 
        proceeding'' and inserting the following:
            ``(1) Authority of commission.--
                    ``(A) In general.--In any proceeding'';
            (2) by redesignating subparagraphs (A) through (D) of such 
        paragraph as clauses (i) through (iv), respectively and moving 
        such redesignated clauses and the matter following such 
        subparagraphs 2 ems to the right; and
            (3) by adding at the end of such paragraph the following 
        new subparagraph:
                    ``(B) Cease-and-desist proceedings.--In any 
                proceeding instituted pursuant to subsection (k) 
                against any person, the Commission may impose a civil 
                penalty if it finds, on the record after notice and 
                opportunity for hearing, that such person--
                            ``(i) is violating or has violated any 
                        provision of this title, or any rule or 
                        regulation thereunder; or
                            ``(ii) is or was a cause of the violation 
                        of any provision of this title, or any rule or 
                        regulation thereunder.''.

SEC. 702. FORMERLY ASSOCIATED PERSONS.

    (a) Member or Employee of the Municipal Securities Rulemaking 
Board.--Section 15B(c)(8) of the Securities Exchange Act of 1934 (15 
U.S.C. 78o-4(c)(8)) is amended by striking ``any member or employee'' 
and inserting ``any person who is, or at the time of the alleged 
misconduct was, a member or employee''.
    (b) Person Associated With a Government Securities Broker or 
Dealer.--Section 15C of the Securities Exchange Act of 1934 (15 U.S.C. 
78o-5) is amended--
            (1) in subsection (c)(1)(C), by striking ``or seeking to 
        become associated,'' and inserting ``seeking to become 
        associated, or, at the time of the alleged misconduct, 
        associated or seeking to become associated'';
            (2) in subsection (c)(2)(A), by inserting ``, seeking to 
        become associated, or, at the time of the alleged misconduct, 
        associated or seeking to become associated'' after ``any person 
        associated''; and
            (3) in subsection (c)(2)(B), by inserting ``, seeking to 
        become associated, or, at the time of the alleged misconduct, 
        associated or seeking to become associated'' after ``any person 
        associated''.
    (c) Person Associated With a Member of a National Securities 
Exchange or Registered Securities Association.--Section 21(a)(1) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78u(a)(1)) is amended by 
inserting ``, or, as to any act or practice, or omission to act, while 
associated with a member, formerly associated'' after ``member or a 
person associated''.
    (d) Participant of a Registered Clearing Agency.--Section 21(a)(1) 
of the Securities Exchange Act of 1934 (15 U.S.C. 78u(a)(1)) is amended 
by inserting ``or, as to any act or practice, or omission to act, while 
a participant, was a participant,'' after ``in which such person is a 
participant,''.
    (e) Officer or Director of a Self-regulatory Organization.--Section 
19(h)(4) of the Securities Exchange Act of 1934 (15 U.S.C. 78s(h)(4)) 
is amended--
            (1) by striking ``any officer or director'' and inserting 
        ``any person who is, or at the time of the alleged misconduct 
        was, an officer or director''; and
            (2) by striking ``such officer or director'' and inserting 
        ``such person''.
    (f) Officer or Director of an Investment Company.--Section 36(a) of 
the Investment Company Act of 1940 (15 U.S.C. 80a-35(a)) is amended--
            (1) by striking ``a person serving or acting'' and 
        inserting ``a person who is, or at the time of the alleged 
        misconduct was, serving or acting''; and
            (2) by striking ``such person so serves or acts'' and 
        inserting ``such person so serves or acts, or at the time of 
        the alleged misconduct, so served or acted''.

SEC. 703. COLLATERAL BARS.

    (a) Section 15(b)(6)(A) of the Securities Exchange Act of 1934.--
Section 15(b)(6)(A) of the Securities Exchange Act of 1934 (15 U.S.C. 
78o(b)(6)(A)) is amended by striking ``12 months, or bar such person 
from being associated with a broker or dealer,'' and inserting ``12 
months, or bar any such person from being associated with a broker, 
dealer, investment adviser, municipal securities dealer, or transfer 
agent,''.
    (b) Section 15B(c)(4) of the Securities Exchange Act of 1934.--
Section 15B(c)(4) of the Securities Exchange Act of 1934 (15 U.S.C. 
78o-4(c)(4)) is amended by striking ``twelve months or bar any such 
person from being associated with a municipal securities dealer,'' and 
inserting ``twelve months or bar any such person from being associated 
with a broker, dealer, investment adviser, municipal securities dealer, 
or transfer agent,''.
    (c) Section 17A(c)(4)(C) of the Securities Exchange Act of 1934.--
Section 17A(c)(4)(C) of the Securities Exchange Act of 1934 (15 U.S.C. 
78q-1(c)(4)(C)) is amended by striking ``twelve months or bar any such 
person from being associated with the transfer agent,'' and inserting 
``twelve months or bar any such person from being associated with any 
transfer agent, broker, dealer, investment adviser, or municipal 
securities dealer,''.
    (d) Section 203(f) of the Investment Advisers Act of 1940.--Section 
203(f) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-3(f)) is 
amended by striking ``twelve months or bar any such person from being 
associated with an investment adviser,'' and inserting ``twelve months 
or bar any such person from being associated with an investment 
adviser, broker, dealer, municipal securities dealer, or transfer 
agent,''.

SEC. 704. UNLAWFUL MARGIN LENDING.

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

SEC. 705. NATIONWIDE SERVICE OF SUBPOENAS.

    (a) Securities Act of 1933.--Section 22(a) of the Securities Act of 
1933 (15 U.S.C. 77v(a)) is amended by inserting after the second 
sentence the following: ``In any action or proceeding instituted by the 
Commission under this title in a United States district court for any 
judicial district, subpoenas issued by or on behalf of such court to 
compel the attendance of witnesses or the production of documents or 
tangible things (or both) may be served in any other district. Such 
subpoenas may be served and enforced without application to the court 
or a showing of cause, notwithstanding the provisions of rule 45(b)(2), 
(c)(3)(A)(ii), and (c)(3)(B)(iii) of the Federal Rules of Civil 
Procedure.''.
    (b) Securities Exchange Act of 1934.--Section 27 of the Securities 
Exchange Act of 1934 (15 U.S.C. 78aa) is amended by inserting after the 
third sentence the following: ``In any action or proceeding instituted 
by the Commission under this title in a United States district court 
for any judicial district, subpoenas issued by or on behalf of such 
court to compel the attendance of witnesses or the production of 
documents or tangible things (or both) may be served in any other 
district. Such subpoenas may be served and enforced without application 
to the court or a showing of cause, notwithstanding the provisions of 
rule 45(b)(2), (c)(3)(A)(ii), and (c)(3)(B)(iii) of the Federal Rules 
of Civil Procedure.''.
    (c) Investment Company Act of 1940.--Section 44 of the Investment 
Company Act of 1940 (15 U.S.C. 80a-43) is amended by inserting after 
the fourth sentence the following: ``In any action or proceeding 
instituted by the Commission under this title in a United States 
district court for any judicial district, subpoenas issued by or on 
behalf of such court to compel the attendance of witnesses or the 
production of documents or tangible things (or both) may be served in 
any other district. Such subpoenas may be served and enforced without 
application to the court or a showing of cause, notwithstanding the 
provisions of rule 45(b)(2), (c)(3)(A)(ii), and (c)(3)(B)(iii) of the 
Federal Rules of Civil Procedure.''.
    (d) Investment Advisers Act of 1940.--Section 214 of the Investment 
Advisers Act of 1940 (15 U.S.C. 80b-14) is amended by inserting after 
the third sentence the following: ``In any action or proceeding 
instituted by the Commission under this title in a United States 
district court for any judicial district, subpoenas issued by or on 
behalf of such court to compel the attendance of witnesses or the 
production of documents or tangible things (or both) may be served in 
any other district. Such subpoenas may be served and enforced without 
application to the court or a showing of cause, notwithstanding the 
provisions of rule 45(b)(2), (c)(3)(A)(ii), and (c)(3)(B)(iii) of the 
Federal Rules of Civil Procedure.''.

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

    (a) Findings.--
            (1) The Congress finds as follows:
                    (A) The work of the Financial Crimes Enforcement 
                Network (hereinafter in this section referred to as 
                ``FinCEN'') is essential to safeguard the United States 
                financial system and its international affiliates from 
                the abuses of financial crime, including terrorist 
                financing, weapons of mass destruction proliferation, 
                and money laundering.
                    (B) All avenues of financial intermediation are 
                vulnerable to abuse by illicit actors, and FinCEN 
                exercises the authorities of the Bank Secrecy Act over 
                a broad range of financial institutions.
            (2) The Congress further finds and recognizes the recent 
        establishment by FinCEN of an International Programs Division 
        to expand and enhance global financial intelligence sharing 
        initiatives aimed at combating transnational crime threats 
        facing United States financial markets, and takes note of 
        FinCEN's efforts to collaborate with foreign financial 
        intelligence unit partners on analytical projects to identify 
        and address emerging threats and vulnerabilities.
            (3) The Congress further finds and recognizes the role of 
        FinCEN in discovering and investigating widespread fraud in the 
        mortgage market and elsewhere in the financial services 
        industry. Alongside an effective licensing and registration 
        system for all mortgage originators, a vigilant FinCEN is 
        critical to the recovery of our housing markets and consumer 
        confidence in both the home buying process and the financial 
        services industry as a whole.
    (b) Reauthorization.--Section 310(d)(1) of title 31, United States 
Code, is amended by striking ``such sums as may be necessary for fiscal 
years 2002, 2003, 2004, and 2005'' and inserting ``not more than 
$105,500,000 for fiscal year 2010, and such sums as may be necessary 
for fiscal years 2011, 2012, 2013, and 2014''.
    (c) Additional Financial Fraud Authorization of Appropriations.--In 
addition to such other amounts otherwise made available or appropriated 
to FinCEN, there are authorized to be appropriated to FinCEN 
$15,000,000 to be used specifically for efforts to detect financial 
fraud. Such sums are authorized to remain available until expended.

SEC. 707. FAIR FUND IMPROVEMENTS.

    (a) Amendment.--Subsection (a) of section 308 of the Sarbanes-Oxley 
Act of 2002 (15 U.S.C. 7246(a)) is amended to read as follows:
    ``(a) Civil Penalties To Be Used for the Relief of Victims.--If in 
any judicial or administrative action brought by the Commission under 
the securities laws (as such term is defined in section 3(a)(47) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(47)), the Commission 
obtains a civil penalty against any person for a violation of such 
laws, the amount of such civil penalty shall, on the motion or at the 
direction of the Commission, be added to and become part of a 
disgorgement fund or other fund established for the benefit of the 
victims of such violation.''.
    (b) Conforming Amendments.--Section 308 of such Act is amended--
            (1) in subsection (b)--
                    (A) by striking ``for a disgorgement fund described 
                in subsection (a)'' and inserting ``for a disgorgement 
                fund or other fund described in subsection (a)''; and
                    (B) by striking ``in the disgorgement fund'' and 
                inserting ``in such fund''; and
            (2) by striking subsection (e).

SEC. 708. AUTHORITY TO CONTRACT FOR COLLECTION OF DELINQUENT JUDGMENTS 
              AND ORDERS.

    Subsection (b) of section 4 of the Securities Exchange Act of 1934 
(15 U.S.C. 78d(b)) is amended--
            (1) in the heading of such subsection, by striking ``and 
        Leasing Authority'' and inserting ``, Leasing Authority, and 
        Contracting Authority''; and
            (2) by adding at the end the following new paragraph:
            ``(4) Contracting authority.--
                    ``(A) In general.--Notwithstanding any other 
                provision of law, the Commission is authorized to enter 
                into contracts to assist in the collection of any claim 
                of indebtedness resulting from any judgment or order 
                (either by litigation or settlement) obtained by the 
                Commission in any judicial action or administrative 
                proceeding brought by or on behalf of the Commission. 
                This authority includes, but is not limited to, the 
                retention of private legal counsel to furnish legal 
                services, including representation in litigation, 
                negotiation, compromise, and settlement. Private 
                counsel retained under this paragraph may represent the 
                Commission in such debt collection matters to the same 
                extent as the Commission may represent itself.
                    ``(B) Terms and conditions of contract.--Each such 
                contract shall include such terms and conditions as the 
                Commission considers necessary and appropriate, and 
                shall include provisions specifying--
                            ``(i) the amount of the fee to be paid 
                        under such contract or the method for 
                        calculating that fee;
                            ``(ii) that the Commission retains the 
                        authority to represent itself, resolve a 
                        dispute, compromise a claim, end collection 
                        efforts, and refer a matter to other counsel or 
                        to the Attorney General; and
                            ``(iii) that the Commission may terminate 
                        either the contract or the private counsel's 
                        representation of the Commission in particular 
                        cases for any reason, including for the 
                        convenience of the Commission.
                    ``(C) Payment of fees.--Notwithstanding section 
                3302(b) of title 31, United States Code, a contract 
                under this paragraph may provide that fees and costs 
                incurred by private counsel under such contracts are 
                payable from the amounts recovered.
                    ``(D) Competition required.--Nothing in this 
                paragraph shall relieve the Commission of the 
                competition requirements set forth in title III of the 
                Federal Property and Administrative Services Act of 
                1949 (41 U.S.C. 251 et seq.).
                    ``(E) Counterclaims.--In any action to recover 
                indebtedness which is brought on behalf of the 
                Commission by private counsel retained under this 
                paragraph, no counterclaim may be asserted against the 
                Commission unless the counterclaim is served directly 
                on the Commission. Such service shall be made in 
                accordance with the rules of procedure of the court in 
                which the action is brought.''.
                                 <all>